<PAGE>
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.
<PAGE>
IMPERIAL THRIFT AND LOAN ASSOCIATION
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
----------- ------------
1996 1995
----------- ------------
(Unaudited)
(In thousands)
<S> <C> <C>
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
======== ========
</TABLE>
See Notes to the Unaudited Financial Statements
2
<PAGE>
IMPERIAL THRIFT AND LOAN ASSOCIATION
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-------------------------- ------------------------
June 30, June 30,
-------------------------- ------------------------
1996 1995 1996 1995
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
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)
======= ======= ======= =======
</TABLE>
See Notes to the Unaudited Financial Statements
3
<PAGE>
IMPERIAL THRIFT AND LOAN ASSOCIATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
--------------------------
1996 1995
------------ ------------
(In thousands)
<S> <C> <C>
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
</TABLE>
See Notes to the Unaudited Financial Statements
4
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30
----------------------------------
1996 VERSUS 1995
----------------
VOLUME RATE TOTAL
------ ---- -----
(IN THOUSANDS)
<S> <C> <C> <C>
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
====== ===== ======
</TABLE>
7
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30
--------------------------------
1996 VERSUS 1995
----------------
VOLUME RATE TOTAL
------ ---- -----
(IN THOUSANDS)
<S> <C> <C> <C>
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
====== ====== ======
</TABLE>
9
<PAGE>
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
<PAGE>
FINANCIAL CONDITION
NONPERFORMING ASSETS
The following table sets forth the Company's nonperforming assets by
category at the dates indicated.
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30,
1996 1995 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
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%
</TABLE>
The following table provides certain information regarding the Company's
allowance for credit losses.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
-------- ------------
1996 1995
---- ----
(IN THOUSANDS)
<S> <C> <C>
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
====== =======
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 20,534
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,250
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 71,287
<INVESTMENTS-MARKET> 70,665
<LOANS> 557,052
<ALLOWANCE> 9,673
<TOTAL-ASSETS> 669,534
<DEPOSITS> 527,035
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,632
<LONG-TERM> 54,000
0
0
<COMMON> 53,309
<OTHER-SE> 30,558
<TOTAL-LIABILITIES-AND-EQUITY> 669,534
<INTEREST-LOAN> 29,712
<INTEREST-INVEST> 3,492
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 33,204
<INTEREST-DEPOSIT> 14,843
<INTEREST-EXPENSE> 16,327
<INTEREST-INCOME-NET> 16,877
<LOAN-LOSSES> 2,821
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 7,200
<INCOME-PRETAX> 7,421
<INCOME-PRE-EXTRAORDINARY> 7,421
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,609
<EPS-PRIMARY> 0.69
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.27
<LOANS-NON> 5,146
<LOANS-PAST> 0
<LOANS-TROUBLED> 5,974
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8,105
<CHARGE-OFFS> 1,290
<RECOVERIES> 37
<ALLOWANCE-CLOSE> 9,673
<ALLOWANCE-DOMESTIC> 9,673
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
