Taxi Medallion Loan Delinquencies and TDRs Jump at Progressive

Progressive Credit Union (New York, NY) reported more problems associated with its taxi medallion loan portfolio.

After reporting a loss of $19.5 million loss for all of 2015, Progressive Credit Union posted a loss of $15.8 million for the first quarter of 2016.

Driving the loss was an increase in provisions for loan and lease losses. Progressive reported provisions for loan and lease losses of $19.1 million for the first quarter of 2016. A year earlier, the credit union had provisions for loan and lease losses of almost $1.7 million.

As of March 31, 2016, loans 60 days or more past due were slightly less than $24.6 million. This was up from $20.8 million at the end of 2015 and $3.75 million as of March 2015. At the end of the first quarter of 2016, 4.07 percent of the credit union's loans were delinquent.

In addition, early delinquencies (30 to 59 days past due) jumped from $9.9 million at the end of 2015 to $32.3 million as of March 2016.

The credit union reported a significant increase in trouble debt restructured loans (TDRs), which rose from $33.5 million at the end of 2015 to almost $89 million as of March 31, 2016. All TDRs were in nonaccrual status. TDRs represented 14.76 percent of all loans and 37.62 percent of its net worth at the end of the first quarter.

Progressive had net charge offs of almost $5 million at the end of the first quarter of 2016 compared to $1.3 million one year earlier.

Progressive Credit Union currently has a large cushion to absorb expected and unexpected losses from its taxi medallion loan portfolio.

At the end of the most recent quarter, Progressive had $55.7 million in allowances for loan and lease losses -- an increase of slightly more than $14.1 million from the end of 2015. Approximately $11.6 million in allowances for loan and lease losses was attributed to troubled debt restructured loans.

As of March 2016, the credit union had a coverage ratio (allowances for loan and lease losses to delinquent loans) of almost 227 percent.

Furthermore, Progressive is holding $232.9 million in equity at the end of the first quarter of 2016. The credit union has a net worth ratio of 37.22 percent, which fell by 186 basis points from the end of the previous quarter.