U.S. Central Federal Credit Union reported late Monday that growing losses on its portfolio of private-label mortgage-backed securities created a $39.4 million loss for its second quarter, and an $84.8 million loss for the first-half of the year.

While the performance was much improved from last year's first half ($983 million of red ink) it reflects a growing realization of losses that were previously projected or unrealized. For example, second quarter results show actual principal losses on 65 impaired securities totaling $128 million. For the entire first half the results are worse: principal losses on 71 securities totaling $397 million, indicating that there is no hope for recovery on these investments.

At mid-year, the CU was sitting on $5.4 billion of unrealized losses on its investments. U.S. Central reported assets of $30.2 billion at mid-year, down from $35.1 billion at year-end 2009. Three years ago it boasted $52 billion of assets.

U.S. Central was taken under conservatorship by the National Credit Union Administration in March 2009 and has been run by the government ever since.

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