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An accounting error is forcing Enterprise Financial Services Corp. to slash the profits it reported for 2010 and the first nine months of last year.

Earnings in 2010 may fall by as much as 55 percent from what the bank had claimed, Enterprise announced today. Profits could be cut as much as 33 percent from the bank’s previous reports for the first nine months of last year.

Enterprise Financial, parent of Clayton-based Enterprise Bank, said  that it discovered an “inadvertent” accounting error that overstated profits from loans taken on from failed banks.  Enterprise bought failed banks in recent years in the Phoenix area and Olathe, Kansas, a Kansas City suburb.

Enterprise shares any losses on those loans with the Federal Deposit Insurance Corp. under the company’s original agreement to buy those failed banks.

The bank holding company delayed the release of its fourth-quarter and full-year results, and canceled an analyst conference call on earnings scheduled for Thursday. It didn’t say when it would release those results.

Enterprise said it expects to keep its “well capitalized” designation under federal bank safety rules.

“We do not believe the error involved any part of our core banking business,” Enterprise President and CEO Peter Benoist said in a press release.  He said trends remain favorable for loan quality, growth of commercial loans and deposits.

Despite the mistake, Benoist said Enterprise still made a profit in 2010 and last year from the failed banks it purchased.  Benoist said he expects those profits to continue this year.

The accounting errors will lower 2010’s earnings-per-share to 20 to 25 cents, the bank said.  It had previously reported a 45 cent per-share profit.

For the first nine months of last year, the bank said it would report earnings of 98 cents to $1.15 per share.  It previously reported $1.46.  Earnings for all of last year should be $1.20 to $1.35 per share, the bank said.

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