Small Connecticut Bank Says Errors Inflated '94, First-Quarter Profits

The discovery of accounting errors in its books for 1994 and the first quarter of 1995 has prompted a small Connecticut bank to reduce its reported earnings for both periods.

Hometown Bancorp, holding company for Bank of Darien, is conducting a full internal review of results last year and in this year's first quarter. The $224 million-asset company is also working with its independent accountant, Price Waterhouse & Co. in Stamford, to examine and restate its earnings.

The company reported this week that it is expecting a "material reduction in income from that previously reported," but officials don't expect to release any details for about two weeks.

Bank and Price Waterhouse officials declined to say more about the nature of the errors.

"They've always been a well-capitalized, profitable, and well-managed institution," said John Carusone, president of Hartford's Bank Analysis Center. "It's an enigma to me."

Hometown president and chief executive Kevin E. Gage started work at the company in 1985 as an outside auditor for Price Waterhouse.

Hometown reported first-quarter 1995 net income of $518,000, a 29% increase from the similar 1994 period. Net income for 1994 was $1.9 million, up 44% from 1993.