The $8.9 billion Members United Corporate FCU yesterday reported a $4.6 million net loss for July 2010, driven by $8 million in new other-than-temporary-impairments from its latest investment review.
Although the red ink drops the Warrenville, Ill.-based corporate to an $11 million year-to-date net loss, the new OTTIs were absorbed by retained earnings and did not impair its remaining $14.6 million in member capital shares. Retained earnings dropped to just under $4 million after accounting for the losses.
In total, Members United has recorded a total of $610 million worth of OTTI on its current investment portfolio. However, actual recorded OTTI losses-and the capital impaired to cover them-exceed current Clayton Holdings and Andrew Davidson & Co. (AD&Co) loss projections by 15%, some $90 million.
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Previously recorded OTTI was based on Clayton reviews, the corporate said. However, Members United has since added AD&Co as a second source, and the firm projects lower losses than Clayton. Other reasons include loan performance that exceeds previous expectations.
Unrealized losses also shrank, dropping to $883 million. One year ago in July 2009, unrealized losses numbered nearly $1.7 billion.
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