Will be fun to watch?!? Probably not...
😎 Mind if we take a little break from all that politico stuff? After awhile, it gets a bit e-r-r, well...taxing!
Back on the home front, June 3rd is the day that major, #1 snafu - the infamous "no formal proposal proposal" - comes home to roost. Local Government FCU will officially go its own way and become CIVIC FCU - they call it "Independence Day"!. Lets hope the separation goes well, as over 400,000 LG/CIVIC members will be affected.
Once the two credit unions get beyond "I Day", expect some "trouble"! Call it what you will - human nature, sibling rivalry, managerial egomania - but the stage has increasingly been set for a little "turf" warfare.
Best example? Take a look at the new savings rates recently posted up by CIVIC compared to SECU's rates. While you look remember that everyone in North Carolina can become a member of CIVIC - including every SECU member!
✅ Certificates of Deposit Rates*
Term SECU Rate CIVIC Rate Min. Deposit
6 months 3.90% 4.35% $250
12 months 4.10% 5.50% (!) $250
18 months 4.40% 5.50% (!) $250
24 months 4.40% 4.35% $250
30 months 4.00% 4.19% $250
36 months 4.00% 4.19% $250
48 months 3.75% 4.25% $250
60 months 3.75% 4.30% $250
* Red indicates better rate .
At 3/31/25, SECU held @$15 billion in member certificates of deposits ("CD's") of which 2/3rds - @$10 billion - was invested in those shortest term 6 & 12 month categories.
✅ MMSA - At 3/31/2025, SECU held @$16 billion in daily withdraw-able money market savings accounts ("MMSA") at 2.02%. CIVIC has posted a rate of 2.10%
✅ IRA's - At 3/31/2025, SECU held @ $3.3 billion in daily withdraw-able individual retirement accounts at 3.05%. CIVIC just posted 3.56%.
CEO Leigh Brady's questionable claim at the last Annual Meeting of superior SECU savings rates appears to be under direct, highly visible attack. Assume that this is entirely coincidental and unintentional, but wouldn't bet on it. Rather suspect the fight is on!
But before you go moving your money around, remember LG/CIVIC has its challenges too.
If this turns into a "messy divorce", it's the members and front-line staff who will suffer most. And, while LG/CIVIC is safe and sound, the credit union operated "in the red" in both 2023 and 2024. Its largest ever quarterly loss to date was in the just completed first quarter of 2025!
Are LG/CIVIC members going to cheerfully accept losing complete access to the 275 SECU branches? Also, it appears that LG/CIVIC members wanting to deposit cash are being directed to Walmart for that service! That's kinda like being forced to give up your home washer and dryer and told to get happy doing your clothes at the laundromat! And of course, it should be mentioned that most LG/CIVIC members are, if dissatisfied, eligible to become members at SECU (if they haven't already!). "Changing sides" can work both ways! Gonna be interesting...
😎 Shame about all this and that "no formal proposal proposal"... but at least it was anticipated, well thought out, and approved in our "Strategic Plan"!
It was... wasn't it?
"They paved paradise and put up a parking lot"
ReplyDeleteI work in a medium size branch and we are having 5+ members a daily fleeing LGFCU to join SECU even with the high STC rates LGFCU is already offering.
ReplyDeleteThere is a reason Civic/LG is having to raise their interest rates to the highest in the market. People are leaving in droves. Literally thousands of LGFCU accounts are being closed out daily across the state.
LGFCU doesn’t know their members sadly and their members are the ones who are losing out in this situation
I predict Civic will merger with another credit union in 5 years just to survive
Same at my branch. They’re leaving LG in droves because LG doesnr understand their base. They wanted to be independent. It’s not working out already.
DeleteYou... do realize that LGFCU does not have a 300+ branch network to maintain right?
ReplyDeleteYes. And now so do their members. Precisely why they are leaving.
DeleteThousands of accounts? Total exaggeration. That’s not happening and they’re just fine.
ReplyDeleteNope, absolutely true - just pay attention over the next few months to the numbers.
DeleteFolks working in branches are seeing it every day. Willing to bet my Canes playoff tickets you ain't one of them.
Nope. Literally thousands daily.
DeleteFolks should understand this is what LGFCU predicted and wants. They save $50 million a year paying SECU, and reinvest nowhere near that in physical infrastructure, they shed the high maintenance and costly members that choose to transact in a branch, and they aren't beholden to SECU's 40+ year old core and its lack of capability and they own their own product roadmap and timeline in the future. Basically being liberated from SECU's archaic technology and business practices. Of course they'll lose some members along the way, but they'll come out the other end way better off.
ReplyDelete'The Proof will be in the Pudding' ...
Deletesounds like you should be working for LGCU instead of SECU ... propaganda crafted by clever sales professionals ...
Deletewhat proof? that's the thing. they won't cry about us taking their high maintenance members. they're positioned for a digital future, not stuck in the analog past.
Deletewell it seems they'll be just another CU that can have high "Profits" ...
DeleteThe thing about heavy brick and mortar branch channels is that they don't respond to member demand, they create it. Meaning, as long you provide branches everywhere, members will clog them with transactions they can do far more efficiently through other channels.
ReplyDeleteThere is a reason most CU's and banks are descaling their physical footprints. New/new fortunately is re-thinking the archaic model, but has yet to address the branch albatross.
Consider this as an example..
Navy FCU; $160b deposits, 368 branches.
SECU; 49.6b in deposits; 275 branches
PenFed; 27b deposits; 37 branches
BECU; 25.8b; 68 branches
Deposits per branch:
Penfed: $731 milion
Navy $435 million
BECU; $380 million
SECU: $180 million.
The other 3 average 46,000 members per branch, compared to SECU's 10,458 members per branch.
SECU member per FTE of 369 is just over half of the average of 695. This inefficiency reflects SECU's "unique" branch model.
This data says a lot, and none of it is positive for SECU. Sure, we will get some LGFCU members, but we will lose the income from the operating agreement, but still be saddled with a huge branch network, and take on LGFCU's most expensive members. Taking away the expenses to match the loss in operating income from LGFCU is virtually impossible.
The inefficiency only gets worse over time because of changing member behaviour and demographics.
Most are descaling branches with investments in other channels. I guess it's a strategy not to, but pretty curious one.
It's unfortunate the SECU and LGFCU split isn't a win, win, but that's not determined based on them losing some members.
No doubt it will be bumpy for LGFCU members in the short-run (we might withhold judgment on that until we execute a core change, BTW), but in the end, LGFCU is the winner here.
You do not understand "service" and you never will. You think it's fine for members to have punch button phone menus and long wait times whenever they try not to use a branch and do it over the phone. You think members should do everything over the internet and never interact with a person at all. "Just use our friendly chatbot!" Bet you couldn't answer their question anyway. The way of the future=have a lot of money and maybe personal service will be there. Otherwise, go to the back of the line.
Delete@7:44pm Not sure what you mean. Can you provide an example of a time you were sent to the back of the line by SECU?
DeleteWhy are you silent on 1Q results? Almost all of your criticism on ELT and Board is "backed up" with results. Now that you can't point to that any more you go silent on them? Here are some highlights to save you time:
ReplyDelete* Annualized deposit growth of 18%, with annualized loan and membership growth above 5% and 4%, respectively. You will find all will be well above industry when that data comes out.
* Delinquency dropped $591 million, down 51% from year-end!
*The DQ ratio declined to 1.55%. For reference, it was 1.71% in your last quarter in 2016. New / new credit quality now officially better than old / old.
* total auto dq, including 30-60, declined 20% in the quarter! As the first TBP portfolio, clearly as those newer loans originated under TBP are a higher mix of the total portfolio, results are improving. Clearly an objective of a more balanced portfolio of A & B has been met.
* 12 months rolling avg. c/off rate dropped again!
*expenses were held to a very modest 5% annualized rate, one of the lowest years of growth going back well into the 2000's.
* total revenue down, because net interest is down with higher dividend expense for members, and the positive income from the $5 billion safety loan is no longer in our run rate - so that's been absorbed.
* PCA ratio dropped, a reflection of the above.
No negative results. TBP working, deposit growth very high, DQ ratio significantly improved and better than 2016 - despite higher rates and inflationary affects.
It's all working well. Superior results and execution. If you're going to bring resolutions and more self-nominated directors, you're gonna need new talking points.
3:41 pm Thought readers should hear "directly" of the latest progress from the oft-maligned lending area.
DeleteSorry to have been negligent in taking a look at SECU's quarterly progress - the data report was just released May 1 by NCUA. Will try to hop on it and get with it. Glad you value and apparently eagerly await my quarterly analysis!
Before taking a look as you request, would you please help with a bit of clarification on your statements?
1) Are you saying that SECU deposits will grow by 18% during 2025? ("annualized growth rate of 18%).
2) Dropping $591 million in delinquency in 3 months is incredible! How did you do that?
3) Could you share with us what your "mix of TBL" auto loans is at 3/31/25 - new and used?
4) How did you determine "No negative results"?
5) How did you determine: "It's all working well."?
6) How did you determine: "Superior results and execution"?
Is there an independent, impartial source we can use to validate your comments - especially 4,5,6 .... or do we just take your word for it?
Thanks again for your prompt reply...and since you mention those upcoming resolutions, have you by chance heard anything from the Board?
1) The membership , loan and deposit growth are 1Q growth rates, annualized, as reported by the NCUA. Not saying full year will be 18%. It’s a statement of fact, not a prediction. I am predicting those growth rates will be higher than industry average when that data comes out.
Delete2) By members making payments and adhering to the terms of their agreement.
3) sorry - don’t share non public data here. Not allowed to.
4,5,6). Easy. The results are great. Good mgmt and execution. You looked at results you didn’t like or said were bad and condemned ELT and Board. Now results are good. Not an accident. See how that works?
8:33pm Thanks for your quick response! Did I miss your response on the resolutions?
Delete1) "Not saying that "full year will be 18%". Yes, I bet you're not, because you know that is not a credible statement. Won't happen and you know it, right? Believe most readers grow tired of this continued silliness.
2) Interesting! Explain that to us!
Why did members decide in March to suddenly make payments? Was it something that your innovative collection procedures created or was it an "I Saw The Light " moment by our members? Tell the truth, did anything you did make that difference? (Be certain of your answer.)
3) And we all know why... the oft claimed rush of "A" paper RBL to SECU is just not continuing... your theory has slackened and is in decline . Few members are "buying in" to SECU as a best price lender, particularly for new cars.... while the majority of SECU members are "buying the farm" with race-based pricing.
Glad to be proved wrong, nothing proprietary in your data. Great chance to force a blogger to eat crow! Why would you miss such an opportunity? Who won't "allow you to" tell the truth...
No reluctance to look at the data of which you are so proud. Will try to confirm your assessment of "No negative results"? "It's all working well."?
"Superior results and execution"?
Do you agree that thebest we can do is rely on the official federal data you submitted to NCUA as being accurate and impartial - the baseline to use?
9:16..
Delete1) Goodness gracious you have issues. I simply highlighted an NCUA reported piece of data - that 1st quarter annualized growth was 18+%. Then, indulged your dumb question about what it meant. Now you patronize me and you "bet" I'm not saying it was going to be for the full year? Never said it was.
9:16..
Delete2) Still patronizing me. Do you think I'm stupid or something? We both know the answer to the question, but you know best. It's you business model - you executed it back in the great recession.
9:16..
Delete3) the rates of growth in the new and used car portfolios was better than industry dating back to TBP inception and the full year of 2024. We are not immune from industry trends. We did A members back, back, but you understand the concept of mix, don't you? A & B mix went up because C-E volume declined at a greater rate, or grew at a slower rate, depending on the portfolio. For those origination cohorts - higher mix of A & B = better performance. Better performance is showing up in portfolio as TBP originated mix increases as % of total portfolio. Not a hard one to graphs, but willing to make pie charts in crayon colors if it would help you.
9:16 Seem to have touched a nerve... well several.
DeleteAs to 1) yep the 18% was a gross exaggeration. No argument there.
2) Won't comment on your question other than to say no I think you're smart... which makes the non-answer to the claim even worse.
Please explain more fully, because I have no clue what you mean by the recession "business model". Please tell us.
3) More gook of gobble? Translation - you're not lending much to those who need you most anymore. Think we all figured out that would happen with RBL.
"Not a hard one to graphs, but willing to make pie charts in crayon colors if it would help you." Okay with me!
11:47 "So you have no insight on how you managed your high risk mortgage portfolio through the great recession? I wasn't here at the time, but it's all there to see in the NCUA reports.
DeleteFunny you don't remember that. Keep playing coy, but why don't you spend some time looking at those reports so you can learn what happened at your credit union.
@11:47 Need to balance lending enough to A tier borrowers so that we can lending to those who need it the most. Having massive amounts of low tier borrowers and loans on the books leads to major losses and the inability to then lend to low tier.
Delete!0:42 Your answer is reminiscent of Abbot and Costello's famous comedy routine... "Who's on First"
Deletehttps://video.search.yahoo.com/yhs/search?fr=yhs-mnet-001&ei=UTF-8&hsimp=yhs-001&hspart=mnet¶m1=3093¶m2=84460&p=Who%27s+on+first+abbott+and+costello&type=type9014486-spa-3093-84460#id=54&vid=7d5a809a36206d8a0b2b3382b8027091&action=click
Mbr, loan and deposit growth is only due to LGFCU upcoming separation from Secu so don’t pad yourself on your shoulder.
ReplyDeleteI’m sure charge off ratio has dropped dramatically because you charged all the loans off. Mbr’s don’t suddenly decide overnight to pay their loans and bring them current.
We have more collection tools now and the ability to touch base with delinquent members like email and we reach out earlier. Faaaaaaaaar and away more effective then the “old/old”
DeleteThey do when they get their tax refunds. Same thing happens every year.
Delete10:15am So let me understand this. The drop in delinquency in the first quarter of 2025 by $591 million is because you have just discovered that SECU has email? Is that correct? Do you think anyone believes that?
DeleteSome sound advice: "When you find yourself in a hole, the first thing to do is quit digging!"
@10:29 if that’s true why way SECu delinquency rate 2.07% in March of last year? The numbers don’t back up your theory.
DeleteYes, tired of this too, but wanted to string the original question #2) together for a last look:
ReplyDelete** Commenter (5/4/2025 3:41pm): " Delinquency dropped $591 million, down 51% from year-end!"
Q: 2) Dropping $591 million in delinquency in 3 months is incredible! How did you do that?
** Commenter (5/4/2025 8:33pm): "2) By members making payments and adhering to the terms of their agreement."
Q: 2) Interesting! Explain that to us!
Why did members decide in March to suddenly make payments? Was it something that your innovative collection procedures created or was it an "I Saw The Light " moment by our members? Tell the truth, did anything you did make that difference? (Be certain of your answer.)
** Commenter (5/4/2025 11:21pm) "2) Still patronizing me. Do you think I'm stupid or something? We both know the answer to the question, but you know best. It's you business model - you executed it back in the great recession."
Q: 2) Won't comment on your question other than to say no I think you're smart... which makes the non-answer to the claim even worse.
Please explain more fully, because I have no clue what you mean by the recession "business model". Please tell us.
** Commenter (5/5/2025 8:42am): ""So you have no insight on how you managed your high risk mortgage portfolio through the great recession? I wasn't here at the time, but it's all there to see in the NCUA reports.
Funny you don't remember that. Keep playing coy, but why don't you spend some time looking at those reports so you can learn what happened at your credit union."
Q: Well, it took a long time for you to say you "weren't there" and are apparently unwilling to tell us what that 2008/10 "recession model" was that you say is "all there to see in the NCUA reports". Wish you would be more forthcoming on that "business model, because I truly have no clue what you're talking about.
BUT.... IF THAT 2008/2010 "BUSINESS MODEL" HAS TAUGHT YOU HOW TO DROP DELINQUENCY BY $591 MILLION IN ONE QUARTER .... PLEASE KEEP USING IT!!!
.. and you're welcome! Glad to help out!