Fred B. Koons says his last experience melding an entrepreneurial mortgage company into a bank was a tough one, but he learned from it.

Since October, Mr. Koons, chairman and chief executive officer of Dime Bancorp's mortgage unit, has been focused on integrating North American Mortgage Co., one of the last independent mortgage banks, into Dime.

In an interview this month at Dime's New York headquarters, Mr. Koons asserted that the deal has been the "best acquisition" of a mortgage bank by a large financial institution.

One indication of how successful, he said, is that the mortgage bank's top executives and sales force decided to remain after the deal closed, as Dime accommodated their desire for autonomy in setting prices, compensation levels, and marketing strategies.

But Mr. Koons' experience as head of Chase Manhattan Corp.'s mortgage unit when it bought American Residential Holding Corp. in 1994 was not as happy.

First of all, the timing was terrible-a sudden increase in interest rates led to a plunge in loan demand from the $1 trillion-plus level of 1993.

And industry observers blamed Chase's bureaucratic ways for the exodus of AmRes' top executives and salespeople almost immediately after the sale,

This time around, Mr. Koons said, he paid more attention to "cultural differences and management styles."

Mr. Koons and his deputy at Dime, Richard Mirro, who was also his deputy at Chase, have built morale at the acquired mortgage bank by adopting many of its practices as Dime's own. In fact, Dime's mortgage unit has taken on the North American name.

They continued the tradition of North American's annual sales extravaganza at a resort; this year it was at Disney World. They have also retained the institution of the "producers council" where top loan producers meet regularly with senior executives to tell them how the sales force sees things and to voice concerns.

Nor does Dime set prices for North American loan officers, or tell them which products to promote. Instead, Mr. Koons said, Dime posts the market price and tells its loan officers "you go out and set the price."

Because salespeople know their particular markets best, "we feel they are much more effective" at setting a price than a central authority can be, Mr. Koons said. And to make sure they do not give the store away, Dime compensates its loan officers not just on volume, but also on the profitability of the loans made.

At the end of the first quarter, not quite six months after the deal closed, Dime's loan volumes told the story. The thrift made $6.7 billion of home loans, one-third more than in the previous quarter.

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