NEW YORK—Defaulting taxi medallion loans continue to take their toll on Progressive Credit Union here.
Progressive is the last remaining major New York City taxi medallion lending credit union. Melrose CU and LOMTO FCU were closed this year by NCUA and Montauk CU was merged into Bethpage FCU in 2016.
During the third quarter of 2018, the credit union reported a 9.7% decline in its assets to $382.8 million. Year-over-year, assets at the credit union fell by almost 23.7%, reported Keith Leggett, the former senior vice president and senior economist at the ABA.
Progressive CU posted a loss of $53.3 million for the first three quarters of 2018. During the third quarter of 2018, the credit union posted a loss of $35.3 million.
The credit union increased provision for loan and lease losses during the third quarter of 2018 by almost $26.6 million. As of September 2018, provision for loan and lease losses was $46.8 million, Leggett said.
Net Worth Falls
Due to the third quarter loss, the credit union's net worth fell from $80.5 million as of June 2018 to $44.5 million as of September. Between June and September, the credit union's net worth ratio tumbled from 19% to 11.63%.
Delinquent loans increased by 14.3% during the third quarter to almost $98 million. As of September 30, the credit union's delinquency rate was 24.75%. Also, early delinquencies (30 to 59 days past due) rose by 32.9% during the most recent quarter to approximately $15.8 million, Leggett said.
“As of September 2018, $39.1 million of commercial loans not secured by real estate, presumably taxi medallion loans, were 60 days or more past due. This means that 13.69% of the credit union's $285.8 million in commercial loans not secured by real estate were delinquent,” Leggett said.
TDR Issues
In addition, the credit union reported $133.2 million in troubled debt restructured non-real estate secured commercial loans, of which $45.3 million were delinquent. “This indicates that about 34% of these loans were 60 days or more past due,” Leggett said.
The credit union recorded as of September 2018 year-to-date net charge-offs of almost $34.4 million. Almost all of the net charge-offs were commercial loans not secured by real estate. Allowance for loan and lease losses increased by 25.5% during the third quarter to $108.5 million at the end of the third quarter. The credit union's coverage ratio (allowance for loan and lease losses to delinquent loans) was 110.75%, Leggett said.
“Interestingly, the credit union reported a large increase in uninsured non-member deposits compared to a year ago. On September 2018, uninsured non-member deposits were $40.3 million, up from $10 a year earlier,” Leggett noted.
“Furthermore, total non-member deposits were almost $84.6 million as of the most recent call report. Non-member deposits were approximately 32.5% of all shares and deposits at Progressive Credit Union,” Leggett said.