THE HISTORY
 OF
OUR COMPANIES

American Sterling Corporation (ASC) is an investment management holding company that was incorporated in California in 1984.  The primary operations of the ASC subsidiaries are banking, insurance underwriting and insurance services.  A description of each of the ASC subsidiaries is presented below.

Some of the companies that comprise ASC subsidiaries began operations prior to 1984.  The Bank of Levasy was the original name of American Sterling Bank (ASB).  It was initially chartered in 1907 as a state bank. and in 1963, it moved from Levasy, Missouri to Sugar Creek, Missouri and changed its charter to a national bank.  In 1967, the bank moved to its current headquarters in Sugar Creek, Missouri.

In 1971, Lawrence K. Dodge  acquired the bank and in 1983, the bank’s name was changed to Sterling National Bank.  A second branch was opened in 1985 in Blue Springs, Missouri and in 1990 a third branch was opened in Kansas City, Missouri.  In 1997, the bank organized its mortgage banking operations in Irvine, California.  The bank’s name was changed to American Sterling Bank in 1998 and in February 2001, the bank converted to a national thrift and became a wholly owned subsidiary of American Sterling Corporation.

American Sterling Insurance Services (ASIS) was founded in 1977 as a general insurance agency.  American Sterling Insurance Company (ASIC) was founded in 1979.

In the 1990s, ASIC derived substantially all of its revenue from the underwriting or mortgage collateral protection insurance for financial institutions (i.e. force placed coverage).  These policies were marketed through American Sterling Insurance Agency (“ASIA”).  ASIA is a subsidiary of ASC.  ASC sold the force placed business to Zurich in October 1997.

American Sterling Bank (ASB) has two distinct business focuses:  (1) retail and commercial banking operations in Missouri and (2) mortgage loan generation operations based in Foothill Ranch, California.  The retail and commercial banking operations provide ASB’s customers with all of the products and services that are customary for a commercial and retail bank.  ASB converted from a National Bank to a National Thrift in March of 2001.  The retail bank’s headquarters and main branch are located in Sugar Creek, Missouri.   ASB owns four satellite bank branches: one in Kansas City, Missouri and one in Blue Springs, Missouri.  A third satellite branch is operated at in Carefree, Arizona, and the newest branch opened December 2004 and is located in Foothill Ranch, California.

Management intends to continue to expand its banking operations in both its existing markets and newer markets in Arizona and California, targeting businesses that require loans between $.5M to $1.5M as well as construction loans for commercial and residential purposes.  The loan production offices are subject to changes in interest rates, which can affect both volumes and margins. Management believes obtaining consistent volumes is key to long-term success and intends to continue its expansion in other geographic markets.

American Sterling Bank (ASB) mortgage loan operations are based in Foothill Ranch, California.  The independent contractors generate loans through the mortgage loans branch office locations through out the country.  In September 2006, the mortgage division of the bank acquired the mortgage broker division of Universal Saving Bank located in Milwaukee, MI.  This acquisition added ten additional mortgage branch locations and expanded the markets in which the bank originates mortgage loans,

The loan production operation generates mortgage loans that are funded by the retail division of ASB.  This mortgage division is actively originating residential mortgage loans in Arizona, California, Colorado, Idaho, Kansas, Missouri, Nevada, New Mexico, Oregon, Utah, and Washington.  Approximately 10% of the loans funded are generated by ASB contractors and 90% originate from independent brokers.  ASB holds the loans for approximately one month and then sells them to loan consolidators.  Income from this operation is directly related to the loan generation fees and service release premiums generated when the loans are sold.

American Sterling Insurance Company (ASIC) is a property casualty insurance underwriter licensed in nineteen states. After the sale of the force placed business to Zurich, the company explored various alternatives, which included a very brief venture, beginning in 1999, into the California personal lines business of homeowners and automobile coverage. ASIC currently provides insurance programs for two general agencies which have long established lines of business that permit the company to obtain consistent underwriting levels with minimum risk, while contributing to the deposit growth of American Sterling Bank.

The first general agency provides monthly low limit automobile polices and has been in this line of business for over 10 years. Loss ratios have been extremely stable, which permits the company to obtain a consistent 4% underwriting profit with increased net investment income.

The second general agency provides coverage for representation and warranties given by loan originators to loan consolidators to whom loans are being sold. Historical loss ratios, which extend over 5 years, indicate the opportunity for the company to obtain 10% underwriting profit while minimizing the company’s underwriting risk.

ASIC was formerly headquartered at 9800 Muirlands Boulevard, Irvine, California until the sale of ASIA in October 1998. The property, which is approximately 8.4 acres, includes a two-story 55,000 square foot office building, is currently leased to Zurich under a 5-year lease. In addition to the building, there is approximately 4 acres of undeveloped land. Management has been exploring options available to develope the property which has considerable unrealized value.

American Sterling Insurance Services (ASIS) is a general insurance agency that provides commercial insurance for small to medium sized businesses, fully insured and self-insured group employee benefit programs, and third party administration (TPA) services for billing and claims processing to companies that self-insure their employees for medical coverage. It also provides limited medical products to companies that do not offer traditional medical coverage to their employees. 

ASIS markets its products through both direct sales and through brokers. TPA services are provided through automated information systems, which permit the adjudication and settlement of most claims automatically, reducing costs associated with what otherwise is a fairly labor intensive process.  Claims payment checking accounts for the payment of self-insured plans are often established with ASB, providing additional deposits for the bank operations.

Founded in 1984, American Sterling Capital Corporation (ASCC) has been primarily an investment company, investing in technology, oil and gas exploration and real estate.  The primary purpose of this company is to invest in non-core business opportunities or to provide financial support for opportunities that arise within other divisions of the group of companies,

American Sterling Education Solutions is the philanthropic division of American Sterling.  It was established in 2005 to provide assistance to non-profit organizations for purposes of becoming self supporting.  This organization provides assistance with the development of strategic plans to allow the organization to achieve its philanthropic goals and mission,