The third-largest bank based in Georgia is restating earnings for several quarters in 2010-2011 after regulators disagreed with how it treated deferred tax assets.
As a result, Blairsville-based United Community Banks will record a non-cash expense totaling $156.7 million over four earlier quarters.
Deferred tax assets, or DTAs, are kind of like 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.
United's stock fell about 10 percent Friday in regular-hours trading. The bank said it will restate results for the fourth quarter and full year 2010, and the first three quarters of 2011.
United officials said the move will not affect operations and the bank will announce a profit for the fourth quarter of 2011.
Given market turmoil in the banking industry, accounting for DTAs has been a minefield for the sector, said Chris Marinac, a bank analyst with FIG Partners.
Marinac said United is gradually improving its condition.
United had said last quarter it was having discussions with the Securities and Exchange Commission over its accounting of these assets, which is highly technical.
The issue boils down to United not setting aside enough of a DTA allowance in prior quarters, in the SEC's view. Securities regulators also disagreed with forecasts of profitability in the future, when the bank could use the assets to lower tax liabilities.
United is the eighth largest bank in metro Atlanta. It suffered heavy losses caused by the collapse of the real estate market.
As part of the restatements, United’s fourth quarter 2010 net loss was $173.1 million, instead of a previously reported $16.4 million, resulting in a full year 2010 loss of $502.3 million. The loss for first quarter 2011 is now $237.3 million, instead of $142.5 million.
The restated profit for second quarter 2011 increased to $12 million from $7.6 million. The third quarter 2011 loss increased to $11.3 million from $6.2 million.
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