WOODSIDE, N.Y.—The performance of conserved LOMTO FCU continues to decline due to plummeting taxi medallion values in the New York City market. As of mid-year, the credit union was unprofitable and insolvent.
As CUToday.info reported, the $156-million credit union was placed into conservatorship on June 26, 2017.
Over the last year, the credit union has shrunk from $218.9 million in assets to $156 million.
LOMTO reported a loss of $11.3 million for the second quarter. As of mid-year 2018, the credit union had a loss of $16.5 million.
“The second quarter loss was due to a 64.2% increase in provision for loan and lease losses during the quarter to $14.1 million,” 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 fell by 26.4% to almost negative $54 million as of June 2018. The credit union's net worth ratio was minus 34.57%.”
LOMTO reported delinquent loans of $13.3 million as of June 2018 – this is down from $18.2 million at the end of March 2018 and $38.4 million from a year ago. As of June, the credit union had a delinquency rate of 10.44%, Leggett noted.
“However, the credit union reported an almost 21% increase in early delinquent loans (30 to 59 days past due) during the second quarter to $20.4 million,” Leggett said.
Other Issues
As of mid-year, net charge-offs were $11.45 million. The net charge-off rate was 16.34%.
Through the first two quarters of 2018, 47 members with $16.75 million in loans have filed for bankruptcy protection.
Troubled debt restructured (TDR) commercial loans grew by 34.8% in the second quarter to $19.9 million, of which $8.3 million are 60 days or more past due. The credit union had a $2.7 million increase in allowance for loan and lease losses in the second quarter to $26.3 million. Its coverage ratio was 197.02%, noted Leggett.
“As of June 2018, LOMTO has drawn all of its line of credit of $100 million from one or more corporate credit unions,” added Leggett.