Tuesday, March 5, 2024

SECU Financials - 2023: Covering Your Assets (CYA)?

 https://images.saymedia-content.com/.image/t_share/MTc2MjkzNzczNzQyMDU2NjIx/checking-and-using-a-spirit-level.png ... Esse Quam Videri.

"To Be, Rather Than To Seem."

Mona Moon Image Stelfanie Williams Image Jennifer Haygood Image Chris Ayers Image Bob Brinson Image Mark Fleming Image  Ben McLawhorn Image McKinley Wooten, Jr. Image 

The "Legacy SECU Board" ("Remaining 8" pictured) has turned the Credit Union on its head since 2021. Most of their "industry standard innovations" ( a classic oxymoron!) have been poorly conceived, poorly executed, or both - from hiring, to RBL, to H410, to operational snafus, to midnight bylaw changes, wasteful "We-We" marketing, to verifiably "less than transparent" frankness with the SECU membership.

The "Legacy Board" evidently hopes that no one will notice the destructive brilliance of their leadership. Unfortunately, the SECU financials keep revealing some ugly truths. We've looked at the financials over the last few days [link] in terms of over capitalization (which prompts low savings rates), soaring operating costs, and the ridiculous "negative growth" [link] pronouncement. The Board seems affronted that members might have the audacity to challenge this record of mis-performance. The "We know best" attitude stubbornly persists. 

Lets look at one more issue which is costing SECU members tens of millions of real dollars - loan charge-offs. Losses on loans are a fact of life - bad things do happen to good people and bad decisions do occur. But, SECU has a strong record of prudently managing a diverse loan portfolio - and members equally have a strong record of repayment. But, losses have rocketed under the new policies of the Legacy Board:

Net annual SECU loan losses:

2020 $ 73.2 million

2021 $ 70.5 million

2022 $ 95.5 million

2023 $196.9 million

The Legacy Board took control with a new direction, new leadership, new policies, and that new "We-We" hubris in September 2021. Not sure how they will "explain away" a $100 million increase in loan losses - but it is definitely on their watch and the result of their leadership. 

And please don't "blame the Fed" while you're milking them with that $5 billion loan - that really would be crude! Can't wait to hear the CYA!

     ...  members paying an extra $100 million to become an "industry standard" lender?

It's your credit union, your loss, your choice... not "theirs".






22 comments:

  1. Loan losses escalating because the loan officer is superfluous. Decision to lend based on number generated by credit bureaus using unknown inputs. Why does SECU have loan officers these days? Those jobs are Adding to expense column aren’t they?

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    1. Before anyone starts to respond to this post arguing that loan officers ARE needed, it's clear this commenter is using satire to prove a point.

      The bad decisions that started a few years ago at many levels (Board and Executive Leadership) is starting to come to light. Many saw this coming when all this nonsense began, but the folks who spoke up were either discredited or ignored. Since there has been no ownership or accountability so far for these bad decisions.....I fully expect the finger pointing to commence.

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    2. Those in power(8+1) are doing everything possible to discredit all who disagree. They have a plan and they are implementing it.

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    3. "... but the folks who spoke up were either discredited or ignored"

      Not only ignored They "the legacy employees" were cast as the enemy!!!
      Told to look elsewhere for their passion ... etc...
      (and that was the polite part)
      The newbies had this so just go sit at the back of the bus... you 'ole stoopid rednecks'!!!
      We'll show you has to 'make a profit'!

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  2. Well, someone finally said it about loan officers and branches - "superfluous"?. Guess we better talk about that before it is too late.

    If you're below the top of the employment pyramid at SECU, might want to start paying serious attention to what's going down - other than deposits and trust - at SECU.... could be you.

    But don't panic just yet. Would make the case that RBL and automated "decisioning" on loans is already costing the members $100+ million (and rising rapidly) each year (those soaring losses!).
    Even at $100k with benefits, you could hire 1,000 additional loan officers with that $100 million and stop the bleeding (and get rid of RBL, too!!!) ... but you can't do both.
    Why not let the members and staff choose!

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    Replies
    1. "Do More with Less" is a dog whistle for AI ...

      That is their real unspoken plan ...

      Delete
  3. Loan Administration makes bad loans not the members. Give us back the decision mking authority on all loans

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  4. the $100 million is LAs new rewards program "FREE MONEY". No credit card program can beat us now.

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  5. When they going to put out the career path? It's been 3 years

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    Replies
    1. There’s not a career path at SECU. Just a dead end. 4 more in 24.

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    2. The inner circle has a career path with promotions. Everyone else is left out to dry so they would move out on their own. A very passive aggressive technique these guys have nailed. Just sad all around for the rest of us....

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    3. The only career paths now are in lending and FAS. MSS and branch positions are just jobs, not careers. Very sad.

      But oh well, that is the industry standard, after all.

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    4. Right! I could have had 10 kindergarten Kids write them up by now, (borrowing managements crayons!) ... Of course The Kids were kicked out of their space so they could build a Gym so it might have taken a few extra weeks...

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  6. Don't know how anyone can look at these numbers and not declare the lending restructuring under Hayes to be an utter failure.

    Centralizing collections and specializing lending in the contact center - both horrendously bad decisions.

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    Replies
    1. So, what are they doing about it? Why are those 8 continuing with a failing business structure? Must be something in it for them somewhere….

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  7. and if they had left well enough alone we would be worth what ... 54, 56 ... 58 billion and climbing steady without the need to borrow money...
    Obviously they never read the Hare and the Tortoise ...
    all get rich schemes are just that ... schemes!
    The house of cards is getting wobbly ....
    best to build your house on a rock of truth!
    but hey what do I know ...

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  8. Was asked if the loan loss trend is continuing to grow in 2024. Difficult to project based on just one month but ...

    According to the published financials, LOANS CHARGED-OFF NET OF RECOVERIES in January 2024 alone were -$27,839,000, compared to net losses in January 2023 of -$16,321,000.

    If you multiply the January 2023 -$16 million loan losses x 12 months, it comes pretty close to the @$200 million in actual total loan losses incurred for last year.

    If you multiply the January 2024 loan losses of -$27.8 million x 12 months as a forecast, you come up with total loan losses exceeding -$300 million!

    Lets hope that the January 2024 loan losses of -$27.8 million are not predictive.

    Perhaps the SECU loan administration mavens can explain what is going on... certainly the Board needs to know what's going on.

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    Replies
    1. times are getting tougher, don't see this being fixed any time soon ... JMO

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  9. There is $94.2 million in personal/car loans that are 90+ days past due. Another $70M is 60+. We gonna take big losses this year.

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    Replies
    1. Hard to collect loans made by a machine.

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    2. The car loans that are under RBL?

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  10. Unbelievable-and our leadership is being transparent according to the latest CEO email…would hate to see this place not being transparent-what is really going on? How do the elite 8 sleep at night & then say we are financially strong & sound, who is believing that?! What can be done about it? We won’t make it to October at this rate….

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