My earlier posts have looked at the three large New York City taxi medallion lending credit unions. However, there are several other credit unions within the greater New York metropolitan region that have some exposure to taxi medallion loans -- Quorum Federal Credit Union (Purchase, NY), Bay Ridge Federal Credit Union (Brooklyn, NY), Aspire Federal Credit Union (Clark, NJ), and First Jersey Credit Union (Wayne, NJ).
Quorum Federal Credit Union
While Quorum did not originate taxi medallion loans, it purchased taxi medallion participation loans. According to its 2015 Annual Report, it had $76.3 million in taxi medallion loans. The credit union stated that it stopped its tax medallion participation purchase program in 2013.
Quorum Federal Credit Union reported a 2016 loss of $6.7 million, driven by an increase in loan loss provisions. Loan loss provisions rose from $7.9 million at the end of 2015 to $24.5 million at the end of 2016.
The credit union saw its net worth fall from $72.2 million to $65.5 million. The credit union had a net worth ratio of 7.25 percent at the end of 2016.
The credit union has almost $35 million in delinquent loans. Its delinquency rate was 4.67 percent on December 2016. Delinquent loans represent 53.43 percent of the credit union's net worth.
Early delinquencies (30 days to 59 days past due) were slightly less than $8.1 million.
Quorum FCU reported almost $30.8 million in Troubled Debt Restructured TDR) loans, of which $24.5 million were business loans. TDR loans as a percent of total loans and net worth were 4.10 percent and 46.97 percent, respectively.
The credit union reported allowance for loan and lease losses of $27.8 million. Its coverage ratio was 79.51 percent at the end of 2016.
Bay Ridge Federal Credit Union
Bay Ridge Federal Credit Union posted a profit for 2016 of $434,189. As a result, the credit union's net worth rose to almost $19 million as of December 2016.
Its net worth ratio at the end of 2016 was 9.47 percent.
Loans 60 days or more past due were $6.6 million -- up from $3.8 million at the end of the third quarter and $4 million at the end of 2015. Approximately, $4 million were member business loans (MBLs). The delinquency rate on December 31, 2016 was 3.74 percent. Delinquent loans to net worth was 34.81 percent.
In addition, early delinquencies were $5.2 million at year end.
Bay Ridge FCU stated as of the end of 2016 it had $23.1 million in TDR loans, of which $21.3 million were MBLs. TDRs were 13.05 percent of loans and 121.48 percent of net worth.
The credit union reported holding allowance for loan and lease losses of $3.8 million. Its coverage ratio was 57.17 percent.
Aspire Federal Credit Union
Aspire Federal Credit Union has a taxi medallion lending credit union service organization (CUSO).
The credit union reported a full-year loss of $1.6 million. As a result of the loss, the credit union's net worth fell from $19.1 million to $17.5 million during 2016. Its net worth ratio of 10.11 percent as of December 2016, down from 10.48 percent a year earlier; but up from the prior quarter.
The credit union reported almost $7.3 million in delinquent loans, of which $3.3 million were member business loans (MBLs). The delinquency rate was 5.18 percent on December 31, 2016. Delinquent loans comprised 41.37 percent of the credit union's net worth.
In addition, the credit union is reporting early delinquencies of $3.7 million at the end of 2016.
Outstanding TDR loans were $5.9 million, of which $3.6 million are business loans. TDR loans were 4.22 percent of all loans and 33.71 percent of net worth.
The credit union reported allowances for loan and lease losses of $4.3 million. Its coverage ratio was 59.45 percent.
First Jersey Credit Union
First Jersey Credit Union also has a taxi medallion lending CUSO.
The credit union reported a loss of almost $2.6 million for 2016, after posting a loss of slightly less than $2.7 million for 2015.
As a result, the credit union's net worth fell from $12.3 million on December 2015 to $9.7 million on December 2016. Over the year, the net worth ratio fell by 30 basis points to 8.24 percent.
At the end of 2016, almost $5.7 million loans were 60 days or more past due and its delinquency ratio was 7.82 percent. Delinquent MBLs were $3.2 million.
Early delinquent loans were $2.8 million.
Outstanding TDR loans were $4.5 million, of which almost $2.9 million were business loans. TDR loans were 6.24 percent of loans and 46.73 percent of net worth.
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Keith- Any idea how many BILLION$ of this toxic waste loan participations are sitting on other credit union Balance Sheets? How deep are the constituents of Duke Street buried in this crap? Did the NCUA miss the subject matter of concentration risk? Any idea of the sum total of all losses from Montauk CU, Melrose CU, LOMTO CU & the above credit union's on these medallions?
ReplyDeleteI've read that CU industry exposure to taxi medallion loans are around $6.4 billion. I would guess there are about $3 billion in participations.
DeleteI'm estimating the loss rate on medallion loans will be around 40 to 50 percent.
I'm just curious where you get your numbers from....loss rate of 40-50% is not true, in fact the majority of these loans are still paying but because they have to be restructured they are reported as delinquent. It is scare tactic reporting like this that is making it worse for the credit unions that are trying to weather the storm. These loans became bad NOT because of poor standards at the credit union but because cities are letting app taxis like Uber and Lyft to operate outside the rules and regs that the taxi industry has to comply with. It is not a fair playing field. I find your reporting to be reckless and almost anti-credit union. I have yet to read a fair and balanced post from you.
ReplyDeleteIt is true that Uber and Lyft has disrupted the market and I agree with you that they don't have to comply with the same rules and regulations that the taxi industry has to comply with. Unfortunately, the taxi industry is going through the process of creative destruction.
DeleteIn many cases, I am quoting the medallion CU lenders from their lawsuits and letters to Mayor DeBlasio's Administration, which have stated that they would not be able to refinance or modify these loans because the value of taxi medallion had dropped sharply.
A restructured loan that is current is not counted as delinquent. Only delinquent loans are counted as delinquent whether they are restructured or not.
DeleteIt is you who is not balanced or simply not informed.
@anonymous You are clearly either affiliated with a taxi exposed credit union or own medallions and are talking your book. The fact of the matter is that medallion values in markets outside of NYC are down ~80% from the peak and in NYC they are down 50%+, and this is without seeing large scale liquidations of medallion collateral which are surely coming. There are now several lenders that have taken tens or hundreds of millions in write downs against their medallion loan books. Efforts to collect on personal guarantees have been spectacularly unsuccessful to date. Just because some CUs and banks haven't taken the losses doesn't mean the loans aren't economically impaired, it's just a matter of the CUs not having the guts or the capital to face the reality of the current taxi business.
DeleteYou can argue all day about whether the cities have applied regulation fairly, but the public is clearly voting with its feet and its wallet. Restoring the taxi monopolies around the country, which was ultimately the source of the staggering sums people paid for medallions and CUs lent on, is simply not going to happen.
Your attacks on Keith is just shooting the messenger. Time for the taxi industry to adapt its business model, and time for the lenders that didn't diversify properly to accept the fate of all lenders who can't manage risk. Your energy would be better spent on dealing with those task rather than trolling Keith.
How long can Quorum FCU, Aspire FCU, First Jersey CU and Bay Ridge FCU survive? If I were CEO at either of these credit unions I would be actively seeking merger partner before the grim reaper shows up at the door. There is no turning these credit unions around. Except for Bay Ridge, the other three thought they were smarter than the average bear by getting into the medallion business. I bet they wish they could turn back clock.
ReplyDelete