Signature Bank Announces Sharp Cuts In Lending Delays As New York Economy Reopens

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About half of Signature Bank’s $ 55 billion loans are in New York City commercial real estate, from office towers and apartment buildings to family retailers.

“It will obviously take some time to get back to pre-pandemic level of activity,” CEO Joseph DePaolo said during a conference call on Tuesday. “But it is gratifying to see the revival return to this great city.”

The bank’s data shows that loans that paid interest but not principal rose $ 200 million in the second quarter to $ 3.8 billion. The spokeswoman said the increase was due to the fact that deferred loans moved to “modified” status after the resumption of interest payments.

An improved urban economy helped the bank nearly double its second-quarter net income to $ 215 million. The total volume of loans increased by 7% – an astonishing achievement with many lenders reporting little to no credit growth. The bank’s shares, which have surged twice as fast as their peers over the past 12 months, are up 6% today.

However, signatures and other lenders may not be able to tolerate distressed borrowers any longer. In June, President Joe Biden extended the federal moratorium on foreclosures only until July 31st.

“It’s hard to imagine how he could expand it given the recent employment data,” said Myra Rodriguez Valladares, managing director of MRV Associates, a financial consulting firm. “The lifting of the moratorium can indeed lead to an increase in the insolvency of banks.”

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