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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) July 22, 1997
REGENCY BANCORP
(Exact name of registrant as specified in its charter)
California 33-82150 77-0378956
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
7060 N. Fresno, Fresno, California 93720
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (209) 438-2600
Not Applicable
(Former name or former address, if changed since last report).
Page 1 of 8 pages
The Exhibit Index is on Page 4.
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Item 5. OTHER EVENTS.
Registrant issued a press release and shareholder's letter each dated
July 22, 1997, announcing the 2nd quarter results and Capital
Augmentation Program. The registrant stated that it took action at
June 30, 1997 resulting from an analysis of strategic alternatives to
make a special adjustment to the balance sheet of Registrant's
subsidiary, RSC and engaged Carruthers & Company to assist registrant
in raising additional capital. The foregoing description is qualified
by reference to the press release and shareholder's letter attached as
exhibits 99.1 and 99.2
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
Not Applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not Applicable.
(c) EXHIBITS.
(99.1) Press Release dated July 22, 1997.
(99.2) Shareholder's Letter dated July 22, 1997
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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.
REGENCY BANCORP
Date: July 22, 1997 Steven F. Hertel /s/
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Steven F. Hertel
President
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EXHIBIT INDEX
Sequential
Exhibit No. Description Page No.
----------- ----------- --------
99.1 Press Release dated 5-7
July 22, 1997
99.2 Shareholder's Letter 8
dated July 22, 1997
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Wil Goodrich, Vice President-Director of Marketing (209) 438-2600
REGENCY BANCORP ANNOUNCES 2ND QUARTER RESULTS
AND CAPITAL AUGMENTATION PROGRAM
FRESNO, JULY 22- - Regency Bancorp, parent company of Regency Bank,
announced its financial results through June 30, 1997. During the first six
months of the year, the company reported a consolidated net loss of $1.9 million
as compared to net income of $560,000 for the same period of 1996.
The net loss for the first half of 1997 was a direct result of additional
write downs associated with the bank's real estate investment subsidiary,
Regency Service Corporation (RSC). Steve Hertel, president and chief executive
officer, stated that management and the board, with the assistance of outside
consultants, recently completed an analysis of strategic alternatives available
to the company. The result of this analysis was a decision to make a special
adjustment to RSC's balance sheet to write down real estate investment
properties.
"This action reflects our determination," Hertel said, "to accomplish a
more rapid disposition of RSC's investment properties than might otherwise be
achieved under a normal course of business approach.
"The goal of the company is to mitigate the financial impact of RSC's
mandated divestiture," he added, "so that, in the future, the financial results
of the company should be more reflective of the continued strong performance of
both the bank (absent RSC) and Regency Investment Advisors, Inc. (RIA), the
company's investment advisory subsidiary. We determined that this action would
be in the best interests of the company and its shareholders, as well as
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enhance the prospects for a successful new capital offering."
Regency Bancorp also announced that it has engaged Carruthers & Company to
assist the company in raising additional capital. Carruthers & Company, of the
Washington, D.C. area, is a financial advisory and consulting firm that
specializes in community bank capital enhancement programs. The form and
structure of the capital offering is still under analysis.
Notwithstanding the company's consolidated results, Hertel noted the
continued solid performance of Regency Bank and RIA, as well as the strong
growth of the company. During the first two quarters of 1997, the bank (absent
RSC) and RIA recorded aggregate net income of $943,000. The company also
reached record asset levels during the first half of this year, up 15.4% to
$186.9 million compared to $161.9 million at mid-year 1996. Total deposits of
the bank increased 21.4% during the last twelve months to $170.9 million. In
addition, the bank's total loan portfolio also reached a record level with
$113.3 million invested locally, an increase of 13.2% from $100.1 million a year
ago.
The company's president also affirmed that, "I continue to be pleased by
the performance of the bank and RIA which represent the principal components of
our company's future. We recently issued a Visa Cash Access card, which is a
replacement for paper checks and other debit cards. In the near future, we'll
begin testing 24-hour personal computer or touch tone telephone banking and bill
paying at the home or office."
He also pointed out that Regency Investment Advisors, Inc., which
represents the only community bank based investment advisory firm in
California's Central Valley, reported a record total of assets under management
of $80.3 million as of June 30, 1997.
Regency Bancorp and its subsidiaries have served Fresno and the Central
Valley since December of 1980. The company currently serves the greater Fresno
market and Madera County through its three banking branches and has a loan
production office in Modesto. It's stock trades
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over the counter under the symbol REFN with four market makers: Van Kasper
& Co., Hoefer & Arnett, Banc Stock Financial Services, and Sutro & Co.
# # #
Regency Bancorp -- Summary Financial Data - Unaudited
FOR THE SIX MONTHS ENDED JUNE 30,
1997 1996
INCOME STATEMENT DATA:
Net interest income $ 4,498,000 $ 4,159,000
Provision for loan losses 835,000 -0-
Non interest income 1,400,000 1,775,000
Non interest expense, without RSC 4,761,000 4,783,000
RSC expenses 3,590,000 182,000
Earnings (losses) before income taxes (3,288,000) 970,000
Net earnings (loss) (1,907,000) 560,000
PER SHARE DATA:
Net earnings (loss) $ ( 1.03) $ 0.31
Book value 6.44 7.17
BALANCE SHEET DATA:
Total Assets $186,870,000 $161,931,000
Total Loans 113,280,000 100,110,000
Deposits 170,862,000 140,722,000
Shareholders' equity 12,045,000 13,030,000
JULY 22, 1997
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EXHIBIT 99.2
July 22, 1997
Dear Regency Bancorp Shareholder:
For the last several years, the board, management and staff of Regency Bancorp
have been actively involved in an FDIC-mandated divestiture of the real estate
investment activities of our bank's subsidiary, Regency Service Corporation
(RSC).
In the past, we've provided you with a detailed summary of the divestiture's
regulatory requirements. Though our efforts have been vigorous, we found it
necessary to seek federal approval last year to continue our divestiture efforts
beyond the regulatory deadline of Dec. 19, 1996. Our new deadline is Dec. 31,
1998.
We are convinced that divestiture efforts are hampering our ability to take
advantage of the many oppor-tunities that are available to expand our basic
banking and money management business. With the assistance of an outside
advisory firm that specializes in analyzing strategic alternatives to build long
term shareholder value, we accomplished an extensive analysis of our company's
performance.
The consensus of management and the board of directors was that we must put
RSC's financial impact, to whatever extent possible, behind us now in order to
produce income that reflects the current and anticipated excellent performance
of Regency Bank and Regency Investment Advisors, Inc. (RIA). As a result, at
the end of the second quarter, we took a number of dramatic steps to re-organize
and expedite the winding down of our remaining real estate properties.
It's because of the earnings performance of Regency Bank and RIA that we're
confident in issuing the enclosed news release announcing a loss of $1.9 million
year-to-date in 1997, for the holding company. If the bank's and RIA's
performance (net of RSC) during the second six months mirrors the first six
months of 1997, this loss is anticipated to be reduced to less than $1 million
by year end.
Our intention to raise additional capital is also noted in the release. Though
the method of raising capital hasn't been determined (public offering or
private), nor the amount, we are confident that it will be in the long term best
interests of the company and its shareholders.
If you would like additional information or a copy of our report to the
Securities and Exchange Commission on Form 10-Q, for the period ended June 30,
1997, please contact our Shareholder Relations Department at (209) 438-2600,
ext. 213, or toll free at 1-800 562-6449.
Thank you for your continuing support of Regency Bancorp. We're looking forward
to serving you and working to enhance the value of your investment.
Sincerely,
Steven F. Hertel
Chairman of the Board
President and Chief Executive Officer
