Signature Bank (SBNY) 2009 Q1 法說會逐字稿

Welcome to the SIGNATURE BK NEW YORK NY 2009 first quarter results conference call. (Operator instructions)

I would like to turn the conference over to Mr. Joseph DePaolo, President, CEO and Eric Howell, CFO of Signature Bank. Mr. DePaolo, please go ahead.

Thank you Mitch. Good morning and thank you for joining us today for the Signature Bank 2009 first quarter results conference call. Before I begin my formal remarks, Susan Lewis will read the forward looking disclaimer.

This conference call and oral statements made from time to time by our representatives contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that is subject to risks and uncertainties. Forward-looking statements include information concerning our future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations capitalization, new private client team hires, new office openings, the regulatory environment and business strategy. These statements often include words such as may, believe, expect, anticipate, intent, plan, estimate or other similar expressions. As you consider forward-looking statements, you should understand that these statements are not guarantees of performance results.

They involve risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to one, economic and regulatory conditions, two, changes in interest rates loan demand real estate value and competition which can materially affect origination levels and gain on sale results in our business as well as other aspects of our financial performance, three, level of defaults losses in prepayments on loans made by us whether held in portfolio or sold in the whole loan secondary market which can materially affect charge-off levels and required credit loss reserve levels and four, competition for qualified personnel and desirable office locations.

Additional risks are described in the offering circular relating to the offering and our quarterly and annual reports filed with the FDIC. You should keep in mind that any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time and we cannot predict these events or how they may affect the Bank. Signature Bank has no duty to and does not intend to update or revise the forward-looking statements after the date on which they are made. In light of these risks and uncertainties you should keep in mind that any forward-looking statements made in this conference call or elsewhere might not reflect actual results. Now I would like to turn the call back to Joe.

I will provide some overview and then Eric Howell, our Chief Financial Officer, will review the Bank's financial results in greater detail. Eric and I will address your questions at the end of our remarks. Once again this quarter we delivered solid financial results in the face of the chaos impacting the entire economic landscape. Particularly the financial services sector. By remaining true to depositor focus relationship based banking model, we continue to distinguish ourselves amid the turmoil and take advantage of the disruption in the marketplace.

During the first quarter deposits were up $449 million with core deposit growth representing $315 million. We saw loan growth of $97 million to $3.57 billion. Strong earnings growth - earnings up 48.3% to $14.6 million or $0.41 diluted earnings per share. Our credit quality remains stable despite the current difficult environment and on March 31 we returned all $120 million of TARP received during the fourth quarter.

First, let's look at deposits. Total deposits for the quarter rose $449 million, reaching $5.84 billion. This includes core deposit growth of $315 million and increases in short-term escrows of $123 million and broker deposits of $11 million. Average deposits in the first quarter were up $515 million or 10.4% to $5.46 billion when compared to the 2008 fourth quarter. Again, this is a key deposit metric, which we closely monitor due to fluctuations in short-term escrow deposits. Non-interest bearing deposits increased $152 million from last quarter to $1.72 billion, representing 29.4%, of total deposits. Off balance sheet money market deposits declined in the first quarter to $1.5 billion, a decrease of $161 million versus last quarter. Total assets reached $7.43 billion, up $1.61 billion, when compared with the same quarter last year. And average assets for the first quarter grew $1.49 billion or 26%, versus the 2008 first quarter.

Let's review loans. Loans for the first quarter were up $97 million or 2.8%, reaching $3.57 billion, representing 48% of total assets at quarter end. Given the current economic environment, loan demand from our clients has somewhat decreased. Since we are in a position of strength, due to our capital levels, we are selectively taking advantage of quality lending opportunities. Non-performing loans were 1.26% of total loans or $45.1 million in the first quarter compared with the 2008 first quarter, which was 1.8% of total loans or $40.1 million.

Provision for loan losses for the 2009 first quarter was $9.6 million, up $3.2 million or 50% when compared with the same quarter of last year. This increase was primarily driven by growth in the loan portfolio, combined with an increase in the provision for the deteriorating economic environment. Net charge-offs for the 2009 first quarter was $7.2 million or 0.82% annualized compared with $1.5 million or 0.29% for the 2008 first quarter. The first quarter included one charge-off of $5.1 million on a CNI loan with a principal balance of $9.2 million. This loan was first placed on non-accrual in the 2007 fourth quarter and was provided for in prior quarters. As we continually noted during 2008, we are well aware of the impact of the current economic situation it's had on the marketplace and obviously the potential for more turbulence is evident. As such once again for this quarter our provision for loan losses remains high and we expect this will continue.

Now on to earnings. Net income for the 2009 first quarter was $14.6 million, or $0.41 cents diluted earnings per share. Up 48.3% when compared with $9.9 million or $0.33 cents diluted earnings per share reported in the 2008 first quarter. Net income available to common shareholders. Now I would listen very closely here. Net income available to common shareholders for the first quarter of 2009 was $2.4 million or $0.07 diluted earnings per share. The Bank recorded a $10.2 million accelerated deemed dividend in the first quarter of 2009 related to the value of the warrants issued to the U.S. Treasury, to account for the difference between the book value of the preferred stock we purchased from the Treasury and the purchase price for the preferred stock. The $10.2 million accelerated deemed dividend combined with the previously scheduled preferred dividend of $2 million, resulted in a total deemed dividend of $12.2 million during the first quarter of 2009.

Excluding the the affect of the accelerated deemed dividend of $10.2 million, net income available to common shareholders was $12.6 million or $0.36 diluted earnings per share. Just to be clear, no cash was paid for this $10.2 million accelerated deemed dividend. It is merely a non-cash accounting entry. Quarters growth in net income when compared with the 2008 first quarter is attributable to various factors, including core deposit growth, solid loan growth and net interest margin expansion. This was partially offset by increases in non-interest expense and the provision for loan losses.

With regard to growth in our private client banking teams, during the first quarter we added two new teams, including ninth team from Norfolk Capital One. We also expanded two existing teams with the appointment of additional bankers. Now with 58 teams headed by 73 group directors we continue to take advantage of the opportunities available to attract and retain veteran private client bankers in the metro New York market. A pipeline of quality banking teams interested in joining the Bank had notably increased over the past several months. In fact the pipeline for teams is larger than ever in our history.

Before I turn the call over to Eric, I want to briefly touch upon the Bank's decision to return the funds we received from the Capital Purchase Program to the U.S. Treasury Department. First, let me address why we initially accepted the TARP. And again, please listen very closely here. Signature Bank is well capitalized and was not in need of additional funds. In fact, the Bank had just completed a $148 million common stock offering in September of 2008, which was over subscribed. Today the Bank's capital ratios remain among the highest in the industry with or without the funds from the Capital Purchase Program.

When the Treasury's program was initiated it was positioned as offering additional funds to strong banks to instill confidence and liquidity in the wake of Lehman Brothers. At that time the message from the Treasury was that weaker institutions would not be asked to participate. Signature Bank accepted the invitation from our primary Federal Regulator, the FDIC, to participate in the program since we are one of the most financially sound institutions in the country. It was intended to be a positive partnership between government and business.

So why did Signature Bank return the capital? Well, to begin with, because we can. We are a healthy institution and have always been. We accepted the invitation to participate in the program from a position of strength. The perception has totally changed. There is now a stigma surrounding the program. It was the Treasury's original intent to give funds to strong banks like Signature Bank. However, as the program evolved and additional legislation was enacted, weak banks were offered funds and non-banks became banks to get funds. This received tremendous attention and has also been the subject of taxpayer and lawmaker outrage resulting in punitive conditions being imposed. General misperception developed that any bank that took funds from the program must be in trouble. This was certainly not the case for Signature Bank. As legislation continues to evolve, the rules changed and the restrictions of the program hindered our ability to execute our business model.

Specifically, as all of you know the cornerstone of this institution is the objective compensation model that we offer our banking teams. The restrictions imposed by Congress on TARP recipients impacted this compensation program hampering our ability to attract and retain banking teams placing the Bank at a competitive disadvantage. Also the Bank had concerns that addition conditions would arise at any time which might impact our business and may not be prudent for shareholders. Lastly, the investment community's focus shifted to tangible common equity as a primary indicator in an institution's health. A tangible common equity of 7.83%, clearly shows our strength. There is no question that returning the funds was in the best interest of our shareholders, clients and this institution. The choice to de-TARP has proven to be well received overall. Now I'll turn the call over to Eric to review the financial results in greater detail.

Thank you, Joe and good morning everyone. I'll start by reviewing net interest income and margin. Net interest income for the first quarter reached $57.5 million, up $16.3 million, or 39.5%, versus the 2008 first quarter and a decrease of 2.4%, or $1.4 million from the 2008 fourth quarter. Net interest margin on a tax equivalent basis grew 33 basis points in the quarter to 3.37% versus the same period last year. On a linked quarter basis net interest margin decreased 14 basis points. The linked quarter decrease was mostly the result of a reduction in the amount of accretion of discounts on previously impaired securities recognized during the quarter.

During the first quarter of 2009 the Bank recognized $377,000 in interest income from the accretion of discounts on previously impaired securities compared with $1.7 million in the fourth quarter of 2008 representing a full year's accretion . Additionally, net interest margin was affected by significant inflows of core and short-term escrow deposits during the latter half of the first quarter, thereby increasing low yielding cash balances. The Bank expects to prudently invest the funds in the 2009 second quarter. Let's look at asset yields and funding costs for a moment. Yields on investment securities decreased 36 basis points to 4.98% this quarter versus last quarter, however, net of the accretion previously discussed yields were stable.

Turning to our loan portfolio yields on average commercial loans and commercial mortgages decreased 26 basis points to 5.41% this quarter from last quarter. This decrease was primarily driven by the reduction in short-term rates for the quarter. Now on to liabilities. The cost of deposits for the quarter decreased 18 basis points to 1.55%. As short-term rates continued to decrease and deposit competition eased we were able to lower our deposit costs for the quarter. Due to the significant deposit inflows we lowered our overall borrowing by $400 million. The short-term overnight borrowings were at low overall rates. Therefore, by paying them down we saw an increase in borrowing costs of 76 basis points due to legacy fixed positions. Although we replaced extremely low cost borrowings with slightly higher cost core deposits, we still managed to decrease our overall cost of funds by 13 basis points to 1.92%. As you all know, the core value of our franchise lies in our ability to generate low cost deposits. In the long run, as we expect interest rates to rise in the future, these core deposits will prove beneficial and will be much lower in cost than wholesale funds.

Looking at non-interest income and expense, non-interest income for the 2009 first quarter was $10.4 million, an increase of $539,000 compared with the 2008 first quarter. This is mainly due to a rise in gains on sales to securities which was offset by a decrease in commissions. Commissions we earn on off balance sheet money markets accounts have been significantly reduced and for some funds even eliminated in order to maintain positive yields on the funds in this unusually low interest rate environment. Non-interest expense for the first quarter of 2009 was $34 million versus $28.6 million, for the same period a year ago. The $5.4 million increase or 19% was mainly because of the addition of new private client banking teams and offices, growth in client activity and additional costs of $1.2 million related to FDIC deposit assessment fees and the FDIC deposit guarantee program.

I just want to remind everyone that the FDIC has announced that they will implement a one-time special assessment in the second quarter. We are still waiting to learn of the amount of the special assessment. It could be as much as 20 basis points. The Bank's efficiency ratio improved in the first quarter 50.1% and 55.2% in the first quarter of 2008, driven by the growth in net interest income. Turning to capital. Our capital position remains among the strongest industry wide. The Bank's tangible common equity ratio of 7.83%, tier one risk base of 13.44%, total risk base ratio of 14.25% and leverage capital ratio of 9%, as of March 31, 2009, were well in excess of regulatory requirements and reflect the relatively low risk profile of the balance sheet. Now I'll turn the call back to Joe, thank

Thanks Eric. The first quarter results indicate we are off to a good start this year. And our single point of contact approach and depositor emphasis confirms to our clients that Signature Bank is a safe place for their deposits. With strong growth in core deposits, loans and earnings this quarter we set the stage for the remainder of this year, which we expect will be another challenging one. However, we remain confident in the Bank's foundation and deposit of focus model, as well as our team's ability to continually execute. Signature Bank is in a strong capital position with abundant liquidity and a well structured balance sheet. All these attributes will allow us to not only weather these uncertain times, but also afford us the necessary opportunities to capitalize on the industry turmoil and disruption. As I stated earlier, our team pipeline is quite strong.

Lastly, on this Friday, May 1, Signature Bank will be eight years old and I would like to congratulate all my Signature Bank fellow colleagues. At this point, we are happy to answer any questions you might have. Mitch, I'll turn it over to you.

Thank you, sir. Ladies and gentlemen we will now begin the question and answer session. (Operator instructions) And our first question comes from Dave Rochester with FBR Capital Markets.

Good morning guys.

Good morning.

Quick one on the loan growth, we saw some deceleration this quarter as expected, do you see that level trending through the end of 2009? Somewhere around $100 million, $150 million per quarter and could you update us on maybe a range of what you expect for 2009?

It's kind tough the gain visibility, but I think the $100 million to $150 million at the top end per quarter is a reasonable range right now but it's difficult to predict at this point, still.

Given that expectation what are you looking at for expense growth in 2009 versus 2008.

I think expense growth in line with previous years, in that 20% to 25% arena.

You talked about the investment of the extra liquidity in the second quarter, could you talk about where you see margin going?

Well we certainly think they are stable at this point. It's really going to depend on how much in core deposit flows we get and really more so on where we can invest those. It's really the asset side that's giving us more difficulty at this point. Because there is just not a lot of places to put those deposits coming in.

In terms of reinvestment rates, if you continue to have access deposit growth over loan growth for securities you are looking at anything in the 4.5% to 5% range?

I will give a wide range, I think it's between 4% and 5%.

Okay. And your AOCI note that became a little bit more negative this quarter I'm sure you have gains in your agency and BS portfolio, do you happen to know what the unrealized gain was.

I don't have the unrealized gain position. I just have the net. I think it's around $20 million.

Okay. And one last one, any thoughts of potentially raising additional common with the run we've seen in the stocks in the banking space recently?

It's a very good question, I think our decision whether to raise capital would not so much be in the run up of what is in the stock. It's really going to be based upon the growth of the institution. Our growth has been fairly strong. Since we raised capital last, June 30th numbers, the bank has grown over $1billion. But as Eric pointed out during the call our capital ratios are fairly strong. So you have to weigh your strong capital ratios with the growth expectations.

Yes. Okay, great. Thanks, guy.

Thank you, David.

Our next question comes from the line of Matthew Clark with KBW Asset Management.

It sounds like your delinquencies are down. Can you give as a better sense for what might be going on behind the scenes in terms of migration of risk ratings if at all, by loan type maybe and just a better visibility as to what might be going on behind the scenes from the credit side.

Maybe what I will do is give you a sense of what happened with our loan growth. I mean with your growth in the non-accruals. And that will give you a sense of some of the things. The growth in our non-accrual portfolio was primarily driven by two credits. One of them was a condo construction project that is actually 100% complete and because there were very little in the way of condo sales the 33 apartments in the building were rented to the extent 30 of 33 were fully rented. On this particular project they just received, they went for and just received re-approval to make it a condo project and we expect between five and six sales of the apartments to occur over the next 90 to 120 days. What that will do will allow the loan to be paid down somewhat to a point that it may then cash flow to support a permanent mortgage. We are very comfortable with that $11 million project because of existing cash flow that's there, although not enough to keep it current. And the fact there is going to be sales that will allow some pay down to the loan and their strong collateral. The other project was a $6 million project that we participated in for CRA purposes with an agency, and again there is collateral there and there are sales occurring. So in the way of the non-accruals, the good news is that there are two projects that have collateral and sales occurring on one and sales to be expected to occur on the other one. Regarding the flavor or the color, what we are seeing is not so much any big credits as much as we are seeing the smaller ones. Things that Eric and I have talked about in the past several quarters unlike the granular credit the 50 to 100 to 150, that's where we are seeing more issues than we are on the big side in terms of big credits.

And the types of those credits?

They are actually all over the board. They're in just about every industry. Probably on the smaller credits more CNI than anything. Because if we are doing commercial real estate they have a tendency to be larger ones. I wouldn't say any industry concentration in those smaller credits.

Okay. Great. In terms of the escrow deposit that you guys have on the books. Can you give us a total amount of escrow deposit with the embedded I'm assuming in non-interest bearing.

For the most part it's non-interest bearing. And the overall escrow deposit balances at the end of the quarter were $352 million. Short-term escrows.

Okay. Great. I will leave it at there. Thanks.

Thanks Matt.

Our next question comes from Lana Chan with BMO Capital Markets.

Joe, can you talk about the pipeline you talked about with the new team hires and would you give out a target as to how many teams you hope to hire this year. If you could characterize these teams whether they are more loan focused or deposit generators.

Sure, Lana. We originally gave guidance that we were going to hire four teams, we've hired two thus far. I would expect and I'm sorry I'm not going to give a specific number, but I would expect that we will exceed the number that we projected of four. As I had stated during the call, the pipeline is as large as it's ever been, so you can characterize it as being very strong. I would say the teams are more deposit gatherers than loan generators. And I think it's simply a matter of banks having gotten bigger, lost their way as to how they should service clients, these teams that we are talking to realize that they're at risk because their books of business are starting to be segregated to other parts of the banks that their employed so that really is going to allow us to take advantage of it. I will say this, Eric in answering Dave Rochester's question about expense growth, that expense growth was assuming four teams. We would be very happy to blow away the expense growth and have more expense because we hired many more teams. I can't give you any sort of timeline as to when, other than that its a fairly strong pipeline and we hope to be able to execute on it. As you know Lana, as soon as we hire a team or teams we let the market know through a press release and you will hear about it very quickly when it happens.

Right, thank you, Joe. Second question is one of your local New York competitors recently reported earnings and some deterioration in the multifamily loan portfolio. Could you talk about your own multifamily portfolio and some of the trends you are seeing there?

Well, we are very, and I rarely use words like very. We are very confident in our multifamily residential portfolio. We did some stress testing to it. And all the residential multifamily loans came out very well. Their all done based on current cash flows. We don't have any issues thus far popping up in the multifamily. In terms of our watch list, in terms of past due loans, we're not seeing any issues thus far popping up in multifamily arena.

Thanks Joe.

Thank you Lana.

Our next question comes from the line of Amanda Larson with Raymond James.

I wanted to know why commissions were down so much in the quarter.

Sure, Amanda. Some of it was due to decrease in the funds we had, balances that went from $1.66 down to $1.5 billion, but the bigger reason for the decrease in the commissions was just that the fund companies had to significantly reduce the payout for us and in some cases even eliminate it. There are some funds that we were earning 50, or more than 50 base points on that, that were literally reduced to zero, so that they could maintain a positive yield on those funds. Especially the government in treasury funds, the yields are in the base to single digit basis points. So without cutting our fees they wouldn't be able to maintain a positive yield. That's really the reason for the commission offset. The good news there is that with increasing rates we do have some positions in our securities portfolio where we've had some nice gains. We were able to offset some of the pressures and commissions by taking some gains in the securities portfolio.

So are you assuming they will continue to be pressured.

As long as we are in the low interest rate environment, yes.

Okay. Also what was other core 2009 interest income comprised of? Why was that up?

It was mostly due, we put on some credit default swaps and corporate bonds that we have, so those CDS's moved in a positive direction for us. So that was what made up most of that other line item.

Okay, and then on the commercial real estate multifamily side, I wanted to know what kind of spread you are seeing, and if cap rates are continuing to go up on those.

Cap rates are certainly continuing to go up. Depends on the type of CRE credit. I think we are getting yields on those anywhere from the mid fives to the mid sixes.

That's all, thanks so much.

Thank you.

Thank you, our next question comes from the line of Andy Staff with B. Riley & Company.

Good morning. What do you see going forward regarding deposit growth?

Very good question. The reason why I say very good question because as Eric said earlier he used the word visibility. It's hard to judge, I will tell you why. We have strong core deposit growth. In the past we would be able to judge of that deposit growth, what truly was sticking. With this deposit growth some of it is, the majority of it is pure deposit growth and it's staying. But some of it could be deposits that moved from off balance sheet or from treasuries to on balance sheet. Some of it could be because clients are staying on the sidelines and waiting to see what is going to happen before they deploy the funds. So it's very hard for us. That visibility is not there. It's not clear for us if we grow a $0.5 billion in the quarter or $0.25 billion of deposits in the quarter, how to divide that up between 80% that's sticking, 90% that's sticking because the excess is waiting to be deployed. So I'm sorry I can't give you an idea now because we are not seeing about the growth either.

Okay. Thank you. That's all my other questions have been answered.

Thank you.

Thank you, our next question comes from the line of Avi Barak with Sandler O'Neil.

Hey guys, I just had a quick question, trying to get my arms around the $10.2 million deemed dividend, not the separate $2 million regularly scheduled. I know that TARP is still a pretty fluid situation with the Treasury and everyone. But just trying to come up with how you get your carrying value for the warrants and if the $10.2 million could be reversed in future quarters either in part or in its entirety and how the process works now with repurchasing the warrants from the Treasury.

Well, you know, let's first look at this preimposed TARP. If you look at our capital pre the TARP, and then you look at our capital after TARP. That $10.2 million had absolutely no affect on our net capital position. It's strictly an up and down between our additional paid in capital line item which went up by $10.2 million, and our retained earnings which went down by $10.2 million. So it's strictly just an accounting entry, it's based on SEC guidance, it's not even GAAP, it's SEC guidance, and it had no affect on the capital, it is totally non-cash. Certainly we are in discussions with the Treasury to see if they will just let the warrants go, obviously the rules change significantly related to TARP. If that happens I would expect we reverse the entry. Right now we notified the Treasury ultimately that we are not going to repurchase the warrants. For us, we are in a position of growth, we don't see how it makes any sense to utilize capital to purchase warrants that were issued at practically two times book value. Remember the exercise price on these is north of $30, $30.21, so we will be happy to take capital at $30.21, especially in this environment. That's really where it is, but it's a non-cash entry. And we will see if the Treasury does anything about letting us go of any of these warrants.

So just the way to think about it we are going to wait and see depending on how the Treasury wants to deal with the warrants.

You are looking at the worse case scenario right now. We taken the $10.2 million deemed dividend through net income available common, so the only thing positive, the only thing that could come out is something that's positive in that we could see some or all of that being reversed. But really to us, we are more focused on capital and what affect it had on the capital and it had no effect on our capital.

Okay. Fair enough.

Avi, we really look at it that we earn $0.36 after the dividend and this is purely non-cash accounting.

I came up with the same $0.36 number. I'm just asking because it seems like now all the banks that are returning TARP are trying to figure out how to value these warrants and ultimately are they going to just go away for nothing or is the Treasury going to demand some kind of premium for them. Separately, just a quick question on the increase in non-performers you mentioned the condo, just wondering geographically where that was located.

In Queens.

Okay. That's all my questions, thank you.

Thanks.

And our next question comes from the line of David Darst with FTN Equity Capital.

Morning. Can you give us the average loan to value real estate portfolio.

Right now we are doing - it's probably around 60% to 65%.

Okay. How much deterioration have you seen in re-appraisals from items that come in to the watch books?

We haven't really seen any commercial real estate on the watch list, David. Remember the vast majority of the commercial real estate loans that we originated were in 2008. Where we saw the environment and where the economy was going. I think it would take some time before those get to a watch list state. If ever.

Were those you will underwritten to the 60% to 65% range or were some lower.

Somewhere at the 75%, we didn't go north of 75%.

Okay. Then, your gain on sale from the SBA loans, looks you were able to clean out that -- held for sale bucket this quarter. How did that demand look? Will we see a much lower run rate for sale this year?

That market was pretty frozen in the fourth quarter. Thankfully, it's eased up and starting to loosen up and get more activity there. I would expect we would be at similar levels to the earlier part of last year I would say, David .

Okay. Thank you.

David since you asked that question it allows me to interject something as I'm listening to the question. In our gains on sale, I know that many of you out there listening to the call like to subtract that from operating income. But one of the things you have to realize in this interest rate environment, when our commission income is down because the off balance sheet money market accounts are paying one to five basis points, particularly the treasury funds, and therefore as Eric pointed out our commission income is down because our trails or our commissions are cut drastically, it's this environment that gives the opportunity for our treasury group to act very prudently and take advantage of the situation and have gains on sales. So if the interest rate environment goes up, then sure we will not have those gains but that reduction in the gains will be more than offset by the increases we will have in commissions. I wanted to point out because I know many of you like to deduct the gains on sale related to our AFS portfolio. When in fact we don't believe that's the way to look at it. I thought I would get my two cents in there. Thank you.

Thank you our next question comes from the line of Steven Russell with Emerald Advisors. Go ahead please.

Good morning. Could you just give us a number for your 30 to 89 days delinquent and what you did in renegotiated loans this quarter.

Yes, the 30 to 89 delinquent bucket is $20 million, down from $32 million in the prior quarter. We had no trouble debt restructurings this quarter.

Okay. Thank you.

Thank you, our next question comes from the line of [Walker Forehand] with [Hogue Capital Advisors].

Good morning. My question was just answered the previous gentlemen, thank you, though.

Our next question comes from the line of Peyton Green with Sterne, Agee.

Question about the bond portfolio. Just wondering Eric, if you can address what kind of cash flow you expect to get off the portfolio this year and what kind of roll off yield you will have.

We've seen our cash flows on the portfolio strengthen and we've kept it very short so we are getting about $70 million in cash flow per month. That portfolio used to be in the $50 million to $60 million range. And reinvestments in, I would say the mid fours.

Okay. What kind of roll off yield are you losing?

Probably in the low five's. Low fives to upper four's.

Okay, are you seeing the cash flow on the private label CMO's pick up as well?

Yes, we definitely are.

Okay. Great. Any idea how much you saw in the first quarter?

It was about 5% of that portfolio in the first quarter, Peyton. It was pretty strong.

That's great. Okay. Thank you very much.

Thank you Peyton.

And our next question comes from the line of Bill Roy with JM Partners, go ahead please.

If you can give me the REO breakout for the last two quarters.

We have no REO. Other real estate owned, we have no other real estate owned.

Okay. Thanks.

Thank you, we have no more audio questions, I would like the turn the conference back over the management for any closing statements.

Thank you for joining us today. We appreciate your interest in Signature Bank. As always, we look forward to keeping you apprised of our developments thank you.

Ladies and gentlemen this concludes the Signature Bank's 2009 first quarter results conference call. A replay of today's discussion may be accessed via the web site, www.signatureny.com.