Delinquencies Up Almost 25 Percent During Q3 at Taxi Medallion Lender Progressive CU

Troubled taxi medallion loans caused a decline in asset quality at Progressive Credit Union (New York, NY) during the third quarter of 2017.

Progressive Credit Union had $74.2 million in delinquent loans at the end of the third quarter of 2017. Delinquent loans were up 24.8 percent during the quarter. The percentage of loans past due was 15.81 percent, up from 12.24 percent from the previous quarter.

The credit union also reported $54.2 million in net charge-offs, as of September 2017. The net charge-off rate on average loans was 13.77 percent.

In addition, outstanding troubled debt restructured loans were $120.5 million.

At the end of the third quarter, the credit union has $26.9 million in foreclosed and repossessed other assets, presumably taxi medallions.

Due to the decline in asset quality, the credit union increased provision for loan and lease losses to build its allowance for loan and lease losses.

Provision for loan and lease losses was $59.9 million at the end of the third quarter, up from $40.4 million from the prior quarter.

Through the first 3 quarters of this year, allowance for loan and lease losses increased by $5.7 million to $76.8 million, as of September 2017. The credit union's coverage ratio dropped to 103.59 percent during the quarter from 115.54 percent and since the beginning of the year from 107 percent.

As a result of the increase in provision for loan and lease losses, the credit union reported a year-to-date loss of $65.7 million, as of September 2017.

This loss caused the credit union's net worth to fall from almost $195 million at the end of 2017 to $129.2 million as of September 2017. The credit union's net worth ratio tumbled from 32.96 percent to 25.77 percent over the same time period.