The $30 billion U.S. Central FCU reported a $39.4 million second quarter net loss today, further depleting the corporate stabilization fund's $1 billion capital note to $310 million. The seized wholesale corporate reported a $44.5 million net loss during first quarter 2010.
According to financial reports posted on U.S. Central's website, the second quarter loss was the result of $44.9 million in other-than-temporary-impairments to U.S. Central's non-agency residential mortgage backed securities. Ineffective derivatives strategy was blamed for an additional $5.8 million investment loss during second quarter.
Net interest income of $16.4 million partially offset the losses. Interest income declined during second quarter, but not as much as U.S. Central's average funding rate, resulting in an increase in net interest income compared to same period last year.
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Assets dropped nearly $5 billion from March 31, the result of U.S. Central's repayment of $5.8 billion worth of CU SIP borrowings, offset by a new $800 million loan from NCUSIF.
Another $164 million in CU HARP borrowings will mature in fourth quarter 2010.
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