Delinquencies and net charge-offs at taxi medallion lender Progressive Credit Union (New York, NY) rose in 2017.
At the end of 2017, delinquent loans were $84.5 million, up from $74.2 million at the end of the third quarter and $66.5 million at the end of 2016. The delinquency rate has risen from 11.45 percent at the end of 2017 to 19.01 percent at the end of 2017.
Net charge-offs increased from $37.4 million at the end of 2016 to $63.3 million at the end of 2017. The net charge-off rate went from 6.32 percent to 12.34 percent over the same time period.
In addition, the $485.9 million credit union reported troubled debt restructured commercial loans not secured by real estate at almost $128 million. At the end of 2017, 33.50 percent of the TDR commercial loans not secured by real estate were 60 days or more past due.
The credit union reported a loss of $81.9 million for 2017, after reporting a loss of $57.4 million for 2016. The 2017 loss can be attributed to an almost $75 million in provision for loan and lease losses.
As a result of the 2017 loss, the credit union's net worth fell by 42 percent over the year to $113.1 million as of December 31, 2017. Over the year, the credit union's net worth ratio dropped from 32.96 percent to 23.26 percent.
Between December 2016 and December 2017, the allowance for loan and lease losses increased by $11.7 million to $82.8 million. Its coverage ratio was 97.95 percent at the end of 2017, slightly lower than 107 percent a year earlier.
At the end of 2017, the credit union has a total buffer (net worth and allowance for loan and lease losses) of almost $196 million to absorb expected and unexpected losses.
NCUA remains busy doing nothing. Uber & Lyft are not primarily responsible for the taxi medallion plummet from the peak. NCUA created the plummet by validating Progressive to go all in on taxi medallion loans. Don't stop. Speed up. And indeed Progressive broke the loan to share ratio record.
ReplyDeleteLoan/Shares at 12-2014:221%. At 12-2015:208%. At 12-2016: 191% and at 12-2017: at 153%. Loan balances exceed deposit balances. That explains the Note Payable 12-2017 at: $84M. Did the NCUA Concentration Risk Specialist miss something here? Is there a time when more is never enough? And how long will the NCUA allow the Net Income to run Negative?
Net Income 12-2014:$10M. 12-2015:(-$19Million),
12-2016 (-$57Million). 12-2017 (-$81Million). Is the NCUA stuck on stupid? Has your analysis caused paralysis? And can the NCUA Interest Rate Risk Specialist share how financing these $900,000 taxi medallion loans with a 30 year amortization with no principal reductions for 10 years - how was that provident or productive to the member or the credit union? Worse still, can the NCUA Interest Rate Risk Specialist share how interest only payments with a 15 year balloon and no principal pay down is a good business loan? Now Progressive Assets have moved from $700 Million at year end 12-2014 to less than $485 Million at year end 12-2017. Success by Shrinkage? Did CEO & CFO salary and board conference travel share the same shrinkage? 12-2014 ROA was 1.48% it has been negative every year since to wit: 12-2015 -2.90%; 12-2016 -9.27% and 12-2017 a staggering -15.21% Expect the village idiots on Duke Street to soon announce: the Corporate CU Settlement Recovery Rebate will be the offset to taxi medallion loan losses. Yes it is both hard to swallow and leaves a bad taste in your mouth. At least well, never mind.