DISTINCTLY DIFFERENT Message from the President Strategic Planning Financial Highlights A Color-Coordinated Team Google Reviews
Message from the President Welcome new shareholders and my best regards to all shareholders. It has been with your continued support that I am fortunate enough to be presenting our 2018 Annual Report. In a slightly different format than in previous years, I hope you will find it informative and value added. I would like to begin by guiding you through some of the highlights from 2018. The Bank successfully completed a capital raise in June of $9.5 million. The new capital gives the Bank the necessary resources to support our growth initiatives planned for 2019 and beyond (assets size and human capital). Post capital raise, the regulators terminated all regulatory orders and the Bank is now listed on the OTC - Pink Open Markets exchange under the ticker of SGBG. During 2018, progress continued on the disposition of legacy non-performing assets; loan loss provision was increased to support on-going growth; investments in technology and the client experience (renovation of Sandy Springs financial center, now the Client Engagement Center) continued along with the hiring of new loan production personnel and additional risk management personnel to effectively manage credit and operational risk. The Bank also opened its new Loan Production Office in Gwinnett County, a market targeted as a growth area. Year-end audited financial statements with more details can be accessed via this link FINANCIALS. A comprehensive strategic plan developed near the end of last year provides bank management and the Board of Directors a well thought out roadmap, critical to helping Signature Bank s success as we move forward. This plan includes the pursuit of new clients and the deepening of existing client relations, continued enhancement of our digital presence, and attention on driving growth through the deployment of experienced Relationship Bankers, while leveraging your capital investment through operational efficiencies, reducing expenses whenever possible, and providing a 5-star client experience. Not to be left unsaid, all growth will be high quality loans and deposits. Risks will be managed with best in class risk mitigation practices. Entering 2019, we are well positioned to capitalize on the market disruptions occurring in our industry and in our targeted area. A recent key transaction between SunTrust and BB&T represents the last of the large banks headquartered in Atlanta. Great timing! Targeted tactical strategies have been developed to capitalize on these opportunities and our position as one of the few remaining locally-owned and operated banks in Metro Atlanta. More information can be found on our updated Investor page via this link INVESTOR RELATIONS. On behalf of the Board of Directors, management and all team members dedicated to accomplishing our goals and growth, we look to an exciting 2019. We pledge our unwavering commitment to creating a worthy investment for YOU, our shareholders. PAGE 2 SIGN UP TO RECEIVE WEBSITE ALERTS
Strategic Planning Strategic meetings were held during 4th quarter of 2018 to develop the Bank s strategic initiatives, goals and growth strategy. Following is an excerpt from the 2019 Strategic Plan: 1. Market Products & Services (Client Perspective) Marketing involves drawing attention to the Bank with relevant products and services while building brand trust. The goal is to maximize sales potential by generating quality leads across all product lines. 2. New Business Acquisition (People and Culture) There must be a culture in place where employees are continuously trained, recognized, coached and held accountable for helping to obtain new business acquisitions. 3. Offensive Support (Proactive Internal Capabilities) The sales team needs support from the entire organization to ensure the closing process is a distinctly different experience which will lead to deeper relationships and client referrals. 4. Deliver Product (Client) Once the client owns the product/service, they need to access it. The Bank will continuously work to provide an optimal experience for both physical and electronic delivery channels. 5. Service Product (People and Culture) A strong service culture will lead to a competitive advantage. In order to exceed client service expectations, the Bank must excel in providing staff training, internal communication and coaching. 6. Maintain Security (Internal Capabilities) The Bank will continue to be a safe and secure institution with which to do business by continually monitoring and adapting policies across all areas of risk, including credit, liquidity, cybersecurity and more. 7. Deepen Relationships (Client) Existing clients are the Bank s best source of new revenue. For the Bank to succeed in its mission to help clients prosper, the team must maximize their engagement with the clients. 8. Develop Staff (People and Culture) Engagement involves two parties, the client and staff. If we want our clients to stay engaged, we must also strive to keep the staff engaged. 9. Grow Bank (Internal) To grow in today s financial market, we must continue to innovate. The best ideas will come from within as we foster a growth mindset for the Bank. 10. Opportunistic Outlook (People and Culture) Seek opportunities to capitalize on physical market expansion and attracting experienced banking professionals who are complimentary to our growth objectives. PAGE 3
Below are highlights from the 2018 results. Capital ratios remain very strong and wellpositioned to support the growth for 2019 and beyond. (000 s omitted) Financial Highlights & Key Ratios As of December 31, 2018 Total Loans & Leases $61,291 Liquidity Ratio 50.12% Total Assets $119,660 Yield - Total Investment Securities (Book) 2.42% OREO $2,971 Yield on Earning Assets 4.09% Total Deposits $99,486 Cost of Funding Earning Assets 0.41% Total Equity Capital $17,338 Net Interest Margin 3.68% Asset Growth Rate 7.68% Interest Rate Spread 3.39% Deposit Growth Rate 2.37% Noninterest Income to Assets 0.24% Core Deposits Growth Rate 5.68% Noninterest Expense to Assets 4.75% Return on Assets (ROA) -1.18% Leverage Ratio (Core Capital) 15.88% Return on Equity (ROE) -8.73% Total Risk-Based Capital Ratio 27.99% Total Interest Income $4,109 Texas Ratio 36.06% Total Interest Expense $412 Loss Allowance to Loans 1.11% Total Noninterest Income $255 Total Noninterest Expense $5,089 Below are selected financial projections from the 2019 Strategic Plan. Total Assets are expected to grow by approximately 8% and the Bank is projected to make a net income of $411K. Projected Balance Sheet as of 12.31.19 Cash, Due From and Fed Funds Sold $1,589 Investments $29,940 TOTAL LOANS $94,212 Allowance for Loan Loss ($941) Net Loans $93,271 Fixed Assets, Net $615 OREO $2,986 Other Assets $596 TOTAL ASSETS $128,997 TOTAL DEPOSITS $109,270 Borrowings $1,250 Other Liabilities $327 TOTAL LIABILITIES $110,847 TOTAL CAPITAL $18,150 TOTAL LIABILITIES & CAPITAL $128,997 Projected Income Statement as of 12.31.19 TOTAL INTEREST INCOME $5,432 TOTAL INTEREST EXPENSE $442 Non Interest Income After Provision $4,705 Other Income $600 Sale on SBA Loans $783 Operating Expense Subtotal $5,677 NET INCOME $411 The information provided in this Annual Report includes certain statements, estimates and projections with respect to the Bank s anticipated future performance. Such statements, estimates and projections reflect significant assumptions and subjective judgments by Bank management concerning anticipated results. These assumptions and judgments are believed by management to be reasonable but may or may not prove to be correct and there can be no assurance that any projected results are attainable or will be realized. Industry experts may disagree with these assumptions, judgments or management s view of the market and prospects for the Bank. PAGE 4
A Color-Coordinated Team As referenced in the Message from the President, the organization s success is dependent upon well-performing human capital. In this regard, the Bank utilizes a personality assessment tool as we look to add new team members called the Color Code. All Signature Bank team members completed the personality assessment to determine their primary color code. The organization utilizes this information to create a top-performing team that capitalizes on their strengths and overcomes their limitations as identified from the color code assessment results. Color Code analyzes our Team s driving Core Motives. In other words, the Color Code helps us to understand why we do what we do versus simply what we do. We can t possibly begin to understand ourselves if we don t know what motivates us. So why is this important to you, as a shareholder? Because at the end of the day, it s the Signature Team which drives results, creates the growth and returns value to your investment. A collaborative team with a unified focus creates a more productive and efficient environment, thereby strengthening our value proposition and distinctly different service pledge. Signature Bank s Team Make Up RED: Power, Decisive, Assertive, Determined, Leader, Focused BLUE: Relationships, Compassionate, Loyal, Analytical, Intuitive, Dependable WHITE: Peace, Balanced, Objective, Even-Tempered, Voice of Reason, Inventive YELLOW: Fun, Persuasive, Insightful, Flexible, Charismatic, Trusting Reviews In late 2018, Signature established a client feedback program to consistently gather client feedback. A campaign will launch designed to: 1) Gather feedback by utilizing one consistent methodology - NPS (Net Promoter Score), a widely recognized quality of service measurement 2) Monitor our client experience across each delivery channel 3) Improve our digital rankings (SEO) using services such as Google 4) Communicate our distinctly different service delivery As of the publication of this Annual Report, Signature is maintaining a 4.9 Google Review rating. Promote your investment among the internet community, please rate us with comments by clicking on the link below and follow through to post your review to Google. CLIENT FEEDBACK PAGE 5
DISTINCTLY DIFFERENT Signature Bank of Georgia 6065 Roswell Road, Suite 110 & 600 Sandy Springs, GA 30328 404.256.7700 Loan Production Office 1186 Satellite Boulevard, Suite 100 Suwanee, GA 30024 404.303.3200