U.S. Central Publishes Audited 2008 Annual Report
September 14, 2009
Release of U.S. Central Federal Credit Union’s 2008 Audited Annual Report
Dear Members:
Late in the evening on Friday, September 11, 2009, Corporate One received a copy of U.S. Central Federal Credit Union’s (U.S. Central’s) Audited 2008 Annual Report. As we have reported to you previously, we were awaiting its release before we can issue our own 2008 Annual Report.
Below are links to the U.S. Central Annual Report and to a question and answer sheet published by the NCUA related to the report.
The release of U.S. Central’s audited 2008 Annual Report was anxiously awaited, so that we may conclude our own audited Annual Report. However, its contents were essentially what we had expected and what we had been reporting to you over the past several months. Our next step will be to work with our external auditor, Crowe Horvath, on analyzing the information in the report and making determinations about our own financials. However, I want to reiterate, that even in a worst case scenario whereby Corporate One would have to write down all the capital we have remaining at U.S. Central ($15 million), Corporate One (as of July 31, 2009) has more than $65MM in reserves and undivided earnings (RUDE) to absorb any future losses on our portfolio.
The deterioration in the U.S. housing and mortgage markets and the global credit markets, which started back in 2007 and persisted into 2009, has continued to impact holders of residential mortgage-backed securities. Accordingly, we expect Corporate One will experience additional losses based on bonds determined to have other-than-temporary impairment (OTTI). However, we do not expect those losses to be greater than our existing $65 million in RUDE. This means that the capital you have placed with Corporate One – both paid-in capital (PIC) and Membership Capital Shares (MCS) – should remain intact.
We hope to be issuing our audited 2008 Annual Report shortly, but if you have questions in the meantime related to the U.S. Central Annual Report, Corporate One’s financials or our capital position, please contact our VP, Chief Financial Officer, Melissa Ashley at 866/MyCorp1, ext. 9351 or mashley@corporateone.coop, or you may always call me directly.
Thank you again for your patience as we work through our audit. I look forward to providing our Annual Report to you soon.
Respectfully,
Lee C. Butke
President/CEO
866/MyCorp1, ext. 9300
lbutke@corporateone.coop
