MSIC 2022 Annual Report

MSIC AUDITED F MSIC AUDITED FINANCIAL STATEMENTS

MASSACHUSETTS CREDIT UNION SHARE INSURANCE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021

N OTE 2 - S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES (C ONTINUED ) I NVESTMENT S ECURITIES (C ONTINUED ) Securities Available-for-Sale (Continued)

OTTI is required to be recognized if: (1) the Corporation intends to sell the security; (2) it is “more likely than not” that the Corporation will be required to sell the security before recovery of its amortized cost basis; or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. For all impaired debt securities that the Corporation intends to sell, or more likely than not will be required to sell, the full amount of the depreciation is recognized as OTTI through earnings. Credit-related OTTI for all other impaired debt securities is recognized through earnings. Non-credit related OTTI for such debt securities is recognized in other comprehensive income. I NVESTMENT IN MSIC P ARTNERS , LLC As of September 30, 2021, the Corporation held an investment in MSIC Partners, LLC, whose primary purpose is to provide services to support credit unions and their credit union service organizations. As of September 30, 2021, the Corporation had invested $325,000 (13 share units at $25,000 each) in MSIC Partners, LLC, representing an approximate 33% interest. During 2022, the Corporation invested an additional $375,000 (15 share units at $25,000 each) resulting in the Corporation obtaining a controlling voting interest. In 2021, the investment was accounted for using the equity method and no impairment had been recognized. F EDERAL H OME L OAN B ANK S TOCK The Corporation, as a member of the Federal Home Loan Bank of Boston (“FHLB”), is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. Management reviews this investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of September 30, 2022 and 2021, no impairment has been recognized. R EAL E STATE H ELD FOR I NVESTMENT AND P REMISES AND E QUIPMENT , N ET Land, buildings, equipment, computer software and leasehold improvements are stated at cost, less accumulated depreciation and amortization.