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U.S. Centrals November net income at 32.8 million
LENEXA, Kan. (12/29/08)—U.S. Central announced it had recorded net income of $32.8 million for November, bringing its year-to-date earnings to $108.7 million. However, Treasury plans and fears about the economy and overall market illiquidity have affected market pricing of its assets, it said last week. Members’ share and certificate accounts averaged $24.5 billion during November, compared with $36.4 billion in November 2007, according to U.S. Central’s monthly financial statement posted Dec. 19. Net interest income totaled $39.1 million in November, compared with $37 million in October. Fed funds/LIBOR spreads were again historically wide in November and were the primary reason for the high net interest income total, said the report by Kathryn E. Brick, senior vice president and chief financial officer. Net losses on financial instruments totaled $1.4 million for the month, primarily as a result of gains paid to members on the redemption of member certificates. Also, U.S. Central reclassified securities with a fair value of $145.2 million from trading to available-for-sale ($124.7 million) and held-to-maturity ($20.5 million). As of Nov. 30, accumulated other comprehensive income (AOCI) on the balance sheet reflected an unrealized loss of $5.6 billion, up from $4.6 billion a month earlier. The announcement that the Treasury Department would no longer plan to purchase mortgage-related assets under the Troubled Asset Relief Program (TARP), coupled with continued fears about the U.S. economy and overall market illiquidity, caused spreads on these assets to widen significantly, resulting in a decline in fair value of approximately $650 million, the report said. Securities backed by credit card receivables, auto loans and student loans also experienced spread widening, which accounted for the remainder of the AOCI change.


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