COLUMBUS, Ohio – Corporate One FCU yesterday became the first corporate credit union to report a loss for 2009, telling its members it lost another $3.5 million in December, bringing losses for the year to $42.3 million.
But even following $72.6 million of losses for 2008, the $3.3 billion corporate assured its members it will not join other troubled corporates by depleting their capital.
The report comes as several other corporates are expected to issue their own financials over the next few days showing big losses for 2009, which will require thousands of credit unions to write down capital they own in some of those corporates.
"Corporate One remains unique in that our members’ capital accounts have not been depleted, thanks to our positive RUDE (reserves and undivided earnings) position. And we continue to believe that we will not have to ask members to impair their capital with us in the future for several reasons,” said Lee Butke, president of Corporate One, in a letter issued yesterday to his 800 members.
Among the reasons, he said, are that Corporate One has no more exposure to U.S. Central FCU, having depleted all of the capital it had in the failed corporate giant; Corporate One continues to have strong operating earnings, $14.9 million for 2009; and the corporate continues to grow, adding eight new members in the fourth quarter of 2009.
At the end of 2009 Corporate One had $23.6 million of RUDE, $25.7 million of members’ paid-in-capital and $118.4 million of members’ membership capital shares.
December’s $3.5 million loss was caused by the write-down of other-than-temporary impairment on mortgage-backed securities. That made a total of $42.6 million in OTTI recorded on impaired investments for 2009, amounting to all of the corporate's loss.
However, new troubled emerged in November when Corporate One acknowledged the risk of future losses on some of its underwater securities was heightened because bond insurer Financial Guarantee Insurance Corp was ordered by state regulators to stop paying claims.
The results for 2009 are unaudited. Audited financials are not expected to be completed for several months.
