Bay Ridge Federal Credit Union (Brooklyn, NY) became undercapitalized during the second quarter of 2018 due to losses arising from taxi medallion loans.
The $183 million credit union reported a mid-year loss of almost $4.9 million. In comparison, the credit union recorded losses of $2.3 million for the prior quarter and $2.1 million from a year ago.
The mid-year loss arose from an increase in provision for loan and lease losses of almost $6.1 million, up from $3.1 million for the first quarter of 2018.
Due to the second quarter loss, the net worth for the credit union fell by 20.3 percent during the quarter to $9.8 million. As of June 2018, the credit union was undercapitalized with a net worth ratio of 5.36 percent.
At mid-year, the credit union had almost $68.4 million in commercial loans not secured by real estate. Presumably, many of these loans were to finance taxi medallions.
As of June 2018, the credit union reported $12.1 million in delinquent loans, of which $9 million were commercial loans not secured by real estate.
Bay Ridge's delinquency rate was 7.12 as of mid-year 2018. The delinquency rate on commercial loans not secured by real estate was 13.16 percent.
In addition, troubled debt restructured (TDR) commercial loans not secured by real estate was $19.8 million. Almost $4.8 million of these TDR loans were 60 days or more past due. This means that 24.12 percent of these loans are delinquent.
Net charge-offs were $2.8 million, of which $2.3 million were participation loans. Net charge-offs of TDR commercial loans were $1.383 million.
The credit union increased its allowance for loan and lease losses during the second quarter from $7.45 million to $9.66 million. The credit union's coverage ratio fell from 193.09 percent as of March 2018 to 79.77 percent as of June 2018.
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Maybe NCUA should conserve and run it for a few years. They have really turned around Melrose and LOMTO!!
ReplyDeleteIs the NCUA ignorant, incompetent or both? Year end December, 2009 Bay Ridge had robust loan to share ratio of 115%. Did the NCUA notice its ROA was -0.49% and year end income was -$569,915 with a Net Worth of 8.0%. Does concentration risk at 115% present a red flag to the NCUA? Or is the NCUA color blind and observes a green light. Now Bay Ridge shows net income through June of -$4.8M and a wrecked ROA of -5.18% How is that working with a loan to share ratio of 99.0%? Now Net Worth is a skinny 5.36% and the $9M in Net Worth is soon to be exhausted, extinguished and depleted. From 2009 through today where has the proactive NCUA been? The NCUSIF exposure to losses from Progressive, Melrose, LOMTO and Bay Ridge will continue and we can expect more to come. The NCUA has failed to competently audit and examine these credit unions and now the losses due to NCUA incompetence are for the world to see. When can the credit union community obtain an audit of the NCUA? Is the NCUA subject to an examination? Are the NCUA exam teams from Progressive, Melrose, LOMTO, and Bay Ridge still doing exams at other credit unions? Now that is a scary proposition. The NCUA is out of control & the losses only validate the cost of gross incompetence. CAMEL code: 5. Conservatorship and Liquidation of the NCUA is the cure. FDIC can manage the liquidation. Lets move on.
ReplyDeleteMr. Costanzo...you say the same thing for each blog post. We get it. Move on.
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