Capital City Bank Group in Tallahassee, Fla., plans to restate several quarters of financial results to correct its handling of transactions between its Capital City Bank and Capital City Home Loans units.
The $4.1 billion-asset company said in a regulatory filing that certain mortgage loan purchases were improperly recorded in its financial statements. The issue impacted Capital City’s earnings for 2022 and the first half of this year.
The restatement will correct issues tied to mortgage banking revenue, loan interest income, compensation expense, other income, income taxes, net income, loans, other assets, other liabilities and equity.
As a result, investors “should no longer rely upon the financial statements and related information in the company’s earnings releases,” the filing said. The plan is to amend the previously filings.
“Management is reassessing the effectiveness of [the company’s] internal control over financial reporting and disclosure controls and procedures,” the filing said. The company “expects to report a material weakness in its internal controls with respect to the inaccuracies. … Management intends to implement new controls to remediate any control deficiencies that exist with respect to these transactions.”