Deal Profile – Fireside Bank
Relevant Statistics: |
Loan type: Performing subprime automobile receivables |
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Background: |
Kemper Corporation (the “Company”), formerly known as Unitrin, Inc., specializes in property and casualty insurance, life and health insurance products for individuals, families, and small business. The Company’s subsidiary, Fireside Bank (“Fireside”), is an FDIC insured and regulated California industrial bank specializing in Certificates of Deposit and non-prime automobile lending. On March 19, 2009, the Board of Directors of Unitrin, Inc. approved a plan for Fireside to exit the automobile finance business. |
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Investment Banking Role: |
Raymond James & Associates was engaged by Kemper to assist the Company in evaluating strategic alternatives for Fireside Bank including the possible sale of all or a material portion of the Bank or the Bank’s portfolio of finance receivables. |
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Successful Outcome: |
On August 6, 2011, CPS Fender Receivables LLC, a wholly-owned subsidiary of Consumer Portfolio Services, Inc. entered into an agreement to purchase a $237 million portfolio of performing automobile purchase receivables from Fireside Bank. On September 14, 2011, the transaction closed. As a result of the transaction, Kemper expects to recognize a gain of approximately $3 million from the sale, net of tax and transaction costs. CPS financed the transaction through a credit agreement with Goldman Sachs Bank USA and Fortress Credit Corp. (collectively “the Lenders”) under which the Lenders agreed to lend 98% of the purchase price. CPS agreed to fund the remainder. |
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Kemper is a financial services company that provides a diverse array of insurance and automobile finance products and services for individuals, families and small businesses. Among the brands in Kemper’s Property and Casualty Insurance businesses are Kemper Preferred and Unitrin Specialty, which sell automobile, homeowners and other personal insurance and commercial automobile insurance through networks of independent agents, and Unitrin Direct, which sells automobile and homeowners insurance directly to consumers or through employer-sponsored voluntary benefit programs. Kemper’s common stock is traded on the NYSE under the symbol KMPR.