Tuesday, October 27, 2015

Taxi Medallion Lender Melrose CU Reports Q3 Loss of $21.57 Million

Melrose Credit Union (Briarwood, NY) posted a loss of $21.57 million for the third quarter as provisions for loan losses increased $28.55 million to $43.5 million during the third quarter.

Delinquent loans continued to grow during the third quarter. According to Melrose's financial performance report, loans 60 days or more delinquent jumped by 127.7 percent during the quarter to almost $125.8 million. As of September 30, delinquent loan rate was 6.28 percent, up from 2.76 percent the prior quarter.

Early delinquencies (30 to 59 days delinquent) at Melrose dropped during the quarter from nearly $149.1 million to $96.1 million.

Troubled debt restructurings (TDRs) increased by 38.7 percent during the third quarter to approximately $219.5 million. As of the end of the third quarter, TDRs were 10.95 percent of loans and 60.86 percent of net worth. All TDRs are in nonaccrual status.

Allowance for loan and lease losses rose by 70.8 percent during the third quarter to $68.1 million. Melrose's coverage ratio (allowance for loan and lease losses to delinquent loans) was 54.15 percent on September 30.

The credit union's third quarter loss caused its net worth to fall to $360.6 million. As a result, the credit union's net worth ratio declined from 18.04 percent on June 30 to 17.30 percent on September 30.
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