Naugatuck Valley Financial (NVSL) will record a deposit-related charge during the first quarter due to not paying enough interest on some certificates of deposit renewals.
The $573 million-asset company said Friday that after taxes the charge will be roughly $528,000 in the quarter that ended March 31.
The affected certificate accounts, which potentially date back to 2007, were renewed under the accounts' automatic renewal option at a time when the bank was offering promotional interest rates. The renewals were given rates lower than the special rates that should have been offered.
The bank estimates that the underpayment ranges from $750,000 to $850,000 and expects to complete the exact determination during the quarter ending June 30, the Naugatuck, Conn., company said.
Naugatuck Valley did not say how the charge will affect earnings for the first quarter. In January, the company reported earning $556,000 in the fourth quarter.
On Monday morning, Naugatuck Valley's shares were trading at $6.95, down more than 4% from Friday's closing price.