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Wednesday, February 23, 2005

Unizan: Internal controls inadequate

Unizan Financial Corp., the parent company of Unizan Bank, said Friday it has identified deficiencies with its internal financial control, but the company expects to remedy those problems shortly.

The disclosure was made in Canton-based Unizan's fourth-quarter and full-year earnings report.

According to Unizan, those shortcomings include inadequate computer controls for security and infrastructure, as well as inadequate documentation. These factors could have a material effect on 2004 results, the company said.

"The company's weaknesses will not be considered remediated until new internal controls are operational for a period of time and are tested, and management and its independent registered public accounting firm conclude that these controls are operating effectively," Unizan said in a prepared statement.

Also Friday, Unizan said it earned $3.3 million, or 15 cents per share, during the fourth quarter. That's a 28 percent increase from $2.6 million, or 12 cents per share, during the same period last year.

Current results include a $2.2 million charge for the impairment of certain investment securities.

For the fiscal year, net income totaled $11.7 million, or 53 cents per share, a decline from $23.2 million, or $1.05 per share, during fiscal 2003. The 2004 results were affected adversely by $5.1 million in salary expense for the exercise of stock options and $2.7 million for professional fees and severance costs associated with its pending merger with Huntington Bancshares Inc.

Unizan and Huntington (Nasdaq:HBAN) agreed in January 2004 to merge, but that merger is on hold until January 2006 pending the resolution of regulatory investigations of Columbus-based Huntington's methods for how it accounted for auto leases in the years prior to 2002.

Unizan (Nasdaq:UNIZ) manages more than $235 million in deposits at six bank branches in the Dayton area. Overall, the company has more than 40 branches in Ohio and also operates Unizan Financial Advisors Inc.

posted by Brian Moran @ 9:13 AM   0 comments

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