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

Elevations Credit Union
Notes to Financial Statements
December 31, 2008 and 2007
As noted in Note 15, the Credit Union wrote-off its entire $2,708,093 member and permanent capital in Western
Corporate Federal Credit Union (WesCorp) and its $4,533,101 capital in Sun Corporate Credit Union (SunCorp) in
2008 based on the March 20, 2009 announcement that the losses at these institutions exceeded the capital in these
organizations. On January 28, 2009, the NCUA Board announced the Temporary Corporate Credit Union Share
Guarantee Program through September 30, 2011. The NCUSIF guarantee applies to all share amounts above
$250,000, and the NCUSIF insurance coverage applies to all share amounts below $250,000. The net effect is that
during the period of the guarantee the entire share account will be treated by the NCUSIF as if it was insured.
Approximately $62,000,000 of the corporate credit union certificates mature before December 31, 2009 and therefore
are guaranteed. Approximately $5,000,000 of the corporate credit union certificates mature after September 30,
2009 and are therefore not guaranteed.
Certificates are generally non-negotiable and non-transferable, and may incur substantial penalties for withdrawal
prior to maturity.
Note 3. Loans to Members
Loans to members consist of the following:
December 31
2008 2007
Mortgage loans:
Fixed rate $ 186,100,212 $ 157,217,441
Variable rate 8,763,092 34,729,744
Hybrid/Balloon 42,633,093 46,291,361
Home equity line of credit, variable rate 179,252,493 75,227,165
416,748,890 313,465,711
Vehicle loans 120,783,369 149,012,084
Credit card loans, unsecured 53,868,563 51,511,270
Commercial loans 5,293,992 2,572,149
Other consumer loans, primarily unsecured 8,845,055 10,920,513
605,539,869 527,481,727
Deferred net loan origination costs 649,491 795,588
Allowance for loan losses (6,072,114) (5,446,052)
ELEVATIONS Credit Union 2008 annual report 36
$ 600,117,246 $ 522,831,263
The Credit Union offers non-traditional hybrid/balloon mortgage loans to its members. Hybrid/Balloon loans consist
of loans that are fixed for an initial period of three, five or seven years. After this period, the mortgages are converted
to variable rate using the fully indexed rate, which can result in significant payment shock to the borrower.
Non-traditional mortgage loans may have significantly different credit risk characteristics than traditional fixed and
variable rate mortgages. However, the Credit Union believes it has established prudent underwriting standards as
well as adequate risk management functions to monitor these additional risks.
The following is an analysis of the allowance for loan losses:
Years Ended December 31
2008 2007
Balance, beginning of year $ 5,446,052 $ 6,134,728