It appears that Progressive Credit Union (New York, NY) came clean about its true financial performance prior to its emergency merger with Pentagon Federal Credit Union (McLean, VA) on January 1, 2019.
Progressive Credit Union was a casualty of the disruption to the taxi industry by ride sharing companies.
At the end of 2018, Progressive Credit Union had $325.6 million in assets and $270.5 million in commercial loans not secured by real estate, which presumable were mostly or all loans to finance taxi medallions.
Progressive Credit Union reported a loss of $102.99 million for 2018. The loss for the fourth quarter was $49.7 million.
The fourth quarter loss was attributed to an increase in provision for loan and lease losses by $40.4 million during the fourth quarter. As of the end of 2018, provision for loan and lease losses were $$87.25 million.
The fourth quarter loss also wiped out the net worth for Progressive Credit Union. Net worth fell from $44.5 million as of September 2018 to negative $5.2 million at the end of 2018. The credit union's net worth ratio fell from 11.35 percent on September 30, 2018 to minus 1.58 percent on December 31, 2018. At the end of 2018, the credit union was critically undercapitalized.
The credit union reported that at the end of 2018 delinquent loans were almost $100.6 million. This meant that 26.7 percent of its loans were 60 days or more past due at the end of 2018.
In addition, early delinquencies increased by 37.2 percent during the fourth quarter to $21.6 million.
The credit union charged off almost $69.4 million in loans in 2018, but recorded recoveries of approximately $24.6 million. As a result, the net charge-off rate was 10.89 percent for 2018.
The credit union's allowance for loan and lease losses rose by 27.7 percent during the fourth quarter to $138.6 million. The credit union's coverage ratio (allowance for loan and lease losses divided by delinquent loans) was 137.85 percent.
The emergency merger of failed Progressive into Pentagon Federal Credit Union prevented the National Credit Union Share Insurance Fund from incurring losses.
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It's a shame the members of Pen Fed did not have a "vote" here. I wonder why anyone would agree to such a losing proposition. Makes one wonder if the credit union is actually being run FOR the members.
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