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WesCorp March 2009 financials posted
SAN DIMAS, Calif. (5/14/09)--Western Corporate FCU (WesCorp), based in San Dimas, Calif., posted its March 2009 financial statement with some special accounting adjustments. As of March 31, WesCorp posted a credit loss of $5.566 billion related to its securities portfolio. Of that, $390.5 million was from recognizing credit losses in the collateralized debt obligation positions. The remaining $5.175 billion came from the rest of the securities portfolio--mostly from Alt-A and particularly the Pay-Option Arm collateral portions. This amount represents an unaudited estimate of future credit losses and is considered to be other-than-temporary impairment (OTTI) in accordance with accounting guidelines, said WesCorp in its financial summary. Additional unrealized losses related to WesCorp’s securities portfolio were $6.034 billion, recorded as of March 31. WesCorp is operating with a Prior Undivided Earnings Deficit of $3.745 billion, which is guaranteed by the National Credit Union Share Insurance Fund. In an effort to release March financial information as soon as possible, WesCorp recorded its estimates of OTTI as of March 31, before it completed Dec. 31 audited financial statements. This required that all of the impact of OTTI be recorded through the income statement during March 31--even though the majority of OTTI expense is attributable to the period ending Dec. 31. As a result, March financial statements are not presented in accordance with generally accepted accounting principles because net losses are materially overstated in March for amounts that should be recorded as of December and adjustments to interest income on securities that are impaired as of Dec. 31. Once the Dec. 31 audited financials have been completed and issued, WesCorp said it will correct and restate January, February and March 2009 financial statements as appropriate. On March 20, the National Credit Union Administration (NCUA) board placed WesCorp into conservatorship and appointed itself as conservator. The NCUA board has given overall management authority to conduct day-to-day operations to the CEO and management of WesCorp, so that the corporate may continue to operate. For more information, use the link.
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