Saturday, November 5, 2016

Taxi Medallion Lender LOMTO Is Undercapitalized

According to Call Report data, LOMTO Federal Credit Union (Woodside, NY) is now undercapitalized.

The credit union reported net worth of $20.5 million. Its net worth ratio was 8.40 percent as of September 2016. However, its minimum risk based net worth requirement was 10.04 percent.

The credit union reported a loss of almost $11.75 million through the first three quarters of 2016. The credit union reported $9.9 million in loan loss provisions during the first nine months of 2016.

The credit union reported an increase in delinquent loans during 2016. At the end of 2015, delinquent loans were $6.4 million. By the end of the third quarter, delinquent loans were $30.4 million.

This means that as of September 2016, the delinquent loan rate was 13.43 percent. This is up from 2.65 percent at the end of 2015.

Also, delinquent loans were 148.38 percent of the credit union's net worth.

The credit union further reported that approximately $33.8 million in Troubled Debt Restructured (TDR) loans, of which $14.8 million is in non-accrual status. TDR loans were 14.91 percent of loans and 164.72 percent of net worth, respectively.

LOMTO recorded $3.4 million in charge-offs through the first 3 quarters of 2016. The net charge-off rate was 1.94 percent.

LOMTO reported that $25.75 million in allowances for loan and lease losses. The credit union's coverage ratio was 84.64 percent at the end of the third quarter. However, the coverage ratio is overstated as $15 million was allocated to cover TDR loans.

In aggregate, LOMTO has a buffer of net worth plus allowances for loan and lease losses of $46.25 million to absorb expected and unexpected losses.

On other interesting fact is that uninsured deposits at LOMTO have fallen by 47 percent over the last year to $11.4 million.

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