Investor Presentaiton
LOUISIANA CORPORATE CREDIT UNION
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investment Securities (continued)
Purchase premiums and discounts are recognized in interest income using the interest method over the
terms of the securities. Declines in the fair value of held-to-maturity and available-for-sale securities
below their cost that are deemed to be other than temporary are reflected in earnings as realized losses.
Management evaluates securities for other-than-temporary impairment (OTTI) on at least a quarterly
basis, and more frequently when economic or market concerns warrant such evaluation. U.S. GAAP
specifies that (a) if an entity does not have the intent to sell a debt security prior to recovery and (b) it is
more likely than not that it will not have to sell the debt security prior to recovery, the security would not
be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend
to sell the security and it is more likely than not that the entity will not have to sell the security before
recovery of its cost basis, it will recognize the credit component of an OTTI in earnings and the remaining
portion in other comprehensive income. The credit loss component recognized in earnings is identified as
the amount of principal cash flows not expected to be received over the remaining term of the security as
projected based on cash flow projections. For held-to-maturity debt securities, the amount of OTTI
recorded in other comprehensive income for the noncredit portion of a previous OTTI should be amortized
prospectively over the remaining life of the security on the basis of timing of future estimated cash flows
of the security.
Federal Home Loan Bank (FHLB) stock is restricted as to its marketability. Because no ready market
exists for this investment and it has no quoted market value, the Credit Union's investment in this stock is
carried at cost.
The NCUA Central Liquidity Facility (CLF) is a liquidity lender for credit unions experiencing unusual
or unexpected liquidity shortfalls. During 2020, the Credit Union joined the CLF as an agent member on
behalf of member credit unions. CLF stock is restricted as to its marketability. Because no ready market
exists for this investment and it has no quoted market value, the Credit Union's investment in this stock is
carried at cost.
Other investments consist of two investments in credit union service organizations accounted for using
the equity method. Primary Financial Company, LLC offers a program, SimpliCD, which enables the
Credit Union's members to invest in and issue federally insured certificates of deposit. CU Business
Group, LLC provides business lending and deposit consulting services to credit unions nationwide.
Loans to Members
The Credit Union grants installment and demand loans to its members. Loans receivable are stated at
unpaid principal balances. Interest on loans, which is recognized on the accrual basis, is calculated based
on the principal balance using rates as stipulated in the loan agreements. The Credit Union evaluates each
member's credit worthiness on a case-by-case basis. Loans to members were $-0- and $102,443 at
December 31, 2021 and 2020, respectively.
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