Investor Presentaiton
LOUISIANA CORPORATE CREDIT UNION
NOTES TO FINANCIAL STATEMENTS
8. COMMITMENTS AND CONTINGENCIES (continued)
Financial Instruments with Off-Balance Sheet Credit Risk (continued)
The Credit Union, as agent, has entered into an Excess Balance Account (EBA) agreements with
participating member credit unions and the Federal Reserve Bank, whereby the Federal Reserve Bank
opened EBA accounts for the benefit of the participants at the request of the agent. As such, the balances
in the EBA accounts are not reflected in the Credit Union's financial statements. These balances totaled
$57,500,000 and $38,000,000 as of December 31, 2021 and 2020, respectively. The aggregate balance in
the EBA represents a deposit liability of the Federal Reserve Bank solely to the participants. The Credit
Union, as agent, is responsible for calculating and distributing the interest payable to each participant on
the participant's excess balance.
Other
The Credit Union was not party to any legal actions as of December 31, 2021.
During 2009, the Credit Union impaired and charged off 100% of its investment in U.S. Central Federal
Credit Union (USC), which was placed in conservatorship by the NCUA on March 20, 2009. The Credit
Union is entitled to available recoveries after satisfaction of all liabilities of the liquidation estate based on
its pro-rata share of member contributed capital. The Credit Union was issued a claim certificate in the
amount of $5,874, 197. During 2021, the Credit Union received $3,224,934 in payments, which is
recognized as miscellaneous other operating income in the statement of income for the year ended
December 31, 2021.
In February 2022, the Credit Union was notified of an additional payment in the amount of $1,257,078
which was received in March 2022. The remaining claim after the aforementioned payments is $1,392,185;
however, no assurance can be provided as to the ultimate amount, if any, to be recovered at this time.
Further distributions will be evaluated by the liquidating agent on a semi-annual basis on June 30 and
December 31 of each year.
9. FAIR VALUE MEASUREMENTS
The Credit Union uses fair value measurements to record fair value adjustments to certain assets and
liabilities and to determine fair value disclosures. U.S. GAAP defines fair value as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced
liquidation or distressed sale) between market participants at the measurement date. Fair value is best
determined based upon quoted market prices. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including discount rate and estimates of future cash flows.
Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
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