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COLUMBUS, Ohio — The American financial services landscape is looking quite a bit like the Bizarro World depicted in Superman comics where everything is the exact opposite of normal.The $5.2 billion Corporate One Federal Credit Union is a prime example. November financials released Dec. 29 reported record-breaking earnings, but also the corporate’s first ever other than temporary impairment.“Without question, we’ve heard a lot about the problems associated with market dislocation, but that same dislocation has also created earnings opportunities,” said Corporate One President/CEO Lee Butke. “If we’re able to take the OTTI in stride, what we’ve achieved this year is literally, far and away, a record year.”According to financial statements posted on Corporate One’s Web site (www.corporateone.coop), total year-to-date net income stands at $19.7 million as of Nov. 30, which includes a $5.1 million write down. That’s more than $6 million ahead of last year’s pace, thanks to a lucrative leveraging of the Fed funds and Libor rates, which has racked up a record $25.6 million year-to-date in net interest income.Butke said although member deposits are on the decline in the corporate system-Corporate One is down $255 million so far this year-the success of Primary Financial’s SimpliCD program is partly to blame. SimpliCD has grown to more than $7 billion under management, with Corporate One’s own members increasing their participation in the program by $600 million so far this year. That’s more than double the amount brokered last year and contributed to this year’s record earnings. (See related article, page 1.)The $5.1 million write-down on two bonds, together worth $11 million, should be the extent of Corporate One’s losses this year; furthermore, no additional OTTIs are anticipated for 2009.“These are not pleasant scenarios we’re using in the modeling, they’re very stressed,” Butke said. “So, quite literally, we’re not expecting anything in 2009 as well. Now of course, things could get worse, even worse than our current stressed scenarios, but I can say we’re highly confident with our numbers.”He added that even though the two bonds took a $5.1 million hit on the balance sheet, actual dollar losses are expected to be only around $1.7 million.Why take the lump in November, rather than wait until year-end? Butke said that’s standard procedure at Corporate One.“We try to be proactive for our members, and put a quick close on the year-end financial numbers,” he said. “I think it’s important to get that opinion audit into our members’ hands as quickly and effectively as possible.”–[email protected]

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