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| FISI > SEC Filings for FISI > Form 8-K on 21-Jan-2009 | All Recent SEC Filings |
21-Jan-2009
Material Impairments, Other Events
On January 16, 2009 the Company determined that it expects to record non-cash charges for the fourth quarter of 2008 related to other-than-temporary impairment of certain investment securities. The other-than-temporary impairment charge is expected to be approximately $30 million pre-tax and $18 million after-tax. Final determination of the charge is subject to final analysis of third party security valuations and other determinations. The Company expects to announce its fourth quarter and full year 2008 financial results after the market closes on January 28, 2009.
As previously disclosed, the Company owns a portfolio of pooled trust preferred securities collateralized by preferred debt issued primarily by financial institutions, and to a lesser extent, insurance companies. Also as previously disclosed, the Company owns a portfolio of privately issued whole loan collateralized mortgage obligations ("CMOs"). Due to the decline in the fair value of the securities in these classes, rating agency downgrades to some of the securities within these classes, deterioration of collateral performance in some of the securities within these classes and the continued weakness of the U.S. economy has led to the determination that certain of the securities within these classes are other-than-temporarily impaired.
As previously disclosed, the Company recorded a tax valuation allowance in the third quarter of 2008 of $12 million that it expected would be reversed in the fourth quarter of 2008. The Company anticipates that after inclusion in its financial statements of the reversal of this $12 million tax valuation reserve and the inclusion in its financial statements of an estimated $18 million after-tax impairment charge on securities the Company will incur a net loss of approximately $3 million for the fourth quarter of 2008 and that capital at both the Company and Its principal subsidiary, Five Star Bank, will remain at levels sufficient to be well-capitalized.
Forward-looking statements
This Form 8-K may contain forward-looking statements that reflect our current
expectations about our performance. These statements rely on a number of
assumptions and estimates and are subject to various risks and uncertainties
that could cause our actual results to differ from our expectations. Factors
that could affect our financial results include, among other things, changes in
national or regional economic conditions; changes in market interest rates;
significant changes in banking laws or regulations; increased competition in our
businesses; higher-than-expected credit losses; changes in the market values of
securities in our investment portfolio; and unanticipated changes in regulatory,
judicial, or legislative tax treatment of business transactions.
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