SECU Financials - 2023: Covering Your Assets (CYA)?

  ... Esse Quam Videri.

"To Be, Rather Than To Seem."

   

The "Legacy SECU Board" ("Remaining 8" pictured) has turned the Credit Union on its head since 2021. Most of their "industry standard innovations" ( a classic oxymoron!) have been poorly conceived, poorly executed, or both - from hiring, to RBL, to H410, to operational snafus, to midnight bylaw changes, wasteful "We-We" marketing, to verifiably "less than transparent" frankness with the SECU membership.

The "Legacy Board" evidently hopes that no one will notice the destructive brilliance of their leadership. Unfortunately, the SECU financials keep revealing some ugly truths. We've looked at the financials over the last few days [link] in terms of over capitalization (which prompts low savings rates), soaring operating costs, and the ridiculous "negative growth" [link] pronouncement. The Board seems affronted that members might have the audacity to challenge this record of mis-performance. The "We know best" attitude stubbornly persists. 

Lets look at one more issue which is costing SECU members tens of millions of real dollars - loan charge-offs. Losses on loans are a fact of life - bad things do happen to good people and bad decisions do occur. But, SECU has a strong record of prudently managing a diverse loan portfolio - and members equally have a strong record of repayment. But, losses have rocketed under the new policies of the Legacy Board:

Net annual SECU loan losses:

2020 $ 73.2 million

2021 $ 70.5 million

2022 $ 95.5 million

2023 $196.9 million

The Legacy Board took control with a new direction, new leadership, new policies, and that new "We-We" hubris in September 2021. Not sure how they will "explain away" a $100 million increase in loan losses - but it is definitely on their watch and the result of their leadership. 

And please don't "blame the Fed" while you're milking them with that $5 billion loan - that really would be crude! Can't wait to hear the CYA!

     ...  members paying an extra $100 million to become an "industry standard" lender?

It's your credit union, your loss, your choice... not "theirs".

SECU Financials - Why Level With SECU Members?

Because if you don't level with the members, you will eventually lose their trust ...

✅ One final absurd and disheartening example:

It would appear from these financials released to the membership, that SECU has reversed its 2-year long slide in growth - up 7.07% during 2023 !; well ahead of the board-approved strategic growth target of +4.50%.  Exceeding the Board goal by + 2.57% (7.07% - 4.50% target = 2.57%). A great leadership success!

What if we were to adjust that asset growth ratio to reflect that "unusual" $5 billion loan from the Fed? Pretty sure that would be more transparent, wouldn't you? After all, if the Fed - out of the goodness of its heart - were to loan you or me $5 billion, would that make us billionaires? (Even if we fled the Country, they'd find us! Oh yeah they would!!) 

On December 31, 2022 SECU had $ -0- in borrowed funds, a year later on December 31, 2023 SECU had $5 billion in borrowed funds. So, lets subtract that unusual $5 billion borrowing and compute a more transparent growth ratio, okay? 

The assets at December 31, 2023 drop from $54.58 billion to $49.58 billion ($5 billion lower). The Credit Union's assets at 12/32/2022 were $50.97 billion. That would indicate a drop in assets of -$1.4 billion ($50.97 - $49.58 = - $1.4 billion) during 2023, not a growth of 7.07%!

Meanwhile, deposits at SECU declined by another $102 million during January, 2024. Two down years in a row, working on a third...

Guess you could spin that as "negative growth"! Why not? Would make just as much sense as "artificial intelligence", "virtual reality", and "We Are SECU!".

... "To be, rather than to seem." ... which should you choose?

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