Saddled with millions of dollars in delinquent loans and stung by two consecutive money-losing quarters, Bank Plus Corp., parent of Fidelity Federal Bank, is looking for a buyer.
“It is likely that we will be part of the ongoing consolidation in the banking industry,” said Chief Executive Mark K. Mason, who was installed last month after his predecessor resigned amid heavy criticism. “It is likely that will happen in the near term. I can’t say when, it depends on interested parties.”
But analysts wonder whether Bank Plus, currently the second-largest L.A.-based savings and loan, will be able to attract a buyer in its weakened state.
Bank Plus reported a net loss for third quarter ended Sept. 30 of $59.8 million ($3.50 a share), compared with net income of $3.4 million (17 cents) for the like quarter a year ago.
The losses, combined with news that the institution faces serious difficulties with its loan portfolio, have resulted in a sharp fall in Bank Plus stock. Shares now trade at around $3.50, down more than 75 percent from as recently as April.
“When a thrift is at $3.50 because all of a sudden it has credit problems like Bank Plus has had, you have to wonder if it is a viable company,” said Don Destino, an analyst at Jefferies & Co.
The third-quarter loss was due largely to provisions for estimated loan losses of $51.8 million associated with Bank Plus’ credit-card business.
As of Sept. 30, delinquencies of 30 days or more on its total outstanding credit-card balances were 16 percent. That compares with an industry average delinquency rate of around 4.5 percent.
Credit-card problems have weakened the quality of the thrift’s assets in general. Net non-performing assets increased to $39.7 million in the third quarter or 1.04 percent of total assets. That compares with a statewide average of around 0.85 percent for savings and loans.
Faced with such problems, Bank Plus announced on Nov. 2 that it was effectively shutting down its credit-card lending business a move that makes it a less attractive target for many potential acquirers.
“Any acquirer would have to be a large bank that could absorb the losses that Bank Plus is suffering,” said Olaf Vlieks, an analyst at Sutro & Co. in San Francisco.
Bank Plus’ problems also have taken their toll on senior management, leading to the resignation of the thrift’s former chief executive, Richard Greenwood.
Greenwood had angered key institutional shareholders last summer by publicly stating that Bank Plus was not only talking to investment bankers about a seeking a buyer, but was interested in making acquisitions. That prompted investors to issue an open letter on Aug. 14 demanding that the thrift seek a buyer as soon as possible or they would move to remove the board.
