Imperial Will Sell Loans of $250 Million : Firm to Key on Retail and Mortgage Banking
Continuing its reorganization effort to concentrate primarily on retail and mortgage banking, Imperial Corp. of America on Tuesday entered into an agreement to sell $250 million in residential and commercial loans to Old Stone Bank.
Imperial will use the proceeds to repay short-term wholesale funds as well as advances from the Federal Home Loan Bank Board.
In addition to the $250 million in loans, Old Stone will also receive about $140 million in outstanding loan commitments, located primarily in California. Providence, R.I.-based Old Stone, the principal subsidiary of Old Stone Corp., is a $2.9-billion thrift holding company that operates 113 offices in 24 states.
“This transaction is good for both Imperial and Old Stone,” Kenneth J. Thygerson, Imperial’s president and chief executive, said. “For ICA, we have taken a major step forward in solidifying our new, more focused corporate direction. For Old Stone, they have acquired a quality portfolio and business unit, which will immediately give them a strong presence in a premier market.”
About 20 employees of Imperial’s real estate industries group, which originated and administers the loan portfolio, will be hired by Old Stone, which will also take over Imperial’s loan production offices here and in Newport Beach and San Francisco.
The deal “represents a unique opportunity for Old Stone to expand its activities rapidly in California,” said Theodore W. Barnes, Old Stone’s chief executive. The Rhode Island savings bank already has more than $211 million in commercial real estate loans in California.
The loans that Imperial will sell to Old Stone are currently performing and have not been written off, according to Stephen Haines, Imperial’s executive vice president and chief administrative officer.
Old Stone will assume the loans at par value, making the deal “pretty much a break even,” Haines said.
Last month, Imperial, a multi-state savings and loan holding company, with $8.6 billion in assets, closed its telemarketing program, which employed 30 people, as part of Thygerson’s reorganization effort to eliminate or reduce several unprofitable Imperial programs. Thygerson, former president and chief executive of the Federal Home Loan Mortgage Corp., joined Imperial in September.
Imperial operates 113 savings and loan association branch offices in California, Kansas and Colorado. Its largest subsidiary is Imperial Savings of California, with assets of $7.7 billion.
The company lost $4.9 million in the third quarter and has earned only $243,000 for the nine months ended Sept. 30.
