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CU System
Southwest Corporates December losses total 103M
DALLAS (2/2/10)--Southwest Corporate FCU reported Friday an additional $103 million of investment impairment losses in its unaudited December financial statements. The additional amount brings the corporate's total net loss for 2009 to nearly $226.5 million. The $226.5 million figure is made up of net losses on investments of $260 million partially offset by operating earnings prior to investment losses of $34 million. That compares with a net loss of $691.9 million in 2008. The December $103 million figure is comprised of a $19 million impairment of Southwest Corporate's remaining membership capital shares investment in U.S. Central FCU, and $84 million of impairments of Southwest Corporate's mortgage-backed securities. The amounts reflect continued increases in loss projections over the second half of 2009. Southwest had reported to its members that it will deplete $134.6 million of members' capital accounts in January to cover the retained deficit as of Dec. 31. This will result in a cumulative 72.68% depletion of the original members' capital account. "Southwest Corporate has and will continue to reduce expenses to conserve capital and to support revisions already made to its business model," said a letter from Melissa Wardell, senior vice president/chief financial officer, accompanying the financials. "While actively seeking to lower operating expenses, Southwest Corporate is also mindful to balance any future operating expense reductions with the need to maintain high service quality levels for our members," she wrote.


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