Financial firm to close down

Provident Financial Inc., a Kalispell-based investment and lending company, has announced that it plans to liquidate its assets, though it has not yet determined a closure date.

"It's due to the economy and the demands on our liquidity," president Brad Walterskirchen said. "Everyone is wanting to cash out their notes."

The company, which is not insured any government agency, has seen investors withdraw 30 percent of its assets in the last year, he said.

"At our high point we were at $58 million [in assets' and now we're at $38 million," Walterskirchen said. "Approximately a third of our deposits in this last year have left us. We haven't been growing, we've been going in the other direction. We envision the demands for cashing out notes upon maturity exceeding our liquidity and therefore we feel we cannot continue."

Walterskirchen said that the company will pursue an orderly liquidation. The company will present a plan to its 500 investors, who will vote on the plan, and then move forward with the liquidation.

"We don't want to liquidate the assets in a hasty fashion," Walterskirchen said. "Our investors have not lost their money. Myself and our board are all investors, it's our money too."

The 20-year-old company's investments are backed by its assets, which are cash, loans (mainly secured by real estate), real estate and rental properties.

Provident primarily made short-term real estate loans. Walterskirchen said the company never loaned above 80 percent and all loans were substantiated by appraisal. He added that Provident was not involved in subprime lending.

The firm also has an insurance premium finance division that helps finance people who cannot afford their insurance premiums. Walterskirchen said the insurance division continues to make money for the company.

Provident currently has $38.9 million in investments and will pay back $37.9 million. It has another $1 million in capital and reserves. The company will continue to operate until all its loans have come due and all assets are paid out to investors.

Provident currently employs 10 people, down from 16 at the peak, and Walterskirchen said there will be future layoffs.

"External factors beyond our control have created a perfect storm which has greatly impacted our ability to generate revenue and maintain our investor payable base," Walterskirchen said.

Reporter K.J. Hascall may be reached at 758-4439 or by e-mail at kjhascall@dailyinterlake.com