Haven Bancorp., the holding company for CFS Bank, said its second-quarter earnings would be lower than estimated because of its acquisition of InterCounty Mortgage Inc.
Under the terms, CFS was not able to collect service release premiums until 60 days after the deal closed, Haven said. Haven bought InterCounty from Resource Bancshare Mortgage Group May 1.
The company's earnings would be only "pennies per share" lower than analysts' expectations of 20 cents to 25 cents, a Haven spokesman said last week.
InterCounty Mortgage generated $700 million of loans last year, and it sold the majority of the servicing rights to Resource Bancshares. CFS, which originated $425 million of loans last year, previously has done its own servicing. Haven will farm out most of the entities' combined servicing rights.
Starting Wednesday, the bank can collect servicing release premiums, Haven said. The bank has hired Helene DeCillis from Dime Bancorp as a secondary marketing executive to establish correspondent relationships.
The initial loss will be "progressively recovered from income generated in the third quarter," Haven's chief executive officer Philip S. Messina said in a statement. InterCounty will contribute significantly to Haven's 1999 earnings per share, Mr. Messina said.