Signature Bank reported Q2/17 net income was $14.0 million versus $102.2 million reported in Q2/16. Excluding provision expense and write-downs for the Taxi Medallion portfolio, net income would have been $120.2 million.

Signature said the decrease in net income for the 2017 second quarter, versus the comparable quarter last year, is due to an increase of $154.3 million in the provision for loan losses nearly all attributable to the New York City taxi medallion portfolio.

The bank said non-accrual loans were $392.9 million, or 1.29% of total loans, at June 30, 2017, versus $225.9 million, or 0.75%, at the end of the Q1/17 and $129.5 million, or 0.48%t, at the end of Q2/16. The increase in non-accrual loans for the quarter was due to all taxi medallion loans being placed on non-accrual. excluding taxi medallion loans, non-accrual loans are $25.9 million, or 9 basis points of total loans.

“Signature Bank has executed its business strategy almost flawlessly for 16+ years. Sometimes, the trials and tribulations of business – and how we address them – define us. Recently, we encountered adversity within the taxi medallion landscape. Signature Bank has continually persevered, despite this adversity, which will ultimately strengthen our business. We are now coming out on the other side of it, and are looking forward. We have re-positioned our taxi medallion business to better resolve these types of loans and enable management of Signature Financial to once again fully direct their efforts toward growth initiatives. This quarter, Signature Financial loans grew $252.4 million, excluding taxi medallion loans. Our diversification strategy has always proved beneficial to our model,” explained Joseph J. DePaolo, Signature Bank president and chief executive officer.

“We did not, nor did any others, foresee the dramatic decline in taxi medallion values caused by a combination of rapid radical disruption by app-based hailing systems and inaction by governmental authorities. We did, however, see the disruption coming in time to set an upper limit on loan amounts and to stop our lending earlier than most,” said Scott A. Shay, chairman of the board.

“In times of disruption, we rely on the strength and success of Signature Bank’s depositor-first model to sustain our focus. This deposit first-and-foremost strategy, coupled with our strong, well-capitalized balance sheet, positions us to not only weather storms, but also to grasp opportunities in the marketplace, as evidenced by the two private client banking teams that joined this quarter to further our deposit and loan growth efforts,” DePaolo added.