BYL Bancorp Predicts 1st-Quarter Loss

BYL Bancorp, the Orange-based holding company for Bank of Yorba Linda, said Friday it expects to report a loss of nearly $500,000 for the first quarter as a result of a restructuring. The company, which earned $460,000 a year ago, had decided to get out of the business of packaging loans and selling them on Wall Street, a process known as securitization. Federal regulators, scrutinizing such activities among banks, had required BYL 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. Keeping the loans in its own portfolio, however, also requires more capital, which BYL is raising through the sale of assets. Since the beginning of the year, the company has closed its indirect auto division and sold the division’s portfolio, and it has divested its Diamond Bar residential mortgage division.