7 6 5 4 3 2 1 8 - Elevations Credit Union

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Elevations Credit Union Notes to Financial Statements December 31, 2008 and 2007 Note 2. Investments Investments classified as available-for-sale consist of the following: Amortized Unrealized Unrealized Fair December 31, 2008 Cost Gains Losses Value U.S. government obligations and federal agencies securities $ 11,155,659 $ 560,009 $ - $11,715,668 Auction rate securities 45,000,000 - (1,575,000) 43,425,000 Private label mortgage-backed securities 2,874,117 0 0 2,874,117 Mortgage-backed securities 84,189,032 944,425 (39,377) 85,094,080 ELEVATIONS Credit Union 2008 annual report 34 $143,218,808 $1,504,434 $(1,614,377) $143,108,865 Amortized Unrealized Unrealized Fair December 31, 2007 Cost Gains Losses Value U.S. government obligations and federal agencies securities $ 15,942,139 $ 281,861 $ - $ 16,224,000 Mortgage-backed securities 23,420,188 258,312 - 23,678,500 $ 39,362,327 $ 540,173 $ - $ 39,902,500 Gross unrealized losses and fair value by length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2008 are as follows: December 31, 2008 Available-for-sale Fair Value Continuous Unrealized Losses Existing For: Less Than 12 Months More Than 12 Months Total Unrealized Losses Auction rate securities $ 43,425,000 $(1,575,000) $ - $ (1,575,000) Mortgage-backed securities 18,644,145 (39,377) - (39,377) $ 62,069,145 $(1,614,377) $ - $ (1,614,377) At December 31, 2008, the investment portfolio included 11 securities, none of which have current unrealized losses which have existed for longer than one year. At 2007, the investment portfolio included 17 securities, 4 of which had current unrealized losses which have existed for longer than one year. All of these securities are considered to be acceptable credit risks. Based upon an evaluation of the available evidence, including recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the decline in fair value for these securities is temporary. In addition, the Credit Union has the intent and ability to hold these investment securities for a period of time sufficient to allow for an anticipated recovery. At December 31, 2008, the Credit Union recognized $2,225,890 in other -than -temporary -impairment related to two private label mortgage-backed securities. These investments were recently downgraded and showed breaks in future cash flows which resulted in an other-than-temporary-impairment charge.
Elevations Credit Union Notes to Financial Statements December 31, 2008 and 2007 Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period in which the other-than-temporary impairment is identified. Investments by maturity as of December 31, 2008 are summarized as follows: Available-for-sale Amortized Fair Cost Value Other No contractual maturity $ - $ - $ 1,163,600 Less than 1 year maturity - - 62,000,000 1—5 years maturity 11,155,659 11,715,668 5,000,000 Over 10 years maturity Private label mortgage-backed 45,000,000 43,425,000 - securities 2,874,117 2,874,117 - Mortgage-backed securities 84,189,032 85,094,080 - ELEVATIONS Credit Union 2008 annual report 35 $ 143,218,808 $ 143,108,865 $68,163,600 Expected maturities of private label mortgage-backed securities and mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations and are, therefore, classified separately with no specific maturity date. FHLB stock has been classified with no contractual maturity. Other investments consist of the following: December 31 2008 2007 Share certificates in a corporate credit union $ 67,000,000 $ 69,000,000 Member capital account in a corporate credit union - 889,944 Permanent capital account in a corporate credit union - 4,533,101 FHLB stock 1,163,600 1,142,700 $ 68,163,600 $ 75,565,745 The Credit Union views its investment in the FHLB stock as a long-term investment. Accordingly, when evaluating for impairment, the value is determined based on the ultimate recovery of the par value rather than recognizing temporary declines in value. The determination of whether a decline affects the ultimate recovery is influenced by criteria such as: 1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and length of time a decline has persisted; 2) impact of legislative and regulatory changes on the FHLB and 3) the liquidity position of the FHLB. The FHLB recently announced that it will likely report a risk-based capital deficiency as of December 31, 2008, and therefore will not be able pay a dividend for the fourth quarter of 2008 and will not be able to repurchase capital stock. The FHLB noted their primary concern with meeting the risk-based capital requirements relates to the potential impact of other-than-temporary impairment charges that they may be required to record on their private label mortgage back securities. While it appears that the FHLB of Topeka will be less than adequately capitalized as of December 31, 2008, the Credit Union does not believe that its investment in the FHLB is impaired as of this date. However, this estimate could change in the near term if: 1) significant other-than-temporary losses are incurred on the mortgage backed securities causing a significant decline in their regulatory capital status; 2) the economic losses resulting from credit deterioration on the mortgage backed securities increases significantly and 3) capital preservation strategies being utilized by the FHLB become ineffective.
Page 1 and 2: safe. sound. local. 2008 Annual Rep
Page 3 and 4: table of contents Joseph Wilson Mor
Page 5 and 6: letter from the president Dear Memb
Page 7 and 8: Pictured page 4 Eric Jones Chair Er
Page 9 and 10: The Supervisory Committee ensures t
Page 11 and 12: community relations committee Pictu
Page 13 and 14: kids fair Hundreds of fun-loving ki
Page 15 and 16: mortgages Elevations side-stepped t
Page 17 and 18: community relations Broomfi eld Com
Page 19 and 20: “I am equally passionate about wo
Page 21 and 22: anch managers 5 4 2 3 1 Mary Ann Ka
Page 23 and 24: fi nancials Elevations Credit Union
Page 25 and 26: Independent Auditor’s Report Supe
Page 27 and 28: Elevations Credit Union Statements
Page 29 and 30: Elevations Credit Union Statements
Page 31 and 32: Elevations Credit Union Notes to Fi
Page 35: Elevations Credit Union Notes to Fi
Page 47 and 48: senior leadership team Gerry Agnes

7 6 5 4 3 2 1 8 - Elevations Credit Union

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