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Nevada Stakeholder Everest Pushes for Sale of Orange's BYL Bancorp

Finance: The investment group will try to put two directors on the board to bring about a deal.

September 01, 2000|From Times staff and Dow Jones newswires

A Nevada investment group with a stake in BYL Bancorp said Thursday that it believes the Orange-based bank holding company should be sold.

Everest Partners LP will attempt to place two directors on the BYL board to help expedite a sale, according to a report filed with the Securities and Exchange Commission.

BYL, whose BYL Bank Group primarily serves Orange and Riverside counties, disclosed about two weeks ago that it had been in merger talks with the holding company for People's Bank of California.

Everest Partners said it believes BYL should be sold promptly to People's parent PBOC Holdings Inc. or another purchaser, given BYL's poor performance over the last few years.

BYL is preparing a response, said Robert Ucciferri, president and chief executive officer. He would not comment further.

Earlier this week, federal regulators disclosed that the bank has agreed to abide by a cease-and-desist order, the severest action regulators can take short of a federal takeover.

The order by the Federal Deposit Insurance Corp. requires the bank, among other things, to improve management, raise more capital and operate in a way to improve earnings.

BYL, which has about 350 employees, was one of a number of banks and thrifts that came under scrutiny of regulators for a complex type of financial arrangement in which institutions package and sell their loans on Wall Street.

Last February, the nation's top bank regulators, led by the Federal Reserve Bank, warned institutions that they may need to boost their capital levels to protect against possible loan losses if they continue with the practice, called securitization.

BYL said then that it would exit the securitization business after regulators informed the company that it needed to set aside an additional $8 million in capital for the $100 million in commercial real estate loans the bank had packaged and sold on Wall Street.

The company has since closed its automobile division and sold its Diamond Bar residential mortgage division.

Among the changes instituted under the cease-and-desist order, BYL wrote down its assets for securitization by $800,000.

Everest Partners put forth Nick Becker and David Harvey as nominees to join BYL's board and requested a response by Friday.

In addition, Everest Partners requested a list of company shareholders to contact regarding the sale of BYL.

Everest Partners said it holds 228,400 common shares of the company after purchasing 19,300 shares between July 13 and July 25 for prices ranging from $8.63 to $9.52.

BYL's stock closed Thursday at $11, up 50 cents a share, on the Nasdaq market.

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