... What have we got to lose?
😎 If a lack of experience and expertise qualifies a credit union to be a business/commercial lender, then SECU should be wildly successful!
If, as it appears, there is a continuing struggle to control delinquency and charge-offs at SECU ; then, what could possibly go wrong with jumping into the more complex world of commercial lending? Well, there might be a few risks - and consequences - case in point:
✅ Two CUs Now Own Former Fruit of The Loom Plant After Loan Goes Bad [link CUDaily]
"Vidalia Mills [Louisiana] owed approximately $32.5 million to Jefferson Financial Credit Union and Greater Nevada Credit Union. At auction the highest bid was $1,005,000, which was lower than the appraised value of $1,193,000."
How did a $600 million credit union - a strong school employee focused credit union (originally Jefferson Parish School Employees) in Louisiana - come to partner with a Nevada credit union to lose $30+ million on a start-up denim plant? Want to know? [link] - read it and weep!
"Others were more skeptical of the mill housed in the former Fruit of the Loom facility. To be a fully vertical denim mill with in-house spinning requires a right-sized facility and a knowledgeable workforce at each stage of production, not to mention cash. Pete Roberts, the founder and CEO of Origen USA said. Vidalia lacked it all."[link]
When you lose $30 million bucks "swimming with sharks" in commercial lending waters, well beyond your depth, there are consequences. Especially when your loan loss reserves are only @$6 million and total net worth @ $40 million!
😎 As you see, all it took - as quoted - was "a board open to progressive thinking" misled by a CEO to match - both evidently of the "We Are" type.
✅ Consequences?:
"The Board of Directors, Leadership Team and Employees of Jefferson Financial FCU are excited to announce that the JFFCU membership successfully approved the merger with Keesler Federal on May 21, 2025."
😎 Translation: Jefferson Parish School Employees Credit Union is burnt toast! Hubris has its price!
