Bank One Indianapolis caused a ripple in the placid credit card portfolio market, beating out about 15 other bidders for $20 million of receivables sold recently by Premier Financial Corp. of Elkhart, Ind.

The owners of Prime Bank, which though small had been successful as a niche player, decided to quit the banking business after two years out of frustration over the regulatory process.

The credit card sale allowed Banc One Corp.'s Indiana unit to build its local business with high-quality accounts.

Low Delinquency Rate

About 9,000 of Prime Bank's 16,000 cardholders live in Indiana, and delinquencies were well below average at 1% to 1.5%, said Robert Crothers, chairman of Prime Bank and president of Crittson Financial Services, its card processing affiliate. Nationally, more than 5% of credit card loans are considered delinquent.

The price paid by the Banc One unit was not disclosed, but it is widely believed to have paid the highest premium in several years for a card portfolio of this size. Joseph R. Minnis, Bank One Indianapolis' vice president for credit card sales, called the price "reasonable" given the opportunity to form relationships quickly with thousands of new customers.

Experts say a strong portfolio of credit card receivables typically commands a 20% premium, and that the recent scarcity of deals has boosted the price.

In the only other comparable deal this year, MBNA Corp. is believed to have paid about 25% above the face value of outstandings for $20 million of credit card loans from Provident Bank of Baltimore, according to Robert E. Hyer of Smith Barney, Harris Upham & Co.

The parent of Crittson, a credit card processor for 240 banks, acquired the $60 million-asset Prime Bank in 1990 with the intention of building its own credit card business. The bank is also active in mortgage and installment lending.

The group's intentions were spelled out to regulators from the start. But management decided to sell, Mr. Crothers said, because field examiners kept raising concerns over the bank's level of unsecured debt.

"We're extremely delighted with the premium," Mr. Crothers said. Crittson has signed a letter of intent to sell the rest of the bank to Lake City Bank of Warsaw, Ind.

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