U.S. Central Federal Credit Union Announces Losses
March 1, 2010
Dear Members:
U.S. Central announced today that they have released their 2009 unaudited financial statements and reported that they incurred a $477 million net loss for the fourth quarter, due to other-than-temporary impairment (OTTI) charges of $498 million on its portfolio. We had anticipated that additional OTTI charges at the end of the year would completely impair our membership capital shares at U.S. Central; therefore, we had already written off our entire capital investment in U.S. Central in November 2009. As of January 31, 2009, Corporate One has RUDE of $24.8 million. This RUDE is what has protected our members from any impairment related to the membership capital they hold with Corporate One.
I also would like to address some questions we have received regarding our exposure to investments in U.S. Central that would go beyond the current guarantee period. In support of the credit union network, Corporate One continues to invest our excess liquidity in overnight accounts and share certificates at U.S. Central. These accounts are guaranteed in full by the National Credit Union Association (NCUA) through March 31, 2012, with the option by the NCUA to extend the guarantee through December 31, 2014. Of the current $568 million balance of our share certificates with U.S. Central, 88% mature prior to the currently approved guarantee date. Should the NCUA extend the guarantee through the end of 2014, as we believe they will do given the importance of the guarantee to the credit union network, 100% of our share certificates will have matured prior to the expiration of the guarantee.
Should you have questions related to the release of the U.S. Central 2009 Financial Report, or about Corporate One’s financials, please don’t hesitate to contact our VP, CFO, Melissa Ashley at 866/MyCorp1, ext. 9351 or mashley@corporateone.coop. Or, you may contact me directly. As a reminder, our 2008 audited financials and monthly financial reports can be found on our website at http://www.corporateone.coop/www/DueDiligence.asp.
Respectfully,
Lee C. Butke
President/CEO
866/MyCorp1, ext. 9300
lbutke@corporateone.coop
