NEW YORK—After posting a profit for the first quarter of 2018, taxi medallion lender Progressive Credit Union reported a mid-year loss of almost $18 million.
The numbers are similar to those reported by another taxi medallion lender, LOMTO FCU, as CUToday.info reported here.
For the second quarter, Progressive Credit Union recorded a loss of $$22.28 million. The loss was due to an increase in provision for loan and lease losses from $3.16 million as of March 2018 to $20.28 million as of June 2018, reported Keith Leggett, the former senior vice president and senior economist at the ABA.
Due to the second quarter loss, the credit union's net worth tumbled by 21.1% during the quarter to $80.5 million. The credit union's net worth ratio fell to 19% as of June 2018 from 21.92% at the end of the first quarter 2018.
Assets at Progressive Credit Union fell by 9% during the second quarter of 2018 to $423.8 million. A year earlier assets were $511.5 million.
During the quarter delinquent loans edged higher by 1.4% during the quarter to $85.7 million. The credit union's delinquency rate rose from 19.55% on March 31, 2018 to 21.18% on June 30, 2018.
Surge in Charge-Offs
Troubled debt restructured (TDR) commercial loans were $133.2 million at the end of June 2018. The credit union reported that 30.1% of its TDR commercial loans were 60 days or more past due, Leggett said.
The credit union reported a surge in net charge-offs from $7.26 million as of March to $28.89 million as of June 2018. At the end of the second quarter, the net charge-off rate was 13.59%.
Progressive Credit Union reported a 6% decline in its allowance for loan and lease losses balances to $86.5 million, as net charge-offs grew faster than provision for loan and lease losses. The credit union's coverage ratio was 100.89% as of June 2018.
“The credit union has a buffer to absorb expected and unexpected losses of almost $167 million,” Leggett noted.