Corporates are delivering sobering news to members as they apply U.S. Central's second-quarter losses to their own capital coffers, posting letters to members on their Web sites.
Georgia Central Credit Union President/CEO Greg Moore told his members U.S. Central's losses will trickle all the way down into their own member capital investments. Georgia Central owned $23 million worth of U.S. Central paid-in capital, which has been completely wiped out, and $55 million in member capital shares, now 63% impaired.
The cumulative $58 million loss consumes $42.5 million in reserves and undivided earnings, $13.5 million in paid-in capital and $1.9 million worth of member capital shares at Georgia Central.
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At the Lynchburg, Va.-based VACORP Federal Credit Union, President/CEO Jim Hansen told his members their MCS will "likely be depleted by 28%" as a result of U.S. Central's second quarter losses. However, Hansen said he doesn't anticipate recording the capital impairment until U.S. Central completes its audit and the NCUA confirms the accounting methodology.
Southeast Corporate Federal Credit Union reported that U.S. Central's latest numbers will result in an additional $24 million hit, depleting $18 million in retained earnings and impairing PIC by 30%.
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