SOUTHFIELD, Mich. – CenCorp CU became the latest corporate credit union to deplete its member capital as a result of losses trickled down from U.S. Central FCU and from write downs on its mortgage-backed securities.
The $2.5 billion corporate reported a $115 million loss for the first three quarters of the year, creating a $26 million retained earnings deficit, which it was required by NCUA to fill by depleting its membership capital share deposits by 24%, or about $27 million.
The three-quarter losses were due to a $112 million write-down of CenCorp’s capital in U.S. Central and a $7 million loss on mortgage-backed securities, offset slightly by gains in other income.
In recent days other corporates have announced the depletion, or write-down of their members’ capital, including Members United Corporate FCU, Southeast Corporate FCU, Constitution Corporate FCU, First Carolina Corporate FCU and Southwest Corporate FCU. Earlier, WesCorp FCU announced the elimination of all of its members’ $2 billion in capital. These write-downs were all passed down to natural person credit unions.
So far, CenCorp has written down its $149 million of capital in U.S. Central by $135 million, leaving it with $14 million. “Additional impairment charges expected at U.S. Central in the fourth quarter of 2009 would result in a further impairment of CenCorp’s capital investment at US Central,” reported the corporate.
