U.S. Central Federal Credit Union in Lenexa, Kan., said the spreading credit crisis tainted more of its asset-backed securities in October, pushing unrealized losses on its vast investment portfolio up by another $1.2 billion, to a total of $7.3 billion.
The central bank for credit unions, already struggling to cope with huge losses on its mortgage-backed securities, said values of other securities backed by credit card receivables, auto loans, and student loans declined by about $600 million. Its mortgage-backed securities portfolio continued to decline in value, falling another $200 million for the month.
David Dickens, senior vice president for asset/liability management at U.S. Central, said the corporate credit union continues to hold the securities in hopes they will regain their value. Any plans to sell the securities into the market would require U.S. Central to realize some of the losses, he noted.
U.S. Central reported losses of $1.4 million on the securities in October on securities classified as trading, jumbo mortgage loans held for sale, and hedging instruments.
Still, it was able to record net income of $30 million for the month, bringing year-to-date net income to $75.9 million.
Total assets at the end of October were $37.4 billion, down from $46.3 billion a year earlier.
