Wednesday, April 19, 2017

68.5 Percent of Quorum's Taxi Medallion Loans Were Current at the End of 2016

According to Quorum Federal Credit Union's 2016 Annual Report, approximately 68.5 percent of its taxi medallion loans were current.

While Quorum never originated a taxi medallion loan, the credit union participated in taxi medallion loans for 13 years. The credit union ended its taxi medallion participation loan program in 2013. These taxi medallion participation loans were primarily in the cities of New York and Chicago; but the credit union did not divulge the portion of taxi medallion loans in each city.

Quorum stated that it owned primarily 90 percent of these taxi medallion loans originated by parter credit unions.

As of December 31, 2016, Quorum Federal Credit Union (Purchase, NY) had $72.6 million of loans collateralized by taxi medallions.

Taxi medallion loans delinquent by 30 days or more totaled $22,871,000. Almost $20.9 million of the these delinquent loans were 90 days past due or in nonaccrual status.

Quorum's financial notes stated that the credit union increased its provisions for taxi medallion loans in 2016 by almost $19.1 million. The credit union ended 2016 with almost $19.6 million in loan loss reserves for taxi medallion loans, of which $19.2 million were specific reserves.

To estimate its underlying value of the collateral, Quorum engaged a third party specialist. According to the third party specialist, the fair value of a taxi medallion is $489,000 in New York City and $91,000 in Chicago. The $91,000 valuation for Chicago is higher than what other lenders have valued their taxi medallion loans.

While Quorum estimated the December 2016 fair value for New York City and Chicago taxi medallions, the credit union had not at the end of 2016 written down the value of these loans to their current fair value.

Quorum Federal Credit Union reported that almost $35.2 million in taxi medallion loans are scheduled to mature in 2017, $20.5 million will mature in 2018, and $13.3 million will mature in 2019. The remainder of the taxi medallion participation loans will mature in 2020 or later.

However, the credit union cautions that disruption in the value of taxi medallions could cause an increase in losses on these loans.

Read the Annual Report.


  1. "Scheduled to mature"...hmmm.
    Are they balloon loans like a lot of other medallion loans?
    2/3 of the loans are current?
    How many of them are restructured?

  2. Maybe it's me, but "strong capital position" and "well positioned and safe" as noted in CEO letter do not fit with a 6.8% NW (meaning CU is less than well-capitalized) and a loan portfolio under that much stress



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