An anonymouse integrity check!
✅ From a commenter: "I'm offering you a free, and admittedly optional integrity check".
"Recall
that the Callahan analyst, in content you published on this blog,
questioned your comparison set, and suggested that comparing a 50
billion+ CU to all CU's > $500 million [the "peer group" is defined by NCUA - not me!] wasn't very meaningful or
appropriate."
"Here are the 12 month rolling loss rates through 1Q 2025 for the 10 largest CU's ranked by asset size.
1) Navy 2.48%
2) SECU 0.66%
3) PenFed 1.76%
4) SchoolsFirst 1.05%
5) BECU 0.59%
6) Golden 1 0.76%
7) America First 0.99%
8) Alliant 1.04%
9) Mount. America 1.25%
10) Randolph Brooks 0.57%"
"Here are the 12 month rolling loss rates through 1Q 2025 for the 10 largest CU's ranked by asset size.
1) Navy 2.48%
2) SECU 0.66%
3) PenFed 1.76%
4) SchoolsFirst 1.05%
5) BECU 0.59%
6) Golden 1 0.76%
7) America First 0.99%
8) Alliant 1.04%
9) Mount. America 1.25%
10) Randolph Brooks 0.57%"
"* SECU has the third lowest loss rate, and is only 9 basis points higher than RB, who has the lowest loss rate at .57%."
✅ The commenter would like to compare SECU's loan loss and delinquency performance against the top 10 credit unions which is reasonable and that comparison looks good.
😎 The SECU loan analytics folks seem increasing desperate to explain away the lack of performance since 2021 - they claim it was caused by inflation, soaring interest rates, adjustable rate mortgages, a leap year, wrong "peer" group, inaccurate official data, Mike Lord, and those unreliable members!
Of course, we all understand that data can be viewed in many different ways. How does one determine which data is most important? The best answer is to focus on the data which affects SECU members the most. Does the SECU member care about Navy's loss rate or Randolph Brooks'? The answer is "No, not at all" - it doesn't affect the SECU members in any way!
✅ The following info does directly affect SECU members - in a large, hard dollar way:
😎 The SECU charge-off rate for 2021 was .20%, which was $50 million.
The SECU charge-off rate for 2022 was .35%, which was $95 million.
The SECU charge-off rate for 2023 was .62%, which was $197 million.
The SECU charge-off rate for 2024 was .68%, which was $233 million.
❋ Charge offs for first quarter 2025 were $69 million, which if "annualized" (x 4) would mean a projected $276 million in losses for 2025.
✅ And then there is this:
😎 The SECU 60+ day delinquency on the March, 2021 Call Report was $210 million.
The SECU 60+ day delinquency on the March, 2022 Call Report was $216 million.
The SECU 60+ day delinquency on the March, 2023 Call Report was $470 million.
The SECU 60+ day delinquency on the March, 2024 Call Report was $700 million. The SECU 60+ day delinquency on the December, 2024 Call Report was $1.15 billion!
The SECU 60+ day delinquency on the March, 2025 Call Report was $556 million.*
❋ That is an improvement! SECU delinquency levels are now a little over twice as high as in 2021 ($210 million), rather than over three times as high at March, 2024 ($700 million).
✅ The "LA" folks proclaimed the following: "* Delinquency dropped $591 million, down 51% from year-end! "
As a little "integrity check", hope that remarkable 51% drop in delinquency would be explained. How was that accomplished? What new innovative collection techniques were adopted in the last three months? Will equally dramatic improvements occur in the second quarter?
😎 Lets hope an "explanation of integrity" is forthcoming and that the 51% drop is real. Why? First because $1.15 billion is a big number! And, because if 51% drop is not real and you add it back, SECU's delinquency ratio would double...
New math? ... or just "new/new"?
Anonymous has left a new comment on your post "SECU Analytics: "We're #3! Don't Worry, Be Happy! ... And Be Quiet!"":
ReplyDeleteThank you for posting this information. It is good that members see the full picture do they care informed as possible when they draw their own inclusions. For now, a coupla thoughts:
- Indeed the NCUA decides their peer groups they report on, but CU’s should best determine who their peer group is. There are other sources, like Callahan and SNL that CU’s can use to form their peer groups and get NCUA efficiently.
- We have seen on this blog some emphasis on results vs. peers, especially as a basis to assess current performance. Benchmarks are useful - mostly to determine whether or not you are trending with others - which indicates whether there is a macro issue affecting all, or whether results and trends are far different from others, which may indicate a unique problem. Bechnark info has limits and it’s true we are more absolute petformance than relative performance. This is a favorable comparison and may lead folks to a different view than what we’ve seen here to date. Either way, you can’t just discount peer comparison when it shows something positive, and I this case, different than what’s been put forth on the blog.
- no mystery in how the DQ dropped. Loans were given miss. A standard practice and it’s how the CU got through the great recession.
- there is compelling data that shows rate increases affect house payments and I turn delinquency. It would be ideal for readers to see that too. I wound resoevtfulkyboffer that it’s also just common sense that higher rates would affect resetting ARM borrower. Perhaps the right thing to do would be provide the data and keys members form their own conclusion.
12:06 pm The anonymouse does it again!! Fails "the test" with the usual: "no response response"!
DeleteParagraph 2: " ... but CU’s should best determine who their peer group is."
That is almost hallucinogenic in terms of any "statistical integrity"! Only the credit union being judged can determine who its peers are? Not sure if any remark better underscores the concerns over lack of transparency and "weaseling" ("the no formal proposal proposal") which has been so prevalent since 2021.
Paragraph 3: If you take the commenter at face value (perhaps not a solid choice), the data seem to show that there are no "macro" issues equally affecting the top 10 credit unions. The diversity in ratios clearly shows you that, if you're impartial.
In all cases it is sounder analysis, and far more accurate, to look at the results of each individually. Which is what the blog post does.
Paragraph 3: The Clincher! The ridiculous: " NO RESPONSE RESPONSE" as follows:
"- no mystery in how the DQ dropped. Loans were given miss. A standard practice and it’s how the CU got through the great recession."
For we who suffer to understand, would you please translate: "LOANS WERE GIVEN MISS."
Say what??? Be sure to send your answer to the Board so they know the truth too!
Paragraph 4: "I wound resoevtfulkyboffer that it’s also just common sense"
Sorry your "resoevtfulkyboffer" is not common sense to most intelligent folks!
Look forward to your equally prompt response to:
"LOANS WERE GIVEN MISS."
... which will truthfully explain that unbevelievable 51% drop in delinquency!
Wishing you the best and "resoevtfulkyboffer"!!!!
It is very unclear points that troll is attempting to make. Mainly gobbledygook. What on earth was "Resoevtfulkyboffer" trying to say? Sure hope this person is not on the ELT or we members are in "deep dodo"!
DeleteDeep dodo? Are you saying they are giving us the bird?
Deletehilarious yes but pathetic also
ReplyDeleteWhy do you need LA to explain why delinquency dropped? What does that have to do with integrity? It’s not classified or top secret info. It’s on the call report for all to see. Maybe you should read it. Then post your questions so we can tell you how to interpret it correctly.
ReplyDeleteLA needs to tell the members why delinquincies dropped. Members want to know that SECU is making course corrections and what those corrections are. We want SECU to be good stewards of our money. And yes a lot of us can read the call report. Why are you so arrogant and condescending to the membership?
Delete12:38pm Well, did get another long, wandering response to the questions. But let me post a few short phrases verbatim:
ReplyDeleteParagraph #1: "What we don’t see is a trend, but it would show the magnitude of the increases in losses over the last few years is similar. That is sort of common sense knowing we have higher rates and inflation, and the higher industry losses in every loan products well documented by the broad universe that tracks and reports this stuff."
The writer seems to feel that this is a response - it is! "What we don't see is a trend." That's right, that list of the Top 10 doesn't show any "macro" trends that are uniformly increasing or decreasing losses among the group. Thank you for the confirmation.
Paragraph #2: "Sorry for the typos or spellcheck thing. We put a bunch of mortgages in modifications and they are no longer or not yet delinquent on modified payments. That’s what we did in the Great Recession to get through that."
Translation: We changed the delinquency status to make the loans appear current. Thank you for the confirmation of something that any lending person already knew - you fudged the due date ! Will take this issue up tomorrow.
To make tomorrow's post more accurate will you tell us how many loans you "modified" and the dollar effect that had on improving your delinquency? All $591 million improvement from modifying the loans to make them appear current? Thanks in advance for the info.
Paragraph #4: "Don’t even know what your angle is, besides rooting against SECu, but it’s clear you don’t understand this stuff."
Don't believe that most readers blieve that I'm rooting against SECU and I suspect that they don't believe I "don't understand this stuff." - though many may disagree with the opinions expressed.
What I'm rooting against is misinformation which intentionally and unjustifiably misleads SECU's member-owners (and perhaps the Board?).
You shouldn't have proclaimed a $591 million plunge in delinquency - "down 51%" - without telling the membership you had fudged the due dates to make the loans current.
Sorry, unforgivable.
Bless your heart. I gave nothing but facts. No, didn’t mention why DQ dropped, but it did. Curious how you characterized it. fudged due dates? The members under hardship asking for help would characterize it differently.
ReplyDelete3:44pm The fudge was in your lack of transparency.
DeleteBut answer the questions: How many did you modify? What was the total $$ amount that "became un-delinquent"?
You can help everybody by simply sharing those #s.
Thanks for the blessing!
Quote: “you fudged the due date” what are you accusing your credit union of? And, sorry not gonna answer your little questions. Look it up. Public knowledge that apparently I became the keeper of.
DeleteWhat’s the main takeaway here and what is your point? Ok, so losses and DQ are up a lot at SECU, but they are at other credit unions, too. And, this shows we still have better portfolio performance than most, even though they have risen. Are there issues we’re having that others aren’t that is causing this increase, and do you have opinions on why this is happening?
ReplyDelete@ 5:26p To answer your last question, you could start by checking out the daily posts on this blog for the past two years.
Delete5:26pm For the record don't overlook this paragraph from the actual post:
ReplyDelete"✅ The commenter would like to compare SECU's loan loss and delinquency performance against the top 10 credit unions which is reasonable and that comparison looks good."