SAN DIMAS, Calif. – WesCorp FCU reported Monday it will be unable to post its completed financial results for 2008 until later in the first quarter as its struggles to assess fair values for its $544 million of ten troubled collateralized debt obligations, better known as CDOs.
WesCorp reported preliminary net income of $57.8 million for 2008, even as unrealized losses on its $22 billion of investments surged to $2.5 billion for the year. But all of the net income could be erased, depending on whether WesCorp decides to mark some of the growing unrealized losses on its CDOs as other-than-temporary impaired, according to several experts. "That is the most toxic of the toxic assets," said Charles Felker, vice president for credit union bond house First Empire Securities and a former chief investment officer for NCUA, referring to CDOs, in general.
At year-end, WesCorp recorded $148.1 million of market losses on $193.5 million of CDOs it holds available for sale–a mark-down of 80%. It has also marked down $239.9 million of CDOs it holds in its held-to-maturity category by 46%, or by $109.5 million. But WesCorp said it won’t be able to determine what portion of those market losses, if any, it will take as a charge until comprehensive reviews are completed later in the first quarter.
WesCorp is also holding more than $12 billion of subprime and so-called AltA asset-backed securities for which it has tentatively recorded a loss of $1.1 billion.
The corporate credit union reported member shares declined by 23%, or $4 billion, during 2008, to $16.8 billion at year-end.
Officials at WesCorp declined a request to comment.
