DULUTH, Ga. – Georgia Central CU said additional losses on its U.S. Central FCU holdings will force it to deplete its own members’ capital by an additional $12 million on Dec. 22, the latest trickle-down of U.S. Central losses.
In a letter to members last week, Gregg Moore, president of the $2.7 billion corporate, said the latest move will mean 31% of its members’ membership capital shares will have been depleted.
Moore, who also served as a director of U.S. Central until NCUA took it over last March, said he expects further losses on Georgia Central’s capital in U.S. Central, which will be passed down to members. "We believe there is a strong probability that U.S. Central will reflect a further depletion of member capital in the fourth quarter based on additional (other-than-temporary impairments) to be reported and deducted from our capital account in early 2010, and that it is likely to result in the elimination of our remaining capital investments at U.S. Central," he reported.
If Georgia Central is forced to extinguish all of its capital in U.S. Central it would result in a depletion of a total of 44% of its members’ MCS.
At least seven corporates have depleted their member capital in recent weeks as a result of losses trickling down from U.S. Central, including Members United Corporate FCU, Southwest Corporate FCU, Constitution Corporate FCU, Southeast Corporate FCU, Carolina Corporate FCU and CenCorp CU. Earlier, WesCorp FCU, which was also taken over by NCUA in March, depleted $2 billion of member capital.
The losses are trickling down to natural person credit unions and being reported as write-downs.
