Unrealized Gains or Losses in AFS Securities

The recent rise in medium-term and long-term interest rates has caused many credit unions to report unrealized losses on their available-for-sale (AFS) securities portfolios. While these unrealized losses on AFS securities do not affect current earnings, they do have implications for future earnings if the securities are sold.

According to NCUA, the accumulated unrealized gain or loss on AFS securities at federally insured credit unions went from an unrealized gain of $2 billion as of March 31, 2013 to a unrealized loss of $614 million at the end of the second quarter of 2013.

Alaska USA FCU reported the largest unrealized loss on AFS securities at almost $63 million. See the table below for the 25 federally insured credit unions with the largest unrealized losses on AFS securities. Click on image to enlarge.



For federally insured credit unions that reported holding AFS securities as of June 2013, the median ratio of unrealized gain or loss on AFS securities to total assets was minus .03 percent. However, 54 credit unions had unrealized losses on AFS securities that were at least 1 percent of the credit union's total assets.

The following table list the 25 credit unions with at least $50 million in assets that have the largest exposure to unrealized losses on AFS securities as a percent of assets.