Consumer Portfolio Services completed the sale to purchase Fireside Bank’s $237 million loan portfolio this week from parent company Kemper Corp. Fireside, which exited the auto business in March 2009, will retain $475 million of previously charged-off loans.
Irvine, Calif.-based subprime lender CPS manages a $1.9 billion portfolio, which consists of about 160,000 accounts. The Fireside acquisition is CPS’s fifth in 10 years.
Kemper expects to recognize a gain of approximately $3 million from the sale, net of tax and transaction costs, in the third quarter. Kemper intends to receive approximately $255 million of additional capital from Fireside in the fourth quarter.
As part of the deal, Fireside will turn in its bank charter.
Here are some stats about Fireside’s portfolio, as of June 30:
- Revenues were $12.8 million, down from $26.7 million in 2Q10;
- Net income was $5.0 million, up from $2.7 million in 2Q10; and
- 3.4% of loans in the portfolio were 30-to-60-days delinquent, down from 4.3% at 4Q10.
Kemper is a publicly traded insurance company with a market capitalization of $1.58 billion.
