SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 1, 1996
Commission file number 2-76555
COMMERCE SECURITY BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0720548
(State or other jurisdiction of (I.R.S. Employer or
incorporation or organization) Identification No.)
7777 Center Avenue, Huntington Beach, California 92647-3067
(Address of principal executive offices) (Zip Code)
(714) 895-2929
(Registrant's telephone number, including area code)
Successor by Merger to
SDN BANCORP, INC.
135 Saxony Road, Encinitas, California 92024-0905
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
As of September 1, 1996, the registrant completed its merger (the "Merger")
of Commerce Security Bank ("Commerce") and SDN Bancorp, Inc. ("SDN") as
contemplated by the Agreement and Plan of Reorganization dated April 23, 1996
(the "Agreement") to form a new holding company ("Holdco") which would become
the sole shareholder of both companies.
As of August 28, 1996, Dartmouth Capital Group, L.P. (the "Partnership")
invested approximately $14.5 million in the registrant to fund the Commerce
Acquisition. In exchange for that investment, the registrant issued a total
of 3,664,776 additional shares of Common Stock at a price per share of $3.95.
At the Partnership's direction the registrant issued 1,080,000 of those
shares of Common Stock, in the aggregate, to certain limited partners of the
Partnership (the "Direct Holders") and the remaining 2,584,776 shares of
Common Stock directly to the Partnership. Giving effect to the issuance of
those shares to fund the Commerce Acquisition, the Partnership owns 48.0% of
the Common Stock and the Direct Holders own, in the aggregate 34.19% of the
Common Stock.
Holders of SDN Common Stock were issued one share of Holdco Common Stock
for each share held in SDN. A total of 4,327,606 shares of SDN Common Stock
were outstanding at the time of the Merger. Holders of Commerce Common Stock
were issued 1,527,540 shares of Holdco Common Stock and received cash of
approximately $14.1 million. An additional 58,212 shares of Holdco Common
Stock and cash of approximately $346,000 are held in escrow pending
resolution of the SAIF recapitalization. A total of 99,164 shares were issued
to other direct investors and investment bankers involved in the Merger. There
were 9,759,098 total shares
outstanding after the Merger.
Item 7. Financial Statements and Exhibits
Description Page
(a) Financial statements of business acquired NA
(b) Pro forma financial information NA
(c) Exhibits
Press Release dated September 3, 1996 4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMERCE SECURITY BANCORP, INC.
September 16, 1996 By:/s/ Curt A. Christianssen
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Curt A. Christianssen
Senior Vice President
Chief Financial Officer
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Commerce Security Bancorp, Inc.
FOR IMMEDIATE RELEASE
September 3, 1996
Contact: Robert P. Keller, Chairman, (603) 366-2643
COMMERCE SECURITY BANK AND SDN BANCORP, INC. ACQUISITIONS COMPLETED
Commerce Security Bank and SDN Bancorp, Inc. announced today consummation
of the Agreement and Plan of Reorganization to form a new holding company
that will be the sole shareholder of Commerce Security Bank and SDN Bancorp,
Inc. of Encinitas. The new holding company, Commerce Security Bancorp, Inc.,
has combined assets in excess of $420 million, based on June 30, 1996
financial statements. Mr. Robert Keller, the Chairman and Chief Executive
Officer of SDN Bancorp, Inc. has been named President and Chief Executive
Officer of Commerce Security Bancorp, Inc. and Chairman and Chief Executive
Officer of Commerce Security Bank. Peter Paulsen, the founder and previous
Chairman of Commerce Security Bank will continue on the Board of Directors
of the Bank and will join the Board of the new holding company.
Mr. Keller stated "Commerce Security Bank will retain its local identity
with local board and management, and will be able to call upon a larger
organization for additional support and expertise." Keller went on to say "we
are committed to the Sacramento market and look forward to working with the
Bank's Board of Directors to strengthen and expand the Bank's commitment to
providing superior banking services to local businesses and residents."
Under the terms of the agreement, each share of SDN Bancorp, Inc. stock
will be exchanged for one share of common stock in Commerce Security Bancorp,
Inc. Sixty percent of the Commerce Security Bank shares will be exchanged
for cash equal to approximately 1.5 times Commerce Security Bank's book value
per share as of December 31, 1995. The balance of the Commerce Security Bank
shares will be exchanged for common stock in the new holding company having
a pro forma book value approximately equal to Commerce Security Bank's book
value per share as of December 31, 1995. The transaction will be accounted
for as a purchase, and it is expected that shareholders will recognize gain
or loss for federal income tax purposes only to the extent they receive cash
in the transaction.
Commerce Security Bank had total assets in excess of $213 million at
June 30, 1996 and conducts its business from twenty-one functional offices.
Commerce Security Bank is metropolitan Sacramento's premier commercial bank,
offering loan and deposit products to businesses and individuals throughout
the area. It also provides mortgage banking and equipment finance services
in more than thirty states.
Mr. Keller has had a lengthy and successful career in banking. From 1994
to 1995, he served as President and Chief Executive Officer of Independent
Bancorp of Arizona, Inc., an NASDAQ listed bank holding company with assets
of $1.8 billion. Prior to that he served as President and Chief Executive
Officer of New Dartmouth Bank, a privately owned financial institution with
assets of approximately $2 billion located in Manchester, New Hampshire.
Commerce Security Bancorp, Inc. owns, in addition to Commerce Security Bank,
San Dieguito National Bank of Encinitas, California and Liberty National
Bank of Huntington Beach, California.
For further information, please contact Robert Keller at Commerce Security
Bancorp, Inc. (603) 366-2643.
