Imperial Corp. of America: Hit with bad...

Imperial Corp. of America: Hit with bad consumer loans and write-downs of its junk bond portfolio, the parent of San Diego-based Imperial Savings of California on Tuesday reported a $34-million loss for its second quarter.

ICA announced earlier that it was anticipating the loss and planned to reduce assets by $2 billion to conform with tough new capital-adequacy standards included in the $166-billion S & L rescue bill approaching passage by Congress.

The loss, in contrast with a profit of $10.4 million in last year’s second quarter, was caused mainly by $56.6 million in loan-loss provisions. Those included $25.9 million for anticipated consumer loan losses, including its fraud-ridden auto-loan portfolio purchased from Grand Wilshire of Glendora, a bankrupt finance company.

Also in the second quarter, Imperial took a $27.9-million write-down of its corporate bond portfolio, including a $22-million write-off on junk bonds issued by Integrated Resources, a troubled financial services company whose credit worthiness was recently downgraded. ICA said last month that the current value of its total junk bond portfolio is 8% less than its $1.35-billion cost.

Making up 12% of its $11.9 billion in assets, Imperial’s junk bond portfolio is the second largest in the country in percentage of assets.

Imperial is shrinking its assets as part of a plan to boost capital to the 3% tangible net capital minimum required by the proposed S&L; bail-out bill. Imperial’s current tangible capital is only 1.32% of assets. Last month, Imperial announced plans to sell both its bank credit card and auto-lease divisions, moves that combined would cut assets by $675 million.

Imperial President Kenneth Thygerson resigned last month and was replaced by board member Allan Tessler.