Cardinal to Restate Income

$1 million downward revision tied to pipeline of George Mason Mortgage
By MortgageDaily.com staff
1/21/2005

Differences in accounting for the pipeline of loans between Cardinal Financial Corp. and the Fairfax, Virg.-headquartered company it recently acquired have led the company to restate income down by as much as $1 million.

Cardinal announced it will restate its operating results for the three and nine month periods ended Sept. 30, 2004 as a result of corrections in accounting adjustments surrounding last July's acquisition of George Mason Mortgage.

The mortgage banker expects the amendments will reduce previously stated net income to common shareholders of $1.3 million to no less than $300,000 for the third quarter 2004. The effect of the rectification will likely reduce net income of $2.6 million to no less than $1.6 million for the nine months ended Sept. 30, 2004, according to the announcement.

The corrections, of nonrecurring and noncash nature, were primarily related to the purchase accounting adjustments associated with acquired loans held for sale and the acquired pipeline of unfunded loan commitments, the Virginia-based lender said, adding that it will restate "as soon as practicable."

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