First Alliance Expects Lower 2nd-Quarter Results

First Alliance Corp. said its second-quarter results will fall short of analysts’ estimates because it didn’t make as many mortgage loans as anticipated and borrowers paid off loans faster than expected.

The Irvine-based mortgage lender said it will make between 10% and 20% fewer loans directly to borrowers in the second quarter compared with the previous quarter. Faster-than-expected loan prepayments will lower the value of mortgage servicing assets First Alliance owns, the company said.

Analysts expected First Alliance to earn 50 cents a share in the second quarter, based on the average estimate of six analysts surveyed by IBES International Inc. The company earned $7.9 million, or 53 cents a share, on revenues of $23.2 million for the second quarter ended June 30, 1997. In the first quarter this year, First Alliance earned $7.3 million, or 35 cents a share.

“While we are disappointed with these results, we do not believe they are indicative of future operations,” Brian Chisick, president and chief executive, said in a statement. First Alliance plans to buy back 1 million shares during the rest of the year, Chisick said.

This month the American Assn. of Retired Persons accused First Alliance of deceptive and predatory lending practices aimed at older homeowners. The association filed a motion to join others in a lawsuit against First Alliance, seeking up to $50 million in restitution for customers of the lender. The company has denied the allegations.