Merger Would Diversify Bank's RE Loan Portfolio

First Bank of Beverly Hills (Calif.) will shift the focus of its asset portfolio from real estate loans and securities to a more diversified mix of mortgages and loans to non-real estate business, if the transaction between its parent company, Beverly Hills Bancorp Inc., and Orchard First Source Asset Management LLC is completed. OFS is a privately owned company that provides senior secured financing to middle market and industrial companies. Under the terms of the deal, it will receive an 80% equity stake in Beverly Hills Bancorp. OFS Funding LLC will be merged into First Bank. The transaction is intended to satisfy the terms of a cease and desist order issued against First Bank by the Federal Deposit Insurance Corp. and the California Department of Financial Institutions. Another change to First Bank will be the creation of a Small Business Administration lending program to loan to Southern California businesses. Beverly Hills Bancorp's stock is trading on the pink sheets. During the afternoon of March 3, when the deal was announced, its price rose from $0.03 per share to $0.15 per share.