Bolstering its capital to support asset growth, California's Imperial Bank sold $39 million worth of stock in a former finance subsidiary.

Imperial reduced its stake in Imperial Credit Industries Inc. from 40% to 25% in the transaction, in which it sold shares as part of a public offering by Imperial Credit.

Imperial Credit sold 3.5 million shares in the April 24 offering, which was managed by Lehman Brothers, raising $91.7 million at $26 a share, including Imperial Bank's $39 million.

"The proceeds of the stock sale by the bank will provide an increase in capital available to support the significant asset growth it is experiencing in light of the recovering California economy," Norman P. Creighton, chief executive, said in a statement.

Imperial Credit was founded by the bank in the early 1980s as a commercial mortgage company. In recent years, however, it has branched out into specialty commercial finance products, including leasing, asset-based lending, and franchise financing. The credit company also owns a California-chartered thrift, which takes insured deposits and acts primarily as a mortgage lender.

Imperial Credit officials could not be reached for comment.

Imperial Bank spun off the subsidiary in a 1991 public offering, while holding on to 40% of the stock. In past statements, Imperial Credit officials had noted that the large block of stock held by the bank could dampen Imperial Credit's stock price.

Robert M. Franko, the bank's chief financial officer, said it hopes to use the new capital to push for more loan growth and to be prepared for a possible acquisition.

"We want to have enough capital to support our loan growth," Mr. Franko said. "We expect loan demand in our niche to be good because the California economy is improving and there's a lot of disruption going on with other banks out here."

Imperial, with about $2.9 billion of assets, concentrates on middle- market commercial lending.

"We're always looking for ways to expand our franchise," Mr. Franko added. "But we're a $3 billion bank with 10 branches, and most of the acquisitions we see are $300 million banks with 10 branches. We're fairly specialized."

Meanwhile, Imperial has reported that its first-quarter earnings increased 46%, to $6.8 million.

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