Monday, November 7, 2016

Losses Surge on Higher Provisioning for Bad Taxi Medallion Loans at Progressive CU

Taxi medallion lender Progressive Credit Union (New York, NY) reported a loss of almost $52.4 million through the first three quarter of 2016 on higher provisioning charges.

For the third quarter, the loss was $32.98 million.

Provisions for loan and lease losses were $60.3 million at the end of the third quarter, up from $25.1 million as of June 2016.

The credit union's net worth fell from $233 million as of June 2016 to $200 million as of September 2016. Progressive's net worth ratio dropped from 36.71 percent to 33.95 percent over the same time period.

Delinquent loans increased by 45.2 percent during the quarter to approximately $70.6 million at the end of the third quarter. As a result, 11.62 percent of all loans were 60 days or more past due. In addition, delinquent loans were 35.29 percent of net worth.

Early delinquencies (30 to 59 days past due) were $14.2 million as of September 30, 2016.

Progressive reported net charge-offs of $10.8 million as of September 2016, up from $4.3 million from the previous quarter.

Troubled Debt Restructured (TDR) loans were $123.4 million at the end of the third quarter. TDR loans were 20.32 percent of loans and 61.7 percent of net worth.

Allowances for loan and lease losses (ALLL) were $91.1 million as of September 2016, up from $62.3 million as of June 2016. The credit union's coverage ratio (ALLL divided by delinquent loans) was 129.11 percent. However, its coverage ratio is overstated as $38.1 million was allocated to cover TDR loans.

The credit union is reporting a buffer of net worth and ALLL of $291.1 million, which is able to absorb expected and unexpected losses.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.