Signature Bank | March 31, 2016 MORGAN STANLEY RESEARCH March 31, 2016 MORGAN STANLEY & CO. LLC Ken A Zerbe, CFA Signature Bank
[email protected] +1 212 761-7417 Adam Jonas, CFA Fasten Your Seat Belts; It's Going to Be a
[email protected] +1 212 761-1726 Steven M Wald Bumpy Taxi Ride … but Worth It
[email protected] +1 212 761-0474 Neel Mehta Industry View Stock Rating Price Target
[email protected] +1 212 761-8582 In-Line Overweight $163.00 Signature Bank ( SBNY.O, SBNY US ) The negative impact of ride-sharing on the taxi industry should not Midcap Banks / United States of America be underestimated, and could drive sharply higher credit losses in Stock Rating Overweight Industry View In-Line SBNY's taxi portfolio (we estimate a 25% cumulative loss). We Price target $163.00 explore both the risks and offsets to taxi lending, and why SBNY Shr price, close (Mar 30, 2016) $138.26 Mkt cap, curr (mm) $7,038 remains a key Overweight. 52-Week Range $163.15-119.60 Ride-sharing companies pose a significant threat to the taxi industry Fiscal Year Ending 12/15 12/16e 12/17e 12/18e and, by default, to the creditworthiness of taxi medallion borrowers. Our work ModelWare EPS ($) 7.30 8.17 9.36 10.86 with our Autos and Shared Mobility colleague Adam Jonas highlights how Prior ModelWare EPS - 8.27 9.42 10.60 ($) rapidly ride-sharing companies have overtaken taxis in less dense urban Consensus EPS ($)§ 7.21 8.29 9.50 11.00 markets, with more drivers who also broadly earn more per hour than their P/E 21.0 16.9 14.8 12.7 taxi counterparts.