A California banking company on an expansion spree has made an unsolicited $31 million bid for a majority stake in the parent company of Honolulu-based Finance Factors.

TFC Holdings Inc. said it is willing to pay $1,000 per share for 31,000 shares, or about 51 percent, of privately held Finance Enterprises Ltd., according to an Oct. 23 letter to Finance Enterprises' shareholders.

Finance Enterprises said in a news release that it is still analyzing TFC's proposal but had no comment on the details of the bid.

"The board of directors of the company has been, and is continuing to, analyze the proposal described in those letters in accordance with its fiduciary duties," Finance Enterprises said.

TFC officials had no immediate comment.

TFC is the parent of Alhambra, Calif.-based TomatoBank, which operates five branches in the Los Angeles area and has about $350 million in assets.

The bank, known as InterBusiness Bank until it changed its name in August, was founded six years ago by Los Angeles physician Stephen Liu. The bank specializes in lending to Los Angeles' Asian-American and Hispanic communities.

Finance Factors was founded in 1952 by several prominent local Chinese families. The company, with $652.7 million in assets, operates 11 full-service branches in Hawai'i and has a mortgage center in Guam.

The bid for Finance Enterprises underscores TomatoBank's aggressive growth strategy. According to the company's Web site, TomatoBank's assets have grown more than 35 percent per year while its net income has increased by about 50 percent.

In the first half of 2006, TomatoBank said its assets grew 56.5 percent while earnings more than doubled from the year-earlier period.

The unsolicited bid comes as Finance Factors is considering converting from a depository financial services loan company into a commercial bank.

Under its current charter Finance Factors can offer loans, mortgages and savings accounts but can't offer checking services, debit cards and lines of credit for business customers. The conversion would allow Finance Factors to offer those additional services.

The bid also comes as several Finance Enterprises shareholders have been at odds with management over the direction of the company.

A recent effort to resolve that dispute through mediation was unsuccessful and at least one shareholder criticized management for failing to disclose TFC's bid to stockholders.

In a Nov. 3 letter to Finance Enterprises' shareholders, Judith Pavey, attorney for shareholder NVC Limited Partnership, criticized Finance Factors Chief Executive Officer Russell Lau for failing to disclose the buyout plan to stock owners.

Pavey said her client only learned of the bid last week after it was contacted by an attorney for TFC.

"If nothing else, this was important information to all of the shareholders, which should have been disclosed promptly to all shareholders," Pavey said. "We are extremely concerned that Russell Lau did not pass this information on to all stockholders, as he should have."

Maureen Lichter, a Finance Enterprises spokeswoman, said the company's board wanted to complete its assessment of TFC's bid before it sent the proposal to shareholders.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.