The seized Western Corporate FCU posted the corporate system's second highest term deposit rates yesterday, offering 0.74% for a two-year certificate. That's 20 to 30 basis points higher than competitors like Members United Corporate FCU and Southwest Corporate FCU.
NCUA spokesman John McKechnie said normal seasonal outflows are being experienced at WesCorp, and the dividends incent members to keep their shares on deposit. WesCorp remains mindful of its need to build retained earnings, he said, but despite profitability, no amount of earnings can reasonably restore the deficit incurred by credit losses.
WesCorp earned an $80 million profit as of June 30, but according to financial reports posted online, had to apply most of it toward $75 million in new OTTI charges.
As of June 30, WesCorp reported $10.3 billion worth of share certificates, representing about half of its total member shares. Twenty billion worth members' deposits and another $7.25 billion in borrowed funds offset a $5 billion retained earnings deficit and another $3 billion in "total other comprehensive losses," producing $19.3 billion worth of liabilities.
On the assets side, WesCorp has $4.5 billion in cash, $13.5 billion worth of investments, $1 billion in loans and $350 million in other assets on its books. Investments considered legacy assets include asset-backed securities with a fair value of $2.6 billion, private label mortgage-backed securities worth $3.1 billion, and $4.2 billion invested in commercial mortgage-backed securities.