The third-largest bank based in Georgia has received a notice of formal investigation and a subpoena from federal regulators for information about the way the institution accounts for certain assets.
An official with Blairsville-based United Community Banks described the request by the Securities and Exchange Commission as “a routine follow-up” to earlier steps the bank took to satisfy regulators over its handling of deferred tax assets.
"We don’t believe there is any more to it than that and they have not indicated that there is," said United spokesman Craig Metz.
Deferred tax assets, or DTAs, are similar to tax credits companies can accrue for periods of losses that they can later use to reduce their tax burdens once they have returned to sustained profitability.
In January, United restated its earnings for several quarters in 2010-2011 and took a $156.7 million non-cash charge to comply with SEC concerns.
United received the notice May 14 and reported it to investors Wednesday.
According to United, the SEC's request said it "should not be construed as an indication that any violations of law have occurred," and the company is cooperating with the probe.
Last year, United said it was in talks with the SEC over its accounting of these assets, which experts say is highly technical.
"You're dealing with complicated issues where judgments can vary," said Chip MacDonald, a Jones Day banking attorney. "The SEC is very sensitive to the issues and wants to stay on top of their game.”
United is trying to rebound from heavy losses caused by the collapse of the real estate market.
Chris Marinac, a FIG Partners bank analyst, called the probe in an investor note "a distraction regarding a relatively open-and-shut case for [United] except if the SEC wishes to levy fines against the company."
A fine, if any, would be minor, he said.
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