Wednesday, May 16, 2018

Delinquent Loans Flat During the First Quarter at Progressive CU

Unlike taxi medallion lenders LOMTO and Melrose, Progressive Credit Union (New York, NY) reported a profit during the first quarter.

The credit union earned $3.6 million during the first quarter of 2018, after recording a loss of $95 million for the full year of 2017.

The credit union reported a substantial reduction in provision for loan and lease losses during the first quarter of approximately $4.2 million versus provision for loan and lease losses of $26.4 million for the same quarter a year ago. For all of 2017, provision for loan and lease losses was $87.3 million.

The credit union had $324.7 million in commercial loans not secured by real estate as of March 31, 2018. This was down from $338.5 million from the prior quarter.

These commercial loans not secured by real estate are presumably taxi medallion loans and were 69.3 percent of the credit union's assets.

The credit union saw a 115 basis point improvement in its net worth ratio during the quarter to 22.29 percent. The combination of fewer assets and higher net worth contributed to the increase in the net worth ratio.

Delinquent loans were largely flat during the first quarter at $84.5 million. The delinquency rate for Progressive edged higher by 44 basis points to 19.55 percent during the first quarter of 2018. Almost $77.4 million of the delinquent loans were commercial loans not secured by real estate.

Progressive had net charge-offs of $7.3 million as of March 2018 compared to $34.8 million a year earlier.

Troubled debt restructured (TDR) commercial loans not secured by real estate increased by $3 million during the quarter to $131 million. Roughly 34 percent of these TDR commercial loans were 60 days or more past due.

Because net charge-offs exceeded provision for loan and lease losses, allowance for loan and lease losses fell by almost $3.2 million to $92 million. Its coverage ratio was 108.84 percent as of the end of the first quarter of 2018.

About one-third of the credit union's funding is coming from uninsured shares and deposits. Progressive has $279.8 million in shares and deposits at the end of the first quarter of 2018, of which $90.2 million were uninsured.

During the quarter, total shares and deposits fell by $9.4 million, as nonmember deposits accounted for all of the decline.

1 comment:

  1. Here is the perfect business model designed by the NCUA. The NCUA calls it: Shrinking Your Way to Success. Dec, 2014 they were $700M in Assets. Today they have dropped to $468M. It gets better. The membership net worth during this period dropped like a knife through hot butter from a high of $269M to a mere $99M. Did management share with the membership exactly what happened to the $170M runoff in net worth? CEO salary? Offset taxi loan losses? Who raped, pillaged and plundered the $170M net worth? Shares dropped from $288M to $279M & the credit union sports a Note Payable of some $84M. What corporate FCU is holding the Note? Loans drop from $640M to $432M. That is the good news. Bad news delinquency jumps from 2.12% year end 2014 to a high 19.55%. And as one would expect charge offs jump from 0.08% to 6.62%. With a loan to share ratio of 154% expect more bad news. Progressive has gone Regressive. Salaries never did decline. Progressive has the best management money can buy. Can the NCUA say: Concentration Risk? Next time in for a visit to Progressive take a look at the taxi medallion loan portfolio.



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