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Jefferson Cites CDOs, Loss Provisions in Restating Results

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Jefferson Bancshares Inc. of Morristown, Tenn., restated its last quarter as a loss after its take on bad investments and loans worsened.

The $562.6 million-asset company previously announced earnings of $363,000 for the quarter, and $1.2 million for the year, ended June 30. Those numbers were revised to a loss of $848,000 for the quarter and a profit of $30,000 for the year, the bank said Tuesday.

Jefferson blamed the revisions on pre-tax impairment charges of $835,000 tied to collateralized debt obligations, and on an increase to $4.4 million from $3.3 million in the company’s provision for loan losses for the year.

The CDOs were connected with the bank’s 2008 acquisition of State of Franklin Bancshares Inc. in Johnson City, Tenn., it said in a press release earlier this week.

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