... 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....