NEW YORK—Troubled taxi medallion loans caused a decline in asset quality at Progressive Credit Union during the third quarter of 2017, one analyst is reporting.
Progressive had $74.2 million in delinquent loans at the end of the third quarter of 2017, representing a 24.8% increase. The percentage of loans past due was 15.81%, up from 12.24% from the previous quarter, reported Keith Leggett, the former senior vice president and senior economist at the ABA, on his Credit Union Watch blog.
The credit union also reported $54.2 million in net charge-offs, as of September 2017. The net charge-off rate on average loans was 13.77%. In addition, outstanding troubled debt restructured loans were $120.5 million.
At the end of the third quarter, the credit union has $26.9 million in foreclosed and repossessed other assets, presumably taxi medallions, said Leggett.
“Due to the decline in asset quality, the credit union increased provision for loan and lease losses to build its allowance for loan and lease losses. Provision for loan and lease losses was $59.9 million at the end of the third quarter, up from $40.4 million from the prior quarter,” said Leggett.
Through the first three quarters of this year, allowance for loan and lease losses increased by $5.7 million to $76.8 million, as of September 2017. The credit union's coverage ratio dropped to 103.59% during the quarter from 115.54% and since the beginning of the year from 107%. “As a result of the increase in provision for loan and lease losses, the credit union reported a year-to-date loss of $65.7 million, as of September 2017,” Leggett wrote.
This loss caused the credit union's net worth to fall from almost $195 million at the end of 2017 to $129.2 million as of September 2017. The credit union's net worth ratio tumbled from 32.96% to 25.77% over the same time period, Leggett said.
Last week Leggett reported that massive losses from bad taxi medallion loans have wiped out the net worth of Melrose Credit Union, located in Briarwood, N.Y.
As CUToday.info has reported, due to the impact of ride sharing services on taxi-medallions in this city, medallion-lender Melrose CU was placed into conservatorship on Feb. 10, 2017.
Falling medallion prices have impacted several Big Apple CUs. In addition to Melrose, NCUA in June placed medallion lender LOMTO FCU, Woodside, N.Y., into conservatorship. In September of 2015, taxi medallion lender Montauk CU was conserved. It was later merged into Bethpage FCU.