The 2017 Annual Report of Quorum Federal Credit Union (Purchase, NY) provides greater insight into the credit union's taxi medallion participation loan portfolio.
At December 31, 2017, Quorum had almost $64.4 million of loans collateralized by taxi medallions, primarily from New York City and Chicago. However, the credit union does not breakdown the distribution of loans by geography.
The credit union reported an increase in provisions for loan losses for taxi participation loans of $8.1 million during 2017. The credit union also reported net charge-off of taxi medallion participation loans of $2 million during 2017. As a result, the credit union saw its allowance for loan and lease losses associated with taxi medallion participation loans increase from $19.6 million at the beginning of 2017 to $25.7 million at the end of 2017. Approximately 75 percent of the credit unions allowances for loan and lease losses were for taxi medallion participation loans.
At the end of 2017, Quorum stated that the fair value of a taxi medallion was $365 thousand in New York City and $93 thousand in Chicago. The credit union used a third-party valuation specialist to value the underlying collateral of taxi medallions, which was used to determine specific reserves on impaired taxi medallion loans. However, these valuations seem to be too high given recent transaction data from Chicago and New York City.
Quorum stated that at the end of 2017, $21.7 million in taxi medallion loans were current, another $3.6 million were 30-to-89 days delinquent, and almost $39.2 million were 90 days or more past due.
The credit union noted $409 thousand in troubled debt restructured (TDR) taxi medallion participation loans in 2017, after reporting $18.5 million in TDR taxi medallion participation loans in 2016. The credit union reported that all modifications in taxi medallion loans in 2016 and 2017 dealt with maturity and interest rate adjustments.
However, the credit union warned that further deterioration in the value of medallions may result in higher delinquencies and losses.
According to the Annual Report, $47.3 million in taxi medallion loans are scheduled to mature in 2018 and another $13.2 million in 2019. The remainder will mature in 2020 or later.
In closing, I wish more credit unions would post their audited financial statements, so that credit union members and analysts could get more granular information on their performances.
Read Note 4 of the Annual Report for more info.
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“Third party” valuation...NCUA?
ReplyDeleteThe medallions are selling for half that in the open market.
You’re applauding their transparency. They seem transparent when compared to NCUA and Melrose.
In reality, $360,000 for a medallion is deliberate misrepresentation.
Somehow I highly doubt you are a member of the credit union and you aren't an analyst, just an old bank hack looking to scare the markets. So irresponsible.
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