Signature Bank, N.A., a Toledo-based bank that focuses on business and professional clientele in the metro area, has voted to award its shareholders cash dividends for the first time in the privately held bank’s 11-year history.
Rick Brunner, Signature’s chairman and chief executive officer, announced the move Thursday night at the bank’s 11th annual shareholders meeting held at the Toledo Museum of Art. The bank has 480 shareholders.
The bank’s first dividend will be 40 cents per share, payable May 15 to shareholders of record Wednesday. Signature plans to award dividends semiannually.
The chairman said the bank has had a successful run, with its share price rising to $56 per share at the end of 2012.
“We’ve had a good degree of success and dealt out a fair amount of equity, so it was just time to pay a little bit out to shareholders, enhance their shares,” he said. “Given our equity, we decided we can pay out a modest dividend.”
Signature’s governing board had been weighing awarding cash dividends for three years, but held back for various reasons, Mr. Brunner said. “We started looking at it three years ago, but considering that was during the Great Recession, it was felt that that wasn’t the right time to pay it out.”
But Mr. Brunner said bank officials had kept it in their minds all that time that they wanted to reward their investors for their continued loyalty. “We have a very loyal shareholder base. Ninety percent of them have been with us since the very beginning.”
Signature wanted a “recognition for being loyal” and ultimately settled on cash dividends. “As we were preparing for this year, we just felt 2013 was the time to start doing this,” the chairman said. “We thought about doing a stock buyback, but that rewards those who are exiting. We wanted something to reward those who have stayed.”