Plummeting taxi medallion values created a deeper hole for taxi lender Melrose Credit Union (Briarwood, NY). Melrose Credit Union was placed into conservatorship on February 10, 2017.
The credit union reported a loss of $111.2 million for the first quarter of 2018, due to a provision for loan and lease losses of $102.1 million for the quarter.
Due to the quarterly loss, the credit union's net worth fell to negative $299.1 million as of March 31, 2018. The credit union's net worth ratio was a minus 24.75 percent at the end of the first quarter, compared to minus 13.79 percent the prior quarter.
Commercial loans not secured by real estate were $952.6 million as of March 2018 -- down from $1.226 billion as of September 2017. Most, if not all of these loans, were to finance taxi medallions. As of March 2018, almost 79 percent of the credit union's assets were in commercial loans not secured by real estate.
Melrose reported $450.6 million in delinquent loans at the end of the first quarter of 2018. This was down 5 percent from the prior quarter. Almost one third (32.74 percent) of the credit union's loans were 60 days or more past due.
The credit union had $438.6 million in delinquent member commercial loans not secured by real estate. This means that 46.49 percent of its non-real estate member secured commercial loans were at least 60 days past due.
Melrose recorded a net charge-off of $35.5 million during the first quarter, after reporting net charge-offs of $195.6 million for all of 2017. All of the net charge-offs during the first quarter were commercial loans not secured by real estate.
In addition, troubled debt restructured commercial loans not secured by real estate were $227.2 million, according to the most recent call report. Roughly 64 percent of these TDR commercial loans were delinquent.
Due to the increase in provision for loan and lease losses in the first quarter, the credit union reported a 29 percent increase in allowance for loan and lease losses to $306.6 million. The credit union's coverage ratio (allowance for loan and lease losses divided by delinquent loans was 68.04 percent, up from 50.09 percent from the previous quarter.
At the end of the first quarter, Melrose has drawn $191 million of its $300 million credit lines at corporate credit unions. These credit lines are guaranteed by the National Credit Union Share Insurance Fund.
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The $191 million borrowings at the corporates are guaranteed by credit unions. The corporate is probably, realistically undercapitalized also.
ReplyDeleteCredit unions are on the hook for this because the reserve account at ncusif isn’t large enough.
McW, Mr. Transparency, didn’t have the guts to tell us the reason we didn’t get the rebate wired to us now is because they’re not sure they can pay it.
79% of assets is taxi loans.
Nice job Melrose.
Nice job millionaire ceo Kaufman.
Nice supervisory job NCUA and NY.
The Melrose board must have been busy teaching the MCU board how to be pitiful stewards of their members interests.
Millionaire Wong and Kaufman.
Nice job.
How can they keep Melrose open?
ReplyDeleteExcellent question.
DeleteWhat was Progressive Credit Union's 1st Quarter results?
ReplyDeletePosting tomorrow.
DeleteLooks like sumting Wong!
ReplyDeleteLeggett, it's disgusting you're not calling out Costanzo for his racist remark or even posting my comment as usual. You just want your banking puppets to respond. I thought you retired. Go back to academia where you can sit and judge others. People like you and Costanzo are a disgrace.
ReplyDeleteMr. Green:
DeleteIf I did not post your earlier comment, I apologize.
Mr. Green.
ReplyDeleteVery interesting comment. With assessments coming thanks to our regulator’s pathetic supervision allowing CUs to run taxi loans to 75% of balance sheet...
With trades looking the other way in self interest. ..
With our regulator missing the skullduggery of Wong...
With $200M borrowed at corporates from taxi CUs...
With over $1B taxi loans participated...
You write in to whine about what exactly?
Does your board know how pitifully your CU is managed?
Do they know you don’t care about assessments?
It’s ok for you to watch member’s capital be squandered while you whine about banks?
What’s your loan to share?
Nice.