Imperial to Sell Loan Portfolio for $250 Million

Continuing its reorganization effort to concentrate primarily on retail and mortgage banking, Imperial Corp. of America entered into an agreement Tuesday to sell $250 million of its residential and commercial loans to a Rhode Island bank.

Imperial will use the proceeds from the loan sale 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 Bank will receive about $140 million in outstanding loan commitments, located primarily in California. Old Stone Bank is the principal subsidiary of Providence-based Old Stone Corp., a $2.9-billion thrift holding company that operates 113 offices in 24 states.

“This transaction is good for both Imperial and Old Stone,” according to Kenneth J. Thygerson, Imperial’s president and chief executive. “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.”

The loans 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,” said Haines.

Imperial, a savings and loan holding company with $8.6 billion in assets, operates 113 branch offices in California, Kansas and Colorado. Its largest subsidiary is Imperial Savings of California, with assets of $7.7 billion.

It lost $4.9 million in the third quarter and has earned only $243,000 for the nine months ended Sept. 30. Last month, Imperial closed its telemarketing program, which employed 30 people, in another part of the effort to eliminate or reduce several unprofitable Imperial programs.