Atlantic Coast Restates Results
Atlantic Coast Federal Corp. here, the holding company for Atlantic Coast Bank, will restate its historical financial statements for the years ended Dec. 31, 2004, 2005 and 2006, and for the individual quarter ended March 31, 2007.
The restatements involve the company's accounting for two interest rate swaps under Statement of Financial Accounting Standards 133, "Accounting for Derivative Instruments and Hedging Activities," entered into in connection with the company's Federal Home Loan Bank advances.
"Our hedging activities have always focused on reducing interest rate risk and volatility, and in fact these particular transactions were deemed to be economically effective cash-flow hedges," said Robert J. Larison Jr., president and CEO. "Upon further review of the underlying facts and circumstances of the transactions, however, we now have determined that these swaps do not qualify for cash-flow hedge accounting."
As of March 31, 2007, The non-cash cumulative increase in net income over the three-year period is $422,000, net of taxes, with no change in reported stockholders' equity and an increase in reported total assets of only $260,000. Mr. Larison stated that the change in accounting has no significant effect on Atlantic Coast's financial condition, cumulative results of operations or cash flows.
"Earnings per diluted share remain unchanged from previously reported amounts for the first quarter of 2007 and the year ended Dec. 31, 2006," added Mr. Larison. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com