Signature Bank Supports H.R. 5617 to Provide Taxi Medallion Owners Relief From Impending Income Tax Consequences

Bank Endorses Government Officials' Quest to Remove Income Tax Burdens Faced by Taxi Medallion Owner-Drivers from Debt Forgiveness

NEW YORK--()--Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, announced today that it will support H.R. 5617, which proposes targeted legislative income tax relief for potentially thousands of embattled individual taxi medallion owner-drivers (many of whom are immigrants) hurt by the recent crisis in the taxi medallion industry.

Signature Bank has worked thoughtfully with its taxi medallion borrowers to find solutions that would allow them to continue driving their taxis and retain their medallions. In many instances, these solutions have included forgiving a significant portion of their debt. Over the past three years, Signature Bank has agreed to forgive over $75 million of principal debt for more than 250 medallion borrowers. Now, these owner-drivers face the prospect of having to pay income taxes on the cancelled portion of their debt upon the issuance of a 1099-C reporting the debt forgiveness. Signature Bank brought this to the attention of Congressman Gregory Meeks (D-NY), who immediately recognized the critical nature of the problem. The Bill, sponsored by Congressman Meeks, would enact an additional "exception to cancellation of debt income" to exempt these owner-drivers from paying income tax on their forgiven debt. The Bill is also supported by Congresswoman Grace Meng (D-NY), Congresswoman Nydia Velázquez (D-NY), Congressman Hakeem Jeffries (D-NY), Congresswoman Yvette Clarke (D-NY), Congressman Jerry Nadler (D-NY), Congressman Max Rose (D-NY), Congresswoman Carolyn Maloney (D-NY), Congresswoman Alexandria Ocasio-Cortez (D-NY), Congressman Adriano Espaillat (D-NY), Congressman José E. Serrano (D-NY), Congressman Eliot Engel (D-NY), Congressman Peter King (R-NY), and Congressman Tom Suozzi (D-NY).

Signature Bank made conservative loans to taxi medallion owner-drivers between 2008 and 2014. In 2015, the rapid intrusion of unregulated ride-sharing companies such as Uber and Lyft into the yellow taxi industries’ markets caused declining revenue, plunging medallion values, and severe economic hardship to taxi medallion owners across the country. Almost immediately, Signature Bank began working with borrowers to modify and refinance taxi medallion loans under performance stress with the intention of keeping owner-drivers in their cabs. In many instances, these work-outs included debt forgiveness to reduce the loan to a manageable level or resolve it completely.

“Supporting H.R. 5617 affords Signature Bank yet another opportunity to stand by owner-drivers, many of whom we have worked closely with to arrive at a manageable resolution of their debt. We hope this legislation passes to allow these hard-working individuals the opportunity to continue with their livelihoods and not be destroyed by the onerous financial burden they would face if they had to pay income tax on the forgiven debt,” explained Scott A. Shay, Chairman of the Board at Signature Bank.

H.R. 5617 is important legislation that will ensure efforts taken by Signature Bank on behalf of taxi medallion borrowers and the industry will not be undermined by taxing phantom “income” arising from forgiveness of debt. It may also serve as an impetus for other lenders in the industry to follow Signature Bank’s approach towards restoring stability to the taxi industry.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 31 private client offices throughout the New York metropolitan area and Connecticut as well as San Francisco. The Bank’s growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers.

For more information, please visit www.signatureny.com.

This press release and oral statements made from time to time by our representatives contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. You should not place undue reliance on those statements because they are subject to numerous risks and uncertainties relating to our operations and business environment, all of which are difficult to predict and may be beyond our control. Forward-looking statements include information concerning our future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams and other hires, new office openings and business strategy. These statements often include words such as "may," "believe," "expect," "anticipate," "intend," “potential,” “opportunity,” “could,” “project,” “seek,” “should,” “will,” “would,” "plan," "estimate" or other similar expressions. As you consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward-looking statements and can change as a result of many possible events or factors, not all of which are known to us or in our control. These factors include but are not limited to: (i) prevailing economic conditions; (ii) changes in interest rates, loan demand, real estate values and competition, any of which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance, including earnings on interest-bearing assets; (iii) the level of defaults, losses and prepayments on loans made by us, whether held in portfolio or sold in the whole loan secondary markets, which can materially affect charge-off levels and required credit loss reserve levels; (iv) changes in monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; (v) changes in the banking and other financial services regulatory environment and (vi) competition for qualified personnel and desirable office locations. Although we believe that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or our beliefs, assumptions and expectations were incorrect, our business, financial condition, liquidity or results of operations may vary materially from those expressed in our forward-looking statements. Additional risks are described in our quarterly and annual reports filed with the FDIC. You should keep in mind that any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time, and we cannot predict these events or how they may affect the Bank. Signature Bank has no duty to, and does not intend to, update or revise the forward-looking statements after the date on which they are made. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.

Contacts

Investor Contact:
Eric R. Howell, Executive Vice President – Corporate and Business Development
646-822-1402
ehowell@signatureny.com

Media Contact:
Susan Turkell Lewis
646-822-1825
slewis@signatureny.com

Release Summary

Signature Bank Supports H.R. 5617 to Provide Taxi Medallion Owners Relief From Impending Income Tax Consequences

Contacts

Investor Contact:
Eric R. Howell, Executive Vice President – Corporate and Business Development
646-822-1402
ehowell@signatureny.com

Media Contact:
Susan Turkell Lewis
646-822-1825
slewis@signatureny.com