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Members United Corp. delays 1Q financials to end of May
WARRENVILLE, Ill. (4/28/10)--Full first quarter 2010 financial results for Members United Corporate FCU have been delayed another month, according to a portfolio update the corporate posted on its website. The corporate is now targeting the end of May to release audited financial statements. The $9.3 billion asset corporate said the delay is prompted by a March 25 announcement of an organizational restructuring by monoline insurer Ambac. The restructuring means Members United, like several other corporates, must revisit its Other Than Temporary Impairment (OTTI) estimates on bonds insured by Ambac. Ambac ceased payment of claims as of March 25 per an order by the Wisconsin Office of the Commissioner of Insurance. Original estimates indicated Ambac was expected to pay 80% on claims; however, the restructuring announcement indicated the insurer would pay 25% on claims. Members United said it has more than $300 million total holdings (based on a book value) wrapped with Ambac. The full financial report was to be released on Friday. "We are now targeting the end of May 2010 to release the audited statements," said the portfolio update. The corporate expects to record additional OTTI losses once McGladrey and Pullen completes its review of the year-end 2009 estimate recorded as of Dec. 31, including the final determination regarding Ambac support. The losses are expected to result in a retained deficit and the corporate will be required to deplete membership capital shares in accordance with federal regulator's rules related to Paid-in Capital and Membership Capital. "At this time, Members United believes that existing capital in the amount of $151 million will be sufficient to absorb losses that will arise from the OTTI review," said the update on the website. In lieu of providing the full financial results, Members United provided these financial highlights:
* Core net income year-to-date, excluding the OTTI loss estimates, totaled $3 million, compared with $2.9 million for the same period in 2009; * Operating expenses year-to-date were $2.2 million less that the previous year; * Liquidity is adequate as cash and cash equivalents totaled $4 billion; and * Capital totaled $151 million prior to any OTTI charges that may result from the review underway.
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