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N.C. league votes to recap First Carolina Corporate
GREENSBORO, N.C. (2/14/11)--The North Carolina Credit Union League and League Service Corp. board of directors voted unanimously to contribute its fair share toward the recapitalization of First Carolina Corporate CU, the league announced. The board made the commitment at its regular monthly meeting Feb. 3 (Weekly Update Feb. 11). "First Carolina has been a valuable partner to the league and to credit unions in North Carolina over the years," said league President/CEO John Radebaugh. "The corporate landscape has changed dramatically in the last two years, but we strongly believe that the leadership of First Carolina has a great plan in place to continue doing what it does best--serve its members well," he added. In December, the corporate booked its 2010 other than temporary impairment (OTTI) charges, which was offset by accounting adjustments on bonds the corporate had previously written off too much principal, according to a Jan. 24 letter to credit unions from David W. Brehmer, president/CEO. The letter accompanied First Carolina's December 2010 Financial Statements, which are posted on the corporate's website. "The net impact was a loss of $423,000. We sold one credit card asset-backed security at a positive gain of $249,000," said Brehmer in the letter. "After all of these transactions, we were still able to book strong positive earnings for the month. We ended the year with just over $3.2 million in net income." "With no remaining capital at risk at U.S. Central, we have begun building the organization's retained earnings and overall capital position," he said. All remaining deposits at U.S. Central Bridge Corporate are fully covered by the National Credit Union Share Insurance Fund share guarantee, he added. Assets for the corporate are $1.918 billion, about $136 million more than in December 2009. Its capital is at 1.90%, below the minimum required regulatory capital level. Under the final Regulation 704, the corporate resubmitted its Capital Restoration Plan to the National Credit Union Administration on Jan. 21. It plans to recapitalize the organization by April 29, well before the forbearance period expires, according to the financial statement. The targeted recapitalization goal and plan will put the corporate above all required minimum capital levels well before the October deadline. As of Dec. 31, capital totaled more than $39 million, excluding unrealized losses on securities and accumulated other comprehensive losses.
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