Bank Plus Agrees to $150-Million Buyout by FBOP

Bank Plus Corp. of Los Angeles, which returned to profitability last year after an ill-fated venture into subprime credit card lending, has agreed to be purchased by the parent of California National Bank in a deal worth about $150 million, bank officials said Monday.

Closely held FBOP Corp. of Oak Park, Ill., will pay $7.25 cash for each share of Bank Plus, parent of 30-branch Fidelity Federal Bank, said Bank Plus spokesman Neil Osborne. FBOP officials did not return calls for comment.

The deal is expected to close by the end of the year if approved by Bank Plus shareholders and regulators. Bank Plus shares rose 31% on Monday, gaining $1.62 to close at $6.92 in Nasdaq trading.

The deal is part of FBOP’s continued expansion into Southern California. In addition to the five branches of Beverly Hills-based California National Bank, FBOP owns 15-branch San Diego National Bank and in December agreed to buy PBOC Holdings Inc. of Los Angeles, which owns the 24-branch People’s Bank of California. FBOP also owns banks in Illinois and Texas.

Bank Plus suffered losses of more than $190 million in the late 1990s after a disastrous experiment with issuing credit cards to people with troubled credit histories. Delinquency rates for the bank’s credit card portfolio reached 22%, and the Office of Thrift Supervision placed several restrictions on the bank’s operations. Other high-risk credit card lenders at the time reported delinquency rates of 7% to 8%.

The bank severed ties with its two credit card marketing companies in 1998 and sold its remaining credit card portfolio last year.

In March, the Office of Thrift Supervision lifted its “problem association” and “troubled condition” designations from the bank. That freed the company to increase its assets and eliminated requirements that Bank Plus notify the OTS of transactions between the bank and its affiliates.

Bank Plus has 19.4 million shares outstanding and more than 1 million stock options that are likely to be exercised when the deal closes, raising the deal’s value “to a touch more than $150 million,” Osborne said.