Imperial Credit’s Profit Surges in Refinancing Boom

Imperial Credit Industries Inc., one of Orange County’s most successful new public companies in 1992, reported an annual profit of $13.6 million, more than double what it earned for the previous year.

The mortgage bank, based in Newport Beach, benefited from a boom in refinancing last year as homeowners rushed to take advantage of low mortgage interest rates. Those who bought houses in the late 1980s with 30-year mortgages at 9% to 11% were finding 15-year, fixed-rate loans last year ranging from 7.25% to 7.5%.

Imperial Credit went public in May in a jittery market but rebounded later in the year. It also expanded into new markets that included Portland, Denver and Spokane, Wash.

The company, a majority-owned subsidiary of Imperial Bank in Los Angeles, said its earnings for the year were equal to $1.66 a share. For 1991, the company had posted a profit of $5.6 million, or 85 cents a share. Calculations of earnings per share were adjusted for a dividend paid last month in which one new share of common stock was issued for every 19 shares held.

Annual revenue also more than doubled: $47.5 million for 1992, compared to $20.7 million for the previous 12 months.

For the fourth quarter, Imperial’s earnings rose to $3.9 million from $1.5 million for the same period of 1991. Quarterly revenue jumped to $14.2 million from $5.8 million.

Earlier this week, USA Today listed the company as one of the nation’s best new public offerings in 1992. Its shares doubled in value from an offer price of $8 a share to $16 at year’s end.

In Wednesday’s trading on the NASDAQ market, Imperial Credit’s stock closed at $15.50 a share, down 25 cents.

During the year, the company more than doubled its volume of mortgage loan originations. The value of such transactions totaled $3.4 billion for 1992, up from $1.4 billion for the previous year. At the same time, the delinquency rate of its loan portfolio fell from 3.2% at the end of 1991 to 1.6% a year later.

Analysts predict that Imperial will continue to do well this year in a robust refinancing market.

“There’s still a lot of people who have not refinanced their homes who should,” said Richard Johnson, Imperial Credit’s chief financial officer.

In December, the company said it will open three mortgage production offices in New Jersey and one in Florida, its first expansion to the East Coast. The offices will be staffed by former employees of Carteret Savings Bank in Morristown, N.J., which last month was placed into the conservatorship of the Resolution Trust Corp., the federal agency charged with selling the assets of troubled thrifts.