Naugatuck Valley Financial Corp. (NVSL), the holding company for Naugatuck Valley Savings and Loan or the "Bank", announced that it expects to record a pre-tax deposit-related charge of $800,000 during the quarter ending March 31, 2012. On an after-tax basis, the charge is expected to be about $528,000, or $0.08 per common share.
The company said that the charge relates to the underpayment of interest on certain certificates of deposit renewals potentially dating back to 2007, attributable to the renewal of certificate accounts at rates lower than the special rates that should have been offered in accordance with the Bank's deposit account disclosures. The affected certificate accounts are those that renewed under the accounts' automatic renewal option feature at a time when the Bank was offering promotional interest rates for new certificate accounts.
The company said that the Bank is in the process of calculating the amount of underpayment, which is contingent on identifying the specific certificate accounts that may have been affected. Currently, the Bank is only able to estimate the amount of the underpayment, which may range from $750,000 to $850,000. The company expects to complete its determination during the quarter ending June 30, 2012.
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