Imperial Corp. Plans to Shift Areas of Focus
SAN DIEGO — Reeling from a third-quarter loss of $4.9 million, Imperial Corp. of America on Wednesday said it would “embark on a major shift in corporate direction†by eliminating or reducing several of its unprofitable programs.
In his first reorganization effort since joining Imperial last month, President and Chief Executive Kenneth J. Thygerson said that the San Diego-based, multi-state savings and loan holding company would concentrate on two primary business activities--retail and mortgage banking.
Imperial’s program to purchase second mortgages for investment and its telemarketing sales program are being eliminated, Thygerson said. In addition, the company, parent of Imperial Savings & Loan, is “reassessing (the) future role†of its residential and non-residential acquisition, development and construction lending.
The reorganization, Thygerson said, is designed to place emphasis on “solidifying the company’s new simplied and more focused business direction, reducing operating expenses, implementing more conservative financial asset and liability strategies and improving productivity through increased automation of various processing activities.â€
The $4.9-million net loss compared to a loss of $3.6 million in the third quarter last year. For the nine months, Imperial, with $8.6 billion in assets, earned $243,000, compared to $206,000 in the same period last year.
The third-quarter loss included a charge-off of $2.3 million in after-tax costs of a land-purchase option obtained in 1980, and a $2.6-million after-tax loss from the termination of an “asset hedge†that was “structured to provide greater benefit in a rising rate environment,†according to Kevin Villani, Imperial’s chief financial officer. Imperial’s earnings were also hurt by an after-tax charge of $1.4 million from a special, industrywide insurance premium levied by the Federal Savings & Loan Insurance Corp.
The reorganization, he said, is designed to “focus on activities that we can control and do right. There is a lack of focus of management control in the other areas.â€
Imperial executives “would rather be successful at a few lines of business than fail at many,†he added.
Imperial’s telemarketing program was cut earlier this month because “operating expenses were relatively high,†said Villani, adding that about 30 people in that program were laid off.
That program, which sold certificates of deposits over the telephone, began in mid-1984. Last summer, according to an internal memo obtained by The Times, the program’s account executives were told that the telemarketing program was “the Teflon-coated delivery system that doesn’t stick when rates go down the tubes!â€
To inspire the sales force, manager Jack Mann instituted a contest for the 10 sales representatives who sold more than $2 million in CD’s, with prizes ranging from $1,000 to $10,000 each. Also in the third quarter, Imperial increased its reserves for future losses on credit card operations by $2.3 million, and increased reserves on commercial and industrial real estate loans by $1.3 million.
Imperial Savings’s capital base as of Sept. 30 was $249.4 million, or $70.8 million above regulatory minimum.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
