Thursday, July 20, 2023

SECU June/2023 Yearend Financials - The End Of An Error, Part 1

SECU's financial (fiscal) year ends on June 30 of each year. The SECU Board will get its first look at the final results for this year (fiscal year - 6/30/22 to 6/30/23) on Tuesday night.

But, thought you might like an advance look. SECU members are no longer provided access to the full monthly financial statements, as in the past. The Board and "current/future" CEO seem to believe that the membership may not understand - and might misinterpret - the financial data. Although this was never a problem over the last 85 years, "things are changing" at the credit union. The SECU accounting department apparently remains willing to "leak" responsibly, when appropriate. Here's the skinny: 

  Baseline. Prior to September, 2021, SECU had an uninterrupted 85-year record of growth in assets and membership, un-besmirched by sanction or scandal. 

✅ No one should be surprised that several negative financial trends persisted through June 2023:

Total assets - continued to decline, remaining below the $50 billion mark - off over $3+ billion since June 30, 2022

Total deposits - same story, off almost $4 billion from 6/30/2022.

❗The SECU Board and management now state they are no longer focused  on "top-line growth"- that's growth in deposits and assets. Can't blame them for that, given this year's results - wouldn't want anyone to focus on that plunge either.

 ✅ The biggest "news" remains the substantial failure of SECU to meet Board-approved budgetary targets, specifically in the areas of operating costs and delinquency/chargeoff controls.

✔ SECU ended the 2023 fiscal year @ 15% over the SECU Board's budget target ("2% of assets") which equals @ $75 million over the mark.  

Actual 2023 operating costs of @ 2.30% of assets are 24% higher than SECU's traditional operating cost range of 1.86% of assets. That 24% increase in the operating expenses is costing members $220 million more every year.

Delinquency and charge-offs have soared in an improving N.C. economy.  The charge-off levels for 2023 are more than twice (which is tens of millions of dollars) the levels experienced since the "New/New" started weaving its magic less than 24 months ago.

But here's some information which might help you as a member get the full financial picture on SECU [but please don't misunderstand or misinterpret it, ok?]  SECU is required to report complete financial data quarterly to the federal government. Here's how you access it:

1) The National Credit Union Administration (NCUA) is a federal agency which provides deposit insurance to U.S. credit unions - equivalent to the FDIC for banks. The NCUA requires each credit union to file a quarterly (end of each calendar quarter) financial statement known as the "Call Report" or also as the "5300 Report".
2) The quarterly Call Report becomes available to the public 1 month after filing (on Feb 1, May 1, Aug 1, Nov. 1) at the NCUA website: []
3) Go to the website landing page and click on "Analysis' ' (middle of page), then drag down to the right and click on "Research A Credit Union".
4) When the "Research" page pops up enter the charter # (SECU - 66310, LGFCU - 24003. CIVIC - 24898) or in the second section you can search any credit union by name, location.
5) If you enter 66310, the SECU page will pop on "View".
6) When the "Credit Union Details" page pops up, you have several search choices to explore. For the "Call Report", first pick a cycle date (most recent quarter, or go back in history) , then hit "Download" and it will be loaded to your computer. When the report appears, scroll down to the fourth page and you can click on particular financial data or just keep scrolling down through the whole report.
7) On the "Credit Union Details" page you can also view some comparative ratios by clicking on "Request FPR" (look down right side). When the financial performance report page pops up select third option ("I want online") and hit OK. You can then surf among the 3 options: Key Ratios, Financial Summary, Historical Ratios. [if you try this right now, you'll probably get a "no data" response because you're asking for the 6/30 data which hasn't been released yet (Aug 1!)... so back up a quarter and try again!]
More than you wanted to know, right! ... "give people a fish and you feed them for a day; teach them to fish and you feed them for a lifetime."