Enterprise Financial Services Corp. in St. Louis will restate financial statements for six quarters and for full-year 2010 to correct an error tied to failed bank acquisitions.
The $3.4 billion-asset company said it found an accounting error tied to an "inadvertent overstatement" of income on loans covered by loss-sharing agreement with the Federal Deposit Insurance Corp. The restatements will address the first, second, and third quarters in 2010 and 2011.
As a result of the restatement, Enterprise estimated that diluted earnings per share for 2010 will fall to 20 cents to 25 cents, compared to its originally reported 45 cents. Enterprise also said it expects to report full-year 2011 earnings of $1.20 to $1.35 a share, reflected the planned restatement. The company said it will not release earnings or hold its quarterly conference call as it planned to do on Thursday.
"We do not believe the error involved any part of our core banking business," said Peter Benoist, the company's president and chief executive, in a press release.
"The bank's previously reported favorable trends in improved asset quality and solid organic growth in commercial loans and core deposits are unchanged," Benoist added. "Even at the revised level of income on covered loans, we expect that our FDIC acquisitions [will] remain accretive to 2010 and 2011 earnings per share and we expect them to contribute to 2012 earnings."
Early last year, the company raised $35 million in a public offering. Its failed-based acquisitions include the January 2011 purchase of Legacy Bank in Scottsdale, Ariz.