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It’s not much compared to December’s financial carnage, but U.S. Central Credit Union is off to a positive start in 2009. The January unaudited financials, released March 2, reported a $9.2 million net profit and a decrease in U.S. Central’s accumulated other comprehensive income running tab of $6 billion in unrealized losses.“We’ll take good news where we can get it,” said Senior Vice President/Chief Financial Officer Kathy Brick of the $100 million decrease in unrealized losses, which shaved it down to $5.9 billion. She explained that after months of widening, spreads tightened in January for asset-backed securities supported by credit card and student loan receivables, resulting in the slight value gain.The NCUA’s emergency capital infusion plugged December’s OTTI capital drain; U.S. Central also reported that it met regulatory capital requirements as of Jan. 31, with a 6.362% ratio, according to supplemental financial information provided with January’s financials.U.S. Central’s members don’t have to fear OTTIs every month, as the top-tier corporate only values securities quarterly. Brick said it’s a labor intensive process and especially taxing on U.S. Central, which unlike most institutions doesn’t invest in whole loans.“Whole loans aren’t priced using mark-to-market, you just carry them to cost,” she said.January’s numbers were posted hot on the heels of U.S. Central’s December 2008 financials, released just two business days prior.The unaudited statements made official what the entire industry has known for weeks: a GAAP-required $1.2 billion OTTI ate up approximately $700 million in retained earnings, resulting in a negative $463 million line item. That dropped U.S. Central’s capital ratio to 3.756% and forced the NCUA to step in.It seems like pocket change now compared to the $1.2 billion OTTI but had the accounting entry not been required, U.S. Central would have posted a record $120 million net profit for the year.“All of it was blown away by the OTTI announcement, of course, but it would have been a huge record for us,” Brick said.Despite shrinking deposits, the oft-cited Fed funds-Libor spread was the biggest income producer for U.S. Central. Net interest income contributed $238.2 million to 2008′s bottom line, compared to $217.6 million in 2007. Excluding membership capital shares and paid-in capital, total member balances were $23 billion, down from nearly $37 billion at 2007 year-end.–[email protected]

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