Friday, August 3, 2018

Problem Taxi Medallion Loans Cause Surge in TDRs at San Francisco FCU

Problem taxi medallion loans cause a surge in troubled debt restructured (TDR)commercial loans at San Francisco Federal Credit Union.

San Francisco FCU is suing the San Francisco Municipal Transportation Agency over the collapse of the taxi medallion market in San Francisco.

The credit union reported $45.2 million in commercial loans not secured by real estate at the end of the second quarter. Presumably most of these loans were to finance taxi medallions.

TDR commercial loans jumped from almost $2 million as of June 2017 to $13 million as of June 2018 (click on image to enlarge). Roughly 29 percent of all commercial loans were TDRs.

As of June 2018, only 2.35 percent of all TDR commercial loans were at least 60 days past due.

The credit union reported that delinquent commercial loans were $1.84 million -- this is down from $2.2 million at the end of the first quarter of 2018 and $4.64 million a year ago. the delinquency rate on commercial loans was 4.08 percent. Delinquent commercial loans were approximately 56 percent of all delinquent loans.

The credit union reported net charge-offs at mid-year of $2.175 million. About $1.68 million of net charge-offs were commercial loans.

Despite the rise in TDR commercial loans, San Francisco FCU was profitable and well capitalized. The credit union reported a net income of $2.23 million through the first two quarters of 2018. Its net worth ratio was 10.09 percent -- up 20 basis points from the prior quarter.

In addition, the credit union was over-reserved at the end of the second quarter of 2018 with $16.6 million in allowance for loan and lease losses. Its coverage ratio was 507.71 percent.


  1. Double down. You can make it up in volume. Keep the salary and filthy stinking rich bonus for nailing the loan to share ratio. Ignore the default ratio. Ignore the delinquency ratio. We got the best management money can buy. Loan losses are just a part of doing business. You got this. Dive deep. Did you read the chapter on Concentration Risk?

    1. The CEO that got them into mess left town to run another credit union.

  2. Taxi's are still on the streets of SF. Sounds like a mis managed political problem. Devil is in the details, salary and executive comp has been sky rocketing. Double down on un secure loans is the tactic of the day. CECL will drown them and it will be another government funded bailout. Is anyone watching?



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.