SECU: Don't Want To Lose Sight Of That Credit Union Merger Issue...!

    ... has merged 

                       with ...    

Dogwood State Bank, a strong Raleigh-based, North Carolina community bank, announced yesterday that it was merging with Towne Bank, which is headquartered in tidewater Virginia [here read the details at BusinessNC]. 

The combined bank will have assets of @$22 billion. The owners of Dogwood bank did well, selling the bank for $476 million - around 2.2 times the net worth of the bank!

So lets take a look at why credit union member-owners nationwide should strongly oppose having their credit unions given away through mergers with other credit unions. It's "bad business" all the way round!

Using SECU as our example, we have a financial institution owned by @ 3 million members, mostly from North Carolina. SECU has assets of @$55 billion and a net worth of @$6 billion.  SECU also has a well-established service network, experienced staff, and has had in the past a reputation for integrity and fair dealing.

Using the "2.2x net worth" purchase price benchmark in the Dogwood/Towne Bank merger, the market value of SECU to its member-owners would be @$13.2 billion (2.2 x $6 billion net worth)! Each of SECU's 3 million members would be entitled to a payout of @ $4,400. That would represent quite a wonderful boost for individual SECU members as well as the North Carolina economy in general!

😎 That prosperous credit unions nationwide are being merged without ownership interest payouts to the members is financial foolishness. CEOs and Boards which recommend such transactions should be held accountable - and prosecuted if possible. 

✅ The financial best interests of members are being misrepresented. The members are being hoodwinked.

  Quacks? You betcha ... 

 

 

 

 

 

 

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SECU Business/Commercial Lending - Going Whole Hawg?

   or "We, We, We" all the way home?

Interesting how much commentary arises around the topic of business/commercial services at SECU [link]! 

That's good, because SECU members realize that this new endeavor for the credit union is a complex service, in which the Board and executive leadership have no expertise nor experience.  The question being asked: "Has the prudent due diligence been done on this service?" [Doesn't appear so!]

But, before you jump to the wrong conclusion, basic financial services for small, North Carolina, member businesses may be a good thing.  Requests from a few members have always been there; although not offering business/commercial services, certainly hasn't hurt the performance of SECU over the years.

Business/commercial services is an "operational decision" which is rightfully a decision for the current SECU Board. So let it be so! But, hope the Board and ELT will do their homework and not believe the decision shouldn't be subject to questioning by SECU member-owners - who pay for the mistakes and missteps they make.

Pretty obvious that several costly unforced errors have occurred over the last three years. Those faux pas seem to result from "strategic planning" limited in imagination to "everyone is doing it", "me too", and "its industry standard". That won't take SECU into the future... it may assure its failure.

😎 One quick example is the question of: "What is"a small business loan"?"

✅ As you know, the major angst about credit unions within the banking industry centers on the growth in commercial lending.  As you saw in a prior post [link], according to the NCUA, commercial lending by credit unions now exceeds $174 billion, topping both total credit card lending [$85 billion] and total new car lending [$164 billion] - that's all CU card/new car loans for 142 million members! 

😎 Why would the banking industry argue against "small" business loans to help folks "get by" or get started - sounds pretty hard-hearted! But that doesn't appear to be what's going on. Take a look:

✅ Here are the stats on commercial loans at the largest U.S. credit unions as of December, 2024: 

NavyFed          1300 loans   total balances: $820 million   avg. loan amount: $630 thousand

SECU                                               -0-

PenFed              455 loans   total balances:  $1.35 billion   avg. loan amount:  $2.96 million

Boeing               957 loans   total balances:   $3.27 billion   avg. loan amount:  $3.40 million

SchoolsFirst        88 loans   total balances:   $2.33 billion   avg. loan amount:  $ 2.80 million 

😎... not exactly your small engine repair shop, lawn maintenance service, or Ebay start up, is it?

What are the parameters, controls, limits the SECU Board has approved for the upcoming business/commercial services? Why not give members an overview of what and why?

A little transparency won't hurt your image... promise!