Members United Corporate Federal Credit Union will eliminate its retained deficit and deplete 100% of member paid-in capital, as well as 40.2% of membership shares.
The announcement came in the notes that accompany the $7.7 billion corporate's newly released August financial statements, available on its Web site (www.membersunited.org).
Like most corporates, Members United waited for U.S. Central Federal Credit Union to finalize its audit before applying the retained deficit to member capital, as U.S. Central losses account for about 40% of the $578 million lost from retained earnings since Nov. 30, 2008. Much of the rest is due to other-than-temporary-impairments from Member United's investment portfolio.
August's financial statements still reflect a retained deficit because the actual depletion of capital was recorded in September, per Sept. 16 NCUA guidance. Chief Financial Officer Todd Adams confirmed September's number will reflect the capital impairments.
"From our members' perspective, the depletion entries will be reflected on their September 2009 member statements," Adams said.
The release includes a graph that charts accumulated other comprehensive income, or unrealized losses, and cumulative OTTI. The losses peaked in March 2009, but thanks to improved market liquidity, Members United's investment portfolio has shed $192 million in unrealized losses since June.
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