The $32 billion U.S. Central Federal Credit Union reported last week a $687 million other than temporary impairment for first-quarter 2009. Available on U.S. Central's Web site (www.uscentral.org), the release was a first look at the NCUA-managed corporate's numbers since its March 20 conservatorship.The impairment leaves only $1.96 billion in capital. Of that, $1 billion represents NCUSIF emergency capital added in January after U.S. Central stunned the industry with a $1.2 billion December 2008 OTTI announcement. The remaining capital consists of membership shares.That represents only a 23% member capital share impairment from the $1.25 billion reported in February 2009, compared to the 63% MCS impairment the NCUA announced May 1.However, retail corporates and credit unions shouldn't expect a rebate check in the mail. While the percentage of MCS exhaustion did decrease, it was the result of discounting projected credit losses, or cash flows, to present value.The NCUA's gross projected losses of $2.3 billion, resulting in the 63% MCS depletion, still stands, said Director of Public and Congressional Affairs John McKechnie."These fluctuations are expected in any situation when the values of assets are moving targets," he said.U.S. Central's investment portfolio has taken a beating, racking up $12.8 billion in accumulated other comprehensive losses as of March 31, mostly unrealized losses on securities subject to OTTI, he said.In preparing first-quarter financials, the corporate has early adopted provisions of FASB FAS 115-2, which modifies how OTTI is measured and recorded. Only credit loss impairments, separated from other impairments, are recorded as a reduction to earnings. Unrealized losses are considered OTTIs and are reflected in the line item "accumulated other comprehensive income (loss)."The $12.8 billion represents a large decrease in the fair value of U.S. Central's securities. Preconservatorship February financials reported $6.6 billion in unrealized losses.The majority of the $6.2 billion difference is due to U.S. Central's decision to reclassify $9.3 billion worth of held-to-maturity securities to available-for-sale, McKechnie confirmed, with the balance representing additional loss of value experienced during the quarter.U.S. Central echoed what the NCUA has said before: It does not currently intend to sell securities, despite the reclassification."The transfer to AFS is not a signal of a change in strategy or approach," the financials state. "Rather, it provides U.S. Central the flexibility to reduce losses to the NCUSIF if market opportunities arise. While our intention has not changed, we are open to considering alternatives in the future."The Lenexa, Kan.-based corporate also hinted at what will show up in its audited 2008 year-end financials, now anticipated to be released in June. The revised numbers will include a new OTTI total of $3.8 billion, up from the earlier unaudited, preconservatorship $1.2 billion in OTTI.However, all of the difference and then some was "recaptured" as of Jan. 1, $2.7 billion worth were added back to retained earnings, the amount represents noncredit losses. Noncredit losses aren't run through the balance statement thanks to the new FASB rules applied as of first-quarter 2009, officials said.U.S. Central also announced the NCUA has extended its deposit guarantee to accommodate a two-year rolling expiration date with a quarterly extension option, mirroring the deal it's offered retail tier corporates.An independent OTTI evaluation will be conducted every quarter, U.S. Central said.–[email protected]