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Taxi Medallion Lender Progressive CU Recorded YTD Loss of $45 Million "Credit News 24"

Progressive Credit Union (New York, NY) reported a loss of $45 million through the first six months of 2018, as troubled taxi medallion loans weigh on its operation.

The loss arose from the credit union increasing provisions for loan and lease losses to build its reserves to cover problem taxi medallion loans. The credit union increased provisions for loan losses in the second quarter of 2018 by almost $14 million to $40.4 million.

As a result of the loss, the credit union's net worth fell from $169.4 million as of March 31, 2018 to slightly less than $150 million at the end of the second quarter. Its net worth ratio over the same period dropped from 31.10 percent to 29.31 percent.

Delinquent loans rose during the quarter by $13.3 million to almost $59.5 million. The delinquency rate went from 9.16 percent to 12.24 percent.


Early delinquencies (loans 30 days to 59 days past due) were $16 million as of June 30, down from prior quarter's $21.1 million.

Net charge-offs jumped during the second quarter to $42.8 million from $34.8 million. One year earlier, net charge-offs were $4.3 million.

As of June 30, 2018, the net charge-off rate was 16.05 percent.

Over the last year, foreclosed and repossessed other assets (taxi medallions) rose from less than $1 million to $24.8 million, although it fell from its March 2018 level of $29.9 million.

Troubled debt restructured (TDR) business loans were $120.4 million at the end of the second quarter of 2018. TDR loans were 24.79 percent of its total loans and 80.28 percent.

Thirteen percent of TDR loans were 60 days or more past due as of June 30, up from 5.44 percent the prior quarter.

The credit union's allowance for loan and lease losses (ALLL) rose by $6 million during the quarter to almost $68.7 million. The credit union's coverage ratio was 115.54 percent. However, the coverage ratio is overstated, as $26.4 million was dedicated to TDR loans.

As of June 30, 2018, Progressive Credit Union has a buffer of net worth and ALLL of almost $218.7 million to cover both expected and unexpected losses.




Title : Taxi Medallion Lender Progressive CU Recorded YTD Loss of $45 Million "Credit News 24"
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