CAC » Topics » NOTE 15 - SUBSEQUENT EVENTS

This excerpt taken from the CAC 10-Q filed Nov 6, 2008.

NOTE 15 – SUBSEQUENT EVENTS

On October 29, 2008, the Internal Revenue Service issued Revenue Procedure 2008-64 providing guidance under section 301 of the Emergency Economic Stabilization Act of 2008 related to the tax treatment of certain gains or losses recognized by banks and certain other financial institutions on the sale or exchange of preferred stock of Freddie Mac and Fannie Mae. The guidance permitted the Company to treat the OTTI write-down as an ordinary loss for tax purposes effective October 3, 2008. As the effective date was after the quarter end date, the Company will record a tax benefit of $4.9 million in the fourth quarter of 2008.

On October 31, 2008, the federal banking agencies confirmed that banks and bank holding companies could include in third quarter regulatory capital the ordinary loss tax benefit for write-downs of auction rate preferred securities backed by Freddie Mac preferred stock as permitted by the Emergency Economic Stabilization Act of 2008.

 

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