... now insert the other foot.
Let's take one last look at indicators of what to expect with loan losses at SECU - now at record levels of $200+ million annually.
From yesterday's comment [link]:
"😎 An example from the "you know who' commenter on yesterday's post [link]:
"If you look at provision expense and the reserve
together it is an indicator of where we think future losses are going......."
😎 We looked at the reserve yesterday (up +24%). So as requested, let's take a look at the "provision expense". Not to make you an accountant (you have better things to do!), but "generally accepted accounting procedures" (called "GAAP") require SECU "to provide" (that's why they call it a "provision") for future, anticipated losses in the loan portfolio every month. In other words the credit union must expense now ("provide") for loan losses it expects in the future.
Below is a part of the financial statements for SECU at 6/30/2024. (Don't get discouraged!) Just drop down to that last line marked "Provision for Loan Losses".
Now compare this year "2024 Fiscal YTD" (which simply means total of last 12 months) at $262,202,650 to last year "2023 Fiscal YTD" at $137,500,000.
😎 As you see, SECU is reporting that the "provision expense" for loan losses was increased by +$127,702,650 during 2024. SECU also reports, as you can see, that the +$127 million extra expense in 2024 is an increase of +92.87%.
According to SECU, total outstanding loan balances increased by +7.58% during 2024; and as a result, SECU is expecting future loan losses to increase by +92.87.
Go figure....
Thought I'd let you know that this post triggered an absolute rave from the now infamous anonymous commenter! Can be quite a nasty, snarling pup when cornered - by the facts from SECU's own financial reports at 6/30.
ReplyDeleteThink we've all wasted enough time with those rants.
Only true concern is, if this commenter is presenting his bullhockey to the SECU Board as factual, then record loan losses will remain high - at the expense of each and every SECU member-owner.
The SECU Board might want to consider where the truth lies: 1) with the certified financial reports they receive, or 2) with concocted data like this from the loan area.
If you compare the both sources - both can't be true.
Did the monthly loan loss provision amount on a month-to-month basis decrease? If we saw consistent decreases in the monthly loan loss provision, would that be a good thing? Asking for a friend.
DeleteApril, 2024 - $23.2 mill. April, 2023 - $20.0 mill.
DeleteMay, 2024 - $23.3 mill. May, 2023 - $14.0 mill.
June, 2024 - $39.4 mill. June, 2023 - $15.0 mill.
Appreciate the additional information.
DeleteThat guy needs a perp walk out of secu
ReplyDelete"guy" or first woman?
ReplyDeleteJust like they don't mind spending others money on nonsense, they don't really care if they lose others' money. Doesn't really seem to effect them one way or another...
ReplyDeleteI don’t agree with most of your criticisms, but have to agree with you here. Good information.
ReplyDeleteI wonder which factor is more to blame: moving collections away from the branches or risk based lending? It all started the downward spiral around the same time.
ReplyDeleteYes. Both of these factors fall under the same umbrella of centralization. Give the authority back to branches. It will take some "trust and humble decision making" from the BOD and Executive Management to make this happen. Allow the experts (branch personell) to get us out of this rut. Too many meetings occurring right now behind closed doors of folks who don't have the answers.
DeleteComplete disregard for 85 years of business success. 8 Elite know-it-alls. Do they think that their policies are working? How do The Elites measure their success? Oh yes!! Profit! At a nonprofit.....
Delete