First Defiance Financial Corp., of Defiance, Ohio, says it has taken a $1.9 million charge for the third quarter to settle a dispute that arose after the sale of its mortgage subsidiary more than two years ago.
The company said the charge would reduce earnings by 20 cents a share after taxes.
First Defiance sold its Leader Mortgage Co. LLC to U.S. Bancorp of Minneapolis in April 2002. The Cleveland unit's sale gave First Defiance an after-tax gain of $7.7 million, according to its 2003 annual report.
After the sale, U.S. Bancorp claimed that First Defiance was responsible for covering losses on loans in Leader's portfolio that were above what Leader had in reserve, said William J. Small, First Defiance's chairman, president, and chief executive officer. The charge had nothing to do with core operations, and First Defiance settled so it could record the charges in the third quarter and put the dispute behind it, he said.
