Taxi medallion lender Progressive Credit Union (New York, NY) experienced a jump in problem loans during the second quarter of 2016.
Delinquent loans rose from almost $24.6 million as of March 2016 to $48.6 million as of June 2016. The delinquency rate on loans jumped from 4.07 percent to 8 percent over the same time period.
In addition, early delinquencies were $20.3 million as of June 2016. The good news is this was down from $32.3 million at the end of the first quarter.
Troubled debt restructured (TDR) loans increased by 21.1 percent during the quarter to $107.8 million as of mid-year 2016. All TDR loans were in non-accrual status. TDR loans were 17.74 percent of loans and 46.27 percent of net worth.
Progressive Credit Union reported a mid-year loss of almost $19.4 million. Its loss for the second quarter was slightly less than $3.6 million.
The loss was driven by an increase in provisions for loan losses. The credit union added $5.9 million to its provisions for loan losses during the second quarter -- bringing total provisions for loan losses to almost $25.1 million as of mid-year 2016.
The credit union reported an 11.9 percent increase in allowance for loan and lease losses (ALLL) during the second quarter of 2016 to $62.3 million as of June 2016. This resulted in a June 2016 coverage ratio of 128.24 percent. However, the coverage ratio is overstated as $25.5 million was allocated to TDR loans.
The credit union is holding almost $233 million in net worth. Its net worth ratio was 36.71 percent on June 30, 2016 -- down from 37.22 percent for the prior quarter.
This would indicate that the credit union has a buffer to absorb expected and unexpected losses of approximately $295 million.
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Lomto.
ReplyDeleteQuorum.
Progressive.
Melrose.
Assessments.
NAFCU proclamation letter to NCUA there will be no assessments.
NCUA allows concentration of medallion loans equal to 70-75% of ASSETS.
Hard working credit unions everywhere, no one has our back. Not CUNA, not NAFCU, not NCUA, not Congress.
Doesn't matter how well capitalized a CU is if concentration of bad loans is 70% of assets.
ReplyDeleteJust ask WesCorp.
Now, just ask....
I'm trying to understand the size of this problem. At June 30, what are total assets, net worth, delinquent loans and allowance for the medallion lenders you're following?
ReplyDeleteDid the NCUA Capital Market Specialists miss something? How do you say CONCENTRATION RISK? How many years have these Taxi Credit Unions been at 100%+ loan to share ratio? And how many billion$ in Taxi loans have they sold? How far down stream does this toxic waste flow?
ReplyDeleteGood question. Maybe Leggett can total all the risk up so we can get an idea of assessments for next year since Nafcu and CUNA are busy writing dumb letters.
ReplyDeleteMy boards question is a little different.
How did this get to grow into such a large problem?
Aren't there concentration limits?
We have them.