COLUMBUS, Ohio-Corporate One FCU reported that unrealized losses on its books grew by another $21 million in December to a total of $328.1 million, one of seven corporates with large holdings of underwater securities.
But the $3.8 billion corporate told its members yesterday it won't have audited financials available for some time still as it tries to calculate what impact NCUA's $1 billion bailout of U.S. Central will have on its books. NCUA infused $1 billion into U.S. Central last month after U.S. Central took a $1.2-billion charge for its fourth quarter, effectively realizing some of the unrealized losses on its books, and creating a $1.1-billion loss for 2008.
Unrealized losses held by the corporate network have soared to almost $20 billion in recent weeks, led by U.S. Central, with about $11 billion in losses on its books; WesCorp FCU $2.5 billion; Members United Corporate FCU $2 billion; Southwest Corporate FCU $1.2 billion; Constitution Corporate FCU $316 million; SunCorp FCU $162 million and Southeast Corporate FCU $186 million.
Among the impact Corporate One's auditors are still weighing what amount of the $44.6 million of U.S. Central member capital shares; $27.4 million of paid-in-capital II; and $1.9 million of paid-in-capital it will have to account for as impaired.
That $1.1-billion loss wiped out $707 million of retained earnings at U.S. Central, and is also expected to have erased all $450 million of member corporates' so-called PIC II and $43 million of PIC I, losses that U.S. Central's 27 corporate members will have to record on their own books. Experts worry that further write-downs by some of the troubled corporates could necessitate additional NCUA assistance.
But not all corporates are expecting to charge-off all of the PIC II. Jay Murray, president of Mid-Atlantic Corporate FCU, said last week their auditor is not sure yet of the extend of the impairment for their U.S. Central PIC II.
Corporate One also said it is evaluating what impact NCUA's $4.7 billion corporate bailout will have on its 1% NCUSIF deposit, specifically the write-down of the $596,684 it has deposited with the NCUSIF.
