Jun 4, 2008
Executives
Joseph J. DePaolo - President and Chief Executive Officer Eric R.
Howell - Chief Financial Officer Susan Lewis – Investor Relations
Analysts
Dave Rochester – Friedman, Billings, Ramsey Gary Townsend – Hill-Townsend Capital Tom Alonso – Fox-Pit Kelton Lana Chan – BMO Capital Markets Justin Mauer – Lord Abbett Avi Barak – Sandler O’Neill [Pali Sunk] – JP Morgan Alpur Sungur – Sidoti & Company Michael Cohen – Sinova
Operator
(Operator Instructions) Welcome to Signature Bank’s 2008 First Quarter Results Conference Call. Our hosts today will be Joseph J.
DePaolo, President and Chief Executive Officer and Eric R. Howell, Chief Financial Officer of Signature Bank.
I would now like to turn the conference over to Joseph J. DePaolo.
Joseph J. DePaolo
Thank you for joining us today for the Signature Bank 2008 First Quarter Results Conference Call. Before I begin my formal remarks Susan Lewis will read the forward looking disclaimer.
Susan Lewis
This conference call and all 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 are 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, new private client team hires, new office openings and business strategy.
These statements often include words such as may, believe, expect, anticipate, intend, plan, estimate, or other similar expressions. As you consider forward looking statements you should understand that these statements are not guarantees of performance or 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, prevailing economic conditions, two, changes in interest rates, loan demand, real estate values, 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, the level of defaults, losses in prepayments on loans made by us whether held in portfolio or sold in the whole loan secondary markets which can materially affect charge off levels and required credit loss reserve levels. Four, competition for qualified personnel and desirable office locations.
Additional risks are described in 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 have a misact 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 statement made in this conference call or elsewhere might not reflect actual results. Now I’d like to turn the call back to Joe.
Joseph J. DePaolo
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.
The results again reveal that the foundation on which Signature Bank is built remains strong and well positioned for growth. We continue to execute resulting in another quarter of improved financial performance.
During the first quarter we showed increases in core deposits which grew $125 million, loans which were up $194 million nearly 10%, net interest margin which expanded 24 basis points, earnings despite the increase in the provision rose 6% and teams where we added two teams and we’re at 54 in total at quarter end. First let’s look at the positive results.
Deposits increased $76 million totaling $4.59 billion at the end of the first quarter. This includes core deposit growth of $125 million and a decrease of $49 million in short term escrow deposits which as expected were released during the quarter.
At quarter end, short term escrow deposits totaled $97 million. Deposits for the last year increased $621 million or 16% and more importantly average total deposits increased $859 million over the past year to $4.54 billion for the quarter.
Remember this is a deposit metric we focus on because of fluctuations in short term escrow deposits. Non-interest bearing deposits were at $1.27 billion representing 28% of total deposits.
Additionally we saw a significant increase in our off balance sheet money market deposits of $661 million, $2.45 billion, that’s 37% in just this quarter alone which clearly drove our growth in commission income for the quarter. Total assets were at $5.8 billion versus $5.2 billion in the first quarter of last year.
Looking at loans, loans in the first quarter were up $194 million or nearly 10% reaching $2.2 billion. Loans as a percentage of total assets reached 38% at the end of the first quarter.
As a reminder in the fourth quarter of 2007 we hired a seasoned team of banking and real estate professionals which we believe is the premier commercial real estate relationship team in the New York market place. The loan growth during the first quarter was driven in large part by our commercial real estate activities.
The current market conditions have afforded balance sheet lenders, like Signature Bank, with experienced real estate professionals such as the seasoned team we recently hired, a significant opportunity to add quality commercial real estate loans. Let’s take a moment to discuss non-performing loans which increased to $40 million and contributed to the increased provision for the quarter.
Right now we have four loans totaling $36.6 million that comprised the bulk of our non-accrual number. Plain and simple each of these loans has a story to them and they went non-accrual because of specific events for the companies and not due to the overall economic environment.
We are aggressively working through these loans and we’re close to resolution on several of them. One non-accrual loan this quarter made up the majority of the increase.
This loan for approximately $16.5 million is a traditional CNI loan to a media related company. The company obtained financing subordinate to ours to acquire and develop new product lines.
This did not work out for the company and they filed for bankruptcy to relieve them of the debt related to these ventures. This loan was current as to contractual payments due at March 31.
We are working with the client through the bankruptcy as its core business remains in tact. The client has obtained commitments for additional equity and debt financing that should take us out of the credit once bankruptcy proceedings are complete.
This loan is secured by all assets of the client including receivables and equipment as well as a personal guarantee. We remain cognizant of the current overall economic environment and the potential for further impact in our market place.
As a result we have increased our provision. Now let’s turn to earnings.
Net income for the quarter was $9.9 million or $0.33 diluted earnings per share up 6% over the same period a year ago. The growth in net income was due to our expanding net interest margin which was driven by significant decrease in our deposit costs.
Additionally we had a solid increase of 44% or $3 million in non-interest income. During the quarter we continue to focus on team growth and added two new teams.
One of these teams joined from North Fork Bank marking our sixth team from there. This team is comprised of two group directors, is based out of our Jericho office which opened during the first quarter.
This is our 21st office in the Metro New York area. The pipeline remains strong for continued recruitment of talented banking professionals.
Now I’d like to turn the call over to Eric Howell our CFO who will review the financial results in greater detail.
Eric R. Howell
I’ll start by just quickly reviewing the net income results for the quarter. As Joe mentioned net income for the quarter was $9.9 million or $0.33 diluted earnings per share up 6% over the first quarter of last year.
This is the result of first, our expansion in net interest margin which essentially was driven by decrease in deposit costs. Second, increased non-interest income.
Net interest income in the quarter rose to $41.2 million an increase of $7.5 million or 22% from the 2007 first quarter. Now focusing on net interest margin, net interest margin on tax equivalent basis grew 23 basis points surpassing 3%.
This is predominantly due to the re-pricing of our deposit base following the significant decrease if Fed funds in the fourth and first quarters as well as the decrease in libor in the first quarter. Turning to asset yields and funding costs this quarter yields on investment securities decreased 30 basis points during the quarter to 4.88%.
This is a result of downward adjustments of floating rate securities and reinvestment of cash flow in a lower rate environment. Overall the portfolio quality remains strong with a stable average duration of 2.06 years and continues to provide consistent cash flow for reinvestment in higher yielding loans.
Turning to our loan portfolio, yields on average commercial loans and commercial mortgages decreased 67 basis points to 6.40% for the quarter. This decrease was primarily driven by a reduction in prime and libor rates.
Now if you look at liabilities cost deposits for the quarter decreased 70 basis points. As discussed last quarter there was a natural lag effect of deposit re-pricing and a declining interest rate environment.
During the first quarter we were able to pass along many of the fourth quarters decrease in rates as well as the first quarters decrease. Decline in libor costs in the first quarter really helped this effort along.
As always for us the key drivers for margin expansion are raising core deposits and increasing loans as a percentage of our balance sheet and we were able to achieve both this quarter. Now to non-interest income and expense, non-interest income and expense for the first quarter was $9.9 million up $3 million compared with the $6.8 million reported in the first quarter of 2007.
We again had solid growth for the quarter in commissions and fees and service charges. Commissions increased $1.4 million or 47% for the quarter mainly due to the increase in off balance sheet money market deposits as well as an increase in our brokerage related activities.
The rise in fees and service charges of $880,000 or 32% for the quarter are reflective of client expansion and activity. Also included in non-interest income is $2 million in net gains on sales of securities and loans.
Approximately $500,000 of these gains are from our regular SBA activities and $1.5 million is from gains on sales of available for sale securities. There were particular securities that experienced an increase in value as interest rates declined.
We were able to sell these securities for gains and replace them with accretive yielding investments. We also had additional write downs for other than temporary impairment of securities on two securities that we wrote down in the fourth quarter.
One was a small ABS security that we wrote down to zero that was previously carried at a value of $68,000. The other security was a CDO that was downgraded to below investment grade.
We wrote the security down by an additional $635,000 in recognition of the weakening underlying credits in the structure. We’d like to point out that we received all principal and interest payments to date in accordance with the terms of each security for the 12 impaired securities from the fourth quarter including these two.
Let’s look at non-interest expense now. Non-interest expense for the 2008 first quarter was $28.6 million versus $23.3 million for the comparable period last year.
The increase of $5.2 million or 22% was mostly due to the addition of seven private client banking teams including two very large teams and three offices along with the expansion of six of our established offices. Looking at our efficiency ration for the quarter we saw improvement of 55.9% from 57.5% for the first quarter of 2007.
The improvement was predominantly driven by the growth in interest and non-interest income. Now I’ll turn the call back to Joe.
Joseph J. DePaolo
In closing, I just want to point out that while the current investment landscape in credit markets are challenging for any financial services organization Signature Bank has built a strong foundation and established a solid reputation. We remain focused on achieving continued growth just as we did this quarter where we added two new private client banking teams, grew core deposits by $125 million and loans by $194 million.
With our strong capital base we are well positioned to take advantage of dislocation in our market place. Bottom line is that we will continue to do what we do best and deliver on our proven model which includes hiring teams and growing core deposits and loans.
I would be remiss if I did not take a moment to recognize that today May 1st is the seven year anniversary of the opening of Signature Bank. The accomplishments achieved to date have been truly remarkable.
I want to take this opportunity to thank our committed clients, dedicated employees and valued shareholders and directors for their continued support of the bank. Now we will be happy to answer any questions you might have.
Operator
(Operator Instructions) Your first question comes from Dave Rochester – Friedman, Billings, Ramsey.
Dave Rochester – Friedman, Billings, Ramsey
Just a general credit question to start off, it sounds like you’re not seeing any systemic weakness in your commercial business portfolio is that a fair assessment.
Joseph J. DePaolo
Yes.
Dave Rochester – Friedman, Billings, Ramsey
You mentioned you’re close to resolution on a couple of those larger credits, do you expect any of them to be gone by the end of the second quarter?
Joseph J. DePaolo
The way I would judge it we believe that one absolutely, two a strong possibility, and three and outside chance. That’s how I would gauge it.
Dave Rochester – Friedman, Billings, Ramsey
Do you happen to have a sense for what portion of the provision came from the $16.5 million credit?
Joseph J. DePaolo
Since it’s a bankruptcy and its public and if we gave that information out it would tip our hand as to what we believe the shortfall could be and any payment we would get. Therefore we would rather not disclose that.
Dave Rochester – Friedman, Billings, Ramsey
Turning to the watch list could you quantify that this quarter and perhaps the growth you saw over last quarter?
Eric R. Howell
I think the growth in the watch list is really in line with the growth that we’ve seen in our overall portfolio. On a percentage basis I don’t see it being significant.
Dave Rochester – Friedman, Billings, Ramsey
Would you happen to have a percentage of total loans that is right now?
Eric R. Howell
I don’t have that; I’d have to get back to you on that.
Dave Rochester – Friedman, Billings, Ramsey
In terms of a granularity question on the watch list do you happen to have a sense for what portion of the watch list consists of larger loans, larger than $15 or $20 million?
Joseph J. DePaolo
Just the one.
Dave Rochester – Friedman, Billings, Ramsey
Ninety day delinquencies for the quarter, do you happen to have a number for that?
Eric R. Howell
I don’t, but the 90 day delinquency number came down from the prior quarter.
Dave Rochester – Friedman, Billings, Ramsey
In terms of the charge offs any color as to what the charge offs were?
Eric R. Howell
It was really a clean up of a lot of smaller more granular credits.
Dave Rochester – Friedman, Billings, Ramsey
Primarily commercial credit?
Eric R. Howell
Primarily business revolving lines, personal revolving lines. It was really smaller, lower lines.
Dave Rochester – Friedman, Billings, Ramsey
In terms of the granularity of the loan growth could you give us any color on that? One growth was outstanding this quarter.
I’m just trying to figure out if there were any large pieces in there.
Joseph J. DePaolo
A significant portion of the loan growth came from the commercial real estate area. As I mentioned a few moments ago we hired a very large significant premier team from North Fork and they’ve been able to bring over quality clients, significant quality clients.
A large part, if not half, of the business that they have been doing have been multi-family in the burrows which are great, great credits because you have cash flow and then you have the property supporting the loan as well. There are some real opportunities for a balance sheet lender like Signature Bank with this high quality team to do some significant business in this area.
We’re very happy with that growth.
Operator
Your next question comes from Gary Townsend – Hill-Townsend Capital.
Gary Townsend – Hill-Townsend Capital
You had an impressive improvement in your net interest margin in the quarter, any benefit from the securities that you took an impairment charge on?
Eric R. Howell
It was a very slight benefit. I’d say one to two at most basis points.
Gary Townsend – Hill-Townsend Capital
So it was primarily a reduction in funding costs?
Eric R. Howell
That was definitely the primary driver plus the pick up in the loans.
Gary Townsend – Hill-Townsend Capital
Any recent change in libor pricing having an impact on the current quarter?
Eric R. Howell
It will help somewhat on the asset side with some of the loans benefit to libor.
Operator
Your next question comes from Tom Alonso – Fox-Pit Kelton.
Tom Alonso – Fox-Pit Kelton
I wanted to circle back to the guidance you gave for loan and deposit growth for the fourth quarter, any update or changes to that?
Joseph J. DePaolo
No, we’re pretty confident in the numbers still.
Operator
Your next question comes from Lana Chan – BMO Capital Markets.
Lana Chan – BMO Capital Markets
What are your expectations for getting back some of the negative marks that you’ve taken on these securities book?
Eric R. Howell
On the ABS securities that we wrote down, I think we wrote down about $4 million on the ABS securities. We expect to get a substantial amount of that back in the fourth quarter and first quarter of this year and next year.
Between the third quarter, fourth quarter and first quarter of ’09 I would say we’ll receive about $2 million of the $4 million that we wrote down coming back at us. Remember that goes into the margin, it doesn’t come back through the non-interest income; it comes back through our margin.
Lana Chan – BMO Capital Markets
How about on the CDO book?
Eric R. Howell
The CDOs are a little bit longer duration so it will take time before we start seeing principal repayments on those. We don’t expect to see that for some time.
If we see price appreciation to a level for a period of time where we’re comfortable that this chaotic market is behind us then we can start to recognize that back into income as well. I don’t see that happening any time soon.
Operator
Your next question comes from Justin Mauer – Lord Abbett.
Justin Mauer – Lord Abbett
On the libor question given its stickiness relative to Fed funds and prime any sense, did that benefit you guys in a meaningful way in the first quarter that maybe as those numbers start to come closer together that there’s less of that going forward?
Eric R. Howell
It certainly benefited us on the positive side of the first quarter. We have several of our depositors that are tied to that, the libor rate.
The decline, it definitely helped us to reduce deposit costs. I don’t know if it will meaningfully affect that this quarter.
Justin Mauer – Lord Abbett
Secondly, on the North Fork, on the multi-family business, does that tend to be a little bit less margin all things equal to the extent that presumably with the team coming and putting a lot of that stuff on which is great. Do you guys think about that from a margin mix perspective in the loan portfolio or is it just not going to be big enough over time?
Joseph J. DePaolo
We absolutely think about it. What’s great is that the teams from North Fork also bring over deposits, significant deposits along with the loans.
With each of the loans you get the operating accounts and then you get some of the escrows that go along with the loans and you get some of the rent security and those have a tendency to be low cost deposits so that is a positive for the margin. No, we absolutely look at it.
Justin Mauer – Lord Abbett
So you see, as you mentioned, maybe half of their growth coming from that product are they seeing the deposit flows or does that tend to lag a little bit, we’ll start to see that pick up?
Joseph J. DePaolo
I would say it lags but its picking up.
Operator
Your next question comes from Avi Barak – Sandler O’Neill.
Avi Barak – Sandler O’Neill
I was just wondering if you could tell us when your last safety and soundness exam was and if you noticed any particular, I guess you could call it, attitude change on their part and what asset classes they seem to be particularly concerned versus your previous year’s exam?
Joseph J. DePaolo
With the safety and soundness exam it’s confidential. I will say that the last one was done as of 3/31/07 that was the last one.
We expect another one sometime late summer but I’ll basically say we haven’t seen any issues. I’ll just leave it at that, you’re not allowed to discuss camel ratings and the like.
Operator
Your next question comes from [Pali Sunk] – JP Morgan.
[Pali Sunk] – JP Morgan
I was just wondering if you could remind us what the run off of the securities book is in terms of cash flows and what percentage you are currently reinvesting back into securities.
Eric R. Howell
The run off is approximately $50 million per month in cash flows coming back off the portfolio. For the most part we’re reinvesting that back into the portfolio.
Our deposit growth is more or less in line with our loan growth. Our loan growth out stripped it a little bit in the first quarter but I don’t know if we’re going to expect that throughout the course of the year.
[Pali Sunk] – JP Morgan
Are you going to be more aggressive in selling some of the securities at a gain in coming quarters or was this quarter more of a one time event?
Eric R. Howell
I wouldn’t say we’re going to be more aggressive this quarter with some opportunities that made sense for us to take some gains and then replace it with some accretive yielding investments, obviously you’re going to do that when you have those opportunities. With treasury securities trading in basis points we had opportunities in treasury securities to sell them at significant gains and replace them with higher investments.
I don’t know if we’re going to see that if future quarters or not.
Operator
Your next question comes from Alpur Sungur – Sidoti & Company.
Alpur Sungur – Sidoti & Company
I was wondering if you had the margin available for the month of March.
Eric R. Howell
I don’t have the monthly margin breakdown. I was pretty strong though.
Alpur Sungur – Sidoti & Company
In terms of the re-pricing of the assets versus liabilities the one to 90 days GAAP was it positive or negative?
Eric R. Howell
I don’t have the one to 90 day GAAP number.
Operator
Your next question comes from Justin Mauer – Lord Abbett.
Justin Mauer – Lord Abbett
On the NIM, what’s your expectation going forward all things equal now that the Fed’s on the latter tail it seems, is there still catch up you need to play maybe in the first part of the quarter but then things start to get a little better?
Eric R. Howell
I would expect that we’d be able to have a pretty stable NIM through the course. The Fed just moved 25 basis points so we just had all of our prime based loans reset down.
We will have to catch up to that to some extent but 25 basis points is a more manageable number than 50 or 75 basis point moves that we’ve seen. We’ll spend the rest of this quarter catching up that.
Hopefully we can maintain the levels that we’re at. We feel pretty comfortable with the levels we are at and over the long term we’ll look to grow margins with the shift to loans.
Operator
Your next question comes from Michael Cohen – Sinova.
Michael Cohen – Sinova
Certainly you addressed this in your opening remarks but maybe you could provide a little more comfort. In the middle last year we started to see some of the NPA start to creep up and its all been this one off stuff.
What kind of comfort can you give us that maybe that’s going to stop? I know you talked about some of one, two, maybe three coming back off NPA but why shouldn’t we be really worried?
Joseph J. DePaolo
We haven’t seen, our $2.2 billion overall portfolio any trends that alarm us. I think NPAs were unrealistically low when we were at the $2 or $3 million level in 2007.
The fact that $36.6 million of the $40 million are lease for loans. I couldn’t give you any assurance that if three of them go away another one wouldn’t be added on.
The one thing that gives us comfort is that they’ve all been very specific and also two other things. We risk rate all the loans and the weighted average risk rating throughout the past several years including most recently this quarter have remained pretty stable and that weighted average risk rating is reviewed by a credit review group independent of our credit officers and then also is reviewed by the regulators.
We’ve gotten comfort there that there have been no real negative trends. Other than that we’re wary about what’s going on in the market and because of the current markets we’re trying to be a little more cautious in things we do.
Michael Cohen – Sinova
That makes sense, would any of these four loans have scored out at the higher end of the risk rating. A lot of times you’ve talked about, specifically with this media company or I believe in past calls you’ve talked about companies that have made business decisions that were different from where they were when you originally underwrote the loan.
Joseph J. DePaolo
These loans were in all likelihood risk rated a five which is a strong passing loan when it’s done. We had one that we talked about earlier in 2007 that back in 2003-2004 it was a client of ours that did an acquisition and nine months from the date of the acquisition they had to declare bankruptcy because it was a total mess, they did a poor job on due diligence.
It was a strong company prior to that. The more recent one was again a strong five rated credit, it had one line of business that they wanted to expand on, had an investor come in, invest significant dollars, subordinate to us and it went bad rather quickly.
Their core business has remained stable, they had positive EBITDA, the cash flow has been there but to deal with an investor that they could not come to a settlement on forced them into a bankruptcy position that we’d been working with them on because we’re the secured creditor. I don’t know if you could say that you could foresee that happening as part of doing the due diligence and doing the loan.
We have another one that we believe its close to $6 million that’s part of the fall loans that we talked about last quarter that got into a major lawsuit that went bad on them and that’s the loan we actually think we’re going to be coming to closure on because we are comforted by the commercial real estate that backs that loan. Again, it was a functioning company with cash flow; this lawsuit put them in a very bad position.
What helps us on that lawsuit is that we’re the secured creditor. In each of the cases we’ve been the secured creditor.
We always do a Monday morning quarterback, would we have done anything different. Luckily we feel that we would not have done anything differently except for maybe in certain circumstances once things go bad being more aggressive.
That’s what we will do going forward. In each case it was a five rated credit when we did them.
Michael Cohen – Sinova
Given the nature of the relationship business and the way the teams work is there a way to sort of be ahead of when these acquisitions happen presumably you’re aware of them, they’re discussing them with you even though you may not be the lender on the second piece to it, if you will. Is there anything you can do differently there or are you guys thinking about it or are you guys not really aware of these things as they’re in motion?
Joseph J. DePaolo
We usually are, I’ll say usually because I never try to say absolute. We usually in all those cases aware of what’s going on and are cognizant because of the relationship that the teams have and the lenders have with the client.
One of them, which was very difficult, its one of the staples and they were not able to import a product because of, between the US government and another foreign government they were not able to import their product for several months and if affected their revenues by $7 million. We talked about that in the last quarter.
That was something that there was nothing we could do. There was nothing, I believe, they could do.
We were aware of it. In that particular case I would say we would have acted a little more aggressively on our part of one of the four credits.
I don’t think we would have done anything differently particularly with these last two credits. We have everybody at the highest levels actively involved.
One of the things we do is in particular this last $16.5 million credit we actually review the request, we got comfort from the sub-debt holder that they were investing in the company. Here we are, we were the secured lender and then someone came in behind us and invested a lot of money in their due diligence in that line of product did not work out.
That gave us comfort that someone was willing to invest, I won’t get into particulars, but significant millions of dollars behind us. We take comfort in those things but on the other hand the other comfort we get is that we’re working them through and in three of the four cases the client is very amenable to working with us and in one of the four cases its gotten a little sticky but the good news is that we have a judgment and we’re working that judgment through and we’re secure.
Operator
Your next question comes from Gary Townsend – Hill-Townsend Capital.
Gary Townsend – Hill-Townsend Capital
You’ve been adding loans at a rapid pace; can you talk about changes to your credit standards and your credit administration in the past two quarters? Also, you’ve brought on new teams from North Fork, I’d be interested too in how your approach to lending in the commercial real estate space compared to theirs?
Joseph J. DePaolo
I believe that the standards that we have on the commercial estate side are very similar if not exact to what North Fork did in their commercial real estate. We take a lot of comfort in the fact that the team that was primarily responsible for the growth in the North Fork commercial real estate portfolio and prior to that in the M&T portfolio is the team that is leading the charge for us.
If there’s a difference between what we’re doing here at Signature and what they did at North Fork is that on occasion at North Fork they had the chance to do a loan at a much larger dollar amount. With us being a $6 billion institution and I believe when North Fork was acquired by Capital One they were about $50 billion there was an opportunity for them to do larger credits on occasion where here we would not be able to do those larger credits.
When you look at the statistics of North Fork of what they were doing in commercial real estate a large portion of the commercial real estate population are loans under $5 million or multi-family or in the New York area. That’s another difference as well, North Fork on occasion they had the opportunity to do loans in Chicago and other states where we right now are sticking with our 75 mile from headquarters geographic boundary or radius.
Getting back to the first part of your question, we have added a number of lenders on for the growth of the portfolio with the commercial real estate team coming on board we added about five to six people in the support and administrative areas to support the growth of the portfolio. We upgraded significantly the employee in charge of risk management particularly as it relates to credit review.
That was a significant upgrade for us, all in anticipation of the growth in the loan portfolio.
Operator
Your next question comes from Alpur Sungur – Sidoti & Company.
Alpur Sungur – Sidoti & Company
What was the number of deposit accounts at the end of the first quarter?
Eric R. Howell
I’ll have to get back to you on that one.
Alpur Sungur – Sidoti & Company
Do you still expect the expense base to grow at a 20% clip in 2008?
Eric R. Howell
To be conservative I’d stick with that number.
Alpur Sungur – Sidoti & Company
You have a total of 54 teams how many of those have matured so far?
Eric R. Howell
Certainly the seven teams that we hired in the last year we wouldn’t consider mature by any means.
Joseph J. DePaolo
And the two teams this year. I would say somewhere around the 35 number out of 54.
Operator
Your next question comes from Lana Chan – BMO Capital Markets.
Lana Chan – BMO Capital Markets
A follow up on the commercial loan portfolio, the billing dollars in CNI loans how much of that would you say is secured by either commercial real estate cash and marketable securities or has a personal guarantee?
Eric R. Howell
It would be a pretty substantial portion of that. I don’t think we have an exact number on it.
Most of our loans come along with some form of collateral for personal guarantee.
Joseph J. DePaolo
You’re usually getting a lien on the assets of the company including receivables, inventory, equipment and then if the company also has ownership of the land and/or buildings where their operations are housed we usually get a cross corporate guarantee from the real estate company because they usually keep that separate from the operating business. CNI loan is not done on an unsecured basis.
Operator
At this time I am showing no additional question in the queue. I’d like to turn the call back over to management for any concluding remarks they may have.
Joseph J. DePaolo
Thank you for joining us today. We appreciate your interest in Signature Bank and as always we look forward to keeping you apprised of our developments.
Thank you and have a good day.
Operator
This does conclude Signature Bank’s 2008 First Quarter Results Conference Call. Thank you for participating.