UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-Q


[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934.

      For the quarterly period ended September 30, 1999

                                     OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

       For the transition period from _______________ to ______________


                      COMMISSION FILE NUMBER: 0-13091


                      IMPAC COMMERCIAL HOLDINGS, INC.
           (Exact name of registrant as specified in its charter)


                   MARYLAND                         33-0745075
         (State or other jurisdiction of          (I.R.S. Employer
          incorporation or organization)         Identification No.)

                 1401 DOVE STREET
             NEWPORT BEACH, CALIFORNIA                  92660
     (Address of Principal Executive Offices)        (Zip Code)

     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 475-3600

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                            NAME OF EACH EXCHANGE ON
           TITLE OF EACH CLASS                  WHICH REGISTERED
           -------------------              ------------------------
         Common Stock $0.01 par value       American Stock Exchange


      Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
                 Yes [X]     No [   ]

      Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: As of November
15, 1999, there were 8,418,200 shares of the issuer's common stock, $0.01
par value, outstanding.


                 Documents incorporated by reference: None






                      IMPAC COMMERCIAL HOLDINGS, INC.

                      1999 FORM 10-Q QUARTERLY REPORT

                             TABLE OF CONTENTS


                       PART I. FINANCIAL INFORMATION

                                                                       PAGE #
                                                                       ------
ITEM 1:  CONSOLIDATED FINANCIAL STATEMENTS - IMPAC COMMERCIAL
         HOLDINGS, INC.

         Consolidated Balance Sheets, September 30, 1999 and
         December 31, 1998................................................3

         Consolidated Statements of Operations and Comprehensive
         Loss, For the Three Months and Nine Months ended
         September 30, 1999 and 1998......................................4

         Consolidated Statements of Cash Flows, For the
         Nine Months Ended September 30, 1999 and 1998....................5

         Notes to Consolidated Financial Statements.......................6

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.............................13

                         PART II. OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS...............................................27

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.......................28

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES.................................28

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............28

ITEM 5:  OTHER INFORMATION...............................................28

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K................................28

         SIGNATURES......................................................30




                       PART I. FINANCIAL INFORMATION

ITEM 1:  CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                   IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                              SEPTEMBER 30,    DECEMBER 31,
                                                                1999              1998
                                                              -------------   -------------
<S>                                                             <C>           <C>
                           ASSETS
Cash and cash equivalents...................................    $   40,381    $     14,161
Investment securities available-for-sale....................         7,014          17,154
Residual interest in securitizations, held-for-trading......         3,787           8,790
Loan receivables:
      CMO collateral........................................       314,637         326,559
      Commercial Mortgages held-for-sale, net...............         1,374              --
      Commercial Mortgages held-for-investment..............         4,374          24,569
      Finance receivables...................................            --          40,972
      Allowance for loan losses.............................        (1,427)         (2,110)
                                                              -------------   -------------
        Net loan receivables................................       318,958         389,990
Premises and equipment, net.................................        11,027           9,146
Investment in Impac Commercial Capital Corporation..........            --         (15,016)
Accrued interest receivable.................................         2,337           2,627
Other real estate owned.....................................         1,325              --
Due from affiliates.........................................            --          22,131
Other assets................................................         1,690           2,236
                                                              -------------   -------------
        Total assets........................................    $  386,519    $    451,219
                                                              =============   =============

            LIABILITIES AND STOCKHOLDERS' EQUITY
CMO borrowings..............................................    $  275,792    $    285,021
Warehouse line and reverse repurchase agreements............         4,244          50,523
Due to affiliates...........................................         5,106          11,170
Other liabilities...........................................         2,900           1,168
                                                              -------------   -------------
        Total liabilities...................................       288,042         347,882

STOCKHOLDERS' EQUITY:
Preferred Stock; $.01 par value; 9,000,000 shares
   authorized; no shares issued or outstanding at
   September 30, 1999 and December 31, 1998,
   respectively.............................................            --              --
Series A Junior Participating Preferred Stock; $.01 par
   value; 1,000,000 shares Authorized; no shares issued
   or outstanding as of September 30, 1999 and
   December 31, 1998, respectively..........................            --              --
Series B Cumulative Convertible Preferred Stock; $.01 par
   value; 479,999 shares Authorized; 479,999 issued and
   outstanding as of September 30, 1999 and none as of
   December 31, 1998........................................             5              --
Common Stock; $.01 par value; 46,217,295 shares
   authorized; 8,418,200 and 8,625,000 shares issued
   and outstanding at September 30, 1999 and
   December 31, 1998, respectively..........................            84              86
Additional paid-in-capital..................................       137,521         127,004
Accumulated other comprehensive earnings (Loss).............        (8,236)             24
Cumulative dividends declared...............................       (18,096)        (15,575)
Accumulated deficit.........................................       (12,801)         (8,202)
    Total stockholders' equity..............................        98,477         103,337
                                                              -------------   -------------
                                                              $    386,519    $    451,219
                                                              =============   =============

         See accompanying notes to consolidated financial statements.
</TABLE>



<TABLE>
<CAPTION>
               IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE LOSS
                 (dollars in thousands, except per share data)

                                          FOR THE THREE MONTHS    FOR THE NINE MONTHS
                                           ENDED SEPTEMBER 30,    ENDED SEPTEMBER 30,
                                          ---------------------  ---------------------
                                              1999       1998       1999       1998
                                          ---------   ---------  ---------  ---------
<S>                                       <C>         <C>        <C>        <C>
INTEREST INCOME:
   Commercial Mortgage Assets.............$   6,878   $ 10,654   $ 23,480   $  23,503
   Cash equivalents and due from
     affiliates...........................      436        604        844       2,233
                                          ---------   ---------  ---------  ---------
    Total interest income.................    7,314     11,258     24,324      25,736

INTEREST EXPENSE:
   CMO borrowings.........................    5,202      2,124     15,742       2,259
   Warehouse line and reverse repurchase
     agreements...........................      102      4,826      1,261      11,861
   Other borrowings.......................      125          7        410         593
                                          ---------   ---------  ---------  ---------
    Total interest expense................    5,429      6,957     17,413      14,713
                                          ---------   ---------  ---------  ---------
   Net interest income....................    1,885      4,301      6,911      11,023
    Provision for loan losses.............       --      1,020         --       1,137
    Provision for repurchases.............       --         --         47          --
                                          ---------   ---------  ---------  ---------
NET INTEREST INCOME AFTER PROVISION FOR
    LOAN LOSSES AND REPURCHASES...........    1,885      3,281      6,864       9,886

NON-INTEREST INCOME (LOSS):
   Equity in net loss of Impac Commercial
     Capital Corporation...................      --    (14,837)       --      (15,714)
   Gain on sale of loans..................      634         --        881          --
   Mark-to-Market gain (loss) on loans....     (202)        --       (202)         --
   Rental and other income................      447        594      1,210       1,021
                                          ---------   ---------  ---------  ---------

    TOTAL NON-INTEREST INCOME (LOSS)......      879    (14,243)     1,889     (14,693)

NON-INTEREST EXPENSE:
   Write-down of residual interest in
     securities...........................    5,043      1,085      5,543       1,085
   Professional services..................    1,241        254      2,138         535
   General and administrative and other
     expense..............................      336        718      2,193       1,363
   Personnel expense......................      426         --      1,746          --
   Occupancy expense......................      704         --      1,087          --
   Property expense.......................      252         --        646          --
   Management advisory fees...............       --        206         --         585
                                          ---------   ---------  ---------  ---------
    TOTAL NON-INTEREST EXPENSE............    8,002      2,263     13,353       3,568
                                          ---------   ---------  ---------  ---------

   NET LOSS...............................   (5,238)   (13,225)    (4,600)     (8,375)
   Less: Cash dividends on Series B
     Cumulative Convertible Preferred
     Stock................................     (255)        --       (414)         --
                                          ---------   ---------  ---------  ---------
   Net loss available to common
     stockholders.........................   (5,493)   (13,225)    (5,014)     (8,375)

Other comprehensive loss:
   Unrealized losses arising during
     period...............................   (8,918)      (536)    (8,260)       (770)
                                          ---------   ---------  ---------  ---------

   Comprehensive loss.....................$ (14,411)  $(13,761)  $(13,274)  $  (9,145)
                                          =========   =========  =========  =========

   Net loss per share--basic and
     diluted..............................$   (0.65)  $  (1.32)  $  (0.59)  $   (0.96)
                                          =========   =========  ========   =========

   Weighted average shares outstanding -
     basic................................    8,418     10,019      8,476       8,721
   Weighted average shares outstanding -
     diluted..............................    8,418     10,019      8,476       8,721

         See accompanying notes to consolidated financial statements.
</TABLE>




<TABLE>
<CAPTION>
                    IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (dollars in thousands)

                                                               FOR THE NINE          FOR THE NINE
                                                               MONTHS ENDED           MONTHS ENDED
                                                            SEPTEMBER 30, 1999     SEPTEMBER 30, 1998
                                                            ------------------     ------------------
<S>                                                           <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings.............................................  $    (4,600)            $   (8,375)
   Adjustments to reconcile net earnings to net cash
      used in operating activities:
      Equity in Net Loss of Impac Commercial Capital
        Corporation.........................................           --                 15,714
      Decrease in Minority Interest in Impac Commercial
        Capital Corporation.................................          788                     --
      Provision for Loan Losses / Repurchases.................         47                  1,137
      Depreciation............................................        615                    372
      Amortization of Investment Securities Discount..........        (88)                  (124)
      Accretion of Residual Interest in Securities............       (894)                (1,300)
      Writedown of Residual Interest in Securitzation.........      5,543                  1,085
      Net Change in Accrued Interest On Receivables...........        562                 (2,245)
      Net Change in Other Assets and Liabilities..............      1,676                    364
      Net Change in Due From Affiliates and Due to Affiliates.      5,849                (35,932)
      Net Change in Commercial Mortgages Held-for-sale........     43,480                     --
         Net Cash Provided by (Used In) Operating Activities       52,978                (29,304)
                                                              ------------            -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Net Change in Commercial Mortgages Held-for-investment...       18,188                 36,896
   Net Change in Finance Receivables........................           --                (81,219)
   Net Change in Cmo Collateral.............................        3,734               (336,282)
   Principal Reductions On Investment Securities
     Available-for-sale.....................................        1,968                  1,900
   Principal Reductions On Residual Interest in
     Securitizations........................................          354                    919
   Purchase of Premises and Equipment.......................       (1,586)                (1,193)
   Net Cash Acquired Through the Consolidation of Iccc......          692                     --
                                                              ------------            -----------
    Net Cash Provided by (Used In) Investing Activities.....       23,350               (378,979)
                                                              ------------            -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net Change in Warehouse Line and Reverse Repurchase
     Agreements.............................................      (50,188)                93,861
   Net Change in Cmo Borrowings.............................       (9,229)               280,665
   Net Change in Other Borrowings...........................           --                  6,502
   Issuance of Preferred Stock..............................       11,592                     --
   Issuance of Common Stock.................................           --                 28,387
   Repurchase of Common Stock...............................       (1,072)                    --
   Dividends Paid...........................................       (1,211)                (9,863)
                                                              ------------            -----------
      Net Cash Provided by (Used In) Financing Activities...      (50,108)               399,552
                                                              ------------            -----------

Net Change in Cash and Cash Equivalents.....................       26,220                 (8,731)
Cash and Cash Equivalents At Beginning of Period............       14,161                 15,908
                                                              ------------            -----------
Cash and Cash Equivalents At End of Period..................  $    40,381             $    7,177
                                                              ============            ===========

SUPPLEMENTARY INFORMATION:
   Interest paid............................................  $    17,580             $    12,755

NON-CASH TRANSACTIONS:
   Increase (Decrease) in Accumulated Other Comprehensive
     Earnings...............................................  $    (8,260)            $     (770)
   Transfer of Loans to Other Real Estate Owned.............        1,325                     --
   Transfer of Loans From Held for Investment to Held for
     Sale...................................................          754                     --
   Dividend Declared and Unpaid.............................        1,307                  4,509


         See accompanying notes to consolidated financial statements.
</TABLE>




               IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unless the context otherwise requires, references herein to the "Company"
refer to Impac Commercial Holdings, Inc. ("ICH") and its subsidiaries,
Impac Commercial Assets Corp. ("ICH Assets"), IMH/ICH Dove Street, LLC
("Dove") and Impac Commercial Capital Corporation (together with its wholly
owned subsidiary, ICCC Secured Assets Corp., "ICCC"), collectively.
References to ICH refer to Impac Commercial Holdings, Inc. as a separate
entity from ICH Assets, Dove or ICCC.

1.  BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") for
interim financial information and with the instructions to Form 10-Q and
Rule 10- 01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three-month and nine-month
periods ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999. The
accompanying consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.

The operations of ICH have been presented in the consolidated financial
statements for the three months and nine months ended September 30, 1999
and 1998. The consolidated financial statements at September 30, 1999
include the financial results of ICH as a stand-alone entity, the financial
results of ICCC as a result of the purchase by ICH of all of ICCC's
outstanding common shares on March 31, 1999 and the financial results of
ICH Assets and Dove. However, the consolidated financial statements at
September 30, 1998 include ICH's equity interest in net loss of ICCC, as
ICCC was not a wholly owned subsidiary of ICH at September 30, 1998.

On March 31, 1999, the ICH Board of Directors unanimously approved the
purchase of all the outstanding common shares of ICCC representing 5% of
the economic interest, making ICCC a wholly owned subsidiary of ICH. For
further information regarding this transaction, see Note 5. Investment in
Impac Commercial Capital Corporation.

2.  ORGANIZATION

ICH was incorporated in Maryland in February 1997 under the name Imperial
Credit Commercial Holdings, Inc., and in June 1997, ICH changed its name to
IMH Commercial Holdings, Inc. By a vote of stockholders on January 28,
1998, a name change to Impac Commercial Holdings, Inc. was approved. ICH is
a specialty commercial property finance company, which has elected to be
taxed at the corporate level as a real estate investment trust ("REIT") for
federal income tax purposes. This generally allows the Company to pass
through income to stockholders without payment of federal income tax at the
corporate level provided that the Company distributes at least 95% of its
taxable income to stockholders. Impac Mortgage Holdings, Inc. ("IMH")
capitalized ICH with $15.0 million in cash in March of 1997. In October
1998, the Company repurchased from IMH 937,084 shares of its common stock,
$0.01 par value (the "Common Stock") and 456,9l6 shares of its Class A
Common Stock at an average price of $4.375 for a total purchase price of
$6.1 million. During the nine months ended September 30, 1999, the Company
repurchased, in the open market, 206,800 shares of its common stock
outstanding, at a weighted average price of $5.18 per share, for a total
purchase price of $1.1 million. At September 30, 1999 and December 31,
1998, the Company had 8,418,200 and 8,625,000 shares of Common Stock
outstanding and no shares of Class A Common Stock outstanding,
respectively.

3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Method of Accounting

The consolidated financial statements are prepared on the accrual basis of
accounting in accordance with GAAP. The preparation of financial statements
in conformity with GAAP requires management to make significant estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results may
differ materially from those estimates.

Reclassifications

Certain amounts in the consolidated financial statements as of and for the
three and nine months ended September 30, 1998 have been reclassified to
conform to the 1999 presentation.

New Accounting Statements

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, (collectively
referred to as "derivatives") and for hedging activities. It requires that
an entity recognizes all derivatives as either assets or liabilities in the
statement of financial position and measures those instruments at fair
value. If certain conditions are met, a derivative may be specifically
designated as (a) a hedge of the exposure to changes in the fair value of a
recognized asset or liability or an unrecognized firm commitment, (b) a
hedge of the exposure to variable cash flows of a forecasted transaction,
or (c) a hedge of the foreign currency exposure of a net investment in a
foreign operation, an unrecognized firm commitment, an available-for-sale
security, or a foreign-currency-denominated forecasted transaction. This
statement is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. SFAS 133 was amended by SFAS 137, which allows
deferral of SFAS 133 until fiscal quarters of fiscal years beginning after
July 15, 2000. The Company believes that the adoption of SFAS 133 will not
have a material impact on the Company's financial position or results of
operations.

4.  NET LOSS PER SHARE

The following tables represent the computation of basic and diluted loss
per share for the periods presented (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                      FOR THE THREE      FOR THE THREE
                                                       MONTHS ENDED      MONTHS ENDED
                                                       SEPTEMBER 30,     SEPTEMBER 30,
                                                          1999               1998
                                                      --------------     --------------
<S>                                                    <C>                <C>
NUMERATOR:
  Numerator for basic loss per share--
    Net loss.......................................... $    (5,238)       $   (13,225)
    Less:  Dividends paid to preferred stockholders...        (255)                --
                                                       ------------       ------------
      Net loss available to common stockholders....... $    (5,493)       $   (13,225)
                                                       ============       ============
DENOMINATOR:
  Denominator for basic loss per share--
    Weighted average number of common shares
      outstanding during the period...................       8,418             10,019
    Net effect of dilutive stock options..............          --                 --
                                                       ------------       ------------
      Weighted average common and common
        equivalent shares.............................       8,418             10,019
                                                       ============       ============
   Net loss per share--basic........................... $    (0.65)        $     (1.32)
                                                       ============       ============
   Net loss per share--diluted......................... $    (0.65)        $     (1.32)
                                                       ============       ============
</TABLE>

For the three months ended September 30, 1999, the Company had 479,999
weighted average shares of Series B Cumulative Convertible Preferred Stock
that were antidilutive.

<TABLE>
<CAPTION>
                                                      FOR THE NINE         FOR THE NINE
                                                      MONTHS ENDED         MONTHS ENDED
                                                      SEPTEMBER 30,        SEPTEMBER 30,
                                                          1999               1998
                                                      -------------       ------------
<S>                                                   <C>                  <C>
NUMERATOR:
   Numerator for basic loss per share--
    Net loss..........................................$    (4,600)         $    (8,375)
    Less:  Dividends paid to preferred stockholders...       (414)                  --
                                                      ------------         ------------
      Net loss available to common stockholders.......$    (5,014)         $    (8,375)
                                                      ============         ============
DENOMINATOR:
   Denominator for basic loss per share--
   Weighted average number of common shares
     outstanding during the period....................      8,476                8,721
   Net effect of dilutive stock options...............         --                   --
                                                      ------------         ------------
      Weighted average common and common equivalent
        shares........................................      8,476                8,721
                                                      ============         ============
  Net loss per share--basic............................$    (0.59)         $     (0.96)
                                                      ============         ============
  Net loss per share--diluted..........................$    (0.59)         $     (0.96)
                                                      ============         ============
</TABLE>


For the nine months ended September 30, 1999, the Company had 261,977
weighted average shares of Series B Cumulative Convertible Preferred Stock
that were antidilutive.

5.  INVESTMENT IN IMPAC COMMERCIAL CAPITAL CORPORATION

On March 31, 1999 (the "Purchase Date"), the Board of Directors unanimously
approved the purchase of all the outstanding common shares of ICCC
representing 5% of the economic interest, making ICCC a wholly owned
subsidiary of ICH. This minority interest was purchased for $4 and was
recorded in accordance with APB 16 at fair market value. The net assets of
ICCC representing the 95% preferred stock economic interest were recorded
at historical cost and the net assets of ICCC representing the 5% economic
interest related to the common shares were recorded at fair value. As
result of this purchase, ICCC is no longer treated, for federal income tax
purposes, as a separate entity from ICH, and ICCC's items of income and
expense are included on ICH's tax return. In addition, ICH will prepare
consolidated financial statements for 1999 that include the operations of
ICH. Prior to the Purchase Date, the Company was entitled to 95% of the
earnings or losses of ICCC through its ownership of all of the non-voting
preferred stock of ICCC. As such, the Company recorded its investment in
ICCC using the equity method. Under the equity method, original investments
were recorded at cost and adjusted by the Company's share of earnings or
losses. Gain or loss on the sale of loans or securities by ICCC to ICH were
deferred and amortized or accreted over the estimated life of the loans or
securities. Subsequent to the Purchase Date, the effects of all
intercompany transactions were eliminated.

6.  INVESTMENT SECURITIES AVAILABLE FOR SALE AND RESIDUAL INTEREST IN
    SECURITIZATION HELD FOR TRADING

During the nine months ended September 30, 1999, the Company recorded a
$8.3 million unrealized loss in comprehensive loss on the investment
securities available for sale representing a decline in fair market value
based on independent market value bids.

Also during the nine months ended September 30, 1999, the Company recorded
a $5.5 million write down principally related to a loss on a residual
interest in a securitization held for trading representing a decline in
fair market value based on independent market value bids.

7.  SEGMENT REPORTING

The Company's basis for segment reporting is to divide the entities into
(a) segments that derive income from long-term assets and (b) segments that
derive income from the origination and sale of mortgage loans.

The Company reviewed and analyzed its business on the basis of two basic
segments:

    o  The Long-Term Investment Operations, conducted by ICH and ICH
       Assets, invests primarily in commercial mortgage loans and
       commercial mortgage-backed securities secured by or representing
       interests in such loans.
    o  The Conduit Operations, conducted by ICCC, originates commercial
       mortgage loans.

The following table breaks out ICH's segments as of and for the three
months ended September 30, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                 LONG-TERM
                                                INVESTMENT    CONDUIT     ELIMINATIONS
                                                OPERATIONS   OPERATIONS        (1)        CONSOLIDATION
                                                ----------   ----------   ------------    -------------
<S>                                              <C>           <C>         <C>              <C>
BALANCE SHEET ITEMS:
    Net loan receivables                         $318,338      $  620      $     --         $318,958
    Total assets                                  387,423       1,584        (2,488)         386,519
    Total stockholders' equity                     99,732       1,233        (2,488)          98,477

STATEMENT OF OPERATIONS ITEMS:
    Net interest income (expense)                 $ 1,675      $   72      $    138         $  1,885
    Net intersegment interest income (expense)         10         (10)           --               --
    Net loss                                       (4,723)       (515)           --           (5,328)
</TABLE>


The following table breaks out ICH's segments as of and for the three
months ended September 30, 1998 (in thousands):

                                                LONG-TERM       CONDUIT
                                                INVESTMENT     OPERATIONS
                                                OPERATIONS        (2)
                                                ----------     ----------
BALANCE SHEET ITEMS:
    Net loan receivables                         $541,660       $ 186,111
    Total assets                                  621,490         201,573
    Total stockholders' equity                    111,159         (12,136)

STATEMENT OF OPERATIONS ITEMS:
    Net interest income (expense)                $  4,301       $    (369)
    Net intersegment interest income (expense)      2,214          (2,214)
    Equity in net loss in ICCC                    (14,837)             --
    Net earnings (loss)                           (13,225)        (15,616)

The following table breaks out ICH's segments as of and for the nine months
ended September 30, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                LONG-TERM
                                                INVESTMENT     CONDUIT      ELIMINATIONS
                                                OPERATIONS    OPERATIONS         (1)       CONSOLIDATED
                                                ----------    ----------    ------------   ------------
<S>                                              <C>           <C>           <C>             <C>
BALANCE SHEET ITEMS:
    Net loan receivables                         $318,338      $  620        $     --        $318,958
    Total assets                                  387,423       1,584          (2,488)        386,519
    Total stockholders' equity                     99,732       1,233          (2,488)         98,477

STATEMENT OF OPERATIONS ITEMS:
    Net interest income (expense)                 $ 6,721      $ (225)       $    415        $  6,911
    Net intersegment interest income (expense)      1,470      (1,470)             --              --
    Net earnings (loss)                           (21,637)     17,037              --          (4,600)
</TABLE>


The following table breaks out ICH's segments as of and for the nine months
ended September 30, 1998 (in thousands):


                                            LONG-TERM          CONDUIT
                                            INVESTMENT       OPERATIONS
                                            OPERATIONS          (2)
                                            ----------       ----------
BALANCE SHEET ITEMS:
    Net loan receivables                    $541,660         $ 186,111
    Total assets                             621,490           201,573
    Total stockholders' equity               111,159           (12,136)

STATEMENT OF OPERATIONS ITEMS:
    Net interest income (expense)            $11,023         $    (706)
    Net intersegment interest income
      (expense)                                7,903            (7,903)
    Equity in net loss in ICCC               (15,714)               --
    Net earnings (loss)                      (8,375)            (16,539)

---------------
(1)  Eliminations of intersegment balances and transactions between Impac's
     long-term investment operations and ICCC, ICH's conduit operations.
(2)  For the three and nine months ended September 30, 1998 and as of
     September 30, 1998 the Conduit Operations is accounted for based on
     the equity method and is not consolidated. See Note 1. Basis of
     Financial Statement Presentation.


8.  ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses were as follows:


                                                       FOR THE NINE
                                                        MONTHS ENDED
                                                    SEPTEMBER 30, 1999
                                                    ------------------
Balance, beginning of period.......................$     2,110
Provision for loan losses..........................         --
Charge-offs........................................        683
                                                   ------------
Balance, end of period.............................$     1,427
                                                   ============


9.  STOCKHOLDERS' EQUITY

During the nine months ended September 30, 1999, the Company repurchased
206,800 shares of its common stock outstanding at an average price of $5.18
for a total purchase price of $1.1 million.

On May 5, 1999, the Company entered into a stock purchase agreement with
Fortress Partners L.P. ("Fortress"). Under the terms of the stock purchase
agreement, the Company issued to Fortress 479,999 shares of a newly created
series of preferred stock for an aggregate purchase price of approximately
$12.0 million. The preferred stock, which has been designated "Series B
Cumulative Convertible Preferred Stock," has a coupon of 8.5%, paid
quarterly in arrears. The series B preferred stock is initially convertible
into 1,683,635 shares of the Common Stock, subject to adjustment under some
circumstances. In connection with the completion of the series B preferred
stock issuance, the Company and Fortress entered into a registration rights
agreement. Under the terms of the registration rights agreement, Fortress
has the right to require the Company to register under federal and
applicable state securities laws the Common Stock issuable upon conversion
of the Company's series B preferred stock. In connection with the issuance
of the series B preferred stock, the Company recorded issuance costs of
$597,000. At September 30, 1999, the Company accrued $255,000 in preferred
stock dividends.

On July 2, 1999, the Board of Directors declared a second quarter 1999 cash
dividend of $0.125 per common share. The dividend was paid on July 30, 1999
to stockholders of record at the close of business on July 15, 1999.

Effective as of August 4, 1999, the Company entered into an Agreement and
Plan of Merger with AMRESCO Capital Trust ("AMCT"). Pursuant to this
agreement, the Company will be merged with and into AMCT, with AMCT as the
surviving entity (the "Merger"), and each outstanding share of common stock
of the Company will be converted into 0.66094 of a common share of AMCT.
Also pursuant to this agreement, Fortress as the holder of the outstanding
shares of Series B Preferred Stock will convert all of such shares into
1,683,635 shares of common stock of the Company or, if such conversion does
not occur prior to the effective time of the Merger, all of the shares of
the Series B Preferred Stock will be converted into 1,112,782 common shares
of AMCT. The Merger will be accounted for under the purchase method of
accounting. After the Merger, AMCT will have approximately 16.7 million
common shares outstanding. The parties anticipate that the Merger will be
completed in the fourth quarter of 1999. The transactions contemplated by
the Merger Agreement are subject to customary conditions including approval
by the stockholders of the Company and the shareholders of AMCT. The Merger
and certain related tranactions are more fully described under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Significant Transactions."

On September 30, 1999, the Board of Directors declared a third quarter 1999
cash dividend of $0.125 per common share. The dividend was paid on October
22, 1999 to stockholders of record at the close of business on October 11,
1999.

10.  SUBSEQUENT EVENTS

On October 22, 1999, the Company sold the commercial office building
located at 1401 Dove Street, Newport Beach, CA for $11.9 million recording
a gain of $540,000.

On November 10, 1999, the Company purchased investment securities for a
total purchase price of $24.4 million. The purchase included classes J and
K of the SASCO Floating Rate Commercial Mortgage Trust 1999-C3 with face
values of $15.0 million and $10.0 million, respectively, and coupons of
6.86%.


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

Certain statements contained in the following Management's Discussion and
Analysis of Financial Condition and Results of Operations constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21e of the Securities
Exchange Act of 1934, as amended, which can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"anticipate," "estimate," "believe" or "should" or the negatives thereof or
other variations thereon or comparable terminology. The Company's actual
results may differ materially from those contained in the forward-looking
statements. Factors which may cause a difference to occur include, but are
not limited to increased costs and delays related to Year 2000 compliance,
the availability of suitable opportunities for the acquisition, ownership
and disposition of mortgage assets and yields available from time to time
on such mortgage assets, interest rates and their effect on mortgages and
mortgage-backed securities ("MBSs"), including Commercial Mortgages (as
defined below) and mortgage-backed securities on commercial properties
("CMBSs"), changes in estimates of book basis and tax basis earnings, the
availability of suitable financing and investments trends in the economy
which affect confidence and demand for the Company's portfolio of mortgage
assets.

GENERAL

Unless the context otherwise requires, references herein to the "Company"
refer to Impac Commercial Holdings, Inc. ("ICH") and its subsidiaries,
Impac Commercial Assets Corp. ("ICH Assets"), IMH/ICH Dove Street, LLC
("Dove") and Impac Commercial Capital Corporation (together with its wholly
owned subsidiary, ICCC Secured Assets Corp., "ICCC"), collectively.
References to ICH refer to Impac Commercial Holdings, Inc. as a separate
entity from ICH Assets, Dove or ICCC.

ICH was incorporated in the State of Maryland on February 3, 1997. ICH is a
specialty commercial property finance company, which has elected to be
taxed at the corporate level as a real estate investment trust or "REIT"
for federal income tax purposes. This generally allows the Company to pass
through income to its stockholders without payment of federal income tax at
the corporate level provided that the Company distributes at least 95% of
its taxable income to its stockholders. The Company was formed to seek and
capitalize on opportunities in the commercial mortgage market, including
the origination, purchase, securitization and sale of Commercial Mortgages
and investment in Commercial Mortgages and CMBSs.

The Company's Commercial Mortgage assets (collectively, "Commercial
Mortgages") include mortgage loans on:

    o  condominium-conversions,
    o  commercial properties, such as industrial and warehouse space, office
       buildings, retail space and shopping malls,
    o  hotels and motels, and
    o  nursing homes, hospitals, multifamily, congregate care facilities
       and senior living centers.

Prior to August 1999, the Company's operations were divided into two
segments: Long-Term Investment Operations and Conduit Operations. The
Company's Long-Term Investment Operations, which are conducted by ICH,
invest primarily in Commercial Mortgages and MBSs on commercial properties.
The Company's Conduit Operations, which were conducted by ICCC, originated,
purchased, securitized and sold Commercial Mortgages.

SIGNIFICANT TRANSACTIONS

Effective as of August 4, 1999, the Company entered into an Agreement and
Plan of Merger with AMRESCO Capital Trust ("AMCT"). Pursuant to this
agreement, the Company will be merged with and into AMCT, with AMCT as the
surviving entity (the "Merger"), and each outstanding share of common stock
of the Company will be converted into 0.66094 of a common share of AMCT.
Also pursuant to this agreement, Fortress, as the holder of the outstanding
shares of the Company's series B preferred stock, will convert all of such
shares into 1,683,635 shares of Common Stock of the Company or, if such
conversion does not occur prior to the effective time of the Merger, all of
the shares of the series B preferred stock will be converted into 1,112,782
common shares of AMCT. The Merger will be accounted for under the purchase
method of accounting. After the Merger, AMCT will have approximately 16.7
million common shares outstanding. The parties anticipate that the Merger
will be completed in the fourth quarter of 1999. The transactions
contemplated by the Merger Agreement are subject to customary conditions
including approval by the stockholders of the Company and the shareholders
of AMCT. In addition, the Company must satisfy one of two tests:

    o  either the average closing price of the Company's Common Stock for
       the 20 consecutive trading days ending on the fifth trading day
       prior to the closing date of the Merger is equal to or greater than
       $7.40; or

    o  the aggregate of the Company's cash and cash equivalents as shown on
       a balance sheet dated as of the fifth trading day prior to the
       completion of the Merger is not less than $75 million. For this
       purpose, the Company's cash and cash equivalents will include the
       following:

       (a)  $25 million attributable to the Impac CMB Trust 1998-C1 asset
            and the net value after deducting related debt from interest
            only securities and other subordinate commercial
            mortgage-backed securities on the Company's balance sheet;

       (b)  $2.5 million attributable to a performing floating rate loan,
            the current outstanding balance of which is approximately $3.13
            million; and

       (c)  the cost of any future investments made by the Company that
            were approved in advance by AMCT.

The approximately $24 million in cash and cash equivalents held by the
Company as of November 12, 1999, together with the $25 million face amount
of investment securities purchased by the Company on November 10, 1999
(which purchase was approved by AMCT) and the other cash equivalents
described above, are sufficient to satisfy this condition precedent to the
consummation of the Merger. See Note 10. Subsequent Events.

On September 7, 1999, the Company's board of directors received a letter
from Apex Mortgage regarding a proposed acquisition of the Company by Apex
Mortgage. According to filings made by Apex Mortgage with the Securities
and Exchange Commission, Apex Mortgage beneficially owns 7.5% of the
Company's common stock and is a real estate investment trust that invests
in United States agency and other single-family real estate adjustable and
fixed rate mortgages. Apex Mortgage proposed that the Company and Apex
Mortgage be merged, with the Company's stockholders receiving 0.60328 of a
share of Apex Mortgage common stock for each of their shares of the
Company's common stock. The Apex Mortgage proposal stated that it was
conditioned upon the satisfactory completion of due diligence by Apex
Mortgage. On October 22, 1999, following significant deliberations during
which the Company's board of directors reviewed the analysis of its legal
and financial advisors, the Company's board of directors unanimously
determined that they were unable to conclude that the Apex Mortgage
proposal was a superior proposal for purposes of the Merger Agreement with
AMCT and that the Company was therefore bound to proceed with the Merger
with AMCT. The Company's board of directors then unanimously reaffirmed its
recommendation of the Merger with AMCT to the Company's stockholders.

On May 5, 1999, the Company entered into a stock purchase agreement with
Fortress Partners, L.P. ("Fortress"). Under the terms of the stock purchase
agreement, the Company issued to Fortress 479,999 shares of a newly created
series of the Company's preferred stock for an aggregate purchase price of
approximately $12.0 million. The preferred stock, which has been designated
"Series B Cumulative Convertible Preferred Stock," has a coupon of 8.5%,
paid quarterly in arrears. The Series B preferred stock is initially
convertible into 1,683,635 shares of the Company's common stock, subject to
adjustment under some circumstances. In connection with the completion of
the Series B preferred stock issuance, the Company and Fortress entered
into a registration rights agreement. Under the terms of the registration
rights agreement, Fortress has the right to require the Company to register
under federal and applicable state securities laws the common stock
issuable upon conversion of the Company's Series B preferred stock.

In addition, on May 5, 1999, FIC Management Inc. ("FIC Management"), an
affiliate of Fortress, entered into a definitive agreement with RAI
Advisors, LLC ("RAI Advisors"), the then manager of ICH. Under the terms of
this agreement, RAI Advisors assigned to FIC Management all of RAI
Advisors' rights and interests in the existing Management Agreement among
RAI Advisors and ICH in exchange for cash consideration in the aggregate
amount of $6.0 million. Following the assignment, FIC Management became the
exclusive manager of the Company. FIC Management is currently responsible
for:

    o  asset-liability management - primarily the analysis and oversight of
       the purchasing, financing and disposition of ICH's assets,

    o  capital management - primarily the oversight of ICH's capital raising,
       and

    o  investor relations activities and operations management - primarily
       the oversight of ICH's operating subsidiaries.

In connection with Series B preferred stock purchase and the Management
Agreement assignment described above, the Submanagement Agreement among RAI
Advisors, Impac Mortgage Holdings, Inc. ("IMH"), a former affiliate of the
Company, and Impac Funding Corp. ("IFC"), a former affiliate of the Company
which conducted IMH's conduit operations, was terminated and a new
Submanagement Agreement was entered into among FIC Management, IMH and IFC.
The Right of First Refusal Agreement among RAI Advisors, ICH, ICCC, IMH and
IFC was also terminated. In addition, James Walsh, Timothy Busch, Stephan
Peers and Thomas Poletti resigned as directors of the Company and Wesley
Edens, Robert Kauffman and Christopher Mahowald, all of whom are designees
of Fortress, were appointed to the Company's board of directors. Joseph
Tomkinson and Frank Filipps, who served on the Company's board prior to the
Fortress investment in the Company, remain as directors. Effective May 5,
1999, the executive officers of the Company then serving resigned as a
group. Following these resignations,

    o  Mr. Edens was appointed as the Company's new Chairman of the Board and
       Chief Executive Officer,

    o  Mr. Kauffman was appointed as the Company's new President,

    o  Randal Nardone was appointed as the Company's new Chief Operating
       Officer and Secretary, and

    o  Erik Nygaard was appointed as the Company's new Chief Information
       Officer and Treasurer.

As a result of the various transactions with Fortress described above,

    o  Fortress now holds a significant equity interest in the Company,
       with shares of series B preferred stock which, upon conversion,
       would represent approximately 16.6% of the Company's issued and
       outstanding common stock following such conversion;

    o  the principal executive officers of the Company and a majority of the
       members of the Company's board, are designees of Fortress; and

    o  an affiliate of Fortress, FIC Management, now controls the external
       management of the Company's operations, as well as its submanagement
       functions.

By the end of the first quarter of 1999, ICH was notified by its two
investment banks that provided up to $600.0 million of financing (of which
$200.0 million was uncommitted), that these warehouse line agreements would
not be renewed upon their expiration dates of February 1999 and May 1999.

On March 31, 1999 (the "Purchase Date"), the Board of Directors unanimously
approved the purchase of all the outstanding common shares of ICCC, which
represented 5% of the economic interest of ICCC. This minority interest was
purchased for $4 and was recorded in accordance with APB 16 at fair market
value. The net assets of ICCC representing the 95% preferred stock economic
interest were recorded at historical cost and the net assets of ICCC
representing the 5% economic interest related to the common shares were
recorded at fair value. As a result of this purchase, ICCC is no longer
treated, for federal income tax purposes, as a separate entity from ICH,
and ICCC's items of income and expense are included on ICH's tax return. In
addition, ICH will prepare consolidated financial statements for 1999 that
include the operations of ICH.

BUSINESS OPERATIONS

RECENT OPERATIONS DEVELOPMENTS:

The Company's business operations are primarily funded from monthly
interest and principal payments from its Commercial Mortgage and CMBS
portfolios, warehouse line and reverse repurchase agreements secured by
Commercial Mortgages and CMBS, collateralized mortgage obligation ("CMO")
financing, proceeds from the sale of Commercial Mortgages, and proceeds
from the issuance of Common Stock. The acquisition of Commercial Mortgages
and CMBS by the Company's long-term investment operations are primarily
funded from monthly principal and interest payments, warehouse line and
reverse repurchase agreements, CMO financing, and proceeds from the sale of
Common Stock. The acquisition of Commercial Mortgages by the Company's
Conduit Operations were funded from reverse repurchase agreements and the
sale of Commercial Mortgages. The Company's ability to meet its long-term
liquidity requirements is subject to the renewal of its credit and
repurchase facilities and/or obtaining other sources of financing,
including additional debt or equity from time to time. Any decision by the
Company's lenders and/or investors to make additional funds available to
the Company in the future will depend upon a number of factors, such as the
Company's compliance with the terms of its existing credit arrangements,
the Company's financial performance, industry and market trends in the
Company's various businesses, the general availability of and rates
applicable to financing and investments, such lenders' and/or investors'
own resources and policies concerning loans and investments, and the
relative attractiveness of alternative investment or lending opportunities.

In May of 1999, FIC Management became the new manager for the Company. See
"--Significant Transactions". The Company's new management has formulated a
new business plan which management believes will result in a more
profitable investment of stockholders' equity. Under the new business plan,
the Company has terminated certain employees as of August 1999 and is in
the process of repositioning the assets in its portfolio by selling certain
assets to invest in higher yielding assets. Management believed that the
divestment of these assets was desirable because of their poor strategic
fit with the Company's revised business plan and the Company's general need
for enhanced liquidity at that time. The assets for sale consisted of the
real property and improvements held by the Company's Dove subsidiary, all
of the Company's mortgage loans held-for-sale and all of the Company's
mortgage loans held-for-investment, other than the condominium loans in its
portfolio. On July 15, 1999, the Company sold a block of 22 mortgage loans
held-for-sale, and on October 22, 1999, the Company sold the Dove real
property and improvements. The remaining assets, consisting of mortgage
loans held-for-investment, were sold on various dates in September and
October of 1999. Of the assets which the Company initially planned to
liquidate, only one mortgage loan held-for-investment remains unsold.

LONG-TERM INVESTMENT OPERATIONS:

During 1999, the Company's warehouse lenders did not renew their warehouse
facilities upon expiration in February and May of 1999. Without any new
warehouse line agreements, the Company has no credit facility to fund its
mortgage loans. All originations since the expiration of the Company's
existing warehouse line agreements have been, and any future originations
will be, brokered or 100% funded by another lender until such time as the
Company is successful in obtaining another credit facility. In May 1999,
the Company entered into a $13.5 million term loan agreement to refinance
the remaining balance on the expired warehouse line. In July 1999, the loan
was repaid with proceeds from the sale of $31.2 million fixed rate loans.
The Company has also entered into reverse repurchase agreements whereby it
pledges specific CMBS as collateral to secure short-term loans. The
interest rates on the borrowings are based on the one-month LIBOR plus a
margin depending on the type of collateral.

The Company's Long-Term Investment Operations use CMO borrowings to finance
Commercial Mortgages as a means of eliminating some of the risks associated
with warehouse line and reverse repurchase agreements - such as the
potential need for deposits of additional collateral - that are not present
with collateralized mortgage obligations borrowings. Terms of the CMO
borrowings require that an independent third party custodian hold the
mortgages. The maturity of each class of CMO borrowing is directly affected
by the rate of principal prepayments on the related collateral. Equity in
the CMOs is established at the time the CMOs are issued at levels
sufficient to achieve desired credit ratings on the securities from rating
agencies. The amount of equity invested in CMOs by the Long-Term Investment
Operations is also determined by the Company based upon the anticipated
return on equity as compared to the estimated proceeds from additional debt
issuance. Total credit loss exposure is limited to the equity invested in
the CMOs at any point in time.

During the nine months ended September 30, 1999, the Long-Term Investment
Operations conducted by ICH did not acquire any Commercial Mortgages from
ICCC as compared to $331.6 million of Commercial Mortgages acquired from
ICCC during the nine months ended September 30, 1998. As of September 30,
1999, the Long-Term Investment Operations portfolio of mortgage loans
consisted of $314.6 million of mortgage loans held as collateral for CMOs,
$1.4 million of Commercial Mortgages held-for-sale and $4.4 million of
Commercial Mortgages held-for-investment, of which approximately 89% were
fixed rate mortgages and 11% were adjustable rate mortgages. The weighted
average coupon of the Long-Term Investment Operations portfolio of
Commercial Mortgages was 8.07% at September 30, 1999. In addition, the
Long-Term Investment Operations had investment securities
available-for-sale of $7.0 million and residual interest in securitizations
of $3.8 million at September 30, 1999.

CONDUIT OPERATIONS:

On March 31, 1999, the Company repurchased all of the outstanding common
shares of ICCC making it a wholly owned subsidiary of ICH. As a result of
this transaction, the ICCC warehouse line with ICH which provided up to an
aggregate of $900.0 million to finance ICCC's originations, was eliminated
through the consolidation of the financial statements of ICCC with those of
ICH.

Until the termination of certain employees in August 1999, the Conduit
Operations, conducted by ICCC, supported the Long-Term Investment
Operations of the Company by supplying ICH with Commercial Mortgages for
its long-term investment portfolio. Acting as the mortgage conduit for the
Company, ICCC operated three divisions: the ConduitExpress Division, the
CommercialExpress Division and the CondoSelect Division. The ConduitExpress
Division originated no loans during the nine months of 1999 as compared to
$235.7 million during 1998. The CommercialExpress Division originated $5.6
million in loans during the first nine months of 1999 as compared to $154.2
million during 1998. The CondoSelect Division originated no loans during
the first nine months ended September 30, 1999 as compared to $12.7 million
during the first nine months of 1998. The decrease in originations in the
ConduitExpress and CommercialExpress Divisions was primarily the result of
the global liquidity crisis that occurred during the latter part of 1998,
and ICCC's lack of a viable profitable exit strategy for its commercial
mortgage loans. Without sufficient liquidity to accumulate enough
commercial mortgage loans to effectuate a securitization, ICCC was forced
to sell all its commercial mortgage loan originations on a whole loan
service released basis. The sale of commercial mortgage loans on a whole
loan basis is an inefficient method of selling loans in light of the
liquidity crisis and without consistent industry underwriting guidelines.
In order to sell loans on a more profitable basis, ICCC was forced to
increase pricing spreads over a decreasing US 10 year Treasury rate. The
result was a decrease in overall production throughout the fourth quarter
of 1998 and during the first nine months of 1999. In addition, ICCC was
notified by its warehouse lenders that its warehouse lines would not be
renewed upon expiration. In August of 1999, due to implementation of the
new manager's business plan, ICCC terminated certain employees. As of
September 30, 1999, ICCC employed 1 person as compared to 99 persons as of
September 30, 1998. ICCC's servicing portfolio decreased by 99% to $5.9
million as of September 30, 1999 as compared to $510.1 million as of
September 30, 1998. As of September 30, 1999, there were 2 delinquent
Commercial Mortgages for $869,000 over 90 days past due in ICCC's servicing
portfolio.

RESULTS OF OPERATIONS; IMPAC COMMERCIAL HOLDINGS, INC.
THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

NET LOSS

The Company recorded net loss available to common stockholders of $5.5
million, or a loss of $0.65 per basic and diluted loss per common share,
for the three months ended September 30, 1999 as compared to net loss of
$13.2 million, or a loss of $1.32 per basic and diluted loss per common
share, for the three months ended September 30, 1998. The increase in net
loss for the three months ended September 30, 1999 was primarily the result
of a decrease in net interest income and an increase in non-interest
expense offset by a increase in non-interest income.

NET INTEREST INCOME

Net interest income decreased 56% to $1.9 million during the three months
ended September 30, 1999 as compared to $4.3 million during the three
months ended September 30, 1998. Interest income is primarily interest on
the CMO collateral, finance receivables, Commercial Mortgages
held-for-investment, Commercial Mortgages held-for-sale, investment
securities held-for-investment and residual interest in securitization
held-for-trading (collectively, "Commercial Mortgage Assets") and includes
interest income on cash and cash equivalents and due from affiliates.
Interest expense is primarily borrowings on Commercial Mortgage Assets and
includes interest expense on due to affiliates. The decrease in net
interest income was primarily the result of higher borrowing costs
associated with the issuance of the Company's first commercial mortgage
backed CMO. While the CMO borrowing costs were higher than traditional
warehouse borrowings, they are deemed to be permanent financing for the
investment in these loans. The net interest spread on Commercial Mortgage
Assets decreased to 0.27% during the three months ended September 30, 1999
as compared to 1.58% during the three months ended September 30, 1998. The
decrease in net interest spread on Commercial Mortgage Assets was primarily
due to a decrease in investment and residual securities yields and
increased borrowing costs associated with the issuance of fixed-rate CMO
borrowings as compared to variable-rate short-term warehouse borrowings.

The following table summarizes average balance, interest and
weighted-average yield on Commercial Mortgage Assets and borrowings for the
three months ended September 30, 1999 and 1998 and includes interest income
on Commercial Mortgage Assets and interest expense related to borrowings on
Commercial Mortgage Assets only (dollars in thousands):

<TABLE>
<CAPTION>
                                        FOR THE THREE MONTHS             FOR THE THREE MONTHS
                                     ENDED SEPTEMBER 30, 1999          ENDED SEPTEMBER 30, 1998
                                   ------------------------------    ------------------------------
                                   AVERAGE               WEIGHTED    AVERAGE              WEIGHTED
                                   BALANCE   INTEREST   AVG YIELD    BALANCE   INTEREST   AVG YIELD
                                   -------   --------   ---------    -------   --------   ---------
<S>                               <C>        <C>          <C>       <C>         <C>         <C>
COMMERCIAL MORTGAGE ASSETS
Investment and Residual           $ 24,567   $   471      7.67%     $ 28,400    $ 1,184     16.66%
Securities
LOAN RECEIVABLES:
   Commercial Mortgages              6,888       155      8.98       233,955      4,504      7.70
   Held-for-investment
   Commercial Mortgages              5,165        81      6.31            --        --
   Held-for-sale
   Cmo Collateral                  316,252     6,171      7.81       140,370      2,752      7.84
   Finance Receivables                  --        --                 103,908      2,214      8.52
     Total Loan Receivables        328,305     6,407      7.81       478,233      9,470      7.92
       TOTAL COMMERCIAL MORTGAGE
       ASSETS                     $352,872   $ 6,878      7.80%     $ 506,63   $ 10,654      8.40
                                  =======    =======                ========   ========

           BORROWINGS
Warehouse Line Agreements         $ 2,054    $    32      6.36%     $ 282,27    $ 4,749      6.73%
Cmo Borrowings                     275,493     5,202      7.55       117,965      2,124      7.20
Reverse Repurchase Agreements        4,335        70      6.44         7,332         77      4.20
       TOTAL BORROWINGS           $281,882   $ 5,304      7.53      $ 407,57    $ 6,950      6.82%
                                  ========   =======                ========    =======

     NET INTEREST SPREAD                                  0.27%                              1.58%
     NET INTEREST MARGIN                                  1.78%                              2.92%
</TABLE>


Interest Income on Commercial Mortgage Assets: Interest income on
Commercial Mortgages held-for-investment decreased to $155,000 during the
three months ended September 30, 1999 as compared to $4.5 million during
the three months ended September 30, 1998 as average Commercial Mortgages
held-for-investment decreased to $6.9 million as compared to $234.0
million, respectively. The decrease in average Commercial Mortgages
held-for-investment was the result of the Long-term Investment Operations
issuing its first CMO securitization of commercial mortgage loans in August
of 1998. The weighted-average yield on Commercial Mortgages
held-for-investment increased to 8.98% during the three months ended
September 30, 1999 as compared to 7.70% for the three months ended
September 30, 1998. The increase in the weighted-average yield during the
three months ended September 30, 1999 was due to the reclass of lower
yielding ConduitExpress loans to CMO collateral in August of 1998.

Interest income on finance receivables was eliminated during the three
months ended September 30, 1999 as a result of the consolidation of ICCC's
financial statements and the elimination of the warehouse agreement between
ICCC and ICH in the consolidated financial statements of ICH. For the three
months ended September 30, 1999, ICCC's mortgage loans held-for-sale appear
as a single line item on the consolidated financial statements of ICH. In
previous periods' presentation, mortgage loans held-for-sale appear as
finance receivables on ICH's balance sheet. For comparative purposes, the
average loans held-for-sale decreased to $5.2 Million during the three
months ended September 30, 1999 as compared to $103.9 million of finance
receivables for the three months ended September 30, 1998. The decrease in
outstanding balances was attributable to the decrease in commercial
mortgage originations during the three months ended September 30, 1999 as
compared to the same period in 1998.

Interest income on CMO collateral increased to $6.2 million during the
three months ended September 30, 1999 as compared to $2.8 for the three
months ended September 30, 1998 as average CMO collateral increased to
$316.3 million as compared to $140.4 million, respectively. Average CMO
collateral increased primarily due to the Long-Term Investment Operations
issuing CMO financing in the Impac CMB 1998-C1 of $276.5 million, which
were collateralized by $317.8 million in Commercial Mortgages in August
1998. The weighted-average yield on CMO collateral was 7.81% during the
three months ended September 30, 1999 as compared to 7.84% for the three
months ended September 30, 1998.

Interest income on investment securities available-for-sale decreased to
$471,000 during the three months ended September 30, 1999 as compared to
$1.2 million for the three months ended September 30, 1998 as average
investment securities available-for-sale, exclusive of securities valuation
allowance, decreased to $24.6 million as compared to $28.4 million,
respectively. The weighted-average yield on investment securities
available-for-sale decreased to 7.67% during the three months ended
September 30, 1999 as compared to 16.66% For the three months ended
September 30, 1998. Decrease was primarily due to the Company recording no
accretion for the residual interest in securitization due to reduction in
cashflow remittances in the third quarter of 1999.

Interest Expense on Borrowings: Interest expense on warehouse lines used to
fund finance receivables or mortgage loans held-for-sale decreased to
$32,000 during the three months ended September 30, 1999 as compared to
$4.7 million for the three months ended September 30, 1998. The average
balance of warehouse lines decreased to $2.1 million during the three
months ended September 30, 1999 as compared to $282.3 million for the three
months ended September 30, 1998. The decrease in warehouse line borrowings
was a direct result of decreased originations in addition to the sale of
loans at ICCC. The weighted-average yield of warehouse lines decreased to
6.36% during the three months ended September 30, 1999 as compared to 6.73%
For the three months ended September 30, 1998.

Interest expense on CMO borrowings increased to $5.2 million during the
three months ended September 30, 1999 as compared to $2.1 million for the
three months ended September 30, 1998 as average borrowings on CMO
collateral increased to $275.5 million as compared to $118.0 million,
respectively. Average CMO borrowings increased primarily due to the
Long-Term Investment Operations issuing CMO financing in the Impac CMB
1998-C1 of $276.5 million, which were collateralized by $317.8 million in
Commercial Mortgages in August 1998. The weighted-average yield of CMO
borrowings was 7.55% during the three months ended September 30, 1999 as
compared to 7.20% for the three months ended September 30, 1998.

THE COMPANY ALSO USES CMBSS AS COLLATERAL TO BORROW UNDER REVERSE
REPURCHASE AGREEMENTS TO FUND THE PURCHASE OF CMBSS AND TO ACT AS AN
ADDITIONAL SOURCE OF LIQUIDITY FOR THE COMPANY'S OPERATIONS. INTEREST
EXPENSE ON THESE REVERSE REPURCHASE AGREEMENTS DECREASED TO $70,000 DURING
THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $77,000 FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1998. THE AVERAGE BALANCE ON THESE REVERSE
REPURCHASE AGREEMENTS DECREASED TO $4.3 MILLION DURING THE THREE MONTHS
ENDED SEPTEMBER 30, 1999 AS COMPARED TO $7.3 MILLION FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1998. THE WEIGHTED-AVERAGE YIELD OF THESE REVERSE
REPURCHASE AGREEMENTS WAS 6.44% DURING THE THREE MONTHS ENDED SEPTEMBER 30,
1999 AS COMPARED TO 4.20% DURING THE THREE MONTHS ENDED SEPTEMBER 30, 1998

TOTAL NON-INTEREST INCOME (LOSS) INCREASED TO $879,000 FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1999 AS COMPARED TO ($14.2) MILLION FOR THE SAME PERIOD
IN THE PREVIOUS YEAR. INCREASE WAS PRIMARILY DUE TO REDUCTION OF EQUITY IN
NET LOSS OF ICCC AS A RESULT OF THE CONSOLIDATION OF ICCC'S OPERATING
EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THE
SAME PERIOD IN 1998 WHEN ICCC'S OPERATIONS WERE ACCOUNTED FOR UNDER THE
EQUITY METHOD AND APPEAR IN THE EQUITY IN NET LOSS OF ICCC. SEE NOTE 1.
BASIS OF FINANCIAL STATEMENT PRESENTATION. THE COMPANY RECORDED AN EQUITY
IN NET LOSS OF ICCC OF $14.8 MILLION FOR THE THREE MONTHS ENDED SEPTEMBER
30, 1998 PRIMARILY AS A RESULT OF ICCC RECORDING A $15 MILLION
MARK-TO-MARKET ADJUSTMENT ON THE COMMERCIAL LOANS HELD FOR SALE.

TOTAL NON-INTEREST EXPENSE INCREASED TO $8.0 MILLION FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1999 AS COMPARED TO $2.3 MILLION FOR THE SAME PERIOD IN
THE PREVIOUS YEAR. NON-INTEREST EXPENSE PRIMARILY INCREASED DUE TO THE
INCREASE IN THE WRITE-DOWN OF RESIDUAL INTEREST IN SECURITIZATION. DURING
THE THIRD QUARTER 1999, THE COMPANY RECORDED A WRITE DOWN OF $5.0 MILLION
ON A RESIDUAL INTEREST IN A SECURITIZATION HELD FOR TRADING BASED ON
INDEPENDENT MARKET VALUE BIDS. PROFESSIONAL SERVICES AND OCCUPANCY EXPENSE
INCREASED FROM $254,000 TO $1.9 MILLION FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999, PRIMARILY DUE TO COSTS INCURRED IN CONNECTION WITH THE
MERGER WITH AMCT AND LEASE SETTLEMENT COSTS. IN ADDITION, NON-INTEREST
EXPENSE INCREASED AS A RESULT OF THE CONSOLIDATION OF ICCC'S OPERATING
EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THE
SAME PERIOD IN 1998 WHEN ICCC'S OPERATIONS WERE ACCOUNTED FOR UNDER THE
EQUITY METHOD AND APPEAR IN THE EQUITY IN NET LOSS OF ICCC. SEE NOTE 1.
BASIS OF FINANCIAL STATEMENT PRESENTATION.

No management advisory fees were paid during the three months ended
September 30, 1999 as compared to $206,000 for the same period of 1998.

CREDIT EXPOSURES

The Company did not record a provision for loan loss during the three
months ended September 30, 1999 as compared to $1.0 million recorded during
the third quarter of 1998 based on an analysis of loss exposure as compared
to the allowance for loan loss as well as reduced loan acquisitions during
the period. At September 30, 1999 and December 31, 1998, the Company's
allowance for loan losses expressed as a percentage of Commercial Mortgages
held-for-investment, CMO collateral and Finance Receivables (collectively
"Gross Loan Receivables") was 0.45% and 0.54%, respectively. The loan
delinquency rate expressed as a percentage of Gross Loan Receivables which
were 30 or more days past due was 0.39% at September 30, 1999 as compared
to 1.14% at December 31, 1998. The allowance for loan losses is determined
primarily on the basis of management's judgment of net loss potential,
including specific allowances for any known impaired loans, changes in the
nature and volume of the portfolio, value of the collateral and current
economic conditions that may affect the borrowers' ability to pay.


RESULTS OF OPERATIONS; IMPAC COMMERCIAL HOLDINGS, INC.
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

NET LOSS

The Company recorded net loss available to common stockholders of $5.0
million, or a loss of $0.59 per basic and diluted loss per common share,
for the nine months ended September 30, 1999 as compared to net loss of
$8.4 million, or a loss of $0.96 per basic and diluted loss per common
share, for the nine months ended September 30, 1998. The increase in net
loss for the nine months ended September 30, 1999 was primarily the result
of decrease in net interest income and an increase in non-interest expense
offset by an increase in non-interest income.

NET INTEREST INCOME

Net interest income decreased 37% to $6.9 million during the nine months
ended September 30, 1999 as compared to $11.0 million during the nine
months ended September 30, 1998. The decrease in net interest income was
primarily the result of higher borrowing costs associated with the issuance
of the Company's first commercial mortgage backed CMO. While the CMO
borrowing costs were higher than traditional warehouse borrowings, they are
deemed to be permanent financing for the investment in these loans. The net
interest spread on Commercial Mortgage Assets decreased to 0.72% during the
nine months ended September 30, 1999 as compared to 2.05% for the nine
months ended September 30, 1998. The decrease in net interest spread on
Commercial Mortgage Assets was primarily due to a decrease in CMO
collateral yields as compared to commercial mortgages held for investment
and finance receivables and increased borrowing costs associated with the
issuance of fixed-rate CMO borrowings as compared to variable-rate
short-term warehouse borrowings.

The following table summarizes average balance, interest and
weighted-average yield on Commercial Mortgage Assets and borrowings for the
nine months ended September 30, 1999 and 1998 and includes interest income
on Commercial Mortgage Assets and interest expense related to borrowings on
Commercial Mortgage Assets only (dollars in thousands):

<TABLE>
<CAPTION>

                                    For the Nine Months          For the Nine Months
                                  Ended September 30, 1999    Ended September 30, 1998
                                  ------------------------    -------------------------
                                  Average           Weighted   Average             Weighted
                                  Balance Interest Avg Yield   Balance   Interest  Avg Yield

Commercial Mortgage Assets
--------------------------
<S>                               <C>      <C>       <C>       <C>       <C>        <C>
Investment and Residual           $25,172  $ 2,363   12.52%    $ 28,853  $ 3,354    15.50%
Securities
Loan Receivables:
   Commercial Mortgages            11,570      772    8.89      153,501    9,267     8.05
   Held-for-investment
   Commercial Mortgages            28,010    1,647    7.84          --       --
   Held-for-sale
   Cmo Collateral                 320,754   18,698    7.77       50,121    2,979     7.92
   Finance Receivables                 --      --               124,422    7,903     8.47
                                  ----------------            ------------------
     Total Loan Receivables        360,334  21,117    7.81      328,044   20,149     8.19
                                  ----------------            ------------------
       Total Commercial Mortgage
         Assets                    $385,506 $23,480   8.12%   $ 356,897 $ 23,503     8.78
                                  =======----------            =================

         Borrowings
         ----------
Warehouse line agreements          $ 22,201 $ 1,047   6.26%   $ 229,205 $ 11,524     6.70%
CMO borrowings                      279,600  15,742   7.10       42,503    2,259     7.09
Reverse Repurchase Agreements         4,553     214   6.28        8,100      337     5.55
                                  -----------------           ------------------
     Total Borrowings             $306,354  $17,003   7.40    $ 279,808 $ 14,120     6.73
                                  =================           ==================

   Net Interest Spread                                0.72%                          2.05%
   Net Interest Margin                                2.24%                          3.51%

</TABLE>


INTEREST INCOME ON COMMERCIAL MORTGAGE ASSETS: INTEREST INCOME ON
COMMERCIAL MORTGAGES HELD-FOR-INVESTMENT DECREASED TO $772,000 DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $9.3 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS AVERAGE COMMERCIAL MORTGAGES
HELD-FOR-INVESTMENT DECREASED TO $11.6 MILLION AS COMPARED TO $153.5
MILLION, RESPECTIVELY. THE DECREASE IN AVERAGE COMMERCIAL MORTGAGES
HELD-FOR-INVESTMENT WAS THE RESULT OF THE LONG-TERM INVESTMENT OPERATIONS
ISSUING ITS FIRST CMO SECURITIZATION OF COMMERCIAL MORTGAGE LOANS IN AUGUST
OF 1998. THE WEIGHTED-AVERAGE YIELD ON COMMERCIAL MORTGAGES
HELD-FOR-INVESTMENT INCREASED TO 8.89% DURING THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AS COMPARED TO 8.05% DURING THE SAME PERIOD OF 1998. THE
INCREASE IN THE WEIGHTED-AVERAGE YIELD DURING THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 WAS DUE TO THE RECLASS OF LOWER YIELDING LOANS TO CMO
COLLATERAL IN AUGUST 1998.

INTEREST INCOME ON FINANCE RECEIVABLES WAS ELIMINATED DURING THE NINE
MONTHS ENDED SEPTEMBER 30, 1999 AS A RESULT OF THE CONSOLIDATION OF ICCC'S
FINANCIAL STATEMENTS AND THE ELIMINATION OF THE WAREHOUSE AGREEMENT BETWEEN
ICCC AND ICH IN THE CONSOLIDATED FINANCIAL STATEMENTS OF ICH. FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1999, ICCC'S MORTGAGE LOANS HELD-FOR-SALE APPEAR
AS A SINGLE LINE ITEM ON THE CONSOLIDATED FINANCIAL STATEMENTS OF ICH. IN
PREVIOUS PERIODS' PRESENTATION, MORTGAGE LOANS HELD-FOR-SALE APPEAR AS
FINANCE RECEIVABLES ON ICH'S BALANCE SHEET. FOR COMPARATIVE PURPOSES, THE
AVERAGE LOANS HELD-FOR-SALE DECREASED TO $28.0 MILLION DURING THE NINE
MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $124.4 MILLION OF FINANCE
RECEIVABLES DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1998. THE DECREASE
IN OUTSTANDING BALANCES WAS ATTRIBUTABLE TO THE DECREASE IN COMMERCIAL
MORTGAGE ORIGINATIONS DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS
COMPARED TO THE SAME PERIOD IN 1998 IN ADDITION TO THE SALE OF $172.3
MILLION IN LOANS IN FOURTH QUARTER 1998.

INTEREST INCOME ON CMO COLLATERAL INCREASED TO $18.7 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $3.0 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS AVERAGE CMO COLLATERAL INCREASED TO
$320.8 MILLION AS COMPARED TO $50.1 MILLION, RESPECTIVELY. AVERAGE CMO
COLLATERAL INCREASED PRIMARILY DUE TO THE LONG-TERM INVESTMENT OPERATIONS
ISSUING CMO FINANCING IN THE IMPAC CMB 1998-C1 OF $276.5 MILLION, WHICH
WERE COLLATERALIZED BY $317.8 MILLION IN COMMERCIAL MORTGAGES IN AUGUST
1998. THE WEIGHTED-AVERAGE YIELD ON CMO COLLATERAL WAS 7.77% DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO 7.92% DURING THE SAME
PERIOD IN 1998.

INTEREST INCOME ON INVESTMENT SECURITIES AVAILABLE-FOR-SALE DECREASED TO
$2.4 MILLION DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO
$3.4 MILLION DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AS AVERAGE
INVESTMENT SECURITIES AVAILABLE-FOR-SALE, EXCLUSIVE OF SECURITIES VALUATION
ALLOWANCE, DECREASED TO $25.2 MILLION AS COMPARED TO $28.9 MILLION,
RESPECTIVELY. THE WEIGHTED-AVERAGE YIELD ON INVESTMENT SECURITIES
AVAILABLE-FOR-SALE DECREASED TO 12.52% DURING THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AS COMPARED TO 15.50% DURING THE NINE MONTHS ENDED
SEPTEMBER 30, 1998. DECREASE WAS PRIMARILY DUE TO THE COMPANY RECORDING NO
ACCRETION FOR THE RESIDUAL INTEREST IN SECURITIZATION DUE TO REDUCTION IN
CASH FLOW REMITTANCES IN THE THIRD QUARTER OF 1999.

INTEREST EXPENSE ON BORROWINGS: INTEREST EXPENSE ON WAREHOUSE LINES USED TO
FUND FINANCE RECEIVABLES OR MORTGAGE LOANS HELD-FOR-SALE DECREASED TO $1.0
MILLION DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO
$11.5 MILLION DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1998. THE AVERAGE
BALANCE OF WAREHOUSE LINES DECREASED TO $22.2 MILLION DURING THE NINE
MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $229.2 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1998. THE DECREASE IN WAREHOUSE LINE
BORROWINGS WAS A DIRECT RESULT OF THE DECREASED ORIGINATIONS AT ICCC. THE
WEIGHTED-AVERAGE YIELD OF WAREHOUSE LINES DECREASED TO 6.26% DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO 6.70% DURING THE NINE
MONTHS ENDED SEPTEMBER 30, 1998.

INTEREST EXPENSE ON CMO BORROWINGS INCREASED TO $15.7 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $2.3 MILLION DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1998 AS AVERAGE BORROWINGS ON CMO
COLLATERAL INCREASED TO $279.6 MILLION AS COMPARED TO $42.5 MILLION,
RESPECTIVELY. AVERAGE CMO BORROWINGS INCREASED PRIMARILY DUE TO THE
LONG-TERM INVESTMENT OPERATIONS ISSUING CMO FINANCING IN THE IMPAC CMB
1998-C1 OF $276.5 MILLION, WHICH WERE COLLATERALIZED BY $317.8 MILLION IN
COMMERCIAL MORTGAGES IN AUGUST 1998. THE WEIGHTED-AVERAGE YIELD OF CMO
BORROWINGS WAS 7.10% DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS
COMPARED TO 7.09% DURING THE SAME PERIOD IN 1998.

THE COMPANY ALSO USES CMBSS AS COLLATERAL TO BORROW UNDER REVERSE
REPURCHASE AGREEMENTS TO FUND THE PURCHASE OF CMBSS AND TO ACT AS AN
ADDITIONAL SOURCE OF LIQUIDITY FOR THE COMPANY'S OPERATIONS. INTEREST
EXPENSE ON THESE REVERSE REPURCHASE AGREEMENTS DECREASED TO $214,000 DURING
THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO $337,000 DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1998. THE AVERAGE BALANCE ON THESE REVERSE
REPURCHASE AGREEMENTS DECREASED TO $4.6 MILLION DURING THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AS COMPARED TO $8.1 MILLION DURING THE NINE MONTHS
ENDED SEPTEMBER 30, 1998. THE WEIGHTED-AVERAGE YIELD OF THESE REVERSE
REPURCHASE AGREEMENTS WAS 6.28% DURING THE NINE MONTHS ENDED SEPTEMBER 30,
1999 AS COMPARED TO 5.55% DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1998.

TOTAL NON-INTEREST INCOME (LOSS) INCREASED TO $1.9 MILLION FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO LOSS OF $14.7 MILLION FOR
THE SAME PERIOD IN THE PREVIOUS YEAR. INCREASE WAS PRIMARILY DUE TO
REDUCTION OF EQUITY IN NET LOSS OF ICCC AS A RESULT OF THE CONSOLIDATION OF
ICCC'S OPERATING EXPENSES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AS
COMPARED TO THE SAME PERIOD IN 1998 WHEN ICCC'S OPERATIONS WERE ACCOUNTED
FOR UNDER THE EQUITY METHOD AND APPEAR IN THE EQUITY IN NET LOSS OF ICCC.
SEE NOTE 1. BASIS OF FINANCIAL STATEMENT PRESENTATION. THE COMPANY RECORDED
AN EQUITY IN NET LOSS OF ICCC OF $15.7 MILLION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998 PRIMARILY AS A RESULT OF ICCC RECORDING A $15 MILLION
MARK-TO-MARKET ADJUSTMENT ON THE COMMERCIAL LOANS HELD FOR SALE.

TOTAL NON-INTEREST EXPENSE INCREASED TO $13.4 MILLION FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AS COMPARED TO $3.6 MILLION FOR THE SAME PERIOD IN
THE PREVIOUS YEAR. NON-INTEREST EXPENSE PRIMARILY INCREASED DUE TO THE
INCREASE IN THE WRITE-DOWN OF RESIDUAL INTEREST IN SECURITIZATION. DURING
THE NINE MONTHS ENDED SEPTEMBER 30, 1999, THE COMPANY RECORDED A WRITE DOWN
OF $5.5 MILLION ON THE RESIDUAL INTEREST IN SECURITIZATION BASED ON FAIR
MARKET VALUE BIDS OBTAINED IN THE THIRD QUARTER OF 1999. PROFESSIONAL
SERVICES AND OCCUPANCY EXPENSE INCREASED FROM $535,000 FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1998 TO $3.2 MILLION PRIMARILY DUE TO COSTS INCURRED IN
CONNECTION WITH THE MERGER WITH AMCT AND LEASE SETTLEMENT COSTS. IN
ADDITION, NON-INTEREST EXPENSE INCREASED AS A RESULT OF THE CONSOLIDATION
OF ICCC'S OPERATING EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
AS COMPARED TO THE SAME PERIOD IN 1998 WHEN ICCC'S OPERATIONS WERE
ACCOUNTED FOR UNDER THE EQUITY METHOD AND APPEAR IN THE EQUITY IN NET LOSS
OF ICCC. SEE NOTE 1. BASIS OF FINANCIAL STATEMENT PRESENTATION.

NO MANAGEMENT ADVISORY FEES WERE PAID DURING THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AS COMPARED TO $585,000 FOR THE SAME PERIOD OF 1998.

CREDIT EXPOSURES

The Company did not record a provision for loan loss during the nine months
ended September 30, 1999 as compared to $1.1 million recorded during the
nine months ended September 30, 1998 based on an analysis of loss exposure
as compared to the allowance for loan loss as well as reduced loan
acquisitions during the period.

LIQUIDITY AND CAPITAL RESOURCES

Overview: The Company's business operations are primarily funded from
monthly interest and principal payments from its Commercial Mortgage and
CMBS portfolios, warehouse line and reverse repurchase agreements secured
by Commercial Mortgages and CMBS, CMO financing, proceeds from the sale of
Commercial Mortgages, and proceeds from the issuance of common stock. The
acquisition of Commercial Mortgages and CMBS by the Long-Term Investment
Operations are primarily funded from monthly principal and interest
payments, warehouse and reverse repurchase agreements, CMO financing, and
proceeds from the sale of common stock. Prior to the implementation of the
new business plan and termination of certain employees, the acquisition of
Commercial Mortgages by the Conduit Operations were funded from reverse
repurchase agreements and the sale of Commercial Mortgages. The Company's
ability to meet its long-term liquidity requirements is subject to the
renewal of its credit and repurchase facilities and/or obtaining other
sources of financing, including additional debt or equity from time to
time. Any decision by the Company's lenders and/or investors to make
additional funds available to the Company in the future will depend upon a
number of factors, such as the Company's compliance with the terms of its
existing credit arrangements, the Company's financial performance, industry
and market trends in the Company's various businesses, the general
availability of and rates applicable to financing and investments, such
lenders' and/or investors' own resources and policies concerning loans and
investments, and the relative attractiveness of alternative investment or
lending opportunities.

As of November 12, 1999, the Company had approximately $24 million in cash
and cash equivalents. In the event the merger with AMCT is not consummated,
management believes this amount will be adequate to meet the Company's
liquidity needs through the end of fiscal year 2000. Additional financing
or capital will be required, however, to meet the Company's liquidity
requirements for periods after January 1, 2001.

As described above under the caption "-Significant Transactions," the
Merger of the Company with and into AMCT is conditioned upon, among other
things, a requirement that the aggregate of the Company's cash and cash
equivalents as shown on a balance sheet dated as of the fifth trading day
prior to the completion of the Merger is not less than $75 million. The
approximately $24 million in cash and cash equivalents held by the Company
as of November 12, 1999, together with the $25 million face amount of
investment securities purchased by the Company on November 10, 1999 (which
purchase was approved by AMCT) and the other cash equivalents described
above under "-Significant Transactions," are sufficient to satisfy this
condition precedent to the consummation of the Merger. See "-Significant
Transactions," and Note 10. Subsequent Events.

Long-Term Investment Operations: During 1999, the Company's warehouse
lenders did not renew their warehouse facilities with the Company upon
expiration in February and May of 1999. Without any new warehouse line
agreements, the Company has no credit facility to fund its mortgage loans.
Any originations since the expiration of these warehouse lines have been
brokered or 100% funded with another lender. ICH has entered into reverse
repurchase agreements whereby ICH pledges specific CMBSs as collateral to
secure short-term loans. The interest rates on the borrowings are based on
the one-month LIBOR plus a margin depending on the type of collateral. As
of September 30, 1999, amounts outstanding on the reverse repurchase
agreements were $4.2 million.

The Long-Term Investment Operations uses CMO borrowings to finance
Commercial Mortgages as a means of eliminating certain risks associated
with warehouse line and reverse repurchase agreements (such as the
potential need for deposits of additional collateral) that are not present
with CMO borrowings. Terms of the CMO borrowings require that an
independent third party custodian hold the mortgages. The maturity of each
class is directly affected by the rate of principal prepayments on the
related collateral. Equity in the CMOs is established at the time the CMOs
are issued at levels sufficient to achieve desired credit ratings on the
securities from rating agencies. The amount of equity invested in CMOs by
the Long-Term Investment Operations is also determined by the Company based
upon the anticipated return on equity as compared to the estimated proceeds
from additional debt issuance. Total credit loss exposure is limited to the
equity invested in the CMOs at any point in time. At September 30, 1999,
the Long-Term Investment Operations had $275.8 million of CMO borrowings
used to finance $314.6 million of CMO collateral.

Conduit Operations: On March 31, 1999, the Company repurchased all of the
outstanding common shares of ICCC making it a wholly-owned subsidiary of
ICH. As a result of this transaction, the ICCC warehouse line with ICH
which provided up to an aggregate of $900.0 million to finance ICCC's
originations, was eliminated through the consolidation of the financial
statements of ICH and ICCC. See Note 1. Basis of Financial Statement
Presentation.

CASH FLOWS

Operating Activities: During the nine months ended September 30, 1999, net
cash provided by operating activities was $53.0 million. Net cash operating
activities was primarily the result of the sale of mortgage loans
held-for-sale and the decrease of due from affiliates balances.

Investing Activities: During the nine months ended September 30, 1999, net
cash provided by investing activities was $23.4 million. Net cash provided
by investing activities was primarily the result of the sale of mortgage
loans held-for-investment and paydowns on the mortgage loans
held-for-investment, CMO collateral and investment securities.

Financing Activities: During the nine months ended September 30, 1999, net
cash used in financing activities was $50.1 million. Net cash used in
financing activities was primarily the result of a decrease in warehouse
line borrowings and paydown on CMO borrowings offset by the issuance of
preferred stock.

INFLATION

The Financial Statements and Notes thereto presented herein have been
prepared in accordance with GAAP, which requires the measurement of
financial position and operating results in terms of historical dollars
without considering the changes in the relative purchasing power of money
over time due to inflation. The impact of inflation is reflected in the
increased costs of the Company's operations. Unlike industrial companies,
nearly all of the assets and liabilities of the Company's operations are
monetary in nature. As a result, the fluctuation of prevailing market
interest rates could have a greater impact on the Company's operations'
performance than do the effects of general levels of inflation. Inflation
affects the Company's operations primarily through its effect on interest
rates, since interest rates normally increase during periods of high
inflation and decrease during periods of low inflation. During periods of
increasing interest rates, demand for mortgage loans and a borrowers'
ability to qualify for mortgage financing in a purchase transaction may be
adversely affected. During periods of decreasing interest rates, borrowers
may prepay their mortgages, which in turn may adversely affect the
Company's yield and consequently the value of its portfolio of Commercial
Mortgage Assets.

YEAR 2000 COMPLIANCE

PROJECT STATUS

The Company's Year 2000 project was complete as of October 31, 1999. Impac
Funding Corp. ("IFC"), the submanager for ICH, contracted with an outside
vendor to provide coordination, support, testing and implementation with
respect to Year 2000 compliance of hardware and software systems, both on
an information technology ("IT") and non-IT level.

IFC took over the project from the Company's outside vendors during the
second quarter of 1999. The Company's primary IT systems include loan
servicing, loan tracking and accounting and reporting. The Company obtained
information and the published plan with respect to Year 2000 compliance
from the loan servicing systems' outside vendor. IFC's IT department will
continue to monitor the vendor's progress on Year 2000 compliance. The loan
tracking system is currently in compliance with Year 2000. The accounting
and reporting system is currently Year 2000 compliant. The Company's non-IT
systems, which include its file servers, network systems, workstations and
communication systems, are Year 2000 compliant. As of June 30, 1999, the
upgrade of the Company's communication systems had been completed. Testing
on all other in-house hardware had also been completed by June 30, 1999.

With respect to the Company's significant vendors and third parties, the
Company has contacted each of its significant third party vendors and has
received a written certificate of completion of all their year 2000
projects.

The Year 2000 project was divided into two primary phases as follows: (1)
define scope of project and identify all IT and non-IT systems, and (2)
testing of existing systems and implementation of new systems, if required.
The outside contractor on the Year 2000 project submitted monthly status
reports to IFC's IT manager and communicated with IFC's IT department on a
daily basis. The progress of the Company's Year 2000 project was monitored
by the IFC's IT manager through monthly status reports and reviews.


PHASE I - DEFINE SCOPE OF PROJECT

This phase primarily included the inventorying of Year 2000 items,
contacting outside vendors, including reviewing contractual terms and
conditions, reviewing internal software for compliance and determining
costs to complete the project. As of the end of October 1998, Phase I of
the project had been completed. Phase I of the project also included the
testing and implementation or upgrade of non-IT systems.

PHASE II - TESTING OF SYSTEMS

This phase of the Year 2000 project can be divided into four separate
processes as follows: (1) Compliance Questionnaires, (2) Hardware
Certification Information, (3) Software/Data Testing, and (4) Hardware
Testing.

Compliance Questionnaires and Hardware Certification Information. As of
July 31, 1999, these portions of Phase II were complete.

Software/Data Testing. The remaining tasks within this process included
analyzing a list of software being used, testing all software programs,
testing all data from incoming sources, and testing all outgoing data
processes and reporting. As of July 31, 1999, this portion of Phase II was
completed.

Hardware Testing. The Company has completed all testing and is compliant with
all internal Year 2000 hardware issues.

COSTS

The total cost associated with required modifications or installations to
become Year 2000 compliant was not material to the Company's financial
condition. The estimated cost of the project, including upgrading the
Company's communication system, is expected to be approximately $48,000. As
of October 31, 1999, the Company had paid $35,000 to the outside vendor for
completed work on the project. The majority of the company's estimated cost
for the Year 2000 compliance has been or will be spent on software upgrades
and writing new program code on existing proprietary software. Since most
of the Company's hardware had been purchased within the last two years, the
cost of replacing hardware was minimal.

RISKS

The Company does not anticipate any material disruption of its operations
as a result of any failure by the Company to be compliant. However, there
can be no assurance that the Company will not experience disruptions to its
operations as a result of unforeseen effects of the Year 2000 problem. The
Company also relies, directly and indirectly, on other businesses such as
third party service providers, creditors and financial organizations and
governmental entities. Even if the Company's computer systems are not
materially adversely affected by the Year 2000 issue, the Company's
business and operations could be materially adversely affected by
disruptions in the operations of the enterprises with which the Company
interacts.

The Company's reasonably likely worse case scenario would include a
disruption in the ability to capture certain accounting data needed to
record accounting transactions and ultimately cause the disruption of
timely financial reporting. The Company has defined the Year 2000 issues
related to its the internal accounting information systems and has upgraded
and tested such systems to ensure Year 2000 compliance. The Company is
confident that no failures will occur with such systems. The Company has
also relied on the representations of third party vendors, such as loan
servicing companies, to the effect that such vendors' systems are Year 2000
compliant. Should there be a disruption in service from these third party
vendors due to a Year 2000 issue, the Company would most likely be unable
to receive accounting data and therefore, experience only delays in
financial reporting.


CONTINGENCY PLANS

The Company believes its Year 2000 compliance process has enabled it to
successfully modify its computer systems to ensure Year 2000 compliance.
Acceptance testing and sign-off is 100% complete with respect to the
Company's in-house systems. In addition to Year 2000 compliance system
modification plans, the Company has also developed contingency plans for
all other systems classified as critical and high risk. These contingency
plans provide timetables to pursue various alternatives based upon the
failure of a system to be adequately modified and/or sufficiently tested
and validated to ensure Year 2000 compliance. However, there can be no
assurance that either the compliance process or contingency plans will
avoid partial or total system interruptions or the costs necessary to
update hardware and software the response to as yet unforeseen problems
would not have a material adverse effect upon the Company's financial
condition, results of operations, business or business prospects.


ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Securitizations/Sales - Hedging Interest Rate Risk. The most significant
variable in the determination of gain on sale in a securitization is the
spread between the weighted average coupon on the securitized loans and the
pass-through interest rate. In the interim period between loan origination
or purchase and securitization or sale of such loans, the Company is
exposed to interest rate risk. The majority of loans are securitized or
sold within 90 days of origination of purchase. However, a portion of the
loans are held-for-sale or securitization for as long as 12 months (or
longer, in very limited circumstances) prior to securitization or sale. If
interest rates rise during the period that the mortgage loans are held, in
the case of a securitization, the spread between the weighted average
interest rate on the loans to be securitized and the pass-through interest
rates on the securities to be sold (the latter having increased as a result
of market rate movements) would narrow. Upon securitization or sale, this
would result in a reduction of the Company's related gain on sale. During
the nine months ended September 30, 1999 and September 30, 1998 the Company
realized a net hedge gain of $1.6 million and a net hedge gain of $3.6
million, respectively. The Company's Conduit Operations no longer hold any
fixed rate Commercial Mortgages held-for-investment and, accordingly, the
Company no longer enters into transactions to hedge interest rate risk.

As of November 2, 1999, the Company had outstanding indebtedness of
approximately $4.2 million. The Company's current investments in cash
equivalents and its only other security, the Impac CMB Trust 1998 C1 asset,
are not subject to material risk from changes in interest rates.

Interest-Only Strips. The Company had interest-only strips of $4.3 million
and $10.6 million outstanding at September 30, 1999 and December 31, 1998,
respectively. These instruments are carried at market value at September
30, 1999 and December 31, 1998. The Company values these assets based on
market value bids.

These assets are subject to risk of accelerated mortgage prepayment or
losses in excess of assumptions used in valuation. Ultimate cash flows
realized from these assets would be reduced should prepayments or losses
exceed assumptions used in the valuation. Conversely, cash flows realized
would be greater should prepayments or losses be below expectations.


                         PART II. OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

The Bresta Futura Action. On July 28, 1999, an action was filed against
Impac in the Superior Court for the State of California, County of Orange.
Plaintiff in the action, Bresta Futura V B.V., a Netherlands corporation,
alleges that Impac breached its lease agreement with Redstone Plaza
Associates, a California general partnership of which Bresta Futura is the
general partner. The lease with Redstone Associates relates to a property
located in Newport Beach, California which was to be occupied by ICCC.
Bresta Futura is seeking damages in excess of $1.0 million consisting of
unpaid rent from December 1, 1998 through the scheduled expiration of the
lease on December 1, 2003, late charges and interest due on the unpaid
rent, reasonable attorneys' fees and related expenses. The Company answered
Bresta Futura's complaint on September 14, 1999, generally denying the
allegations of the complaint and asserting specific affirmative defenses.
Discovery has recently commenced, and there is no scheduled trial date. The
Company intends to vigorously defend this action.

The Parnes Action. The Company recently became aware of the filing of a
civil action captioned Parnes v. Impac Commercial Holdings, Inc., et al.,
Case No. 816392 (Cal. Super. Orange Co.) (the "Parnes Action"), against the
Company and Joseph R. Tomkinson, Robert L. Kauffman, Frank P. Filipps,
Wesley R. Edens and Christopher W. Mahowald (the "Director and Officer
Parties"). The action is purportedly brought on behalf of Ari Parnes and a
class of others, and alleges that the Company and the Director and Officer
Parties breached duties to the Company's shareholders by giving
insufficient consideration to the unsolicited offer of Apex Mortgage
Capital, Inc. ("Apex") and by failing to conduct an open auction of the
Company. The Company and the Director and Officer Parties believe that they
have meritorious defenses to the allegations of the Parnes Action, and
intend to vigorously defend the action.

The Hillson Action. The Company also recently became aware of the
commencement of a civil action captioned Hillson Partners, LP v. Impac
Commercial Holdings, Inc., et al., Case No. 204775 (Md. Cir. Ct. Montgomery
Co.) (the "Hillson Action"), against the Company and the Director and
Officer Parties, and Fortress Partners, L.P., FIC Management, Inc., and
Fortress Investment Corp. (collectively, the "Hillson Defendants"). The
Hillson Action is purportedly brought on behalf of Hillson Partners, LP and
a class of others, and alleges that Hillson Defendants breached duties to
the Company's shareholders by: (i) entering into the merger agreement with
AMRESCO for insufficient consideration; and (ii) failing to give due
deliberation to, and failing to accept, the unsolicited offer of Apex. The
Company and the other Hillson Defendants believe that they have meritorious
defenses to the allegations of the Hillson Action, and intend to vigorously
defend the action.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5:  OTHER INFORMATION

None.

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

2.1   Agreement and Plan of Merger, dated as August 4, 1999, by and between
      the Company and AMRESCO Capital Trust (previously filed as Annex I to
      the Joint Proxy Statement on Schedule 14A of the Company and AMRESCO
      Capital Trust, as filed with the Securities and Exchange Commission
      on September 10, 1999 and amended on November 3, 1999, and
      incorporated by reference herein).

27.1  Financial Data Schedule*

*     Filed herewith.

(b)   Reports on Form 8-K:

(i)   Current Report on Form 8-K/A, filed May 5, 1999, reporting the
      following events pursuant to Items 5 and 7 of Form 8-K: (A) an
      amendment to the Rights Agreement, dated as of October 7, 19998,
      between the Company and the Bank of Boston, N.A., as Rights Agent,
      and (B) the commencement by the Company of a Stock Repurchase Plan.

(ii)  Current Report on Form 8-K, filed May 20, 1999, reporting the
      following events pursuant to Items 1, 5 and 7 of Form 8-K: (A)
      execution of a Stock Purchase Agreement, dated as of May 5, 1999,
      between the Company and Fortress Partners, L.P. ("Fortress") pursuant
      to which the Company issued approximately $12.0 million of Series B
      Convertible Preferred Stock to Fortress, (B) resignation of all
      current directors of the Company except for Messrs. Tomkinson and
      Filipps and the recommendation to elect Messrs. Edens, Kauffman and
      Mahowald to the Company's Board of Directors and (C) announcing the
      assumption by FIC Management Inc., an affiliate of Fortress, of
      management responsibility for the Company.

(iii) Current Report on Form 8-K, filed August 13, 1999, reporting the
      following events pursuant to Items 5 and 7 of Form 8-K: (A) execution
      of the Agreement and Plan of Merger, dated as of August 4, 1999, by
      and between the Company and AMRESCO Capital Trust, as described in
      Part II, Item 5 of this Report.


                                 SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


IMPAC COMMERCIAL HOLDINGS, INC.



By:  /s/ Gregory F. Hughes
     -----------------------
Gregory F. Hughes
Chief Financial Officer
Date: November 15, 1999