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Suffering From Fannie Mae Investment, Imperial Still Has Net Income

Imperial Capital Bancorp, a San Diego-based commercial lender with $4.1 billion in assets, reported Oct. 17 its third quarter net income of $533,000, down from $1.7 million in net profit for the like quarter of 2007.

ICB said its profits were affected by a $4.6 million impairment charge due to its investment in preferred shares of Fannie Mae, the entity that was placed into conservatorship by the federal government, effectively wiping out shareholders.

For the nine months, ICB reported net income of $3.6 million, down from $14.5 million for the like period of 2007.

Under an agreement with regulators to improve its lending operations, ICB reduced its lending by about two-thirds, ending the quarter with $102.4 million in loan originations, compared to $340 million for the third quarter of last year.

Nonperforming loans at the bank increased to $176.3 million compared to $116.8 million in the second quarter, and $38 million at the end of last year.

The ratio of problem assets, including real estate owned of $27.2 million, to total loans was 7.2 percent. The higher problem loans caused the bank to inject another $10 million into its loan loss reserves, bringing the total reserves to $20.6 million.

“Current market and credit conditions remain volatile and uncertain, and are having an undeniable impact on our financial results,” said CEO George Haligowski.

The bank was still operating as well capitalized, holding 7.2 percent in tier one leverage capital, above the minimum 5 percent threshold.

Shares of Imperial Capital, traded under IMP on the New York Stock Exchange, ended Oct. 17 at $5.02, up 17 percent. Its 52-week range is $2.75 to $27.87.

, Mike Allen


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