GREENSBORO, N.C. - The nation’s corporate credit unions say they have ramped up communications with natural-person credit unions aimed at addressing any concerns over the state of their financial health.
The issue: downgrades by ratings agencies and unrealized losses that are affecting their balance sheets have meant historically numbers-oriented institutions have had to develop new communications skills.
Beginning on page 14, in this issue corporate CUs detail their communications strategies. Spokespersons for a number of corporates stressed to Credit Union Journal that dislocation in the investment market has indeed had a profound impact on the values of certain assets, but all insist they have more than sufficient liquidity to avoid selling those assets prior to maturity and any resulting losses.
First Carolina Corporate, based here, has been reporting not only positive equity and plenty of liquidity, but “record earnings.”
“Given all this current market dislocation, First Carolina and other corporates are making record earnings,” Fred Eisel, SVP/CIO. “We buy a lot of LIBOR floaters, and typically pay to our members the Fed Funds rate. Typically, that spread is fairly narrow, but with the current market, that spread has become quite wide. Today, LIBOR is 248 basis points, and Fed Funds is 200.
“Earnings at U.S. Central and other corporates are hitting record levels each month,” Eisel continued. “We are having challenges with unrealized losses and bonds that are completely out of whack, but we are having record earnings, which is an interesting dynamic.” (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
