ELIZABETHTOWN, Ky.,
May 13, 2011 /PRNewswire/ -- First
Financial Service Corporation (the Company, NASDAQ: FFKY) today
announced it has recorded an additional noncash loss of
$1.1 million for the quarter and year
ended December 31, 2010. The
Company has restated its financial statements for the quarter and
year ended December 31, 2010 to
reflect an additional loss on sale and write downs on real estate
acquired through foreclosure of $796,817. These adjustments are the result
of new information obtained after December
31, 2010 and before the Company filed its Form 10-K about
conditions that existed at December 31,
2010. These adjustments were made in accordance with
Financial Accounting Standards Board Account Standards Codification
("ASC") Topic 855, "Subsequent Events". In addition,
management recorded three additional items that were considered
immaterial prior to the previously mentioned entry. These
were entries to record additional bank franchise tax expense of
$249,193, legal expense of
$83,000 and additional health
insurance of $56,100.
The primary reason for restatement was the receipt of appraisals
after December 31, 2010, on three
properties held at year end as other real estate owned acquired
through foreclosure. The appraisals indicated that the property
values of the three properties had decreased since the date of the
prior appraisals. In addition, after December 31, 2010, the Company sold a fourth
property held at year end as other real estate owned acquired
through foreclosure. The sale provided new information
regarding the fair value of this property at December 31, 2010.
In the process of preparing its financial statements for the
quarter ended March 31, 2011, the
Company concluded that under ASC Topic 855, the lower property
values should more appropriately have been recorded in the quarter
and year ended December 31, 2010,
rather than the quarter ended March 31,
2011. The following table provides additional
information about the values of the affected properties:
|
|
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Balance
Prior
|
|
Balance
After
|
Prior
Appraisal
|
Subsequent
|
|
|
to
Restatement
|
Write
down
|
Restatement
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Date
|
Information
|
|
Property One
|
$
701,400
|
$
231,400
|
$
470,000
|
January
25,2010
|
Appraisal
|
|
Property Two
|
322,579
|
221,779
|
100,800
|
July 12,
2010
|
Appraisal
|
|
Property Three
|
2,445,747
|
255,547
|
2,190,200
|
March 30,
2010
|
Appraisal
|
|
Property Four
|
178,091
|
88,091
|
90,000
|
|
Sale of
Property
|
|
Total
|
$
3,647,817
|
$
796,817
|
$
2,851,000
|
|
|
|
|
|
|
|
|
|
|
|
As a result of the changes noted above, the Company recognized a
net loss attributable to common shareholders of $7.9 million, or $1.66 per diluted common share, for the quarter
ended December 31, 2010, compared to
the previously reported net loss attributable to common
shareholders of $6.7 million, or
$1.42 per diluted common share.
For the year ended December 31,
2010 the Company recognized a net loss available to common
shareholders of $10.5 million, or
$2.21 per diluted common share
compared to the previously reported net loss attributable to common
shareholders of $9.3 million or
$1.97 per diluted common share.
The Company today filed an Amendment No. 1 to its Form 10-K for
the year ended December 31, 2010,
originally filed on April 4, 2011, in
order to restate previously reported financial results for the
quarter and year ended December 31,
2010.
First Financial Service Corporation is the parent bank holding
company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923.
The Bank serves the needs and caters to the economic
strengths of the local communities in which it operates and strives
to provide a high level of personal and professional customer
service. The Bank offers a variety of financial services to
its retail and commercial banking customers. These services
include personal and corporate banking services, and personal
investment financial counseling services. Today, the Bank
serves eight contiguous counties encompassing Central Kentucky and the Louisville Metropolitan area, including
Southern Indiana, through its 22
full-service banking centers and a commercial private banking
center.
This press release contains forward-looking statements.
Statements that are not historical or current facts, including
statements about beliefs and expectations, are forward-looking
statements and are based on the information available to, and
assumptions and estimates made by, management as of the date made.
These forward-looking statements cover, among other things,
anticipated future revenue and expenses and the future plans and
prospects of First Federal Savings Bank. Forward-looking statements
involve inherent risks and uncertainties, and important factors
could cause actual results to differ materially from those
anticipated. Adverse conditions in the commercial real estate
markets, as well as a delay or failure of recovery in the
residential real estate markets, could cause additional credit
losses and deterioration in asset values. First Financial Service
Corporation's results also be adversely affected by further
deterioration in business and economic conditions both generally
and in the markets we serve; changes in interest rates;
deterioration in the credit quality of its loan portfolios or in
the value of the collateral securing those loans; deterioration in
the value of securities held in its investment securities
portfolio; legal and regulatory developments; increased competition
from both banks and non-banks; changes in customer behavior and
preferences; effects of critical accounting policies and judgments;
and management's ability to effectively manage credit risk,
residual value risk, market risk, operational risk, interest rate
risk, and liquidity risk.
For discussion of these and other risks that may cause actual
results to differ from expectations, refer to First Financial
Service Corporation's Annual Report on Form 10-K for the year ended
December 31, 2010, on file with the
Securities and Exchange Commission, including the section entitled
"Risk Factors," and all subsequent filings with the Securities and
Exchange Commission. Forward-looking statements speak only as of
the date they are made, and First Financial Service Corporation
undertakes no obligation to update them in light of new information
or future events.
First Financial Service Corporation's stock is traded on the
Nasdaq Global Market under the symbol "FFKY." Market makers
for the stock are:
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Keefe, Bruyette & Woods,
Inc.
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FTN Midwest
Securities
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J.J.B. Hilliard, W.L. Lyons
Company,
Inc.
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Howe Barnes Investments,
Inc.
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Stifel Nicolaus &
Company
|
Knight Securities,
LP
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SOURCE First Financial Service Corporation