The loss arose from the credit union increasing provisions for loan and lease losses to build its reserves to cover problem taxi medallion loans. The credit union increased provisions for loan losses in the second quarter of 2017 by almost $14 million to $40.4 million.
As a result of the loss, the credit union's net worth fell from $169.4 million as of March 31, 2017 to slightly less than $150 million at the end of the second quarter. Its net worth ratio over the same period dropped from 31.10 percent to 29.31 percent.
Delinquent loans rose during the quarter by $13.3 million to almost $59.5 million. The delinquency rate went from 9.16 percent to 12.24 percent.
Early delinquencies (loans 30 days to 59 days past due) were $16 million as of June 30, down from prior quarter's $21.1 million.
Net charge-offs jumped during the second quarter to $42.8 million from $34.8 million. One year earlier, net charge-offs were $4.3 million.
As of June 30, 2017, the net charge-off rate was 16.05 percent.
Over the last year, foreclosed and repossessed other assets (taxi medallions) rose from less than $1 million to $24.8 million, although it fell from its March 2017 level of $29.9 million.
Troubled debt restructured (TDR) business loans were $120.4 million at the end of the second quarter of 2017. TDR loans were 24.79 percent of its total loans and 80.28 percent.
Thirteen percent of TDR loans were 60 days or more past due as of June 30, up from 5.44 percent the prior quarter.
The credit union's allowance for loan and lease losses (ALLL) rose by $6 million during the quarter to almost $68.7 million. The credit union's coverage ratio was 115.54 percent. However, the coverage ratio is overstated, as $26.4 million was dedicated to TDR loans.
As of June 30, 2017, Progressive Credit Union has a buffer of net worth and ALLL of almost $218.7 million to cover both expected and unexpected losses.
Coverage ratio is overstated for more reasons than TDR.
ReplyDeleteTRY a market value of 30cents on the dollar versus whatever inflated number they're using and try the forbearance afforded them by NCUA...a regulator more focused on survival than prudential supervision.
The regulator that allowed a concentration of taxi medallions to total assets of 75%.
And NCUA will keep doing this with no accountability. They know the federal people with the authority to enforce action on them do not care, and that we individual credit union Boards who care have no authority (just liability) and cannot fire them by leaving. Exit door to bank charter is blocked by NCUA authored requirement of a depositor vote on charter change, a very confusing topic for them.
ReplyDeleteExit to State CU charters might help if some Nat'l Assoc of State Bank/CU Commissioners could win approval for FDIC insurance as an option for State CUs. And no member vote should be required to move to FDIC insurance, still federal. But if vote needed, depositors would pick FDIC, not a confusing topic for them.
ABA/ICBA should support their State Bank Commissioners with getting this as a (the only) path out of NCUA's jurisdiction. State CU boards partner with their State Commissioners on how to best serve communities. More cu conversions to mutual bank charters would result.
No accountability, no change.
Amen.
DeleteNCUA has imprisoned credit unions "while congress slept".
Under lights and with facts on their historic behavior, NCUA WOULD LAST 5 SECONDS.
Congress is as much to blame.