Imperial S&L; Parent Eliminates Dividend as It Reports Big Loss
Imperial Corp. of America on Friday eliminated its quarterly dividend and reported a $15.6-million net loss for the fourth quarter ended Dec. 31. The parent company of Imperial Savings & Loan reported a $13.8-million net profit during the like quarter the previous year. Imperial reported $14.9 million in net income for the recently completed year, down from $51.3 million in 1987.
Imperial linked the fourth-quarter loss to $52.6 million set aside to cover expected loan losses and to satisfy minimum capital requirements requested by federal regulators.
Some of the loan loss reserves will cover losses linked to Grand Wilshire Finance Corp., a Glendora-based automobile finance company that in August entered federal bankruptcy proceedings.
Imperial’s decision to eliminate the fourth-quarter dividend “indicates Imperial’s strong focus on building capital and is not a signal of reduced earnings prospects,” according to a prepared statement issued by ICA Chairman Kenneth Thygerson.
The San Diego-based company expects to “return to levels of profitability experienced during the first three quarters of 1988,” Thygerson said.
Imperial reported $12.2 billion in assets at the end of 1987.
In a related development, disgruntled Imperial Corp. shareholders Thursday filed suit in U. S. District Court in San Diego, claiming that Imperial’s officers and directors had violated federal security laws by misrepresenting “the true financial and operating condition of the company.”
The company substituted “Imperial’s traditional asset base with high-risk ‘junk bonds’ and questionable higher-yielding loans, which . . . generated high risk for the company,” according to the lawsuit.
The suit also alleges that Imperial’s “woefully inadequate (loan-loss reserves) . . . concealed from the investing public the true extent of the risks undertaken by the defendants.”