Signature Bank in New York more than tripled its loan-loss reserves for taxi medallion and other loans in the second quarter yet still managed a double-digit increase in profits primarily on loan growth.
The $36 billion-asset Signature said Wednesday that net income rose 13% to $102.2 million year over year. Signature attributed that gain primarily to a 19% increase in net interest income to $282 million as loans rose 30.1% to $26.7 billion.
Still, profits were curtailed because the company boosted its loan-loss provision to $33 million from $9 million; the additional $24 million in reserves was primarily for troubled taxi medallion loans in Chicago, the bank said.
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Signature Bank in New York reported record profits in the first quarter as strong loan, asset and deposit growth more than offset increased expenses and deterioration in its portfolio of taxi-medallion loans.
April 20 -
The disruption of the taxi industry caused by Uber and Lyft continues to hurt banks that finance taxi medallions. Anticipating more chargeoffs to come, these banks are aggressively boosting their reserves, restructuring delinquent loans and reselling or leasing out foreclosed medallions.
May 12 - New York
Signature Bank in New York has added former New York state banking supervisor Derrick Cephas to its board.
May 4 -
Signature Bank in New York has filed a plan to sell about $299 million in common stock.
January 22
Gains were also hampered by an 8.7% increase in noninterest expenses to $92.3 million that the bank attributed primarily to its recruitment of new private-client bankers and added costs in risk management and compliance.
Noninterest income increased 35% to $13 million mostly due to a $4.4 million increase in net gains on securities sales.
