Description
12/18/2000
1.ITLA CAPITAL CORPORATION (ITLA 15) and its subsidiaries are engaged in the origination of loans, secured primarily by income producing real estate. Imperial Capital Bank is also active in acquiring pools of single-family mortgages in the secondary market for investment purposes. This type of lending is very questionable in today’s market with asset quality on the minds of many investors today. They have 4 offices in California and one in Nevada. We feel, that this is a clean ship and non-performing loans are not an issue for them. Total assets at just over 1.3 billion and total loans at just over 975 million at 9/30/2000. They have posted record earnings each of the past 5 years, with the latest quarterly earnings of $.65 per diluted share, the highest quarter for the company ever. The company has a 5% stock repurchase program in place and has bought back over 15% of their shares already, since going public in 1995. Total assets have more doubled from $534 million at the initial public offering in 1995, a very solid growth history. Loan quality continues to be the number one issue at the company, with the last four years loan losses at less than $2 million, or 20 basis points of their average loan portfolio. Total loan reserves are very solid at 2.22% at 9/30/2000 with non-performing assets at .83%. SNL has ranked them the sixth best publicly traded thrift in the country. Their net interest margins are strong at just over 5% and their efficiency ratio is one of the best at 38%. The company continues to trade well below their book value of $19.25 a share and with a P/E of 6 makes this a compelling value below $16. They have just under 7 million shares outstanding with a block of 300,000 shares trading just last week, which looks to have gotten the stock noticed, breaking though the 15 level. Headquartered in San Diego, California, they were formerly called Imperial Thrift and Loan Association. While downside risk is higher than normal for our picks at 20%, upside potential is 100% over the next 3-4 years. Accumulate aggressively now under 15½.
Catalyst