PLEASANTON, CA – Unitrin Inc. has announced plans to shelve Fireside Bank, the company's subprime auto finance unit. Fireside will cease originations immediately and collect and service its existing portfolio in-house.
"The turmoil in the economy, coupled with changes in the used-car marketplace and increased capital requirements has led to this decision," Don Southwell, Unitrin's CEO, said in prepared statement. "In an era of scarce capital resources for all financial institutions, Unitrin’s management and board of directors believe that it is in the best interests of Unitrin’s shareholders to redeploy its investment in Fireside."
Southwell indicated that the auto lending subsidiary remains solvent despite posting multimillion-dollar net losses in 2007 and 2008. After 50 years in the auto finance business, Fireside had ongoing relationships with more than 15,000 U.S. dealers in 17 states.