-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HXEUh5iKD+yneTKSpcrA1pJhXsadWG3ZRFgVNkwk4Ir/Ru7hcvIEk5JnvjO4+jlu O56imf7JiY7DeyJDfMjRBA== 0000898430-96-003802.txt : 19960816 0000898430-96-003802.hdr.sgml : 19960816 ACCESSION NUMBER: 0000898430-96-003802 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPERIAL THRIFT & LOAN ASSOCIATION CENTRAL INDEX KEY: 0001000234 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 952864759 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26960 FILM NUMBER: 96612131 BUSINESS ADDRESS: STREET 1: 700 N CENTRAL AVE STE 600 CITY: GLENDALE STATE: CA ZIP: 91203 BUSINESS PHONE: 8185510600 MAIL ADDRESS: STREET 1: 700 N CENTRAL AVE STREET 2: STE 600 CITY: GLENDALE STATE: CA ZIP: 91203 10-Q 1 FORM 10-Q DATED JUNE 30, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1996 ------------- or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ----------------- Commission File Number 0-26960 ------------------------------ IMPERIAL THRIFT AND LOAN ASSOCIATION ------------------------------------ (Exact name of registrant as specified in its charter) California 95-2864759 - ---------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 700 North Central Avenue, Suite 600, Glendale, California 91203 - --------------------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) (818) 551-0600 - -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- Number of shares of common stock of the registrant: 7,820,500 outstanding as of July 31, 1996. IMPERIAL THRIFT AND LOAN ASSOCIATION BALANCE SHEETS
June 30, December 31, ----------- ------------ 1996 1995 ----------- ------------ (Unaudited) (In thousands) ASSETS Cash and cash equivalents $ 21,784 $ 22,106 Investment securities held to maturity, at amortized cost (market value $33,383 and $18,052 for 1996 and 1995, respectively) 33,383 18,049 Mortgage-backed securities held to maturity, at amortized cost (market value $37,282 and $42,039 for 1996 and 1995, respectively) 37,904 42,275 Loans receivable: Loans held for investment, net 555,267 447,985 Conditional sales contracts held for sale, net 1,785 55,812 -------- -------- 557,052 503,797 Less allowance for credit losses 9,673 8,105 -------- -------- Net loans receivable 547,379 495,692 Interest receivable 3,981 3,865 Investment in FHLB stock 8,096 12,362 Other real estate owned, net 6,222 6,103 Income taxes receivable 2,752 2,223 Furniture and equipment, net 2,775 3,008 Deferred income taxes 3,171 3,309 Other assets 2,087 1,681 -------- -------- $669,534 $610,673 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposit accounts $527,035 $494,793 FHLB advances 54,000 54,000 Accounts payable and other liabilities 4,632 5,188 -------- -------- Total liabilities 585,667 553,981 -------- -------- Commitments and Contingencies - - Shareholders' Equity: Preferred stock, 5,000,000 share authorized, none issued - - Contributed capital - common stock, no par value; 20,000,000 shares authorized, 7,820,500 and 5,980,000 issued and outstanding in 1996 and 1995, respectively 53,309 30,743 Retained earnings 30,558 25,949 -------- -------- Total shareholders' equity 83,867 56,692 -------- -------- $669,534 $610,673 ======== ========
See Notes to the Unaudited Financial Statements 2 IMPERIAL THRIFT AND LOAN ASSOCIATION STATEMENTS OF OPERATIONS (Unaudited) (In thousands except per share amounts)
For the Three Months Ended For the Six Months Ended -------------------------- ------------------------ June 30, June 30, -------------------------- ------------------------ 1996 1995 1996 1995 ------------ ----------- ----------- ---------- Interest Income: Loans receivable, including fees $14,603 $14,782 $29,712 $28,598 Investment securities 1,354 573 2,300 1,091 Mortgage-backed securities 566 - 1,192 - ------- ------- ------- ------- Total Interest Income 16,523 15,355 33,204 29,689 ------- ------- ------- ------- Interest Expense: Deposit accounts 7,371 7,622 14,843 14,206 FHLB advances 737 28 1,484 206 ------- ------- ------- ------- Total Interest Expense 8,108 7,650 16,327 14,412 ------- ------- ------- ------- Net Interest Income 8,415 7,705 16,877 15,277 Provision for valuation allowance on loans held for sale - 4,774 - 4,774 Provision for estimated credit losses 1,100 5,116 2,821 7,744 ------- ------- ------- ------- Net Interest Income After Provisions for Valuation Allowance and Estimated Loan Losses 7,315 (2,185) 14,056 2,759 ------- ------- ------- ------- Noninterest Income: Late and collection fees 166 410 459 590 Insurance commissions 162 (94) 106 104 ------- ------- ------- ------- Total Noninterest Income 328 316 565 694 ------- ------- ------- ------- Noninterest Expense: Compensation and benefits 1,585 1,712 2,720 3,573 Occupancy and equipment 528 715 1,002 1,154 FDIC assessment 123 298 244 595 Other 1,261 1,114 2,270 2,540 ------- ------- ------- ------- Total General and Administrative 3,497 3,839 6,236 7,862 Real estate operations, net 240 329 327 644 Provision for estimated losses on other real estate owned 296 1,016 888 2,548 (Gain) loss on sales of other real estate owned, net (186) 60 (251) (56) ------- ------- ------- ------- Total Real Estate Operations, net 350 1,405 964 3,136 ------- ------- ------- ------- Total Noninterest Expense 3,847 5,244 7,200 10,998 ------- ------- ------- ------- - Income (Loss) Before Income Taxes 3,796 (7,113) 7,421 (7,545) Provision for income tax expense (benefit) 1,427 (2,953) 2,812 (3,124) ------- ------- ------- ------- NET INCOME (LOSS) $ 2,369 $(4,160) $ 4,609 $(4,421) ======= ======= ======= ======= EARNINGS (LOSS) PER SHARE $ 0.32 $ (0.96) $ 0.69 $ (1.02) ======= ======= ======= =======
See Notes to the Unaudited Financial Statements 3 IMPERIAL THRIFT AND LOAN ASSOCIATION STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30, -------------------------- 1996 1995 ------------ ------------ (In thousands) Cash Flows From Operating Activities: Net income (loss) $ 4,609 $ (4,421) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 445 415 Provision for valuation allowance on loans held for sale - 4,774 Provision for estimated credit losses 2,821 7,744 Provision for estimated losses on other real estate owned 888 2,548 (Gain) loss on disposals of furniture and equipment (5) 5 Gain on sales of other real estate owned, net (251) (56) (Increase) decrease in interest receivable (116) 49 Increase in income taxes receivable (529) (2,876) Decrease (increase) in deferred income taxes 138 (285) Increase in other assets (406) (539) Decrease in accounts payable and other liabilities (556) (1,253) --------- -------- Net Cash Provided by Operating Activities 7,038 6,105 --------- -------- Cash Flows From Investing Activities: Increase in loans receivable, net (109,075) (47,794) Purchases of investment securities (491,625) (76,947) Proceeds from the maturity of investment securities 476,292 76,094 Decrease in investment in FHLB stock 4,266 967 Principal payments on mortgage-backed securities 4,290 - Proceeds from sale of other real estate owned 3,760 5,602 Proceeds from sale of conditional sales contracts 50,051 2,457 Other (127) (59) --------- -------- Net Cash Used in Investing Activities (62,168) (39,680) --------- -------- Cash Flows From Financing Activities: Common stock issued 22,566 - Net increase in deposit accounts 32,242 58,879 Repayment of federal funds purchased - (10,000) Repayment of FHLB advances - (11,950) --------- -------- Net Cash Provided by Financing Activities 54,808 36,929 --------- -------- Net Increase (Decrease) in Cash and Cash Equivalents (322) 3,354 Cash and Cash Equivalents at Beginning of Period 22,106 13,361 --------- -------- Cash and Cash Equivalents at End of Period $ 21,784 $ 16,715 ========= ======== Supplemental Cash Flow Information: Cash paid during the period for interest $ 16,329 $ 14,373 Cash paid during the period for income taxes $ 3,202 $ 38 Noncash Investing Transactions: Loans transferred to other real estate owned $ 4,517 $ 9,071 Loans to facilitate the sale of other real estate owned $ 1,835 $ 3,238
See Notes to the Unaudited Financial Statements 4 NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 1996 NOTE A - BASIS OF PRESENTATION The unaudited financial statements of Imperial Thrift and Loan Association (the "Company") included herein reflect all normal recurring adjustments, which are in the opinion of management, necessary to present a fair statement of the results for the interim periods indicated. Certain reclassifications have been made to the financial statements for 1995 to conform to the 1996 presentation. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The results of operations for the three and six months ended June 30, 1996, are not necessarily indicative of the results of operations to be expected for the remainder of the year. These unaudited financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. NOTE B - EARNINGS PER SHARE Earnings per share is calculated on the basis of weighted average number of shares outstanding during the period. Fully diluted earnings per share has not been reported in these interim financial statements as the dilutive effect of common stock equivalents for outstanding options is less than three percent. NOTE C - COMPLETION OF STOCK OFFERING In April, 1996 the Company completed a secondary public offering of 1,840,000 shares of its common stock. The proceeds of this offering, which included the exercise of the entire underwriters' overallotment option, totaled $22.6 million after the underwriting discount and estimated expenses. NOTE D - IMPAIRED LOANS RECEIVABLE As of June 30, 1996, the recorded investment in loans receivable that were considered impaired under Statement of Financial Accounting Standards No. 114 was $5.1 million. The average recorded investment in these loans during the three and six month periods ended June 30, 1996 was $5.3 million and $6.3 million, respectively. Interest income recognized on impaired loans during the three and six month periods ended June 30, 1996 was $.1 million and $.2 million, respectively. 5 NOTE E - SUBSEQUENT EVENT On July 25, 1996, the stockholders of the Company approved the adoption of a holding company structure with the result that the Company will become a wholly-owned subsidiary of ITLA Capital Corporation. This holding company reorganization is expected to occur during the third quarter of 1996. 6 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is intended to identify the major factors that influenced the financial condition and results of operations of the Company as of and for the three and six month periods ended June 30, 1996. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995 NET INCOME Net income totaled $2.4 million for the three months ended June 30, 1996 compared to a net loss of $4.2 million for the second quarter of 1995. The increase in net earnings was primarily due to increased net interest income, reductions in noninterest expense and significant reductions in the provision for estimated credit losses and in the valuation allowance for loans held for sale. For the second quarter of 1996, earnings per share was $0.32 compared to a net loss of $0.96 per share for the same period in 1995. NET INTEREST INCOME The table below sets forth a summary of the changes in interest income and interest expense resulting from changes in average interest-earning asset and interest-bearing liability balances (volume) and changes in average interest rates (rate). The change in interest due to both volume and rate have been allocated to change due to volume and rate in proportion to the relationship of absolute dollar amounts in each.
FOR THE THREE MONTHS ENDED JUNE 30 ---------------------------------- 1996 VERSUS 1995 ---------------- VOLUME RATE TOTAL ------ ---- ----- (IN THOUSANDS) INCREASE (DECREASE) IN INTEREST INCOME: Investment securities $ 887 $(106) $ 781 Mortgage-backed securities 566 - 566 Loans receivable, net 380 (559) (179) ------ ----- ------ Total increase (decrease) 1,833 (665) 1,168 ------ ----- ------ INCREASE (DECREASE) IN INTEREST EXPENSE: Deposit accounts 347 (598) (251) FHLB advances 709 - 709 ------ ----- ------ Total increase (decrease) 1,056 (598) 458 ------ ----- ------ Increase (decrease) in net interest income $ 777 $ (67) $ 710 ====== ===== ======
7 Total interest income increased by $1.2 million in the 1996 second quarter compared to the same period in 1995 due to increases in the average balances of investment and mortgage-backed securities, offset by lower overall yields on loans receivable resulting primarily from the sale of substantially all of the Company's automobile portfolio in the first quarter of 1996. The average balance of loans receivable increased $14.3 million due primarily to internally generated loan growth despite the sale of the automobile portfolio. The weighted average yield on loans receivable declined to 11.41 percent for the 1996 second quarter compared to 11.81 percent for the same period in 1995 primarily as a result of the sale of the higher yielding automobile loans. Total interest expense increased by $0.5 million in the 1996 second quarter compared to the same period in 1995 due primarily to the addition of $54.0 million of FHLB advances, offset primarily by lower overall rates on deposit accounts. The advances from the FHLB, executed in the fourth quarter of 1995, were primarily used to fund the acquisition of the mortgage-backed securities portfolio. The average balance of deposit accounts increased $26.8 million during the second quarter of 1996 as compared to the 1995 second quarter. The average rate paid on these accounts declined to 5.57 percent in the 1996 second quarter from 6.03 percent during the same period in 1995. PROVISION FOR VALUATION ALLOWANCES ON LOANS HELD FOR SALE During the second quarter of 1995, management classified $23.4 million of certain nonaccural and other potential problem real estate loans as held for sale. As a result, the Company recorded a valuation allowance of $4.8 million to reduce the carrying value of these loans to their estimated market value. Subsequently, these loans were sold in the third quarter of 1995 with no additional losses or provisions. For the second quarter of 1996, no such provisions were required. PROVISION FOR ESTIMATED CREDIT LOSSES Management periodically assesses the adequacy of the allowance for credit losses by reference to many factors which may be weighted differently at times depending on prevailing conditions. These factors include, among other factors, general portfolio trends relative to asset and portfolio size, asset categories, potential credit concentrations, nonaccural loan levels, historical loss experience and risks associated with changes in economic and business conditions. Management believes that the Company's allowance for credit losses as of June 30, 1996 was adequate to absorb the known and inherent risks in the loan portfolio at that date. While management believes the estimates and assumptions used in its determination of the adequacy of the allowance are reasonable, there can be no assurances that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact the Company's financial condition and results of operations. The provision for estimated credit losses declined to $1.1 million in the 1996 second quarter from $5.1 million in the same period in 1995 due primarily to the significant reduction in nonperforming assets. Nonperforming assets to total assets declined to 1.7 percent as of June 30, 1996 from 2.1 percent and 4.9 percent as of December 31, 1995 and June 30, 1995, respectively. The aggregate amount of nonperforming assets declined to $11.6 million as of June 30, 1996 from $13.1 million and $27.1 million at December 31, 1995 and June 30, 1995, respectively. At June 30, 1996, the total allowance for credit losses was $9.7 million or 1.7 percent of total loan receivable. 8 NONINTEREST EXPENSE General and administrative expense decreased $.3 million in the 1996 second quarter versus the same period in 1995 as management continues to focus on controlling operating costs. As a percent of average total assets, general and administrative expense declined to 2.1 percent in the second quarter of 1996 from 2.8 percent for the same period in 1995. Expenses from real estate operations decreased to $.3 million in the 1996 second quarter from $1.4 million in the same period of 1995 due primarily to a reduction in the provision for losses on other real estate owned. Other real estate owned, net of allowances for losses, decreased to $6.2 million at June 30, 1996 from $11.2 million at June 30, 1995. SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995 NET INCOME Net income totaled $4.6 million for the six months ended June 30, 1996 compared to a net loss of $4.4 million for the same period in 1995. The increase in net income was primarily due to increased net interest income, reductions in noninterest expense and significant reductions in the provisions for estimated credit losses and in the valuation allowance for loans held for sale. For the first six months of 1996, earnings per share was $.69 compared to a net loss of $1.02 per share for the same period in 1995. NET INTEREST INCOME The table below sets forth a summary of the changes in interest income and interest expense resulting from changes in average interest-earning asset and interest-bearing liability balances (volume) and changes in average interest rates (rate). The change in interest due to both volume and rate has been allocated to change due to volume and rate in proportion to the relationship of absolute dollar amounts in each.
FOR THE SIX MONTHS ENDED JUNE 30 -------------------------------- 1996 VERSUS 1995 ---------------- VOLUME RATE TOTAL ------ ---- ----- (IN THOUSANDS) INCREASE (DECREASE) IN INTEREST INCOME: Investment securities $1,363 $(154) $1,209 Mortgage-backed securities 1,192 - 1,192 Loans receivable, net 1,098 16 1,114 ------ ----- ------ Total increase (decrease) 3,653 (138) 3,515 ------ ----- ------ INCREASE (DECREASE) IN INTEREST EXPENSE: Deposit accounts 1,018 (381) 637 FHLB advances 1,325 (47) 1,278 ------ ----- ------ Total increase (decrease) 2,343 (428) 1,915 ------ ----- ------ Increase (decrease) in net interest income $1,310 $ 290 $1,600 ====== ====== ======
9 Total interest income increased by $3.5 million in the first six months of 1996 compared to the same period in 1995 due to increases in the average balances of all categories of interest-earning assets. The average balance of loans receivable increased $21.6 million for the first six months of 1996 as compared to the same period in 1995 due primarily to internally generated loan growth, despite the sale of substantially all of the automobile portfolio in the first quarter of 1996. The weighted average yield on loans receivable was relatively constant in the first six months of 1996 as compared to the same period in 1995 and is expected to decline in the near term as a result of the sale of the higher yielding automobile loans. Total interest expense increased by $1.9 million in the first six months of 1996 compared to the same period in 1995 due primarily to the addition of $54.0 million in FHLB advances and increases in the average balances of deposit accounts, partially offset by lower overall rates on deposit accounts. The advances from the FHLB, executed in the fourth quarter of 1995, were primarily used to fund the acquisition of the mortgage-backed securities portfolio. The average balance of deposit accounts increased $39.1 million in the first six months of 1996 versus the same period in 1995. The average rate paid on these accounts declined to 5.67 percent in the first six months of 1996 from 5.82 percent during the same period in 1995. PROVISION FOR VALUATION ALLOWANCES ON LOANS HELD FOR SALE See discussion above regarding the provision for valuation allowances on loans held for sale. For the first six months of 1996, no provision was required. PROVISION FOR ESTIMATED CREDIT LOSSES The provision for estimated credit losses declined to $2.8 million for the first six months of 1996 from $7.7 million in the same period in 1995 due primarily to the significant reduction in nonperforming assets. Nonperforming assets to total assets declined to 1.7 percent as of June 30, 1996 from 2.1 percent and 4.9 percent as of December 31, 1995 and June 30, 1995, respectively. The aggregate amount of nonperforming assets declined to $11.6 million as of June 30, 1996 from $13.1 million and $27.1 million at December 31, 1995 and June 30, 1995, respectively. NONINTEREST EXPENSE General and administrative expense decreased $1.6 million in the first six months of 1996 compared to the same period in 1995 as management continues to focus on controlling operating costs. As a percent of average total assets, general and administrative expense declined to 1.9 percent in the first six months of 1996 from 2.9 percent for the same period in 1995. Expenses from real estate operations decreased to $1.0 million in the first six months of 1996 from $3.1 million in the same period of 1995 due primarily to a reduction in the provision for losses on other real estate owned. Other real estate owned, net of allowances for losses, decreased to $6.2 million at June 30, 1996 from $11.2 million at June 30, 1995. 10 FINANCIAL CONDITION NONPERFORMING ASSETS The following table sets forth the Company's nonperforming assets by category at the dates indicated.
JUNE 30, DECEMBER 31, JUNE 30, 1996 1995 1995 ---- ---- ---- (IN THOUSANDS) Nonaccrual Loans: Loans, net $ 5,175 $ 6,619 $15,836 Sales contracts held for sale 199 366 - ------- ------- ------- Total nonaccrual loans 5,374 6,985 15,836 Real estate owned 6,222 6,103 11,235 ------- ------- ------- Total nonperforming assets $11,596 $13,088 $27,071 ======= ======= ======= Troubled debt restructurings $ 5,974 $ 6,182 $10,518 Nonaccrual loans to total gross loans 0.96% 1.34% 3.02% Nonperforming assets to total assets 1.73% 2.14% 4.90%
The following table provides certain information regarding the Company's allowance for credit losses.
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, -------- ------------ 1996 1995 ---- ---- (IN THOUSANDS) ALLOWANCE FOR CREDIT LOSSES: Balance, beginning of period $8,105 $11,076 Provision for estimated credit losses 2,821 13,098 Less net chargeoffs: Real estate loans 1,253 9,447 Conditional sales contracts - 6,622 ------ ------- Total net chargeoffs 1,253 16,069 ------ ------- Balance, end of period $9,673 $ 8,105 ====== =======
LIQUIDITY AND DEPOSIT ACCOUNTS Liquidity refers to the Company's ability to maintain cash flow adequate to fund operations and meet obligations and other commitments on a timely basis, including the payment of maturing deposits and the origination or purchase of new loan receivables. The Company maintains a cash and investment securities portfolio designed to satisfy operating and regulatory liquidity requirements while preserving capital and maximizing yield. As of June 30, 1996, the Company's cash and investment securities portfolio primarily consisted of short- term fixed income instruments which were rated "A" or better by the applicable rating agencies. As of June 30, 1996 and December 31, 1995, the Company's liquidity ratios were 10.4 percent and 8.1 percent, respectively, exceeding the regulatory requirement of 5.0 percent. In addition, the Company's liquidity position is supported by a credit facility with the Federal Home Loan Bank 11 of San Francisco. As of June 30, 1996, the Company had available borrowing capacity under this credit facility of $44.0 million. Total deposit accounts increased to $527.0 million at June 30, 1996, from $494.8 million at December 31, 1995. During the 1996 second quarter, the Company purchased $31.9 million in deposit accounts at a premium of $.2 million. Additionally, the Company entered into an agreement during the second quarter to acquire approximately $30.0 million in deposits. This transaction is expected to be completed in the third quarter of 1996. CAPITAL RESOURCES At June 30, 1996, the Company's Leverage (Core), Tier I and Total Risk- Based capital ratios were 12.5 percent, 15.3 percent and 16.6 percent, respectively. At December 31, 1995 Leverage (Core), Tier I and Total Risk-Based capital ratios were 10.1 percent, 10.7 percent and 12.0 percent, respectively. The minimum regulatory requirement for Leverage (Core), Tier I and Risk-Based capital are 4.0 percent, 4.0 percent and 8.0 percent, respectively. The increase in all regulatory capital ratios at June 30, 1996 from December 31, 1995 was primarily due to the April 1996 common stock offering of $22.6 million and the accumulation of $4.6 million in net income as retained earnings for the six month period ended June 30, 1996. The increase in the capital ratios were partially offset by $58.9 million in total asset growth during the six months ended June 30, 1996. As of June 30, 1996, the Company's capital position was designated as "well capitalized" for regulatory purposes. There were no dividends declared or paid during the first six months of 1996. 12 PART II - OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS The Company is party to certain legal proceedings incidental to its business. Management believes that the outcome of such proceedings, in the aggregate, will not have a material effect on the Company's business or financial condition. Set forth below is a summary description of a previously disclosed lawsuit which involved Imperial. Schinke v. Imperial Thrift and Loan Association, Los Angeles Superior Court, Case No. EC 013054. The complaint alleged damages arising out of the funding of a loan from Imperial to plaintiffs in March 1990, which was secured by two parcels of real property owned by plaintiffs. The subject loan was paid in full in December 1992. Plaintiffs' prayer for damages against the Company included $500,000 in loan proceeds, plus interest paid to the Company during the life of the loan totaling approximately $179,000, plus unspecified damages for business losses. On May 3, 1996, the trial in this matter concluded with a unanimous jury verdict in favor of the Company. ITEM 2 CHANGES IN SECURITIES Not applicable. ITEM 3 DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4 SUBMISSION OF MATTERS OF SECURITY HOLDERS Not applicable. ITEM 5 OTHER INFORMATION Not applicable. ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27 - Financial Data Schedule. (b) Not applicable. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IMPERIAL THRIFT AND LOAN ASSOCIATION Date: August 14, 1996 /s/ George W. Haligowski --------------- ------------------------------------ George W. Haligowski Chairman of the Board, President and Chief Executive Officer Date: August 14, 1996 /s/ Michael A. Sicuro --------------- ------------------------------------ Michael A. Sicuro Senior Vice President and Chief Financial Officer 14 EX-27 2 ARTICLE 9-FDS
9 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 20,534 0 1,250 0 0 71,287 70,665 557,052 9,673 669,534 527,035 0 4,632 54,000 0 0 53,309 30,558 669,534 29,712 3,492 0 33,204 14,843 16,327 16,877 2,821 0 7,200 7,421 7,421 0 0 4,609 0.69 0 5.27 5,146 0 5,974 0 8,105 1,290 37 9,673 9,673 0 0
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