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CU System
Final 2008 financials for U.S. Central are posted
LENEXA, Kan. (3/2/09)--U.S. Central FCU has posted its final financials for 2008, confirming the losses it announced last month. The unaudited results were posted Thursday on U.S. Central's website. U.S. Central earlier announced it recorded an other-than-temporary impairment (OTTI) charge of $1.2 billion in December 2008. The new report says the losses resulted from significant deterioration in some consumer-based investment securities in late 2008, particularly non-agency residential mortgage-backed securities (RMBS). Assets with OTTI charges must be written down to the current fair value, with an offsetting charge to earnings, and these charges are often much larger than expected principal losses because securities must be written down to fair value, said a letter to members from Kathryn E. Brick, U.S. Central's senior vice president and chief financial officer. U.S. Central received a $1 billion capital infusion from the National Credit Union Administration after U.S. Central announced the expected OTTI charge. The infusion was funded in late January from the National Credit Union Share Insurance Fund and qualifies as core capital. Following the capital contribution, U.S. Central was in compliance with its regulatory capital ratio as of Jan. 31. U.S. Central experienced record performance in net interest income during 2009, largely due to historically wide Fed Funds/LIBOR spreads in the third and fourth quarter 2008. Net interest income totaled $238.2 million in 2008, up from $217.6 million in 2007. Members' share and certificate accounts averaged $23.9 billion in December and $33.2 billion for the year 2008. As of Dec. 31, accumulated other comprehensive income (AOCI) on the balance sheet reflected an unrealized loss of $6 billion, compared with $5.6 billion in November. Continued fears about the U.S. economy caused credit spreads on many of U.S. Central's investment securities to widen, causing a further decrease on their value. Total assets for 2008 were $32.7 billion, down from $44.7 billion in 2007. Retained earnings were down a negative $463 million, compared with $598 million in 2007. Total capital is $1.5 billion, compared with $2.3 billion in 2007. For more detail, use the resource link.


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