DALLAS-Southwest Corporate FCU on Friday reported a $103 million loss for December, creating a $226 million loss for 2009.
Southwest, one of a handful struggling with large losses on mortgage-backed investments, told its 1,200 credit union members the losses wiped out $134.6 million of their capital in January, almost three-fourths of all the capital held by members in the troubled corporate.
Last year's loss comes after a loss of $691.9 million for 2008. Southwest said the big loss for 2009 came even as the corporate shored up its operations to book a $34 million net. But a $63 million loss on the depletion of its capital in U.S. Central FCU and a $197.8 million loss on its investments created the large hole. Southwest has now written off all $257 million of capital it once held in U.S. Central.
All but a few of the 27 corporates are now considered under-capitalized by NCUA, which issued an extraordinary regulatory order in April allowing them to operate under capital levels reported on Nov. 30, 2008, as if the U.S. Central losses had not occurred.
December's losses include an $84.3 million charge of Southwest's mortgage-backed securities, caused by the continuing increase in home foreclosure and additional deterioration in the mortgage markets.
