Thursday, February 11, 2016

Bay Ridge Federal Credit Union and Taxi Medallion Loans

Bay Ridge Federal Credit Union (Brooklyn, NY) has some exposure to taxi medallion loans and it appears that these medallion loans are starting to affect the performance of this $201.6 million credit union.

The credit union recorded a small profit of $76,413 for 2015. This was down from $1.6 million for 2014.

This decline in profits is associated with a significant increase in provisions for loan and lease losses. Provisions for loan and lease losses were $1.7 million for 2015 compared to $346,564 for 2014.

This increase in provisions for loan and lease losses caused Bay Ridge to build its allowance for loan and lease losses account from $1.16 million at the end of 2014 to almost @2.5 million at the end of 2015.

Bay Ridge reported an equity capital position of $18.2 million at the end of 2015. Its net worth ratio was 9.20 percent as of December 31, 2015.

Bay Ridge at the end of 2015 had a buffer of $20.7 million to absorb expected and unexpected losses.

Delinquent loans at Bay Ridge credit union increased by 73.9 percent during the fourth quarter to slightly more than $4 million. This means 2.42 percent of loans were 60 days or more past due -- a 102 basis points increase during the quarter. Delinquent loans represent almost 22 percent of the credit union's net worth.

In addition, early delinquencies (30 to 59 days past due) were $9.8 million at the end of 2015. In comparison, $3.4 million in loans were in early stages of becoming delinquent as of mid-year 2015.

Furthermore, troubled debt restructured (TDR) loans increased by 605 percent during the fourth quarter to almost $5.6 million as of December 2015. TDR loans accounted for 30.54 percent of the credit union's net worth.

Bay Ridge reported its coverage ratio (allowance for loan and lease losses to delinquent loans) was 61.53 percent as of December 2015.

Bay Ridge's management and board needs to communicate with its members about its total exposure to taxi medallion loans and how this loan portfolio of taxi medallion loans is performing.

In conclusion, as I become aware of credit unions with exposure to the taxi medallion industry, I will report on the credit union's financial performance.


  1. As part of your reporting, I recommend aggregating any losses (if any ever occur) sustained by the NCUSIF as a result of credit unions with exposure to taxi medallion loans

    1. "If any ever occur".
      Just keep sitting there man. They will.
      And pray congress doesn't look into this train wreck.

  2. Did the NCUA miss something here? Some of these joints have loan to share ratio's over 150%? The words concentration risk come to mind. Hello, NCUA. Is anyone home? Is anyone reading the Call Report data?

    1. Good point. But the concentration risk goes beyond loan to shares (deposits).
      Try 70+% of ASSETS in medallion loans (aka buggy whips).
      Among other things, it's interesting the press has not drilled in to this.

  3. It is time for a change in leadership at Bay Ridge FCU. The trustees are mostly family members of the CEO. They do not have relevant banking experience and expertise. Concentration of loans in the taxi and limo industry never made any sense.



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