LENEXA, Kan. – NCUA on Monday announced losses at U.S. Central FCU have eaten $331 million of the $1 billion capital note issued to the troubled corporate credit union last year, making a total of $2.7 billion of funds in credit union funds lost on U.S. Central so far.
That also includes $598 million in retained earnings, $1.43 billion of membership capital shares and $300 million in paid-in capital held by U.S. Central at year-end 2008.
All of it was eliminated as of the end of the fourth quarter of 2009, when the central bank for credit unions lost another $477 million. That made a total loss of $1.8 billion for 2009.
NCUA issued a statement yesterday after the U.S. Central financials were released to the public to calm the credit union movement. "U.S. Central's results from ongoing operations remain strong. The focus at U.S. Central continues to be that essential payment, settlement and liquidity services meet member needs," said John McKechnie, chief spokesman for the agency.
For the fourth quarter U.S. Central, which was taken into conservatorship by NCUA in the first quarter of 2009, continues to report losses as the result of other-than-temporary impairment-related charges, which totaled $497.9 for the quarter. A large portion of those losses, $142.1 million, were charges on securities insured by troubled bond insurer Ambac. U.S. Central previously had projected that all payments would be received and had not recorded any OTTI on those securities but it now is estimating that approximately 80% of the value of those securities will be recovered.
