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CU System
Southwest Corporate reports December financials
PLANO, Texas (2//09)--Southwest Corporate FCU posted its unaudited financials for December 2008, noting that it had realized more losses during the month. Its net losses for 2008 total $7.9 million. The corporate recognized $31.1 billion higher net interest income for the year ending Dec. 31, 2008,, compared with the year ending in 2007, which it attributed primarily to the historically wide spread between LIBOR and Effective Fed Funds rates resulting from the current market dislocation. It recorded a net loss of $78.5 million for the year, comprised of other-than-temporary impairments (OTTI) of $71.8 million, net loss on mutual funds of $7.8 million, offset by gains of more than $1 million related to the redemption of Visa stock and early redemption of U.S. Central share certificates, the financial report said. Of the OTTI funds, which are deemed not likely to recover to par prior to maturity, $29.7 million related to Lehman Brothers' unsecured corporate debt, and $42 million related to 12 residential mortgage-backed securities. Southwest Corporate anticipates recognizing recoveries of about $20 million over time as the forecasted credit losses are expect to be less than the OTTI charges. The OTTI funds are recorded to the fair value at the impairment date according to SFAS 115. The residential mortgage-backed securities are still performing. However, collateral losses are expected to impact those securities in one to four years, said the report. The corporate's regulatory capital position is at 6.47% , well above the 5% required by the National Credit Union Administration, and higher than the 5.57% recorded at the end of December 2007. It's 2008 retained earnings ratio is 2.88%, compared with 2.50% in 2007. To access the complete report, use the link and click on the December 2008 financials.
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