Losses Surge on Higher Provisioning for Bad Taxi Medallion Loans at Progressive CU

Taxi medallion lender Progressive Credit Union (New York, NY) reported a loss of almost $52.4 million through the first three quarter of 2016 on higher provisioning charges.

For the third quarter, the loss was $32.98 million.

Provisions for loan and lease losses were $60.3 million at the end of the third quarter, up from $25.1 million as of June 2016.

The credit union's net worth fell from $233 million as of June 2016 to $200 million as of September 2016. Progressive's net worth ratio dropped from 36.71 percent to 33.95 percent over the same time period.

Delinquent loans increased by 45.2 percent during the quarter to approximately $70.6 million at the end of the third quarter. As a result, 11.62 percent of all loans were 60 days or more past due. In addition, delinquent loans were 35.29 percent of net worth.

Early delinquencies (30 to 59 days past due) were $14.2 million as of September 30, 2016.

Progressive reported net charge-offs of $10.8 million as of September 2016, up from $4.3 million from the previous quarter.

Troubled Debt Restructured (TDR) loans were $123.4 million at the end of the third quarter. TDR loans were 20.32 percent of loans and 61.7 percent of net worth.

Allowances for loan and lease losses (ALLL) were $91.1 million as of September 2016, up from $62.3 million as of June 2016. The credit union's coverage ratio (ALLL divided by delinquent loans) was 129.11 percent. However, its coverage ratio is overstated as $38.1 million was allocated to cover TDR loans.

The credit union is reporting a buffer of net worth and ALLL of $291.1 million, which is able to absorb expected and unexpected losses.