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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Exchange Act of 1934 Pursuant to Section 13 or 15(d) of The Securities
Date of report (Date of earliest event reported) -- JANUARY 29, 1998
BYL BANCORP
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(Exact name of registrant as specified in its charter)
CALIFORNIA 000-23257 33-0755794
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(Name or other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
18206 IMPERIAL HIGHWAY, YORBA LINDA, CALIFORNIA 92886
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(Address of principal executive officer) (Zip Code)
(Registrants' telephone number, including area code) -- (714) 996-1800
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NA
--
(Former name or former address, if changed since last report.)
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Item 5. OTHER EVENTS
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Attached hereto as Exhibit 99 is a Press Release announcing BYL
Bancorp to acquire DNB Financial. The merger is expected to close by May 31,
1998.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits
99(1) Copy of aforementioned Press Release.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BYL BANCORP
Dated: January 30, 1998 /s/ BARRY J. MOORE
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Barry J. Moore
Senior Executive Vice President/
Chief Financial Officer
2
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EXHIBIT 99.1
For immediate release
January 29, 1998
PRESS RELEASE
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BYL BANCORP ANNOUNCES
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BYL BANCORP TO ACQUIRE DNB FINANCIAL
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Yorba Linda, CA. -- BYL Bancorp ("BYL") (NASDAQ NMS:BOYL), parent company of
the Bank of Yorba Linda, and DNB Financial ("DNB"), the parent company of De
Anza National Bank, announced today the execution of a Definitive Agreement
("Agreement") for BYL to acquire DNB. Under the terms of the acquisition, DNB
will be merged with and into BYL, and De Anza National Bank will become an
operating division of the Bank of Yorba Linda. The transaction will be
structured as a pooling of interests through a tax-free exchange of BYL
shares of common stock for all outstanding shares of DNB common stock.
DNB is a closely held, $73.4 million total asset bank holding company whose
subsidiary, De Anza National Bank, operates three full-service commercial
banking branches in Mira Loma, Indian Hills, Riverside in Riverside County,
California.
The Agreement has been approved by the boards of directors of both companies
and is subject to the approval of the shareholders of both BYL and DNB and
appropriate regulatory agencies. The merger is expected to close by May 31,
1998.
Under the terms of the Agreement, if the transaction closes on May 31, 1998,
the estimated total transaction value will be approximately $20.0 million.
Assuming a closing on May 31, 1998, approximately 4.59 BYL shares will be
exchanged at a stipulated value of $18.75 per BYL share for each of the
232,423 DNB shares, or a total of approximately 1,067,700 BYL shares. The
estimated total transaction value at May 31, 1998 represents approximately
2.5 times the estimated DNB tangible book value at May 31, 1998 and
approximately 25.7 times the DNB estimated net income for the twelve months
ended May 31, 1998.
The aggregate transaction value for DNB will be subject to adjustment based
upon the tangible book value of DNB at the date of closing. The aggregate
transaction value will be the sum of (a) $19,569,722, or approximately 2.53
times the DNB tangible book value at December 31, 1997 and (b) 1.5 times the
change in the DNB tangible book value between December 31, 1997 and the
closing.
The total number of BYL shares to be exchanged will be determined by dividing
the aggregate transaction value for DNB by the stipulated value of $18.75 per
BYL share. The stipulated value per BYL share will be adjusted if the average
closing BYL stock price during the pricing determination period is greater
than $22.50 or less than $15.00 per share. The pricing determination period
will be the twenty consecutive trading days ending three days prior to the
closing of the transaction. BYL may terminate the transaction if the average
closing price during the pricing determination period is less than $12.19 per
share, and DNB may terminate if the average closing price during the pricing
determination period is greater than $25.31 per share. If the stipulated
value per BYL share of $18.75 is adjusted, the amount of the adjustment will
equal one half of the difference between the average closing price per BYL
share during the pricing determination period and $18.75.
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Press Release, Page 2
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DNB is a well-capitalized institution with a tangible equity to tangible
assets ratio of 10.52% at December 31, 1997. Additionally, DNB's 1997 net
earnings of $745,228 represented a 10.96% return on average equity and a
1.05% return on average assets. Non-performing assets were 0.83% of total
assets at December 31, 1997.
"The combination with DNB significantly expands and enhances the Bank of
Yorba Linda's retail banking franchise from its existing base in Orange
County into the contiguous Riverside County market," said Robert Ucciferri,
BYL's President and Chief Executive Officer. "It will significantly increase
the Bank's assets by approximately 45% to almost $240 million and will be
accretive both to BYL's earnings in 1998 and 1999 and BYL's capital. De Anza
National Bank is an excellent institution with a strong banking franchise,
solid earnings and excellent asset quality. Importantly, this transaction
will significantly increase the magnitude of our conventional banking
activities while providing an opportunity to expand the highly profitable fee
income generating activities of our Mortgage and SBA Divisions and our
recently established Auto Dealer Indirect Lending Center," Mr. Ucciferri
continued.
Neil Hatcher, President and Chief Executive Officer of DNB, stated, "We look
forward to having our shareholders participate in the outstanding success
which BYL has posted for its shareholders. Over the last eighteen months, the
Bank of Yorba Linda has been the outstanding performer among its peer group
of southern California banking institutions. BYL brings to our service area a
unique expertise in SBA and Mortgage loans which when combined with our
expertise in traditional commercial business lending will give the business
customer a vast array of new services from which to choose. Additionally,
because of BYL's community orientation, our retail customers will continue to
receive the top quality service they expect and deserve", Mr. Hatcher stated.
The BYL Bancorp is a California corporation headquartered in Yorba Linda,
California with total assets of $164.6 million as of December 31, 1997. Its
principal operating subsidiary is the Bank of Yorba Linda. The Bank's primary
market area is Orange County, California in which it operates five
full-service banking centers and two divisional loan origination offices.
Additionally, the Bank has mortgage loan origination offices in Utah and
Washington State. The Bank specializes in originating and selling
non-conforming and conforming residential real estate loans and Small
Business Administration ("SBA") guaranteed loans. The Bank is the recipient
of the prestigious Bauer Financial Reports five star rating for 1996, the
highest financial performance ranking given to banking institutions by this
nationally recognized financial institution rating service. The shares of
common stock of BYL Bancorp trade on the NASDAQ National Market System under
the symbol "BOYL."
For Further Information Please Contact:
BYL Bancorp/Bank of Yorba Linda
Robert Ucciferri, President and Chief Executive Officer
Barry J. Moore, Senior Executive Vice President and
Chief Financial Officer
714-996-1800
DNBF Financial
Neil F. Hatcher, President and Chief Executive Officer
909-360-8068
