Magazine article American Banker

Ailing Bank Plus of California Hires Keefe to Find a Buyer

Magazine article American Banker

Ailing Bank Plus of California Hires Keefe to Find a Buyer

Article excerpt

Bowing to shareholder pressure, Bank Plus Corp. of Los Angeles, the owner of Fidelity Federal Bank, said Monday that it has hired Keefe, Bruyette & Woods to identify potential acquirers.

Bank Plus' largest shareholder, Tontine Management LLP, had urged the thrift company's directors to either sell or replace its management team. New York-based Tontine owns 9.9% of its shares.

"It has become necessary for us ... to relay our grave concerns and lack of confidence with the current operation management," wrote Jeffrey L. Gendell, managing member of Tontine, in a letter to the thrift company on Friday. "It is time for our board of directors to act,'"

Bank Plus, which has $4.3 billion of assets, reported a net loss of $1.2 million for the second quarter stemming from hits to its portfolio of mortgage-backed securities. The Securities and Exchange Commission required the company to take a $4 million hedging loss in the quarter.

Because of a heavy focus on multifamily mortgages in the early 1990s, Fidelity Federal was slammed with loan losses when the bottom fell out of the market. Though the Southern California economy recovered, the thrift's performance did not follow suit, said Charlotte A. Chamberlain of Jefferies & Co., Los Angeles.

"It has been problem after problem after problem for Bank Plus," Ms. Chamberlain said. "I can't think of another California thrift that is as mired in substandard performance as Bank Plus."

Richard M. Greenwood, Bank Plus' chief executive, said the company hired Keefe Bruyette not only to look for buyers but also to review possible acquisitions that would boost loan origination or deposit-taking capabilities. …

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