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

Elevations Credit Union
Notes to Financial Statements
December 31, 2008 and 2007
ELEVATIONS Credit Union 2008 annual report 44
Amount Value Amount Value
Financial Assets:
Cash and cash equivalents $38,311,000 $38,311,000 $ 78,081,000 $ 78,081,000
Investments available-for-sale 143,109,000 143,109,000 39,903,000 39,903,000
Other investments 68,164,000 68,164,000 75,566,000 75,566,000
Loans and loans held for sale, net 600,117,000 621,147,000 522,831,000 521,826,000
Accrued interest receivable 3,350,000 3,350,000 3,008,000 3,008,000
Financial Liabilities:
Members’ shares 803,901,000 792,857,000 680,803,000 680,803,000
Borrowed funds 15,000,000 15,111,000 0 0
Note 15. Subsequent Event
In January 2009, U.S. Central Federal Credit Union (U.S. Central) announced that it was taking a $1.2 billion charge
during the fourth quarter of 2008 as a result of determining that certain of its investment securities were other-thantemporarily
impaired. On January 28, 2009, the NCUA announced that it was injecting $1 billion of capital into U.S.
Central from the NCUSIF and offering a temporary guarantee through December 31, 2010 of all member shares in
corporate credit unions to provide stability and help maintain liquidity in the corporate credit union system. All
federally-insured credit unions will share the cost of these actions proportionately through a partial write-off of the
credit unions’ existing 1 percent NCUSIF deposit and future assessments of additional premiums to return the
NCUSIF to the normal operating level of 1.3 percent of insured deposits. The impairment of the deposit was
estimated at 51 percent of the December 31, 2008 asset value with an additional assessment of .3 percent of insured
deposits as of December 31, 2008. In March 2009, the NCUA announced that both U.S. Central and WesCorp were
taken into conservatorship and the original loss reserve estimate had increased by $1.2 billion since the January
2009 estimate was made. Based on this adjustment of the loss reserve estimate, the impairment of the NCUSIF
deposit was revised to 69 percent of the December 31, 2008 deposit fund balance. The additional assessment of .3
percent of insured deposits as of December 31, 2008 remained unchanged
On March 27, 2009, the NCUA introduced an amendment to the Federal Credit Union Act to Congress that, if
enacted, could substantially impact the amount of impairment currently estimated. The proposed legislation would
create the Corporate Credit Union Stabilization Fund to absorb losses associated with the corporate credit union
stabilization actions and assess federally insured credit unions for associated costs over as much as a 7-year period.
If the Corporate Credit Union Stabilization Fund is not created, the Credit Union will incur approximately $7,210,000
in impairment and assessment charges for the year ending December 31, 2009.
The underlying causes of the impairment and assessment are events considered to have occurred before 2009, and
were probable but not estimable as of December 31, 2008. Because the amounts became estimable with the NCUA
Board actions in 2009 prior to the issuance of the audited financial statements, the Credit Union wrote-off all of its
$2,708,093 capital in WesCorp. based on the March 20, 2009 announcement that the losses at this institution exceed
the capital in the organization. In addition, the Credit Union performed an evaluation of its corporate capital account
in SunCorp and wrote off $4,533,101 as of December 31, 2008.
As of May 19, 2009 legislation has passed that will allow the Credit Union to defer the expenses related to the
NCUSIF assessment.