Members United: Retained Earnings Will Cover OTTIs
The $8.15 billion Members United Corporate FCU's June portfolio update, released late today, showed a $1 million June profit that increased retained earnings to $9.6 million.
Those figures did not include results of the Warrenville, Ill.-based credit union's OTTI review, which is currently underway. However, Members United stated "preliminary results indicate" retained earnings will be sufficient to absorb OTTI charges expected in July's financial reports.
Members United also has an additional $1.2 million to guard against future capital depletions, after an internal audit turned up it had overstated OTTI in April due to a "one-time formula error." The result was the depletion of member capital shares by 89.7% on May 25, rather than the correct, post-audit amount of 88.8%.
The difference of 0.9% will either be applied to reduce any future depletion, or replenished to the MCS accounts should that prove to be the proper course of action.
The $1.2 million error represents less than 0.2% of the cumulative OTTI of $562.3 million recorded to date.