University of Wisconsin (UW) Credit Union has raised its investment loss contingency charge.
The loss is blamed on investment position the credit union held with Pennant Management.
Last year, UW Credit Union received notice from Pennant of fraudulent loans Pennant allegedly acquired from First Farmers Financial, LLC (First Farmers). As of September 29, 2014, UW Credit Union’s position in the First Farmers Repurchase Agreement B Fund totaled $52.977 million.
Last November, I reported that UW Credit Union's potential loss from the fraudulent investment at $13 million.
However, according to its 2014 audited financial statement's Note 13, UW Credit Union has recorded a valuation allowance of $35.160 million.
As a result of this contingency loss charge, UW Credit union reported a net loss of $15.2 million for 2014.
Read the Annual Report. Read the audited financial statements.
UW is a very well run and respected CU. I wonder with the benefit of 20/20 hindsight what could have been done to prevent this? Maybe UW can at some time share a lessons learned here for others.
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