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

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.