A pioneering regional bank in the digital asset sphere could see its shares soar as much as 25% in the next 12 months, Piper Sandler predicts. Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform, and investors have taken note of its early crypto adoption. The New York firm's stock is up more than 250% from its 52-week low in November. "SBNY shares have experienced a meteoric rise, fueled by the reopening trade and coupled with the favorable reaction to the explosive growth seen in its new payments platform (Signet)," Piper Sandler's Mark Fitzgibbon said in a note released Friday. "How high can SBNY fly?" Piper Sandler reiterated its overweight rating on Signature shares and raised its price target to $313, implying 25% potential upside to the stock's closing price of $251.35 on Thursday. The brokerage also raised its second-quarter and fiscal 2021 earnings expectations. Fitzgibbon also praised Signature's personnel and minimal internal bureaucracy. The bank's "uniquely successful growth model" fuels impressive performance compared with peers, he added. "Signature has been a deposit growth machine since its inception. But the creation of their Signet platform has sort of turbo-charged deposit growth," Fitzgibbon said. "As the company is able to deploy this excess liquidity into higher yielding loans, we would expect the [net interest margin] to move steadily higher over time." Fitzgibbon noted the company announced during a recent conference that it plans to gradually start selected crypto-lending to customers. Piper Sandler isn't the only brokerage bullish on Signature. JPMorgan said in May it has "diamond hands" for the bank and forecast a "tremendous runway ahead for growth" in digital asset adoption. — CNBC's Michael Bloom contributed to this report.
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A pioneering regional bank in the digital asset sphere could see its shares soar as much as 25% in the next 12 months, Piper Sandler predicts.