MSRs Force Mystic To Revise Earnings
Mystic Financial, the holding company for Medford Co-operative Bank, said its was adjusting quarterly net income for the last four quarters to reflect "capitalization of the value of mortgage servicing rights."
Mystic said the adjustment means that net income will increase for the first three quarters affected by the restatement, while it will decrease for the quarter ended June 30, 2003. However, Mystic said that the adjustment will not affect its net income for the fiscal year that ended June 30, 2003.
Mystic said that it had monitored its mortgage servicing rights to determine whether the value of the asset was "material." During the company's fiscal fourth quarter, ended June 30, 2003, the company determined that the value of its MSRs was material on a cumulative basis for the year. Mystic capitalized $248,000, net of amortization, of MSRs in the quarter ended June 30.
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