More Inside about the So. Pac. Lease Portfolio-- John Kruse—

I'm glad the writer of the story for The Daily Breeze sent you his

piece on the  subject,

 http://www.leasingnews.org/archives/February%202003/02-12-03.htm#bad

but (like Paul Harvey says) "There Is More To The Story" on a  historical basis and even a greater LEASING connection than what was noted  in the article.

As I recall, one of your past newsletters, several months ago, noted that

Southern Pacific Bank was in trouble and maybe shut down.  I assumed you had

some insight or insider information relative to their problems and/or their

involvement in the leasing industry, when you published that article.

(Our earliest mention of difficulties was: Southern Pacific Bancorp (3/2002) “for the time being” not going to be able to take any more intermediary business, according to W. Scott McCullum, Capital Advance Leasing. editor )

Southern Pacific Bank (formerly Southern Pacific Thrift & Loan)

has had a great deal of involvement in the equipment leasing arena over the

last 9 or 10 years.

In the latter part of 1993, Southern Pacific Thrift & Loan (SPT&L) started a

leasing division called Southern Pacific Leasing.  Phil Walden (CEO of

Saddleback Financial fame after Unicapital's BK) was the Division's

President (and subsequent President of Imperial Business Credit, Inc.)  In

1994, Southern Pacific Leasing was spun out of SPT&L, became a wholly owned

subsidiary of Imperial Credit Industries, Inc. (NASDAQ ICII and the holding

company of SPT&L) and was known as Imperial Business Credit, Inc. (IBCI). 

About the same time, IBCI acquired all the assets/staff of First Concord

Acceptance Corp, Denver, CO., one of Gordon Robert's old operations. 

Shortly after that acquisition, IBCI negotiated the purchase of about

$35,000,000 to $40,000,000 of small ticket leases from New Era Funding

(formerly Datronic Rental Corp.).  Since I was heavily involved in that

acquisition, I got to know Bob Fisher (New Era's Credit Manager at the time)

very well.  After that, IBCI acquired Ron Wagner's Heritage Leasing group in

San Diego including Bill Hansen (of CMC fame).  The last major acquisition

IBCI made, which I, again, was heavily involved with, was in the latter part

of 1995 or first part of 1996 and that was the Avco small ticket leasing

group in Orange County.  That group also had an office over in Atlanta, GA.

and their portfolio was about $101 million gross and about $90 million net. 

IBCI was subsequently shut down in 1998 or 1999 during a

restructuring/recapitalization of ICII and its subsidiaries.

As you can see, Southern Pacific Bank and its parent, Imperial Credit

Industries, Inc. had an extensive involvement in equipment leasing, both

past and present.  I'm not sure what will happen to ICII, as a result of

Southern Pacific Bank's closure, but ICII had other subsidiaries, besides

the Bank.  ICII's stock has been delisted for more than a year, now and

currently trades at about $0.01 or less in the OTC-Bulletin Board market.

Kruse Financial Services

John Kruse

Managing Director