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Superior Bank Exits Auto Loan Business

December 14, 2000

Superior Bank has announced that is is exiting the auto loan origination business.

According to a company statement, it "had not achieved the necessary level of profitability."

Efforts by F&I Management and Technology to reach Superior Bank officials for comment were unsuccessful. "At this time, there is no one available to comment," said Mira Matic of Rubinstein Associates, Inc., Superior's public relations firm.

Superior joins a growing list of financial institutions that are pulling the plug on their auto loan divisions. In the past two weeks alone, Barrington, Ill.-based GE Capital Auto Financial Services and DaimlerChrysler Financial's semi-independent debis Affinity Services Division, headquartered in Roanoke, Texas, have also exited the auto loan arena.

Other major auto lenders such as Bank of America and Bank One Corporation, pointing to losses on the residual values of off-lease vehicles, have also disclosed cutbacks recently.

Superior Bank, operating as Coast-To-Coast Financial Corporation, entered the non-prime auto lending business in 1995.

In recent months, auto lending represented about five percent of Superior's total lending origination volume. Superior's main business focus is to originate, sell, and service non-prime mortgage loans. Superior's 2000 fiscal year mortgage loan originations were $2.0 billion.

The capital allocated to the auto lending business will be used within Superior Bank's mortgage lending business, according to company officials.

Superior is a $2 billion savings bank headquartered in Oakbrook Terrace, Ill., with its main consumer lending operations headquartered in Orangeburg, N.Y.

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