The Long Island Savings Bank, seeking to broaden the scope of its lending activities, has purchased two small out-of-state mortgage companies.

The unit of Long Island Bancorp. is buying Entrust Financial Corp., Columbia, Md., and Developer's Mortgage Corp., Vienna, Va., in unrelated transactions for undisclosed amounts.

A Dow Jones report put the price of the Entrust deal at around $12 million.

"This is just the first step of many in our drive to become a national lender," said Joe Bryant, executive vice president and head of mortgage banking at Long Island Savings Bank.

The deal marks the first time the Melville, N.Y., thrift has extended itself outside the metropolitan New York area.

Entrust Financial, formerly First Advantage Mortgage, operates 11 branches in New Jersey, Delaware, Maryland, Virginia, and Georgia.

As part of the deal, Long Island Savings Bank picks up $630 million of home-loan servicing.

Entrust is not selling about $300 million of loans it services through a state housing finance agency program, according to company officials and published reports.

The mortgage bank originated about $800 million in 1993 and less than $600 million this year. All originations are retail and some 97% of those are purchase loans, according to Entrust president Albert C. Kocorek.

Entrust is owned by Cooper Life Sciences, an investment company, and Emanual Nadler, a New York-based investor. Entrust bought First Advantage from First American Bancshares on Aug. 31, 1993.

Commenting on the sale, Mr. Kocorek said, "It has become very difficult to compete in a business that is now dominated by banks and thrifts."

Developer's Mortgage, owned by Ronald Fletcher, is a much smaller operation with no servicing portfolio. It, as well as Long Island Savings Bank's New Jersey and Connecticut offices, will now operate under the Entrust name.

For Long Island Savings Bank, the deal provides a platform from which to expand. Other acquisitions may happen in the months to come, thrift offcials said.

"These acquisitions will expand the geographic concentration of our retail origination network by introduction our mortgage services in very attractive new markets," said John J. Conefy Jr., the thrift's chairman.

"At the same time," he added, "we are increasing our servicing portfolio, utilizing our servicing portfolio, utilizing our excess capacity, and reducing our cost to service a loan."

Long Island Bancorp. has $4.5 billion of assets and services payments on some $3.2 billion of home loans.

Last year Long Island Savings Bank originated about $600 million of loans.

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