A $1.7 billion-asset Brookfield, Wis., thrift announced it will restate its fourth-quarter and yearend financial figures after learning that four of its private-issue, mortgage-backed securities had declined in value.
St. Francis Capital Corp., which ended its fiscal year Sept. 30, learned after releasing its earnings results last month that the single-family mortgages backing the securities had more incidents of default and delinquency than previously known, said Jon D. Sorenson, St. Francis' chief financial officer.
The restatement will reduce St. Francis's 12-month earnings to $2.20 per share, from $2.57. The restated earnings-per-share figure is up 20% from the previous fiscal year's $1.82.
Mr. Sorenson said St. Francis is reviewing the methods it uses to monitor the quality of its private-issue, mortgage-backed securities.
"You've got to think of it as a pool of loans that you own," he said. "You need to look at the delinquencies instead of the cash flow."