Signature Bank in New York reported a sharp decline in quarterly profits after suffering steep losses on its Chicago portfolio of taxi medallion loans.
The $37.8 billion-asset company said Thursday that its third-quarter profit fell 21% from the same period last year, to $76.1 million, following its decision to charge off more than $95 million of its Chicago taxi medallion loans. Signature increased its loan-loss provision in the quarter by more than 600%, to $80.5 million.
The value of taxi medallions in many cities has plunged in recent years as ridesharing services like Lyft and Uber have siphoned business away from traditional taxi firms. Following the chargeoffs, Signature has about $58 million of Chicago taxi loans remaining on its books.
The weakness in the taxi portfolio overshadowed what was otherwise a strong quarter. Net interest income climbed 16% year over year, to $290.5 million, due largely to a 25% increase in net loans and leases.
Noninterest income increased 41% to $11.1 million, primarily due to increased income from the sale of securities.
Signature's shares were down 4.3% in early trading Thursday, to $114.53.