WARRENVILLE, Ill. — Members United Corporate FCU depleted all of its member paid-in capital and more than 40% of its membership shares to eliminate its deficit according to recently released financial statements.
The $7.7-billion institution reported a deficit of $277.3 million as of Aug. 31, a decline of $578 million since its Nov. 30, 2008 report when the corporate showed retained earnings of just over $300 million. Depletions from U.S. Central accounts accounted for $230 million, or 40%, of the losses that Members United has experienced since last winter.
Looking forward, the corporate expressed skepticism of a "v-shaped" recovery, noting continued weakness in the housing and labor markets and a consumer that is loaded with debt. According to a chart in the statement, while unrealized losses and cumulative OTTI appeared to have peaked in March at around $2.3 billion, the corporate's investment values have not turned around appreciably, but only "improved slightly" since the equities markets hit their lows.
The corporate said it was following a plan designed to "minimize the ultimate expected losses" to its members CUs by hanging on to securities until maturity. It is holding firm on its suspension of mortgage investment purchases.
