Saturday, August 26, 2023

SECU "This Board" - Just Living On "Borrowed" Time?

 😎 Got to looking at "This Board's" Annual Meeting Notice [here' your link]:

Pretty disheartening stuff - downright sickening to longtime SECU loyalists, to say the least - but there is always hope and optimism, perhaps that's what cooperatives and SECU in particular, are all about! 

So read on through the manure looking for that glimmer of hope. And there it was on page 8 - "The Balance Sheet" for July 31, 2023! 

GOOD NEWS!  SECU's assets are back up over $50 billion!!! Take a look below:


😎 'Course then started wondering why "This Board" used 7/31/2023 financial numbers for a 6/30/2023 fiscal year-end financial report?

Well, that's pretty easy to figure out, since assets at 6/30/2023 were only $49.6 billion (total deposits $45.3 billion) - off almost $4 billion in the last 12 months. "This Board" was simply at it again, trying "to put lipstick on a pig" - been doing that ineptly all year long! At least "This Board" is consistent in its transparency efforts with the membership!

😎 But then it got a bit uglier! Wait a minute, how did assets grow to over $50 billion, when deposits continued to drop? SECU lost another -@$500 million in deposits (dropping from $45.3B to $44.8B)  during the month of July, 2023 alone!? How can that be?

😎 Want to know what's really going on at your credit union? Take a look at the right hand side of the balance sheet ("Liabilities") and focus on the heading "Other Liabilities" at $1.197B - see it? Normally at the end of any month that figure ranges between $100 million and $200 million - but in July it jumped up by over $1 billion! What's going on?

😎 As it turns out "This Board" borrowed between $1 billion and $1.5 billion during July! Why would you do that when you're sitting on $16+ billion in cash and liquid securities (see left side "Assets") earning 2.35%? Unless you wanted to give the impression that the year-long asset losing streak had finally come to an end - it hasn't! Without the billion$+ borrowing, both assets and deposits at SECU continue to decline.

😎 SECU generally borrows from the Federal Home Loan Bank (FHLB). The FHLB is currently making financial institutions short term loans at a borrowing rate of @ 5.55%

BONUS QUESTION: Need to come up with $1.5 billion? Would you as a sensible person borrow $1.5 billion at 5.55% or simply write a check against your $16+ billion in investments earning 2.35%?  

[Hint: If you guess the right answer, you will save yourself $48 million over a year's time - yep, that's right, save $48 million bucks!]

... but the really, really good news is "this Board" has borrowed an additional $1+ billion during August, 2023!   [just another "Comedy of Ayers"?]