Our third initiative toward strengthening the Company and its future has been to implement  state-of-the-art technologies, especially within our Mortgage Operations. We successfully rolled out the first edition of the Impac Direct System for Lending (IDASL) system in the first quarter of 2000, and we have already seen a significant increase in our mort- gage volume and profit margins. By December 31, 2000, substantially all of Impac’s correspondents were submitting loans through IDASL, and 100 percent  of all wholesale loans delivered by brokers were underwritten through the system. In contrast to a number of our competitors, we  have continued to require prepayment penalties  on the mortgage loans generated by our Mortgage Operations and retained for investment in our  Long-Term Investment Portfolio. As a result, in  2000 we increased the percentage of prepayment penalties on our non-conforming mortgage loans  to over 50% of all loans acquired or held for in- vestment. This increases our ability both to more accurately predict future revenues and to hedge against the effects of early prepayments. Our second initiative was to suspend the payment  of our common stock dividend and retain earnings  to increase our assets and grow book value. As a  result, at year end 2000, we had repurchased and retired $2.3 million of the Company’s Common  Stock, and at the end of the first quarter of 2001 acquired a total of $10.0 million of Impac’s 10.5% Cumulative Convertible Preferred Stock. Because the system enables customers across the country to get conditional mortgage loan approvals without delivering loan applications to our corporate offices, it has given the Mortgage Operations access  to new customers and the capacity to serve an ex- panded customer base. Perhaps most importantly, IDASL extends our business to geographical markets we could not previously have reached, all without opening new offices, diluting our centralization or incurring startup and operations costs. Through these actions, we have significantly strengthened and improved our Long-Term Investment Operations. We generated additional liquidity through the restructured CMOs and the dividend suspension, which has been reinvested  into the Company, and we have established solid  and sustainable cash balances of $26.2 million  at year-end 2000. We are still refining IDASL and anticipate in- troducing fraud detection, property appraisals and mortgage insurance approval enhancements by the  end of 2001. With all of these options available with- in minutes via the online system, we envision that 31. The Impac Companies – Letter to Shareholders 30. The Impac Companies – Letter to Shareholders