Signature Bank in New York took yet another write-down on its portfolio of taxi medallion loans in the first quarter, and CEO Joseph DePaolo insists it was for the last time.

“We know we've said this before, but we do feel we've put this behind us now,” DePaolo said during a first-quarter earnings call in which the $44.4 billion-asset bank reported a sharp drop in its quarterly profit after charging off $129 million of its medallion loans.

It was one of several steps Signature took during the quarter to try to clean up the rapidly deteriorating taxi-loan book. The bank also increased its loan-loss provision to $141 million from $20 million in the previous quarter and wrote down or reserved for the value of each of its remaining New York medallion loans to about $160,000.

The moves followed a series of others Signature has made over the past two years to contain its taxi exposure. In last year's second quarter, for example, it lowered the value of its taxi medallion loan book by almost half.

After its latest steps, Signature holds about $149 million of taxi loans in New York and Chicago, or less than 1% of its total loan portfolio. Two years ago, it had roughly $763 million of taxi medallion loans on its books.

Its problems can be traced to rapid rise of car-sharing services such as Lyft and Uber, which have siphoned passengers away from traditional taxis. As taxi fares have plummeted — average daily farebox revenue in New York has declined 43% since early 2014 to $3.9 million, according to the city's Taxi and Limousine Commission — so too have the values of the medallions drivers need to operate their cabs. The average value of a medallion has dropped from a peak of roughly $1.3 million in 2014 to less than $200,000 today.

Medallion values have actually stabilized in recent months, but DePaolo said Signature took such drastic measures because it is highly unlikely taxi medallions will ever command the price they once did.

“We think it's really predominantly behind us at this point,” he said.

Signature is far from the only financial institution to be slammed by the taxi industry’s woes. The $30 billion-asset Sterling Bancorp in Montebello, N.Y., has recently lowered the value of its taxi-loan book, and the $1.4 billion-asset Melrose Credit Union in Jamaica, N.Y., was placed into conservatorship last year. The large majority of the credit union’s loans were for taxi medallions.

Signature’s first-quarter net income fell 74% to $34.5 million from a year earlier as a result of the charge-offs. Excluding the write-down on the taxi portfolio, the bank said it would have earned a record $146.8 million in the quarter.

In other areas of Signature’s first-quarter earnings, net interest income increased 5.4% to $318.5 million thanks primarily to strong growth in commercial real estate and multifamily loans. Deposits increased 5.7% year over year, to $34.8 billion.

Signature also said this week that it has opened a full-service office in San Francisco, its first outside the New York metropolitan market. Signature lured two bankers from First Republic Bank to lead its West Coast expansion.

Signature's shares were down 3.3% in late trading Thursday, to $130.64.

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Andy Peters

Andy Peters

Andy Peters writes about regional banks, consumer finance and debt collections for American Banker.