NEW YORK—Is Progressive CU beginning to turn around its problems with troubled taxi medallion loans?
The $468-million CU reported a $3.6-million profit during the first quarter of this year after losing $97 million last year, $57.3 million in 2016 and $19.5 million in 2015, according to call report data. The last profitable year for Progressive was 2014, when it made $10.2 million.
Progressive CU’s net worth, at 39.08% in 2015, dropped all the way to 21.14% last year—but picked up in Q1 2018 to 22.29%.
The business improvement at Progressive is not being experienced at taxi medallion lenders LOMTO and Melrose, both operating under conservatorship, which continue to lose money and capital.
Progressive reported a substantial reduction in provision for loan and lease losses during the first quarter of approximately $4.2 million versus provision for loan and lease losses of $26.4 million for the same quarter a year ago. For all of 2017, provision for loan and lease losses was $87.3million, reported Keith Leggett, the former senior vice president and senior economist at the ABA.
The Portfolio
The credit union had $324.7 million in commercial loans not secured by real estate as of March 31, 2018. This was down from $338.5 million from the prior quarter.
“These commercial loans not secured by real estate are presumably taxi medallion loans and were 69.3% of the credit union's assets,” Leggett said.
Delinquent loans were largely flat during the first quarter at $84.5 million. The delinquency rate for Progressive edged higher by 44 basis points to 19.55% during the first quarter of 2018. Almost $77.4 million of the delinquent loans were commercial loans not secured by real estate.
Progressive had net charge-offs of $7.3 million as of March 2018 compared to $34.8 million a year earlier, Leggett said.