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Southwest Corporate updates operating insights
PLANO, Texas (5/20/09)--Southwest Corporate updated its Operating Insights Friday and revised its capital losses at U.S. Central FCU in accordance with the first quarter 2009 financials released May 13 by U.S. Central. Total investment losses Southwest Corporate expects to record in April have been reduced by $68 million--to $314 million from $382 million, said a message on Southwest's website from President/CEO John Cassidy. When U.S. Central revised its March financial statements with roughly $500 million less in investment losses than originally reported, with credit losses revised from $2.3 billion to $1.8 billion, the change meant Southwest Corporate's member's capital account at U.S. Central was replenished by $68 million. That results in a 23% reduction, vs. a 63% reduction originally reported, said Cassidy's report. Southwest Corporate had retained earnings of $323 million as of March 31, which means current losses will be covered by retained earnings. "Unlike reported in the May 6 Operating Insights, we do not expect to reduce members' capital accounts at this time due to the change in recording $314 million in investment losses instead of the $382 million previously reported," Cassidy said. As of March 31, Southwest Corporate's total capital was $717 million, and its capital ratio was 7.07%. Investment losses of $314 million would have reduced those March 31 amounts to $403 million and 3.97%. If conditions in the economy continue to deteriorate, losses on Southwest Corporate's member capital at U.S. Central beyond the 23% are possible, as are additional losses related to Southwest's mortgage-backed securities portfolio. For the full update, use the link.
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