Signature Bank at Barclays Global Financial Services Conference
Sep 12, 2018 PM UTC
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SBNY - Signature Bank
Signature Bank at Barclays Global Financial Services Conference
Sep 12, 2018 / 01:00PM GMT
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Corporate Participants
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* Eric Raymond Howell
Signature Bank - EVP of Corporate & Business Development
* Joseph John DePaolo
Signature Bank - Co-Founder, President, CEO & Director
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Conference Call Participants
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* Matthew John Keating
Barclays Bank PLC, Research Division - Director & Senior Analyst
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Presentation
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [1]
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All right, well, good morning, and thanks for coming to this morning's session. My name is Matt Keating, and I cover the mid-cap banks for Barclays. We're very pleased that Signature Bank is returning to this conference once again. As most of you know, Signature has been pretty busy over the last year since it last presented at our September Global Financial Services Conference. It has established the full-service banking presence on the West Coast. It's instituted a quarterly dividend, and it's announced a board-authorized share repurchase program. With us for this fireside chat are Joseph DePaolo, Signature's President and CEO; and Eric Howell, EVP of Corporate and Business Development. Also in attendance from the company is Samantha Martinelli from Investor Relations.
So with that, we're going to kick off the fireside chat portion of this presentation. And you don't need to bring up the slides actually -- I'm sorry, this (inaudible). So we'll kick off maybe with Signature. It often drives a helpful inter-quarter update on recent trends, whether that might be loan growth or deposit growth or maybe potential hiring activity. And so Joe and Eric, I would like to turn the floor over to you just to see if there are any helpful updates for the audience.
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [2]
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Thank you, Matt, and good morning, everyone, and thank you for being here. I'll give you an update. We had a press release recently, where we announced that we've hired 2 new teams on the West Coast. We also have hired a number of teams here in New York that we have not yet sent a press release on. So by next Monday, we'll have hired for this year 8 teams, 2 in San Francisco, which gives us a total of 3, because we had 1 last year. And 6 new teams so far this year here in New York. Eric's been very busy. We have -- as part of these 6 teams, they primarily are C&I and deposit gatherers. We're very excited about these teams. It's an interesting mix of people and from an interesting -- interesting places that we haven't maybe hired from before. We'll be giving out information about the teams in press releases within the upcoming week or weeks.
So those of you who always wonder 3 to 5, 3 to 5, we said we would hire as many as we can when we find the right teams. And we may not be finished yet, although it's late in the year, we could have another 1 or 2 come on board, depending upon a number of circumstances. So that's fairly new, the 8 teams.
On deposits, we always get ourselves in trouble when we give a point in time. So I'll tell you this, for the third quarter, thus far, we are averaging deposit growth of over $1 billion. It's a little bit more than $1.1 billion -- between $1.1 billion and $1.2 billion, on average, through yesterday. Again, I won't give you a point in time because there's large fluctuations on a daily basis sometimes. But to know that the average through September 11 is over $1 billion is a good thing.
On the loan side, we're actually doing very well. We -- one of the teams that we brought on, a new team, is from Silicon Valley Bank. And it's a team here in New York, headed by the person who was in charge of funds?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [3]
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The funds division.
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [4]
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The funds division. He joined us. He was in charge of the funds division for all the U.S., actually for all the world for Silicon Valley Bank. He's heading up a 7-member team. What they really do is subscription lines or capital call lines, very, very secure, safe lines of credit. And -- so that's C&I. They're all floating. And we'll also have a large deposit opportunities as well. So that will slowly help to transform the balance sheet with less fixed than more floating. That's the idea on bringing on this very large and well-respected team.
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Questions and Answers
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [1]
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That's very helpful. And this capital call line business, is it more skewed towards private equity or venture capital? What do you say?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [2]
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Private equity.
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [3]
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It's all private equity.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [4]
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All private equity. Great. It's a very helpful update. And maybe shifting gears from hiring activity and balance sheet trends intra-quarter. Maybe we could talk about the interest rate backdrop and the company's net interest margin's expectations. So last quarter, the bank did guide to ongoing compression in the second half of this year somewhere in the neighborhood of 3 to 6 basis points. However, the high end of that guidance assume that deposit growth didn't come back in any significant degree. It sounds like deposits in the quarter are trending fairly healthily, knock wood. With that, in mind, given what we've seen in the interest rate backdrop, how is the company feeling about that net interest margin guidance range for the back half of the year?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [5]
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I think we've got to reiterate that guidance, really, Matt. Deposit pressures have been pretty strong still. So -- and we had quite a bit of follow-through from the rate hike in June into this quarter. So we're sticking with the 3 to 6. Hopefully, we'll be at the midpoint of that range and at the high end of that range, but we should certainly still be within that range. The fed hike at the end of September should be helpful. Believe it or not, because it's a couple of weeks later than it was in the prior quarter, but then, obviously, that'll lead to further pressure in the fourth quarter. We think 3 to 6 for the next couple of quarters. What's helping us out is we're starting to really see the asset side of the balance sheet catch up, and our loan repricing has definitely started to flow through. It takes a while, especially in the commercial real estate arena to really see the uptick in REITs work their way through. It's good 90 to 120 days to work through the pipeline in that space. So we've really started to see the 4.375, 4.5 and 4.75 handles hit there. So that's helping. So that continued uptick on the asset side should start to offset the liability pressures. And that's why, I think, next year, we will see a little bit less pressures.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [6]
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Great. I mentioned at the onset, one of the bigger changes at Signature over the past year has been its views or thinking around capital return. So maybe we can just talk about the motivations or the emphasis behind announcing the inaugural quarterly dividend last quarter, and more recently, receiving the board's authorization for a share repurchase program. So how's the bank for -- what has historically been very much a growth organization, how are we transitioning now towards a more balanced perspective, I guess, maybe between growth and returning capital to shareholders?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [7]
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Well, it's a situation where, because of the changes in taxes, our effective tax rate drops significantly. And that growth in capital would support an $8 billion growth in assets on a quarterly basis. And we just feel that 3 to 5 is where we want to be and where it makes sense to be. And if you grow your earnings or your capital the way you can support an $8 billion growth and you have that for a couple of quarters, you're going to be well over-capitalized. So it made sense to give some back.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [8]
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And I guess, how should investors should think about the board's $500 million share repurchase authorization? Is that a multiyear plan? Or is that something that the bank would like to achieve in the near term? If you can just maybe comment on that. I know this shareholder vote is still pending on that. But if you could just talk about the expectation there?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [9]
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Well, we'd like it to really never be executed, Matt, right? The goal, first, is to grow, right? If you have an opportunity to bring on a core deposit, that's truly how you build value in a banking franchise, and that's going to be our first goal. But we will use it selectively, especially when we see opportunities like now where we think our stock is significantly undervalued, where we see, let's say, articles come out from certain publications that just don't make sense and aren't true. And we see our stock price being significantly impacted, we'll utilize it. But we want to maintain robust levels of capital. That's core to our franchise into what we do, right? We want to bring on core deposit clients. They want to know that you have a strong capital base. That's not going to change. But we do have a very robust level of earnings. Our growth is -- it's very supportive to our growth. So we have to couple that with the capital levels, with our commercial real estate concentrations and where the stock price is. So we'll use it selectively over the years when the time is right.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [10]
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I mean, in the past, Signature has been highly focused on what its customers and its depositors think of its capital ratios. And so since you have made these changes or these capital actions, has the bank received any pushback from its larger clients around these changes?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [11]
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Not at all. They know that we'll be selective in buying back. They know that with taxi medallions behind us, our credit metrics are -- ex the taxi medallion are astonishingly great. We have very little in terms of past dues and nonaccruals. And that we will keep capital at a level that they'll be comfortable with. They also recognize some of the larger clients that some of these things were necessary to do. And I would say, overall, we've actually hadn't had any pushback.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [12]
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All right. And maybe switching gears a bit to expenses. Given the recent regulatory changes in the broader banking backdrop, the company's recently forecasted sort of high towards -- pointed towards high single-digit expense growth, both this year and, more importantly, into next year. Maybe you can just comment on where some of those savings are coming from and -- not that it's any different from your past expectations, but, in general, how the company's thinking about it, its expense trajectory. Given its size now, it's $45 billion. Any other infrastructure investments that might be needed?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [13]
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One thing I'll say is, we'll never worry about the expense growth if it comes to hiring teams. I want to get that point out that if we have an opportunity to bring on 15 teams, and that means the expense is going to be double-digit instead of single digit, we'll do that. That's revenue-generating expense, as we like to call it. The single digit takes into account all the improvements that we're making. We just did a major conversion on one of our loan systems. We're doing another conversion on the front-end of the loan system. That -- we just did that and completed one in August. We're going to complete another one before the end of the year. And then we have, in this first quarter, a foreign exchange system being upgraded. All those things are taken into account for the single-digit expense. It also -- we have some opportunity to save some expense with the loan system that we put in, but not to the extent that it would move the needle. It's just that the increase in that expense is going to be a lot less than it would have been if we hadn't made any changes because of all the manual processes we had to do.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [14]
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All right. Maybe going back to the team hiring. So earlier this year, the team brought on a team in New York that has considerable expertise in banking companies that operate in a digital currency space and are very familiar with the Blockchain. More recently, digital currencies in general, have been quite volatile and declining a fair amount this year. I'm just wondering if you can talk about the performance of this group, maybe from a deposit perspective, and how the bank views their opportunity, given the changes we've seen in the digital currency landscape.
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [15]
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The opportunities are massive. But you have to understand that we are not taking on clients that do retail business. We take on clients that do institutional business because if they want to keep their dollars. Institutions, they're doing large dollar transactions, they want to keep their money in a bank that has a safe balance sheet. And that's us. We also have what we call the cold wallet, which is the dollars that are not moving on a daily basis. So we're not interested in the mass-market retail because you have to see significant amount of due diligence and know your client and the bank secrecy act. And the only way you could do that, we believe, right now, is by having institutional clients and spending time doing the due diligence there. We primarily are handling things on the -- in the United States and not foreign. The team has been very successful, very successful. But as successful they've been, we've turned down more business than we've brought in because you have to know the players that you're dealing with. And one of the things that intrigued us about hiring this team is that they've been doing it for a number of years, and they know the players, they know the type of transactions that we are interested in and what we're not interested in. I dare say that we could have another $1 billion or $2 billion in deposits that we turned down. That's how successful they have been.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [16]
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Can you comment on the size of their deposit contribution to-date?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [17]
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I could but I won't.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [18]
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That's fair.
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [19]
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I will say this, Chase is spending billions. Bank of America has the most patents. Everyone's looking at Blockchain technology. It's going to allow clients to transact 365 days a year, almost instantaneous. And from an audit standpoint and risk standpoint, you can actually look at the transactions instantaneously. If there is something that you think is unusual, you can look at it. I think that -- and use the correct word, digital, because crypto seems to have this negative connotation. We're not interested in fly-by-night opportunities, we're interested in the long term . And if you don't get involved in Blockchain technology, I said this on the earnings call, 5 years from now, you may not exist as an institution.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [20]
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All right. And maybe we can also talk about the teams that have been hired in the West Coast so far. They've not been -- I mean, it's still early days in that initiative. But how is the bank thinking about the size of the West Coast operations over the next several years? Is it something that can become a meaningful part of the overall operations, 20% of revenues over time? How do you think about it?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [21]
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I mean, we think it's surely going to be additive, right? And we think there's a real opportunity on the West Coast. And if you look at the markets of San Francisco and Los Angeles, they're certainly the most akin to New York where there's a lot of privately held business owners there. And that's what we cater to best. So we're very happy with 2 teams that we've hired there. Thus far, they've build up some strong pipelines that we're looking to close on their loans and the transactions now. One came out of Wells Fargo, another came out of Union Bank, both with over 30 years of banking experience. So very experienced veteran bankers to spirit our efforts out there. But look, Mathew, if we can grow $200 million to $300 million in deposits per year out there and have $1 billion to $2 billion franchise looking at 3 to 5 years from now in San Francisco and then do the same thing in LA, that would certainly be beneficial to the overall franchise.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [22]
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And Eric, on the deposit environment, on the West Coast, is this still a bit less intense than what you're seeing in the New York area at this point?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [23]
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Thus far, what we've seen, it's significantly less intense. I mean, we've talked to probably 10 teams from 10 different institutions recently. Almost every team said the same that they all set 30 basis points for deposits. And 30 basis points for deposits is a lot cheaper than what we're paying in New York. So we think there's definitely going to be a beta there that we can take advantage of.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [24]
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All right. At this point, I'd like to bring up some of the audience response questions. So we're going to allow the audience some time to share some of their views on the banks. So if you could please bring up the first question, that would be appreciated.
My first question from the audience here and you'll see the clickers at your desk there, is, over the next year, how do you expect Signature stock to perform relative to the sector, one, outperform; two, in line; or three, underperform. And we'll take 10 seconds to vote.
(Voting)
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [25]
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And the results are in, and they show that, basically a 52% of the audience or half of the group here believes the stock will outperform over the next year, 28% saying in line and the remainder, underperform.
We'll go to the next question, please. This is question for the audience. Do you expect Signature to engage in M&A in the near term? Choice 1 is, yes, as an acquirer; Choice 2 is, yes, as a seller; or Choice 3 is, no. And we'll take 10 seconds to vote.
(Voting)
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [26]
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And the results here show that 70 -- as expected, given a company that really hasn't made any acquisitions in their corporate history, 71% of the audience says, no, they won't be active in M&A in the near term, about 14% think they could be an acquirer or a seller, potentially. So we'll move to the next question.
So which of the following developments of Signature is most positive in your view? One, its inauguration of the quarterly dividend; two, its announced $5 million share repurchase plan; three, its recent West Coast expansion; four, more moderate expense growth following regulatory relief; or five, funding to get past the taxi medallion troubles? And we'll take a few seconds to vote.
(Voting)
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [27]
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Okay. And the results here show that audience is pretty positive on the West Coast expansion at 44%, believing that's the most significantly positive development. And that's followed by the share buyback authorization at 22% of the group. And maybe I'll ask Joe, for your comments, like, what do you think is the biggest opportunity at the bank over the last several months that you've seen? Do you agree that West Coast expansion is getting most of your focus? Or are you focused more on kind of the core New York business at this point?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [28]
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I would say, in part, the West Coast expansion. But in fairness, not everybody here knew of all the new teams that we've hired, which is equally as exciting.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [29]
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Helpful. All right, so that was very helpful audience participation, so thank you for that. I'd like to switch gears for a moment, and Eric, you mentioned that at certain times, the press has, more recently, a tendency towards expressing fake news, if you want to call it that, and Signature was in the headlines around that. One publication labeled Signature as the bank in Trump's inner circle. And so -- I know that the bank posted a pretty strongly worded rebuke around that article. But if you can talk about -- do you think that most investors now that you've been speaking with understand the inaccuracies in that type of portrayal at the institution? And just any comments there would be helpful. So either Joe or Eric?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [30]
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We work too hard, and our colleagues at the bank work too hard to spend time talking about something that we had no control over. So I'd rather just say that -- I'd rather not spend the time talking about that. I'd rather spend time talking about what we've been accomplishing and what we have yet to accomplish. I recommend that everybody read the 3-page response that we had. And we leave it up to you to decide who's right and who's wrong.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [31]
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Makes sense. At this point, I'd like to open the room for some audience questions. Question at the front here, please.
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Unidentified Analyst, [32]
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You've been more active with business development team hiring, showing a greater sense of urgency and trying to grow and reshape the asset side. What is the main governor on moving even faster and expanding in the West Coast or hiring more teams in C&I? Is it people, is it integrating the culture, is it expenses, like, what is it? Why can't you move faster?
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [33]
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It's a little bit -- it's not expenses, right? Because, as Joe said, if we could hire 20 teams, we would hire them if they are good, high-quality teams. It's hard to find a quality banking team with a truly solid book of business, all right? So it takes us a lot of time calling through all those teams, really getting -- digging into their book of business and making sure that they can truly move that book of business. So -- but it's certainly not the latter part of that question, Mark. It's -- the expense is not the issue. But it takes a lot of management, time and attention. And we don't like to make mistakes, all right? We want teams that truly are sound and have a strong book of business to know when they come at Signature Bank, they're going to be successful and they're going to make a lot of money, all right? So we want to really retain that reputation as being the best bank for these experienced bankers. That's really what takes a lot of time. We'll probably -- we'll look at 10 teams for every team that we hire. And it can be a pretty exhausting process. I think that's the biggest governor.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [34]
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I believe there is another question, I think, in the front here.
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Unidentified Analyst, [35]
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I know you said that the taxi medallion issues here are behind you. But there's still a fair amount of loans to the taxi medallion. Can you update us on that? And are there any surprises, like, a big charge ahead of you? Or do you think you're totally working it down, trying to get rid of the rest of the loans? Or how do you see it now?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [36]
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We are selling -- we had 40 sales so far this quarter with another 40 in the pipeline. We're selling at an amount higher than what we have on the books, though each transaction is a small to intermediate recovery. What we have, the medallion has written down to, I believe, is less than what our competitors have it written down to. And we've been slowly reducing the balances because of the sales. Let me give you an example. Somebody owes us $500,000 and they legally owe us the obligation of $500,000. We've written it down to $150,000. They come or we go to them and say, you can have your loan 100% paid off by giving us $220,000, let's say. They come up with the $220,000, we get a recovery, they get $500,000 absolved, which we took care of few quarters ago. And essentially, that's what we're doing. But it takes time because we're not going to sell at a fireside -- a fire sale amount.
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Eric Raymond Howell, Signature Bank - EVP of Corporate & Business Development [37]
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And we've also gone to many of our borrowers and restructured the loans in such a way that we feel that they're comfortable and back on their feet and earning a good living again and that they'll be able to continue to repay us. So we're seeing clients just pay couple of thousand dollars a month, month after month, and that's allowing us to knock down the average balances as well. So between the cash flows they're receiving on the loans and we refinance, which is a significant portion of portfolio now. And then the ones that we're selling, we're really, as Joe said, knocking down that balance every single quarter. So we feel pretty comfortable where it is today. But we did -- we learned our lesson few quarters ago, right? We're not going to say it's fully over, it's definitely behind us. But it's certainly at a level where at this point, it should really be meaningless going forward. And what's important -- what's most important to us into our core franchise is that we've worked through this and really restructured Signature Financial in a way that the rest of that business is back on their feet and returned towards growth. That's a key component of what we're trying to do and reshape the balance sheet and gain more asset sensitivity by growing that side for the business.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [38]
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And there's a question up here.
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Unidentified Analyst, [39]
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(inaudible)
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [40]
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So the question for those on the webcast was around the competitive environment for a commercial real estate.
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [41]
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You know, we just raised our rates again. We're probably more than a quarter higher on the multifamily. And we're okay with that because we wanted to slow down our growth in that area and pick it up with C&I that is floating rate. We don't find it as competitive when you are not looking to do a $1 billion or more a quarter, looking to do somewhere half that. We're getting our share of business. If we could do as much as -- I know this sounds somewhat crass, but, we can do as much commercial real estate as we want. The team is that good. We didn't miss a beat with George Collette. We did a terrific job putting it together and ran it for 10 years. We didn't miss a beat with the 2 gentlemen that took over for him. It's just that to slow it down, you keep your rates where they are. And we're also concentrating on clients that are in the low 3s, that have several years -- 2 years left. And as rates go up, they want to refinance, will waive the prepayment penalty and refinance it at 100 basis points more than we're earning today and try to get that on the books 2 years earlier than it normally would happen because they would wait until it matured to refinance. So we're doing a number of things. But the competitive landscape, it's interesting. Some of our competitors are keeping their rates where it doesn't make sense, where they primarily borrow, and that spread is getting thinner and thinner and thinner. While, yes, by Monday, we have this meeting, we raised our rate another 1/8 to 4.5.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [42]
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Maybe we could talk -- so you mentioned now you've hired 8 private client-banking teams this year. That probably brings the company's total to, at least, over 100, 110, whatever the number is, right? I guess, my question would be, part of Signature's model is hiring highly experienced banking teams, and unfortunately, these teams won't work forever. And so when the head of a private client banking team does decide to retire and leave the business, how do you go about transitioning and keeping that individual's book of business and continuing to grow that part of the franchise?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [43]
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Well, we have a number of ways. For every team that we have, we have a plan that if the group director retires or leaves, who takes over and how does that transition work? So in the last 2.5, 3 years, we've probably had 30 transitions. We also eliminated 3 teams, which is not something we talk about publicly, but we eliminated 3 teams that were not performing. And what we do is we take their remaining books and merge them in. So there's a number of ways it could happen. One, you have a #2 person or a copartner that when the group director retires, the copartner takes over or the #2 takes over. And that transitioning is usually over a 6- to 12-month period where if there is a client that the person taking over doesn't know, they will get to know. We don't do this with everyone. But another thing we do, and this is the flexibility as an institution that we can have that may be an institution that has 250,000 people can't do, is we ask the group director to stay on as a consultant for 2 years. And they get a portion of the payout of the bonus during that 2-year period. And it is an incentive for them. When they get a phone call from Eric, myself or their former copartner and says, I need you to come to a lunch or I need you to come to a dinner or I need you to come for breakfast or I need you to come to a golf outing or I need you to come to this meeting that they do, so it's not only do they transition for the 6 to 12 months, they then leave, but stay on for another 2 years as a consultant. And that makes the transition very smooth, and it gives them a piece of the action for a time period that they've retired. That's primarily what happens. A second way is, if there really is no #2, we just merge that team with an existing team. That's the second way. A third way is to find a group director from another team. If there's not really one we want to merge them with, we take a group director -- I'm sorry, we take a #2 person from another team and make them the group director or the #1 person. So there's 3 ways of transition. We don't announce it. We probably still only have about 100 teams because of some of the retirements we've had and merges of those teams or some of the 3 teams I mentioned that we terminated.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [44]
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I know we didn't touch pretty much on intra-quarter loan growth updates. I mean, you talked the hiring from that capital call lending team that's been hired. But has anything changed in the environment where you think that, not so much for the quarter, but out longer term that $3 billion to $5 billion annual asset growth target is still in the cards in your view, so you still feel comfortable with that?
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [45]
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Feel comfortable for 2018 and 2019.
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Matthew John Keating, Barclays Bank PLC, Research Division - Director & Senior Analyst [46]
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All right. I think we have 5 minutes left. Is there any questions from the audience, additional questions for the team?
Okay, great. Well, please join me in thanking Signature for the presentation. There will be a breakout session immediately after that. But thank you very much, Joe and Eric, for your time this morning (inaudible).
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Joseph John DePaolo, Signature Bank - Co-Founder, President, CEO & Director [47]
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Thank you, Matt.
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