First Bancorp in Troy, N.C., said Friday that it had revised its 2005 earnings and that it made nearly $2 million more than it initially reported.
The $1.8 billion-asset company said the revision was a result of a settlement reached with the North Carolina Department of Revenue over an income tax audit relating to its real estate investment trust subsidiary.
First Bancorp had initially set aside $6.3 million for back taxes, which it recorded as a loss in the third quarter. As result of that loss it reported that 2005 earnings were down nearly 30% from 2004, to $14.1 million.
But state tax collectors said it would reduce the company's penalty if First Bancorp agreed to pay the back taxes by June 15. First Bancorp now says it expects to pay about $4.3 million, the net result being a $1.98 million increase, or 14 cents per diluted share, to its fourth-quarter and 2005 earnings.
First Bancorp said that its past tax returns were accurate and that it does not owe the back taxes but that its board decided "that it is in the best interests of the company to settle this matter."
