ConnectOne (CNOB) said in its last quarterly report that all of its medallion loans are 100% current as to principal and interest, although the bank said declining medallion values had caused it to record an approximately $2.0 million credit reserve for its taxi medallion loan portfolio.CNOB data by YCharts
Sterling Bancorp (STL) and Capital One (COF) have not specified delinquencies but have some "special mentions" in recent quarterly filings (Sterling Bancorp's 10Q is here and Capital One's is here.) These are loans that have potential weaknesses but are not yet considered substandard.COF data by YCharts
STL data by YCharts
Medallion Financial Corporation (TAXI) is not a bank. Instead, it's a specialty lender with a focus on medallion loans. According to this recent filing, it has $5.5 million, or 1.4%, of its portfolio more than 90 days past due, and $19.5 million 31-90 days late.TAXI data by YCharts
The companies with multibillion-dollar asset bases can absorb losses. Even Medallion Financial is in OK shape because it takes personal guarantees on all of its loans. It can, and has, restructured loans so borrowers can have an easier time making payments. Because Medallion Financial only gives up about 3.6% annual interest in an amortization-only restructuring, it's barely a blip to the bottom line.
Yes, it's true that some New York credit unions have suffered: Lomto, Melrose, Montauk and Progressive. And of course, Montauk generated headlines when it was seized by New York state regulators in September. These lenders are suffering the most because while their median delinquency rate, according to SNL Financial data cited in this Piper Jaffray note, is 7.8%, that's against relatively small asset bases, of $2.1 billion and less.
Medallion Financial, with its personal guarantees and restructurings, and lenders with large, diversified asset bases are really not facing the same risk.
It's time to keep a close watch on what happens to taxi license volume in other cities, because even those pressures that lenders have faced may begin to wane.