-----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, GMqJFS9LHn4VDCuOx0EZ6DkBzSQ+PRSI8FUtmJHMoRn+M0a62/Ny9xJ68hGwiutl yYRzsZQHQGzRhdAZuF/EuQ== 0000898430-01-500434.txt : 20010510 0000898430-01-500434.hdr.sgml : 20010510 ACCESSION NUMBER: 0000898430-01-500434 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010420 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPERIAL CREDIT INDUSTRIES INC CENTRAL INDEX KEY: 0000883811 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 954054791 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19861 FILM NUMBER: 1627213 BUSINESS ADDRESS: STREET 1: 23550 HAWTHORNE BLVD STREET 2: STE 110 CITY: TORRANCE STATE: CA ZIP: 90505 BUSINESS PHONE: 3103731704 MAIL ADDRESS: STREET 1: 23550 HAWTHORNE BLVD STREET 2: BUILDING ONE SUITE 110 CITY: TORRANCE STATE: CA ZIP: 90505 8-K 1 d8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 20, 2001 ------------------------------------------------------------------- IMPERIAL CREDIT INDUSTRIES, INC. (Exact name of registrant as specified in its charter) California 0-19861 95-4054791 ---------- ------- ---------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation or organization) Identification Number) 23550 Hawthorne Boulevard, Building 1, Suite 110 90505 Torrance, California ----- -------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 373-1704 -------------- Page 1 Item 5. Other Events and Regulation FD Disclosure. (a) First Quarter Report of Earnings On April 24, 2001, we reported results for the quarter ended March 31, 2001. The information contained in the release, which is attached as Exhibit 99.1 hereto, is incorporated herein by reference. (b) Nasdaq Notice of Intended Delisting On April 20, 2001, we received a Nasdaq Staff Determination stating that we failed to comply with the minimum bid price requirement for continued listing set forth in the Nasdaq Marketplace rules, and that our Common Stock is, therefore, subject to delisting from the Nasdaq National Market. We have filed a request for a hearing before the Nasdaq Listing Qualifications Panel to review the Staff Determination. The hearing has been scheduled for June 7, 2001. There is no assurance that the Qualifications Panel will grant our request for continued listing. Delisting from the Nasdaq National Market could cause our Common Stock to become significantly less liquid, with a possible negative impact on its value. Also, if our Common Stock is delisted and is not thereafter traded as a "Bulletin Board Stock," our Common Stock would be classified as a "penny stock" which, if certain disclosure and broker or dealer qualifications are not met, could further restrict the market for resale of Common Stock to only such persons as are deemed to be suitable investors of such stock, such as institutional investors, or directors, officers, or owners of 5% or more of the Common Stock. If our Common Stock is delisted, we will seek to have it traded as a "Bulletin Board Stock". Pending the final decision of the Qualifications Panel, our Common Stock will continue to trade on the Nasdaq National Market. (c) Commencement of Exchange Offer and Consent Solicitation On May 7, 2001, we announced that on May 10, 2001 we will commence an offer to exchange all of our outstanding senior notes, including securities issued by a related trust, for a combination of newly issued 12% Senior Secured Notes due June 30, 2005, shares of our Common Stock and warrants to purchase additional shares of our Common Stock. The information contained in the release, which is attached as Exhibit 99.2 hereto, is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit 99.1 Press Release issued by the Company, dated April 24, 2001. Exhibit 99.2 Press Release issued by the Company, dated May 7, 2001. Page 2 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, hereunto duly authorized. Date: May 8, 2001 IMPERIAL CREDIT INDUSTRIES, INC. By: /s/ Irwin L. Gubman -------------------------------------------- General Counsel and Secretary Page 3 EX-99.1 2 dex991.txt PRESS RELEASE DATED APRIL 24, 2001 Exhibit 99.1 EXHIBIT 99.1 IMPERIAL CREDIT INDUSTRIES, INC. NEWS RELEASE Imperial Credit Industries Reports First Quarter 2001 Results of Operations TORRANCE, Calif., April 24 /PRNewswire/ -- Imperial Credit Industries, Inc. (Nasdaq: ICII) reports results for the first quarter ended March 31, 2001. ---- ICII Returns to Profitability in the First Quarter of 2001 Imperial Credit Industries, Inc., (the "Company" or "ICII") reported net income for the quarter ended March 31, 2001 of $312,000 or $0.01 diluted net income per share including an operating loss from discontinued operations of $200,000 or $0.01 diluted net loss per share and an extraordinary gain on the early extinguishment of debt of $618,000 or $0.02 diluted net income per share. The operating results for the quarter ended March 31, 2001 were favorably impacted by a significant increase in recoveries to $4.1 million of previously charged off loans, which resulted in a reduction of the provision for loan and lease losses to $4.6 million as compared to $24.0 million in the same period of the prior year. The Company has increased its allowance for loan and lease losses to $64.8 million at March 31, 2001 as compared to $63.6 million at December 31, 2000. The operating results for the quarter ended March 31, 2001 were negatively impacted by a 150 basis point decrease in the Prime rate and increased levels of non-accrual loans which reduced Southern Pacific Bank's ("SPB") net interest margin to 4.11% for the quarter ended March 31, 2001 as compared to 4.89% for the same period of the prior year. The Company recorded no income tax expense during the quarter ended March 31, 2001 as the Company currently has $130.0 million of tax net operating loss carry-forwards available to offset future income. For the same period of the prior year, the Company reported a net loss of $15.9 million or $0.48 diluted net loss per share after an extraordinary gain on the extinguishment of debt of $947,000 or $0.03 diluted net income per share. Net loss for the quarter ended March 31, 2000 included $9.4 million of severance and other costs related to the Imperial Credit Commercial Mortgage Investment Corp. ("ICCMIC") acquisition. Net Interest Income Decreases As a Result of Margin Compression For the quarter ended March 31, 2001, net interest income before provisions for loan and lease losses and net interest margin decreased to $14.6 million and 4.11% as compared to $21.1 million and 4.89% for the same period in the prior year, respectively. Net interest income before provisions for loan and lease losses and net interest margin decreased primarily as a result of increased deposit costs coupled with lower yields on our loan and securities portfolios. During the quarter ended March 31, 2001, interest income decreased to $48.6 million as compared to $53.4 million for the same period of the prior year. Interest income decreased primarily as a result of decreases in the Prime and Libor interest rates. A majority of the 1 Company's loans are indexed to these indices. As a result of the decrease in the Prime and Libor rates, these loans re-priced to reduced yields during the first quarter, while a majority of our deposit funding base is expected to re-price with reduced interest rates over the next six months. As a result of our loans re-pricing faster than our deposits, SPB's net interest margin decreased during the quarter ended March 31, 2001. The average yield on loans at SPB decreased to 10.42% during the quarter ended March 31, 2001 as compared to 10.74% in the same period of the prior year. SPB's yields on its outstanding loans were also negatively affected by a higher level of non-accrual loans during the quarter ended March 31, 2001 as compared to the same period of the prior year. Average non-accrual loans were approximately $78.4 for the quarter ended March 31, 2001 as compared to approximately $65.5 million for the same period of the prior year. The Company's total loans and leases held for sale and investment, net of allowance for loan and lease losses increased to $1.6 billion at March 31, 2001 compared to $1.5 billion at December 31, 2000. Interest expense was $34.0 million for the quarter ended March 31, 2001 as compared to $32.3 million for the same period of the prior year. The increase in interest expense primarily resulted from an increase in the cost of the Federal Deposit Insurance Corporation ("FDIC") insured deposits of SPB. The average cost of deposits based on daily averages at SPB increased to 6.61% during the quarter ended March 31, 2001 as compared to 5.85% in the same period of the prior year. SPB's average outstanding deposits decreased to $1.6 billion for the quarter ended March 31, 2001 as compared to $1.7 billion at March 31, 2000. Interest on other borrowings increased as a result of the ICCMIC acquisition on March 28, 2000. Average outstanding debt and related interest expense at ICCMIC totaled $37.1 million and $734,000 for the quarter ended March 31, 2001, respectively. The increases in interest expense on deposits and other borrowings were partially offset by a decrease in interest expense on long-term debt which decreased 10.0% to $5.7 million for the quarter ended March 31, 2001 as compared to $6.4 million for the same period in the prior year. The decrease in interest expense on long-term debt resulted from the repurchase of long-term debt during the previous twelve months. Fee and Other Income Decrease As a Result of ICG Deconsolidation Fee and other income decreased $4.4 million to $6.0 million for the quarter ended March 31, 2001 as compared to $10.5 million in the same period of the prior year. Fee and other income decreased primarily due to the deconsolidation of Imperial Capital Group ("ICG") during the fourth quarter of 2000. As a result of the deconsolidation, the Company will not report any investment banking and brokerage fees, other income, or expenses of ICG. Beginning with the fourth quarter of 2000, ICII's 38.5% equity interest in ICG will be reported as equity in the net income of ICG. During the quarter ended March 31, 2000 the Company reported $7.7 million of investment banking and brokerage fees. Gain on sale of loans decreased to $102,000 for the quarter ended March 31, 2001, as compared to $133,000 in the same period of the prior year. For the quarter ended March 31, 2001, the Company sold $44.5 million of Income Property Lending Division ("IPL") loans and $11.1 million of participations in nationally syndicated loans generating a gain of $257,000 and a loss of $165,000, respectively. For the quarter ended March 31, 2000, the Company sold $34.7 million of IPL loans, $51.4 million of nationally syndicated participation loans, $7.5 million of consumer loans, and securitized $28.2 million of Imperial Business Credit's ("IBC") equipment leases, generating gains (losses) of $271,000, ($400,000), zero, and $261,000, respectively. 2 Asset management fees were relatively unchanged at $842,000 for the quarter ended March 31, 2001 as compared to $861,000 in the same period of the prior year. Asset management fees are derived primarily from the management of Pacifica Partners I, a $500 million collateralized loan obligation fund. The balance of assets under management was $484.5 million at March 31, 2001 as compared to $491.3 million at March 31, 2000. For the three months ended March 31, 2001, the equity in net income of ICG was $912,000. The pre-tax income of ICG for the quarter ended March 31, 2000 was $1.0 million. Gain on sale of securities increased to $130,000 for the quarter ended March 31, 2001 as compared to a loss of $602,000 in the same period of the prior year. During the quarter ended March 31, 2001, the Company sold part of its interest in a high yield bond fund managed by Imperial Capital Group ("ICG"). Rental income increased to $1.9 million for the quarter ended March 31, 2001 as compared to $120,000 in the same period of the prior year. Rental income increased as a result of the income producing commercial real estate properties acquired in the ICCMIC transaction, which was completed on March 28, 2000. For the quarters ending March 31, 2001 and 2000, mark-to-market losses were unchanged at $1.8 million. The net mark-to-market losses for the quarter ended March 31, 2001 primarily related to a $649,000 write-down of IBC's retained interests in lease securitizations, a $311,000 write-down of other retained interests, and an $801,000 write-down of loans funded through an off- balance sheet swap managed by SPB's Loan Participation and Investment Group ("LPIG") division. For the quarter ended March 31, 2000, mark-to-market losses were primarily related to a decline in the value of the Company's commercial mortgage-backed securities and investments in total return swaps. The Company wrote down its commercial mortgage-backed securities by $462,000 and its investments in total return swaps by $1.0 million as a result of increased interest spreads and loss assumptions. During the quarter ended March 31, 2000, the Company also wrote down certain consumer loans held for sale by $770,000. The write-downs in these securities and loans during the quarter ended March 31, 2000 were partially offset by increases in the value of the Company's retained interest in residential mortgage loan securitizations of $542,000 as a result of increased prepayment assumptions. Noninterest Expenses Decrease 37% Total noninterest expenses for the quarter ended March 31, 2001 decreased 37% to $16.1 million as compared to $25.5 million for the prior year. The decrease in expenses primarily resulted from decreases in personnel expense, amortization of goodwill, and general and administrative expenses in addition to the deconsolidation of ICG. These decreases were partially offset by increases in legal and professional services and collection costs associated with non- accrual loans and non-performing assets, and real property expenses. During the quarter ended March 31, 2000 noninterest expenses decreased 15% to $16.1 million as compared to $18.9 million for the same period in the prior year assuming ICG was accounted for under the equity method. The decrease in expenses occurred in all expense categories except legal and 3 professional services, collection costs associated with non-accrual loans and non-performing assets, and real property expenses. Assuming ICG was accounted for under the equity method, during the quarter ended March 31, 2000, personnel expenses decreased 25% to $6.8 million as compared to $9.1 million in the same period of the prior year. The decrease was primarily the result of reduced Full Time Equivalent employees ("FTE") and reduced bonus expense. At March 31, 2001, the Company had 404 FTE as compared to 520 FTE (excluding ICG) at March 31, 2000. Assuming ICG was accounted for under the equity method, during the quarter ended March 31, 2000, legal and professional and collection costs increased to $3.2 million as compared to $1.7 million in the same period of the prior year. The increase was primarily the result of increased levels of non- accrual loans and the Company's efforts to accelerate the resolution of problem loans. Assuming ICG was accounted for under the equity method, during the quarter ended March 31, 2000, general and administrative expenses decreased 12% to $3.8 million as compared to $4.3 million in the same period of the prior year. General and administrative expenses decreased in both periods as a result of the Company's efforts to cut costs and increase operational efficiency. Assuming ICG was accounted for under the equity method, during the quarter ended March 31, 2000, amortization of goodwill, net was ($722,000) as compared to $607,000 in the prior year. Amortization of goodwill decreased as a result of the amortization of negative goodwill associated with the ICCMIC acquisition in the first quarter of 2000. During the quarter ended March 31, 2001, amortization of negative goodwill at ICCMIC reduced amortization of goodwill, net by $1.4 million as compared to $72,000 during the same period of the prior year. Real property expenses began to be incurred by our company as a result of the ICCMIC acquisition in the first quarter of 2000. These costs solely relate to the income producing properties owned by ICCMIC. Real property expenses totaled $914,000 for the quarter ended March 31, 2001 as compared to $18,000 in the same period of the prior year. Non-accrual Loans and Non-Performing Assets Our non-accrual loans and leases increased to $85.4 million at March 31, 2001 as compared to $78.5 million at December 31, 2000. The increase was primarily attributable to increased non-accrual loans at SPB's Coast Business Credit ("CBC") division and its Imperial Warehouse Finance ("IWF") subsidiary. CBC's non-accrual loans increased to $36.0 million at March 31, 2001 as compared to $31.8 million at December 31, 2000. The increase in CBC's non-accrual loans was due to the addition of three new non-accrual loans. IWF's non-accrual loans increased to $14.4 million at March 31, 2001 as compared to $9.4 million at December 31, 2000. The increase in IWF's non-accrual loans was due to the addition of a $6.0 million facility to one customer. Since March 31, 2001, the outstanding balance of this loan has decreased to $4.0 million as a result of the sale of underlying loans collateralizing the facility. The overall increase in non-accrual loans was partially offset by a decrease at SPB's LPIG lending division 4 as a result of the sale of problem loans. During the first quarter, SPB sold $1.7 million of LPIG problem loans, resulting in a recovery of $379,000. All unsecured loans related to non-performing credits have been charged off as of March 31, 2001 and December 31, 2000. Our non-performing assets increased to $98.8 million at March 31, 2001 as compared to $87.4 million at December 31, 2000. The increase was primarily attributable to the increase in non-accrual loans described above, and the purchase of non-performing entertainment assets with an estimated value of $4.9 million in connection with the Lewis Horwitz Organization ("LHO") acquisition. This purchase during the quarter ended March 31, 2001 completes the Company's obligation to purchase non-performing assets under the LHO purchase agreement. Allowance for Loan and Lease Losses Increases to $64.8 Million The allowance for loan and lease losses was $64.8 million or 5.10% of total loans held for investment as compared to $63.6 million or 5.39% of total loans held for investment at December 31, 2000 and $49.4 million or 3.61% of total loans held for investment at March 31, 2000, respectively. The ratio of the allowance for loan and lease losses to non-accrual loans and leases ("coverage ratio") was 75.87% at March 31, 2001 as compared to 81.02% at December 31, 2000 and 77.67% at March 31, 2000. For the quarter ended March 31, 2001, the provision for loan and lease losses was $4.6 million as compared to $24.0 million for the same period of the prior year. The reduced provision for loan and lease losses for the quarter ended March 2001 was primarily the result of increased recoveries on previously charged off CBC loans totaling $4.0 million and a reduced number of performing credits migrating to potential problem status. First Step of the Company's Recapitalization Transaction Completed On March 30, 2001 ICII completed the issuance of $16.2 million of Senior Secured Debt. The notes bear an interest rate of 12% and mature on April 30, 2002. The issuance of the Senior Secured Debt is the first step in a recapitalization plan for the Company further explained below. The proceeds from the Senior Secured Debt offering were invested in SPB to facilitate compliance with its regulatory orders. Subsequent to the completed Senior Secured Debt offering, ICII will offer pro rata a package of the following securities in exchange (the "Debt Exchange") for our three currently outstanding series of debt securities (the "Old Notes"): (i) 12% Senior Secured Notes due 2005 (the "Exchange Notes"), (ii) up to 2.0 million shares of our Common Stock (13.952269 shares per $1,000 face amount of Old Notes), no par value and (iii) warrants (the "Debt Exchange Warrants") to purchase up to an additional 7.0 million shares of Common Stock at an exercise price of $2.15 per share (48.832944 warrants per $1,000 face amount of Old Notes). Concurrently with consummation of the Debt Exchange, we will issue up to 7.04 million shares of Common Stock to the holders of a majority in interest of our Old Notes who executed the recapitalization agreement. We further intend to issue and sell at least $10.0 million principal amount of 12% Convertible Subordinated Notes due 2005 to accredited investors in a private 5 placement. The Convertible Subordinated Notes will be convertible after three years into Common Stock of the Company at a price of $1.25 per share. The holders of Old Notes will be offered Exchange Notes as follows: (i) the holders of our 10.25% Remarketed Par Securities due 2002 will be offered to convert into Exchange Notes at $0.80 per dollar of face amount of such Old Notes, (ii) the holders of our 9.875% Senior Notes due 2007 will be offered to convert into Exchange Notes at $0.65 per dollar of face amount of such Old Notes, and (iii) the holders of our 9.75% Senior Notes due 2004 will be offered to convert into Exchange Notes at $0.50 per dollar of face amount of such Old Notes. A majority-in-interest of the 10.25% Remarketed Par Securities due 2002 and our 9.875% Senior Notes due 2007 have agreed to participate in the Debt Exchange, and to strip the Old Notes of all existing financial covenants. Supplemental indentures related to the Old Notes were executed on March 29, 2001. Subject to the occurrence of certain conditions (including the closing of the Debt Exchange and the issuance of Convertible Subordinated Notes), all of the Senior Secured Debt will be automatically exchanged into (i) $18.2 million principal amount of Exchange Notes, (ii) 249,052 shares of Common Stock, and (iii) warrants to purchase up to an additional 871,681 shares of Common Stock at an exercise price of $2.15 per share. Such Exchange Note holders also have limited price protection. Each of the Senior Secured Debt purchasers will further have the right during the period following the Debt Exchange and ending March 31, 2002 to elect to exchange all or a portion of their Exchange Notes and related shares of Common Stock and Debt Exchange Warrants into $18.2 million principal amount of Convertible Subordinated Notes. The Convertible Subordinated Notes will have a 12% coupon and will be convertible into Common Stock at $1.25 per share. Upon successful completion of the recapitalization transaction, ICII will receive gross proceeds of approximately $26.2 million of new capital, most of which will be invested in Tier I capital of SPB. We believe that this new capital will assist our company in its attempt to increase capital levels at SPB in order to meet regulatory requirements. Furthermore, the future exercise of warrants issued in connection with the Debt Exchange is expected to provide approximately an additional $15.0 million of capital for the Company at the time of their exercise approximately three years from the date of issuance of the Exchange Notes. The impact of the Debt Exchange will primarily be to reduce the principal amount of ICII's Old Notes by approximately $36.6 million to $71.7 million based on the success of the exchange offer. ICII expects to complete the Debt Exchange by June 30, 2001. Southern Pacific Bank's Regulatory Capital Increased to "Adequately Capitalized" Levels The Company's largest subsidiary is SPB, an FDIC insured depository institution. On March 30, 2001, the Company contributed $21.2 million of cash to the Bank in the form of new equity capital and converted $22.0 million of SPB's subordinated debt into non-cumulative perpetual preferred stock of SPB. Such capital infusions and conversions, in addition to SPB's earnings through March 31, 2001, restored SPB's capital to amounts above the "adequately 6 capitalized" regulatory minimums as defined in banking regulations. However, the restoration of SPB's capital was not sufficient to meet the capital levels required by its regulatory orders at March 31, 2001. SPB had Tier 1 Leverage and Total Risk-based Capital ratios of 6.11% and 8.40%, at March 31, 2001 as compared to 3.46% and 6.59% at December 31, 2000, respectively. The Company is in the process of revising SPB's capital plan that was submitted to the FDIC and the DFI. Such capital plan has not yet been approved by the FDIC and the DFI. The capital plan indicates that the Bank will not meet any of the above cited capital ratio targets at the indicated dates. However, the preliminary revised plan does indicate that the Bank's capital ratios at December 31, 2001, should qualify it to be categorized as "well capitalized" at that time. Liquidity and Capital Resources On a consolidated basis, our cash and interest bearing deposits decreased to $153.7 million at March 31, 2001 as compared to $214.1 million at December 31, 2000. At our parent company, cash and interest bearing deposits decreased to $2.2 million at March 31, 2001 as compared to $15.9 million at December 31, 2000. Liquidity at our holding company was reduced primarily due to the additional capital investment of $5.0 million into SPB, the repayment of inter- company advances to consolidated subsidiaries, and the purchase of single family residential mortgage loans from a securitization trust established by the Company in 1994. Cash available to our parent company including its consolidated subsidiaries other than SPB totaled $7.4 million at March 31, 2001. Long Term Debt Our long term debt increased to $234.0 million at March 31, 2001 as compared to $219.6 million at December 31, 2000 as a result of the issuance of $16.2 million of Senior Secured Debt on March 30, 2001. The notes bear an interest rate of 12% and mature on April 30, 2002. During the quarter ended March 31, 2001, we repurchased $1.9 million of our company obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the company ("ROPES"), resulting in an extraordinary gain on the early extinguishment of debt of $618,000. Shareholders' Equity At March 31, 2001 our shareholders' equity increased to $40.1 million as compared to $39.4 million at December 31, 2000. The increase in shareholders' equity was primarily the result of net income recorded during the quarter ended March 31, 2001 and due to an increase in the valuation allowance for securities available for sale. Our book value per share and tangible book value per share increased to $1.25 and decreased to $1.35 at March 31, 2001 as compared to $1.23 and $1.37 at December 31, 2000, respectively. General Description of the Company Imperial Credit Industries, Inc., a diversified financial services holding company, was formed in 1991 and is headquartered in Torrance, California. The Company's major business activities are primarily conducted through Southern Pacific Bank, a wholly owned subsidiary. 7 The Company also owns an equity interest in Imperial Capital Group, LLC (approximately 38% ownership). Imperial Credit Industries, Inc. and its subsidiaries and affiliates offer a wide variety of financial services, investment products, and asset management services. Not an Offer of Securities This press release does not constitute an offer of any securities for sale. It is expected that the securities referred to herein will not initially be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. Safe Harbor Statement Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward- looking terminology, such as "may," "will," "intend," "should," "expect," "anticipate," "estimate" or "continue" or the negatives thereof or other comparable terminology. The Company's actual results could differ materially from those anticipated in such forward-looking statements due to a variety of factors. These factors include but are not limited to: the demand for our products; competitive factors in the businesses in which we compete; adverse changes in the securities markets; inflation and changes in the interest rate environment that reduce margins or the fair value of financial instruments; changes in national, regional or local business conditions or economic environments; government fiscal and monetary policies; legislative or regulatory changes that affect our business; factors inherent in the valuation and pricing of commercial loans; other factors generally understood to affect the value of commercial loans and commercial real estate; and the other risks detailed in the Company's 8-K dated May 17, 1999 as filed with the Securities and Exchange Commission (the "SEC"); periodic reports on Forms 10-Q, 8-K and 10-K and any amendments with respect thereto filed with the SEC; and other filings made by the Company with the SEC. ICII's news releases are available at no charge through PR Newswire's Company News on Call by dialing (800) 758-5804 Ext. 420763. Additional corporate information relating to the Company's SEC filings and corporate news releases are available on the internet. The web site address is http://www.icii.com. The Company will hold a conference call at 8:00 A.M. - ------------------- Pacific Time, 11:00 A.M. Eastern Time today. The phone number for the conference call is (913) 981-5542, confirmation number 554862. Audio of the call will be broadcast live on the Internet and will be available on the Investor Relations section of Imperial Credit's web site, located at http://www.icii.com and at http://www.videonewswire.com/ICII/042401. - ------------------- ---------------------------------------- For further information contact: Brad Plantiko/CFO 310-791-8096 or Karen Montandon/IR 310-791-8022 8 IMPERIAL CREDIT INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (unaudited)
ASSETS March 31, December 31, 2001 2000 Cash $ 56,622 $ 30,938 Interest bearing deposits 97,068 183,193 Investment in Federal Home Loan Bank stock 4,216 4,148 Securities held for trading, at market 105,080 164,050 Securities available for sale, at market 61,466 63,684 Loans and leases held for sale, net 380,132 386,469 Loans and leases held for investment, net of unearned income 1,260,308 1,186,119 and deferred loan fees less: allowance for loan and lease losses (64,785) (63,625) Loans held for investment, net 1,195,523 1,122,494 Real property 38,694 53,198 Retained interest in loan and lease securitizations 3,635 6,330 Accrued interest receivable 13,975 15,744 Premises and equipment, net 12,335 10,433 Other real estate owned and other repossessed assets, net 13,332 8,778 Goodwill 31,645 32,330 Other assets 31,201 28,158 Net assets of discontinued operations 11,569 17,630 Total assets $2,056,493 $2,127,577 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $1,623,657 $1,632,704 Borrowings from Federal Home Loan Bank 50,000 65,000 Other borrowings 34,978 84,118 Company obligated mandatorily redeemable preferred securities of Subsidiary trust holding solely debentures of the company ("ROPES") 41,035 42,885 Senior secured notes 16,200 -- Senior notes 176,765 176,757 Accrued interest payable 16,421 18,992 Accrued income taxes payable 20,507 20,522 Minority interest in consolidated subsidiaries 1,141 1,116 Goodwill 22,103 23,797 Other liabilities. 13,614 22,244 Total liabilities 2,016,421 2,088,135
9 Shareholders' equity: Preferred stock, 8,000,000 shares authorized; none issued -- -- outstanding Common stock, no par value. Authorized 80,000,000 shares; 32,096,361 shares issued and outstanding at March 31, 2001 and December 31, 2000 97,778 97,668 Accumulated deficit (64,577) (64,889) Shares held in deferred executive compensation plan 5,635 5,745 Accumulated other comprehensive income-unrealized gain on securities available for sale, net 1,236 918 Total shareholders' equity 40,072 39,442 Total liabilities and shareholders' equity $2,056,493 $2,127,577
IMPERIAL CREDIT INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (unaudited)
Three Months Ended March 31, Interest Income: 2001 2000 Interest on loans and leases. $43,268 $ 45,401 Interest on investments. 5,020 7,345 Interest on other finance activities 330 614 Total interest income 48,618 53,360 Interest Expense: Interest on deposits. 26,589 24,293 Interest on other borrowings. 1,701 1,582 Interest on long term debt. 5,740 6,378 Total interest expense 34,030 32,253 Net interest income 14,588 21,107 Provision for loan and lease losses 4,625 24,019 Net interest income (expense) after provision for loan and lease losses 9,963 (2,912) Fee and Other Income: Gain on sale of loans and leases 102 133 Asset management fees 842 861 Investment banking and brokerage fees -- 7,654 Loan servicing income 1,368 1,526 Gain (loss) on sale of securities 130 (602) Equity in net income of Imperial Capital Group 912 -- Mark to market losses on securities and loans (1,822) (1,773) held for sale Rental income 1,912 120
10 Other income 2,595 2,544 Total fee and other income 6,039 10,463 Noninterest Expenses: Personnel expense 6,826 11,919 Commission expense 487 2,753 Amortization of servicing rights 106 136 Occupancy expense 1,034 1,349 Net expenses of other real estate owned 92 556 Legal and professional services 1,499 1,392 Legal (recoveries) settlements (1) 13 Collection costs 1,662 484 Telephone and other communications 364 871 Amortization of goodwill, net (722) 631 Real property expense 914 18 General and administrative expense 3,815 5,344 Noninterest expenses 16,076 25,466 Acquisition costs -- 9,397 Total expenses 16,076 34,863 Loss from continuing operations before income taxes, (74) (27,312) minority interest and extraordinary item Income taxes -- (10,835) Minority interest in income of consolidated 32 393 subsidiaries Loss from continuing operations (106) (16,870) Operating losses from discontinued operations of AMN, (200) -- net of income taxes Loss before extraordinary item (306) (16,870) Extraordinary item-Gain on early extinguishment of 618 947 debt, net of income taxes Net income (loss) $ 312 $(15,923) Comprehensive income (loss): Other comprehensive income (loss), net 318 (1,958) Comprehensive income (loss) $ 630 $(17,881) Basic income per share: Income (loss) from continuing operations $ 0.00 $ (0.51) Operating loss from discontinued operations, net (0.01) -- of income taxes Extraordinary item-Gain on early extinguishment of 0.02 0.03 debt, net of income taxes Net income (loss) per common share $ 0.01 $ (0.48) Diluted income per share: Income (loss) from continuing operations $ 0.00 $ (0.51) Operating loss from discontinued operations, net of (0.01) -- income taxes Extraordinary item-Gain on early extinguishment of 0.02 0.03 debt, net of income taxes Net income (loss) per common share $ 0.01 $ (0.48)
11 SELECTED FINANCIAL DATA (Dollars in thousands, except per share amounts)
Other Selected Financial Data: At or for the Three Months Ended March 31, December 31, March 31, 2001 2000 2000 Book value per share $ 1.25 $ 1.23 $ 5.65 Tangible book value per share $ 1.35 $ 1.37 $ 6.17 Ratio of earnings to fixed charges 1.0x (0.7x) 0.2x Pre-tax interest coverage ratio 1.1x (10.0x) (3.3x) (Loss) earnings before interest, taxes, depreciation and amortization ("EBITDA") 7,089 $(56,419) $(19,518) Return on average equity (ROE) 3.14% (457.76%) (32.42%) Return on average assets (ROA) 0.06% (19.06%) (2.86%) Net interest margin at SPB 4.11% 4.47% 4.89% Basic weighted average shares outstanding 32,096 32,096 33,212 Diluted weighted average shares outstanding 32,123 32,096 33,212
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At March 31, At December 31, Selected Credit Data: 2001 2000 Core Business Nonperforming Assets Coast Business Credit $36,041 $31,795 Acquired Entertainment Assets and LHO Loans 12,393 7,998 Loan Participation and Investment Group 22,998 26,206 Imperial Warehouse Finance 14,365 9,404 Income Property Lending Division 1,341 1,650 Other core businesses 645 9 Total core business nonperforming assets 87,783 77,062 Non-Core Business Nonperforming Assets Former mortgage banking operations 268 431 Auto Marketing Network, Inc. 596 778 Single Family Loans 3,451 3,949 Other non-core businesses 6,677 5,149 Total non-core business nonperforming 10,992 10,307 assets Total nonperforming assets $98,775 $87,369 Core Business Non-accrual Loans Coast Business Credit 36,041 31,795 Lewis Horwitz Organization Loans 246 246 Loan Participation and Investment Group 22,998 26,206 Imperial Warehouse Finance 14,365 9,404 Income Property Lending Division 1,341 1,650 Other core businesses 645 7 Total core business non-accrual loans 75,636 69,308 Non-Core Business Non-accrual Loans Former mortgage banking operations 268 431 Auto Marketing Network, Inc. 545 716 Single Family Loans 2,483 3,133 Other non-core businesses 6,462 4,941 Total non-core business non-accrual loans 9,758 9,221 Total non-accrual loans $85,394 $78,529 At or for At or for At or for the Three the Three the Three Months Months Months Ended Ended Ended March 31, December 31, March 31,
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2001 2000 2000 Allowance for loan and lease losses to non-accrual loans and leases 75.87% 81.02% 77.67% Allowance for loan and lease losses to gross LHFI 5.10% 5.39% 3.61% Nonperforming assets to total assets 4.80% 4.11% 3.33% Nonperforming assets to LHFI, OREO and other repossessed assets 7.77% 7.39% 5.58% Annualized net charge-offs to average LHFI, net 1.18% 19.52% 2.13%
Imperial Credit Industries, Inc. Financial and Operating Highlights
Consolidated 2001 2000 Operating Results (In millions, except per share amounts First Fourth Third Second First and percentages) Quarter Quarter Quarter Quarter Quarter Revenue Interest income $ 48.6 $ 53.0 $ 57.4 $ 61.0 $ 53.4 Interest expense (34.0) (35.4) (37.1) (35.4) (32.3) Net interest income 14.6 17.6 20.3 25.6 21.1 Provision for loan and lease losses 4.6 66.3 27.5 63.2 24.0 Net interest income (expense) after provision 10.0 (48.7) (7.2) (37.6) (2.9) Gain (loss) on sale of loans and leases 0.1 1.1 (2.3) 0.2 0.1 Asset management fees 0.8 0.8 0.8 0.8 0.9 Investment banking and brokerage fees -- -- 6.2 7.2 7.7 Loan servicing income 1.4 1.5 1.5 1.5 1.5 Gain (loss) on sale of securities 0.1 (0.1) 0.2 13.5 (0.6) Equity in net (loss) income of ICG 0.9 0.5 -- -- -- Mark to market loss on securities and loans held for sale (1.8) (4.8) (4.3) (2.0) (1.7) Rental income 1.9 2.6 2.9 2.6 0.1 Other income 2.6 3.5 2.6 3.7 2.5 Total fee and other
14 income 6.0 5.1 7.6 27.5 10.5 Expenses Personnel expense 7.3 10.1 11.613.7 14.7 Occupancy expense 1.0 1.2 1.3 1.5 1.3 Legal and professional 3.2 3.3 9.4 1.5 1.6 Amortization of goodwill, net (0.7) (0.8) 2.9 (1.3) 0.6 Net expense of real estate owned 0.1 0.1 0.2 0.5 0.6 Real property expense 0.9 1.1 1.6 1.5 -- Other expenses 4.3 5.2 6.4 6.5 6.7 Merger costs -- -- -- -- 9.4 Total expenses 16.1 20.2 33.4 23.9 34.9 (Loss) from continuing operations before income taxes and minority interest (0.1) (63.8) (33.0) (34.0) (27.3) Income taxes -- 37.8 (10.0) (14.6) (10.8) Minority interest in income of consolidated subsidiaries -- -- 0.2 0.5 0.4 Loss from continuing operations (0.1) (101.6) (23.2) (19.9) (16.9) Operating loss from discontinued operations and disposal of AMN (0.2) (4.1) (1.1) -- -- Extraordinary item - gain on early extinguishment of debt 0.6 1.1 0.3 1.1 1.0 Net income (loss) $ 0.3 $ (104.6) $ (24.0) $ (18.8) $ (15.9) Weighted average number of common and common equivalent shares (diluted) 32.1 32.1 32.8 33.7 33.2 Net (Loss) Income per Diluted Share: Income (loss) from continuing operations $ -- $ (3.17) $ (0.73) $ (0.61) $ (0.51) Operating loss from discontinued operations of AMN (0.01) (0.13) (0.03) -- -- Extraordinary item - gain on early extinguishments
15 of debt 0.02 0.04 0.01 0.03 0.03 Net income (loss) per diluted share $ 0.01 $ (3.26) $ (0.75) $ (0.58) $ (0.48) Consolidated Financial Condition (at quarter end): Loans and leases held for sale $ 380.1 $ 386.5 $ 400.6 $ 392.0 $ 344.4 Loans held for investment, net $1,195.5 $1,122.5 $ 1,232.1 $1,311.6 $1,307.3 Securities, at market $ 166.5 $ 227.7 $ 219.6 $ 231.2 $ 252.7 Retained interest in loan and lease securitizations $ 3.6 $ 6.3 $ 10.0 $ 12.1 $ 12.4 Total assets $2,056.4 $2,127.6 $ 2,263.7 $2,403.5 $2,288.3 Deposits $1,623.7 $1,632.7 $ 1,699.3 $1,826.5 $1,681.3 Borrowings from FHLB and other borrowings $ 85.0 $ 149.1 $ 117.4 $ 99.3 $ 68.1 ROPES $ 41.0 $ 42.9 $ 47.0 $ 48.3 $ 60.5 Senior notes $ 193.0 $ 176.8 $ 176.9 $ 176.9 $ 179.0 Total shareholders' equity $ 40.1 $ 39.4 $ 143.4 $ 165.5 $ 187.5 Asset Quality Other real estate owned and other repossessed assets, net $ 13.3 $ 8.8 $ 11.8 $ 14.6 $ 12.8 Non-accrual loans $ 85.4 $ 78.5 $ 81.3 $ 90.8 $ 72.6 Allowance for loan and lease losses $ 64.8 $ 63.6 $ 57.8 $ 50.1 $ 49.4 Ratio of the loan loss allowance to gross loans held for investment 5.10% 5.39% 4.69% 3.82% 3.78% Ratio of the loan loss allowance to non-accrual loans 81.02% 71.14% 55.21% 77.67% 75.87% Charge-offs $ 7.6 $ 61.5 $ 20.4 $ 62.9 $ 7.9 Recoveries 4.1 1.2 0.5 0.5 0.8 Net Charge-offs $ 3.5 $ 60.3 $ 19.9 $ 62.4 $ 7.1
16 Performance and Valuation Return on average shareholders' equity 3.14% -457.76% -62.16% -42.56% -32.42% Return on average assets 0.06% -19.06% -4.11% -3.20% -2.84% After-tax profit margin 1.95% n/a n/a n/a n/a Shareholders' equity 1.95% 1.85% 6.33% 6.88% 8.20% to total assets Book value per share $ 1.25 $ 1.23 $ 4.47 $ 5.12 $ 5.65 Tangible book value per share $ 1.35 $ 1.37 $ 4.71 $ 5.52 $ 6.17 Full Time Equivalent Employees 404 428 536 566 591 Cash Flow Information: Earnings before interest, taxes, depreciation and amortization (EBITDA) $ 7.1 $ (35.4) $ (24.8) $ (28.5) $ (19.5) Pre-tax interest coverage ratio 1.1x (10.0x) (4.6x) (4.7x) (3.3x) Ratio of earnings to fixed charges 1.0x (0.7x) 0.1x 0.1x 0.2x Capital Ratios Risk-based Capital 8.40% 6.59% 9.35% 9.31% 10.33% Risked-based Tier 1 Capital 6.04% 3.54% 5.23% 5.97% 7.18% Tier 1 FDIC Leverage Ratio 6.11% 3.46% 5.47% 6.50% 8.25% Loan Portfolio Multifamily real estate $ 268.9 $ 281.3 $ 310.5 $ 294.2 $ 248.2 Commercial real estate 156.8 151.6 169.5 183.4 179.4 Asset-based loans 742.9 752.9 832.9 844.7 810.3 Loan participations 108.9 123.5 150.6 172.9 183.7 Mortgage warehouse lines 131.5 50.6 33.8 52.1 69.5 Film and television production loans 113.7 83.7 76.7 75.2 24.9 Other 36.9 28.6 17.9 18.2 61.3
17 Total Core Loans 1,559.6 1,472.2 1,591.9 1,640.7 1,577.3 Non Core Loans 90.2 95.1 99.9 119.1 127.1 Gross Loans $1,649.8 $1,567.3 $ 1,691.8 $1,759.8 $1,704.4 Yield on earning assets at SPB 10.04% 10.40% 10.65% 11.18% 10.15% Cost of borrowings at SPB 6.61% 6.66% 6.50% 6.21% 5.85% Net interest margin at SPB 4.11% 4.47% 4.82% 5.69% 4.89%
Deconsolidation of ICG During the fourth quarter of 2000, the Company reduced its ownership percentage in ICG from 63.2% to 38.5% through the sale of a part of its equity interest to ICG and certain management members of ICG. The income from ICG is accounted for by the equity method of accounting beginning with the quarter ended December 31, 2000. For the three months ended March 31, 2001, the equity in net income of ICG was $912,000. As a result of the deconsolidation of ICG, certain components of the Company's first quarter results of operations are not comparable to the same period of the prior year. Therefore, the following proforma statements of operations present the Company's results of operations as if ICG had been accounted for as an equity investment for all periods presented. IMPERIAL CREDIT INDUSTRIES, INC. CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS - ICG UNDER THE EQUITY METHOD (Dollars in thousands - unaudited)
Three Months Ended March 31, 2001 2000 Interest Income: Interest on loans and leases $43,268 $ 45,533 Interest on investments 5,020 7,213 Interest on other finance activities 330 614 Total interest income 48,618 53,360 Interest Expense: Interest on deposits 26,589 24,293 Interest on other borrowings 1,701 1,457 Interest on long term debt 5,740 6,378 Total interest expense 34,030 32,128 Net interest income 14,588 21,232 Provision for loan and lease losses 4,625 24,019 Net interest income (expense) after provision for loan and lease losses 9,963 (2,787)
18 Fee and Other Income: Gain on sale of loans and leases 102 133 Asset management fees 842 861 Loan servicing income 1,368 1,526 Gain (loss) on sale of securities 130 (602) Equity in net income of Imperial Capital Group 912 640 Mark to market losses on securities and loans held for sale (1,822) (1,773) Rental income 1,912 120 Other income 2,595 2,544 Total fee and other income 6,039 3,449 Noninterest Expenses: Personnel expense 6,826 9,093 Commission expense 487 804 Amortization of servicing rights 106 136 Occupancy expense 1,034 1,140 Net expenses of other real estate owned 92 556 Legal and professional services 1,499 1,198 Lawsuit (recoveries) settlements (1) 13 Collection costs 1,662 484 Telephone and other communications 364 555 Amortization of goodwill, net (722) 607 Real property expense 914 18 General and administrative expense 3,815 4,334 Noninterest expenses 16,076 18,938 Acquisition costs -- 9,397 Total expenses 16,076 28,335 Loss from continuing operations before income taxes, minority interest and extraordinary item (74) (27,673) Income taxes -- (10,835) Minority interest in income of consolidated subsidiaries 32 32 Loss from continuing operations (106) (16,870) Operating losses from discontinued operations of AMN, net of income taxes (200) -- Loss before extraordinary item (306) (16,870) Extraordinary item-Gain on early extinguishments of debt, net of income taxes 618 947 Net income (loss) $ 312 $(15,923)
19 EX-99.2 3 dex992.txt PRESS RELEASE DATED MAY 7, 2001 EXHIBIT 99.2 PRESS RELEASE IMPERIAL CREDIT INDUSTRIES, INC. ANNOUNCES COMMENCEMENT OF EXCHANGE OFFER AND CONSENT SOLICITATION FOR IMMEDIATE RELEASE Torrance, California, May 7, 2001 - Imperial Credit Industries, Inc. (Nasdaq: ICII) announced today that on May 10, 2001 it will commence an offer to exchange all of its outstanding senior notes, including securities issued by a related trust, (the "Old Notes") for a combination of newly issued 12% Senior Secured Notes due June 30, 2005, shares of ICII Common Stock and warrants to purchase additional shares of ICII Common Stock in the amount and manner set forth in the Exchange Circular and Consent Solicitation to be distributed to all registered holders (the "Exchange Offer"). The issuance and sale of Senior Secured Notes will be made pursuant to an exemption from registration under the Securities Act of 1933, as amended. H. Wayne Snavely, ICII's Chairman, President and Chief Executive Officer, stated: "The Exchange Offer represents the second phase of our recapitalization plan, announced this past February. The exchange will reduce the amount of holding company debt and assist the efforts of ICII to increase capital levels of its principal subsidiary, Southern Pacific Bank." Concurrently with the Exchange Offer, the Company is also soliciting consents (the "Consent Solicitation") from the holders of certain of the Old Notes to proposed amendments to the indentures under which the Old Notes were issued. The Exchange Offer and Consent Solicitation will expire at 5:00 P.M. New York City time on June 22, 2001 unless extended. Each holder exchanging Old Notes in the Exchange Offer will receive, in exchange for each $1,000 in aggregate principal or liquidation amount of Old Notes exchanged: (i) Exchange Notes in a principal amount equal to (a) the principal or liquidation amount of Old Notes tendered multiplied by (b) the applicable Old Note exchange multiple (as described below); (ii) 13.684163 shares of Common Stock for each $1,000 in aggregate principal amount of Exchange Notes 1 received in the Exchange Offer; and (iii) Warrants to purchase, at a price of $2.15 per share, 47.894572 shares of Common Stock for each $1,000 in aggregate principal amount of Exchange Notes received in the Exchange Offer. Exchange Notes will only be issued in denominations of $1,000 or integral multiples thereof. Any fractional portion of Exchange Notes that would otherwise be issuable will be paid in cash on the exchange date. All calculations will be made in accordance with standard market practice. . The exchange multiple for the 9.75% Senior Notes due January 15, 2004 will be equal to .50. . The exchange multiple for the 9.875% Series B Senior Notes due January 15, 2007 will be equal to .65. . The exchange multiple for the 10.25% Remarketed Redeemable Par Securities ("ROPES") will be equal to .80. ICII will accept for exchange any and all Old Notes validly tendered and not withdrawn prior to the expiration date. Old Notes may be tendered only in multiples of $1,000 of principal or liquidation amount. The consummation of the Exchange Offer is conditioned upon ICII obtaining the consent of its shareholders (or its determination that such consent is not necessary) to certain elements of the transactions contemplated by the recapitalization plan ICII has previously adopted, and is subject to certain other customary conditions. The Exchange Notes will bear interest at the rate of 12% per annum from and including the exchange date. Holders of Old Notes accepted for exchange will receive the amount of interest accrued on the Old Notes to but not including the exchange date. This announcement constitutes neither an offer to sell nor a solicitation of an offer to buy the Old Notes which are the subject of the Exchange Offer. Offers are made only by the Exchange Circular and Consent Solicitation which can be obtained by calling The Chase Manhattan Bank and Trust Company, National Association, the Company's Information Agent, at (415)-954-9506 (attn: Hank Helley). In addition, holders of Old Notes may contact Imperial Capital, LLC, the Company's Financial Advisor, at (310) 246-3700 (attn: Jason Reese, Chris Shephard and Kristin Engle). Holders of Old Notes who have any questions regarding the mechanics of the Exchange Offer and Consent Solicitation should contact the Exchange Agent at (415)-954-9506 (attn: Hank Helley). The Information Agent, the Financial Advisor and the Exchange Agent will answer any questions from holders of the Old Notes with respect to the Exchange Offer and Consent Solicitation solely by reference to the terms of the Exchange Circular and Consent Solicitation. In addition, all questions with respect to the Exchange Offer and Consent Solicitation may be directed to the Company at (310) 791-8096 (Attn: Brad Plantiko, Chief Financial Officer) This Press Release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology such as "may," "will," "intend," "should," "expect," "anticipate," "estimate" or "continue" or the negatives thereof or other comparable terminology. The Company's actual 2 results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in ICII's Registration Statements and Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. For further information contact: Brad Plantiko Chief Financial Officer and Executive Vice President Imperial Credit Industries, Inc. (310) 791-8096 Paul Lasiter Senior Vice President - Controller Imperial Credit Industries, Inc. (310) 791-8028 3 -----END PRIVACY-ENHANCED MESSAGE-----