State Bank Financial (STBZ) in Atlanta has lowered its 2012 earnings to address an accounting error in tied to loans it obtained from failed-bank deals.
The company's profit fell 21% from its unaudited results, to $22.7 million, after management found that they had overstated indemnification assets. State Bank said in a press release Wednesday that its fourth-quarter profit fell by 66%, to $3.2 million, or 10 cents a share. Total assets at Dec. 31 declined by $21 million, to $2.6 billion.
The error was a manual mistake related to U.S. Small Business Administration loans that the bank obtained through failed-bank deals, a company spokesman said. State Bank has made a dozen such deals through the Federal Deposit Insurance Corp. since 2009. The company implemented new controls after noticing the mistake, the spokesman said.
"The complexities of loss-share administration and accounting are great and reliant upon a multitude of estimates developed in a compressed time frame, which adds risk to the earnings announcement process," Joe Evans, the company's chairman and chief executive, said in the release. "We have improved the process and added to the resources dedicated to this task and are confident that these enhancements reduce this risk going forward."