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Southwest Corporate OTTI losses increase
PLANO, Texas (8/3/10)--Southwest Corporate FCU announced a net loss of nearly $20 million for the first six months of 2010, compared with a net income of more than $16.6 million for the same period last year. As a result, the corporate will be required to deplete members' capital accounts in July to eliminate the deficit. The $9 billion asset corporate said the net loss was primarily due to $31.6 million in other than temporary impairment (OTTI) charges recorded in April related to further deterioration of certain non-agency residential mortgage-backed securities since Dec. 31, 2009. Southwest Corporate recorded more than $1.6 million in OTTI charges in June, which was offset by other operating income of nearly $2.6 million. The corporate's net loss for the six months ended June 30 is partially offset by net operating income totaling more than $15 million. The July depletion of members' capital accounts increases the cumulative members' capital account depletion percentage to 77.62% from 72.68%. The corporate reported in its unaudited financial statements posted on its website members' capital accounts totaling $106 million minus the nearly $20 million retained deficit leaves $86.1 million in total regulatory capital. That amount is net of $4 million related to the portion of shares on notice that cannot be counted as regulatory capital as of June 30. The corporate's capital ratio is 1.03%. National Credit Union Administration rules and regulations require a minimum of 5%.
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