-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M1ZJNIUKr22peu6h/59tFGFabv2ozIzejwj9JkF+jYHznrSLlu2NIN2eLDJe0kuP 8q10aJ8tovNw4ucRPXT70A== 0000929624-97-000975.txt : 19970813 0000929624-97-000975.hdr.sgml : 19970813 ACCESSION NUMBER: 0000929624-97-000975 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970811 ITEM INFORMATION: Other events FILED AS OF DATE: 19970812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAY VIEW CAPITAL CORP CENTRAL INDEX KEY: 0000840387 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 943078031 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17901 FILM NUMBER: 97656134 BUSINESS ADDRESS: STREET 1: 2121 S EL CAMINO REAL CITY: SAN MATEO STATE: CA ZIP: 94403 BUSINESS PHONE: 4155737300 MAIL ADDRESS: STREET 2: 2121 SOUTH EL CAMINO REAL CITY: SAN MATEO STATE: CA ZIP: 94403 8-K 1 FORM 8-K 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): AUGUST 11, 1997 ------------------- BAY VIEW CAPITAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-17901 94-3078031 - -------------------------------------------------------------------------------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification incorporation) No.) 1840 GATEWAY DRIVE, SAN MATEO, CALIFORNIA 94404 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (415) 573-7300 -------------- 2121 SOUTH EL CAMINO REAL, SAN MATEO, CALIFORNIA 94403 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events. ------------ On May 8, 1997, Bay View Capital Corporation (the "Company" or "Bay View"), a Delaware corporation and the holding company for Bay View Bank ("BVB"), Bay View Securitization Corporation, California Thrift & Loan, Concord Growth Corporation and Regent Financial Corporation, announced the execution of a definitive agreement to acquired America First Eureka Holdings, Inc. ("AFEH") and AFEH's wholly owned subsidiary, EurekaBank, A Federal Savings Bank ("EurekaBank"). The acquisition will be accounted for using the purchase method of accounting and is expected to be completed on or about January 2, 1998. Under the terms of the definitive agreement, America First Financial Fund 1987-A Limited Partnership (the "Partnership"), the sole shareholder of AFEH, will receive shares of Bay View common stock valued at approximately $210 million (subject to possible adjustment) and $90 million in cash. Pursuant to the agreement, AFEH will be merged into the Company, with the Company as the surviving corporation, and EurekaBank will be merged into BVB, with BVB as the surviving institution. Consummation of the transaction is subject to the satisfaction of a number of conditions set forth in the agreement, including approval by the Company's stockholders and the beneficial unit certificate holders of the Partnership and the regulatory approval of the Office of Thrift Supervision. Attached as Exhibit 99 hereto are the consolidated financial statements of AFEH for the three and six months ended June 30, 1997 and June 30, 1996 prepared in accordance with Rule 3.05 of Regulation S-X of the Securities and Exchange Commission. Item 7. Financial Statements and Exhibits --------------------------------- (c) Exhibits 99 Consolidated Financial Statements of AFEH 2 SIGNATURES 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. BAY VIEW CAPITAL CORPORATION Date: August 11, 1997 By:/s/ DAVID A. HEABERLIN --------------------------------- David A. Heaberlin Executive Vice President and Chief Financial Officer EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION - ------ ----------- 99 Consolidated Financial Statements of AFEH EX-99 2 CONSOLIDATED FINANCIAL STATEMENTS OF AFEH EXHIBIT 99 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (dollars in thousands)
- ------------------------------------------------------------------------------------------------------- June 30, 1997 December 31, 1996 - ------------------------------------------------------------------------------------------------------- Assets Cash and amounts due from depository institutions $ 25,099 $ 28,266 Federal funds sold 15,000 20,000 Securities purchased under agreements to resell 5,300 5,300 Mortgage-backed securities, net Held to maturity 549,490 630,106 Available-for-sale 42,001 44,489 Loans receivable, net 1,477,903 1,403,483 Loans held for sale 495 370 Accrued interest receivable 12,817 12,206 Premises and equipment, net 8,592 8,888 Federal Home Loan Bank stock, at cost 19,906 21,827 Real estate held for sale or investment, net 1,328 1,328 Real estate owned, net 1,237 1,438 Deferred tax assets, net 22,373 22,643 Other assets 6,154 6,121 - ------------------------------------------------------------------------------------------------------- Total Assets $2,187,695 $2,206,465 - ------------------------------------------------------------------------------------------------------- Liabilities and Shareholder's Equity Customer deposits $1,888,965 $1,840,485 Securities sold under agreements to repurchase 15,522 44,353 Other borrowings 75,181 106,998 Other liabilities and accrued expenses 17,072 22,166 - ------------------------------------------------------------------------------------------------------- Total Liabilities 1,996,740 2,014,002 - ------------------------------------------------------------------------------------------------------- Redeemable Preferred Stock; Series A, no par value; 100,000 shares outstanding, $10 million liquidation value at June 30, 1997; and 200,000 shares outstanding, $20 million liquidation value at December 31, 1996 8,854 17,748 Common stock; par value $1.00; 100 shares issued and outstanding - - Paid in capital 102,189 102,189 Retained earnings 79,912 72,526 - ------------------------------------------------------------------------------------------------------- Total Shareholder's Equity 182,101 174,715 - ------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholder's Equity $2,187,695 $2,206,465 - -------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 1 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands) - --------------------------------------------------------------------------------
For the For the For the Six For the Six Quarter Ended Quarter Ended Months Ended Months Ended June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996 - ---------------------------------------------------------------------------------------------------------------------------- Interest income Interest and fees on loans $27,757 $26,510 $54,519 $53,697 Interest on mortgage-backed securities 10,704 12,686 22,024 26,517 Interest and dividends on investment 569 1,167 1,404 2,371 - ---------------------------------------------------------------------------------------------------------------------------- Total interest income 39,030 40,363 77,947 82,585 - ---------------------------------------------------------------------------------------------------------------------------- Interest expense Interest on deposits 21,963 20,333 43,453 40,059 Interest on borrowings 1,248 4,808 2,860 11,327 Preferred Stock accretion 508 542 1,107 1,067 - ---------------------------------------------------------------------------------------------------------------------------- Total interest expense 23,719 25,683 47,420 52,453 - ---------------------------------------------------------------------------------------------------------------------------- Net interest income before provision for loan losses 15,311 14,680 30,527 30,132 Provision for loan losses 250 372 502 780 - ---------------------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 15,061 14,308 30,025 29,352 - ---------------------------------------------------------------------------------------------------------------------------- Non-interest income Deposit related fees 445 453 907 922 Loan related fees 313 387 608 712 Gain on disposition of loans, net 104 107 167 154 Other income 2,669 984 3,536 1,517 - ---------------------------------------------------------------------------------------------------------------------------- Total non-interest income 3,531 1,931 5,218 3,305 - ---------------------------------------------------------------------------------------------------------------------------- Non-interest expense Compensation and benefits 5,769 5,198 11,528 10,554 Occupancy and equipment 2,037 2,089 3,941 4,314 FDIC premiums and special assessments 387 1,085 767 2,180 Professional services 767 208 1,014 530 Advertising and promotion 479 296 714 526 Provision for loss (recovery) on interest rate exchange agreements 131 (100) (5) (569) Other 2,151 2,054 3,945 4,113 - ---------------------------------------------------------------------------------------------------------------------------- Total non-interest expense 11,721 10,830 21,904 21,648 - ---------------------------------------------------------------------------------------------------------------------------- Income before income taxes 6,871 5,409 13,339 11,009 Provision for income taxes 320 - 640 - - ---------------------------------------------------------------------------------------------------------------------------- Net income $6,551 $5,409 $12,699 $11,009 - ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 2 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY For the Six Months Ended June 30, 1997 (dollars in thousands) - --------------------------------------------------------------------------------
Additional Common Paid-in Retained Stock Capital Earnings Total ------- ---------- -------- ----- Balance at December 31, 1996 $ -- $102,189 $72,526 $174,715 Net income -- -- 12,699 12,699 Dividends paid or accrued -- -- (5,100) (5,100) Net unrealized loss on mortgage-backed securities available for sale -- -- (213) (213) - ----------------------------------------------------------------------------------------------------------------------------- Balance at June 30, 1997 $ -- $102,189 $79,912 $182,101 - -----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 3 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) - --------------------------------------------------------------------------------
For the Six For the Six Months Ended Months Ended June 30, 1997 June 30, 1996 - ----------------------------------------------------------------------------------------------------------------- Cash flows from operating activities Net income $ 12,699 $ 11,009 Adjustments to reconcile net income to net cash provided by operating activities Amortization of: Investments and mortgage-backed securities net premium 1,186 1,486 Loan premium 122 543 Intangibles 579 632 Proceeds from sale of loans originated and held for sale 9,069 10,241 Originations of loans held for sale (9,027) (10,668) (Gain) loss on sale of real estate owned and held for sale or investment (1,548) 32 Gain on disposition of mortgage loans (167) (153) Provision for loan losses 502 780 Provision for loss (recovery) on interest rate exchange agreements (5) (569) Net provision for income taxes 640 - (Increase) decrease in accrued interest receivable (611) 486 Decrease in accrued interest payable (1,226) (1,117) Depreciation and amortization of premises and equipment 843 866 Increase in other assets (286) (2,227) Decrease in other liabilities (3,858) (2,082) Other, net (246) 378 - ----------------------------------------------------------------------------------------------------------------- Total adjustments (4,033) (1,372) - ----------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 8,666 9,637 - ------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities Loans originated and held for investment (193,750) (113,330) Purchases of mortgage-backed securities - (14,547) Purchases of real estate loans (4,760) (21,930) Purchases of premises and equipment (586) (512) Principal payments on mortgage-backed securities 81,704 111,480 Principal payments on loans 122,357 148,342 Proceeds from sale of Federal Home Loan Bank Stock 2,599 911 Redemption of preferred stock (10,000) - Proceeds from sales of real estate owned and held for sale or investment 2,654 1,557 Other, net 218 189 - ----------------------------------------------------------------------------------------------------------------- Net cash provided by investing activities 436 112,160 - ----------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Net increase in checking and saving accounts 1,543 45,325 Proceeds from issuance of certificates of deposits 164,904 144,005 Payments for maturing or early withdrawal of certificates of deposits (117,968) (98,268) Net decrease in short-term repurchase agreements (28,831) (115,302) Decrease in Federal Home Loan Bank advances (31,817) (121,032) Dividends (5,100) (5,400) - ----------------------------------------------------------------------------------------------------------------- Net cash used by financing activities (17,269) (150,672) - ----------------------------------------------------------------------------------------------------------------- Net decrease in cash and cash equivalents (8,167) (28,875) Cash and cash equivalents at beginning of period 53,566 70,486 - ----------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 45,399 $ 41,611 - ----------------------------------------------------------------------------------------------------------------- Supplemental disclosure of cash flow information Non cash investing and financing activities: Additions to real estate acquired through foreclosure $ 1,114 $ 2,909 Cash paid for interest (including interest credited) $ 48,780 $ 52,658 Cash paid for alternative income and minimum franchise taxes $ 370 $ 380 - -----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 4 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 1. ORGANIZATION America First Eureka Holdings, Inc. (the "Company") is a wholly owned subsidiary of America First Financial Fund 1987-A Limited Partnership (the "Partnership"), and was formed for the purpose of owning and managing one or more acquired financial institutions. The Company acquired EurekaBank ("Eureka") on May 27, 1988 (the "Acquisition"). 2. BASIS OF PRESENTATION The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary, Eureka and its subsidiaries. All significant intercompany transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (primarily consisting of normal recurring accruals) necessary for a fair presentation of the Company's financial condition as of June 30, 1997, and the results of its operations for the quarters and six months ended June 30, 1997 and 1996. 3. ALLOWANCE FOR LOAN LOSSES The Company recorded loan loss provisions of approximately $250,000 and $502,000 for the quarter and six months ended June 30, 1997, respectively, as compared to $372,000 and $780,000 for the same periods in 1996, respectively. At June 30, 1997 and December 31, 1996, the allowance for loan losses was approximately $7.2 million and $7.1 million, respectively. Management believes that the allowance for loan losses was adequate given the composition, credit characteristics and loss experience of the loan portfolio. 4. INTEREST RATE EXCHANGE AGREEMENTS Prior to 1993, the Company entered into interest rate exchange agreements to reduce the impact of future fluctuations in interest rates on fixed rate mortgages funded by variable rate liabilities. The floating rates to be received by the Company under the terms of these agreements are reset monthly, quarterly or semi-annually and are generally indexed to the FHLB Eleventh District Cost of Funds index or the one or three month London Interbank Offered Rate ("LIBOR"). In 1993, the sustained decline in interest rates in the general economy and the resulting prepayment of mortgage loans associated with the interest rate exchange agreements caused Eureka to establish a liability based on the estimated fair value of interest rate exchange agreements that were no longer deemed effective as hedges. During the quarter ended June 30, 1997, Eureka recorded a provision to non-interest expense on interest rate exchange agreements of approximately $131,000 to reflect the effect of interest rate decreases on the market value of Eureka's related obligations. A net recovery of approximately $5,000 was recorded for the six months ended June 30, 1997. During the quarter and six months ended June 30, 1996, Eureka recorded to non-interest expense recoveries on interest rate exchange agreements of approximately $100,000 and $569,000, respectively, to reflect the effect of interest rate increases on the market value of Eureka's related obligations. The recorded liability for the interest rate exchange agreements totaled approximately $609,000 and $1.2 million at June 30, 1997 and December 31, 1996, respectively. Net interest payable on interest rate exchange agreements was $447,000 and $629,000 at June 30, 1997 and December 31, 1996, respectively, and was included in other liabilities and accrued expenses. For the quarter and six months ended June 30, 1997, net interest expense on interest rate exchange agreements (after amortization of the interest rate exchange agreement liability of $222,000 and $619,000, respectively) totaled 5 AMERICA FIRST EUREKA HOLDINGS, INC. AND SUBSIDIARY approximately $205,000 and $419,000, respectively. For the quarter and six months ended June 30, 1996, net interest expense on interest rate exchange agreements (after amortization of the interest rate exchange agreement liability of $428,000 and $1.1 million, respectively) totaled approximately $258,000 and $385,000, respectively. Net interest expense on interest rate exchange agreements is included as an adjustment to interest income on loans. The notional amount of interest rate exchange agreements outstanding was $80 million and $100 million at June 30, 1997 and December 31, 1996, respectively. 5. INCOME TAXES The consolidated financial statement provisions for income tax for the quarter and six months ended June 30, 1997 and 1996 relate to the Company and its subsidiary. The Company and its subsidiary file calendar year consolidated federal income and combined California franchise tax returns. Deferred tax assets are initially recognized for net operating loss and tax credit carryforwards and differences between the financial statements carrying amount and the tax bases of assets and liabilities which will result in future deduction amounts. A valuation allowance is established to reduce the deferred tax assets to the level at which it is more likely than not that the tax benefits will be recognized. A valuation allowance is recorded if it is more likely than not that some portion or all of the deferred tax assets will not be realized based on a review of available evidence. The allowance is subject to ongoing adjustmets based on changes in circumstances that affect management's assessment of the realizability of the deferred tax assets. Adjustments to increase or decrease the valuation allowance are charged or credited, respectively, to income tax expense (benefit). 6. PROPOSED MERGER WITH BAY VIEW CAPITAL CORPORATION On May 8, 1997, the Partnership announced that it had entered into a definitive agreement with Bay View Capital Corporation with respect to a merger of its subsidiary America First Eureka Holdings with Bay View (the "Merger Agreement"). Under the terms of the Merger Agreement, the Partnership will receive $90 million in cash and $210 million in Bay View common stock (subject to a minimum of 8,076,922 shares and a maximum of 10,000,000 shares) for its interest in America First Eureka Holdings, which owns Eureka. If the market price of Bay View common stock (based on the average closing prices over a specified period) is less than $21.00 per share, the Partnership has the right to terminate the Merger Agreement unless the total value of the shares of Bay View common stock to be received is $210 million in addition to the cash portion of $90 million. The transaction is expected to close on December 31, 1997 or January 2, 1998, and is subject to customary conditions, including regulatory approval and approval by the BUC holders. Please refer to the Partnership's Form 8-K dated May 16, 1997 for further information. The above Bay View shares to be received by the Partnership under the terms of the Merger Agreement are adjusted for a Bay View 100% stock dividend declared on April 14, 1997 to Bay View stockholders of record on May 9, 1997. In May 1997, $10 million of the preferred stock issued to the FDIC was redeemed. The $10 million of mandatorily redeemable non-voting Series A Preferred Stock that remains outstanding is scheduled for redemption in May 1998, but will be redeemed when the merger is completed. Under the terms of the Assistance Agreement, and as a result of the Merger Agreement discussed above, the Partnership expects to pay a final participation payment to the FDIC of approximately $12.8 million from cash received at the time of the merger. The final participation payment is in addition to the redemption of the remaining $10 million in outstanding Series A Preferred Stock. 6 -----END PRIVACY-ENHANCED MESSAGE-----