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UICI Plans to Sell UCNB

United Credit National Bank • United Credit National Bank • 9/29/2000, UICI Completes Sale of United Credit National Bank • 3/20/2000, UICI Plans to Sell UCNB • 2/28/2000, Consent Order

March 20, 2000
Amid heavy losses and regulatory scrutiny, UICI said it would sell its credit-card business. The company said it borrowed $70 million from its chairman to pay back debt.

The financial-services concern said the unit's problems have created liquidity issues, though a spokesman said the company believes it has the resources to meet its needs.

UICI said it expects a $100 million loss on the planned sale of its United CreditServ unit. That loss is in addition to a $147 million pretax operating loss that the company expects from the unit, which issued credit cards to so-called subprime borrowers.

UICI's bank, United Credit National Bank, affiliated with the CreditServ unit, entered into a consent decree last month with the Office of the Comptroller of the Currency. UICI then pulled out of the market for certificates of deposit and stopped marketing the credit cards under the consent decree.

Matthew Cassell, a UICI vice president, said the companies believes it can assure the bank's liquidity through cash flow from credit-card receivables that are still collectible and through the potential sale of UICI stock or other securities.

UICI said it will submit to the OCC a plan for an "orderly exit" of its credit-card business.

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