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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) October 8, 1998
REGENCY BANCORP
(Exact name of registrant as specified in its charter)
California 000-23815 77-0378956
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
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.
The Registrant issued a press release dated October 8, 1998
announcing its third quarter earnings, which states record net
quarterly income of $1.08 million or $0.41 per share for the third
quarter of 1998. The foregoing is qualified by reference to the press
release attached as exhibit 99.1
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 October 8, 1998
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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: October 8 , 1998 /s/ STEVEN R. CANFIELD
--------------------------------
Steven R. Canfield
EVP & CFO
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION PAGE NO.
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99.1 Press Release dated October 8, 1998 5 - 8
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Wil Goodrich, Vice President-Director of Marketing (209) 438-2600
REGENCY BANCORP HAS RECORD THIRD QUARTER EARNINGS
FRESNO, OCT 8 -- Fresno (CA )-based Regency Bancorp (Nasdaq REFN),
parent company of Regency Bank and Regency Investment Advisors, Inc., today
announced record net quarterly income of $1.08 million or $0.41 per share for
the third quarter of 1998. These earnings were a 258% increase over the same
period last year when the bank holding company earned $301,000 or $0.16 per
share.
In the first nine months of this year, the company earned a record $2.2
million or $0.85 per share, a $3.8 million increase over the same period in
1997. A year ago, the company had a net loss of $1.6 million or ($0.87) per
share, as a result of its decision to aggressively write down the value of
real estate investment properties in compliance with revised federal
regulations. The company's net income, exclusive of those write downs, would
have been approximately $1.4 million or $0.75 per share for the first nine
months of 1997, which, when compared to the first nine months of this year,
represents an increase of more than 57%.
"This substantial improvement resulted from the company's ability to
direct all of its efforts and resources to its core banking business and
money management activities," stated Steve Hertel, Regency's chairman,
president and chief executive officer. "Regency Bank has reached record
levels in assets, deposits, and loans. Regency Investment Advisors, Inc.,
our SEC-registered money management subsidiary, also achieved a 16.8% growth
in assets under management despite the turbulent market, and continued its
growing contribution to the bottom line."
The company's record performance, according to Executive Vice President
and Chief Financial Officer Steve Canfield, is due in part, "to a significant
expansion of earning assets. During the last 12
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months ending September 30, 1998, our interest earning assets increased by
$48.7 million and now account for 92% of the company's total assets. This is
a direct result of converting under performing real estate investments into
performing loans."
At September 30, 1998, total assets were up 18.5% to a record $223.8
million from $188.9 million a year ago. Total loans increased 20.4% to $144.3
million as compared to $119.8 million at the end of the third quarter last
year, and deposits grew 13.6% to $198.7 million from $175.0 million over the
same period.
Canfield also noted that "In addition to improving the revenue side of
the income statement, we have focused attention on continually improving
efficiency by controlling operating expenses. Over the past year, operating
efficiency has shown steady improvement, for example, our efficiency ratio
improved from 71.1% at the end of the third quarter of 1997 to 53.5% at the
end of the just-concluded third quarter."
The company's return on average assets for the third quarter of 1998
increased to 2.02% from 0.63% at the end of the same quarter a year earlier.
Return on average equity for this year's third quarter was 20.87% versus
9.58% for the same three-month period in 1997.
"With this record performance and significant growth in earning assets,"
stated Executive Vice President and Chief Credit Officer Robert Longatti,
"I'm pleased to report that we have maintained our excellent credit quality.
Our loan loss reserve, with additions of just $375,000 year to date, is at
1.86% of total loans of $144.3 million. In addition, over $32 million of our
loan portfolio is supported by a full faith guarantee of the U.S. Government
SBA Loan Program.. Excluding these guarantees, our loan loss reserve is in
excess of 2.41%. Finally, nonperforming loans as a percentage of total loans
dropped from 1.68% last year to 1.01% on September 30, 1998."
Regency Bancorp and its subsidiaries have served Fresno and the Central
Valley since December of 1980. The company currently provides banking to the
greater Fresno market and Madera
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County through its three branches and has a government-guaranteed loan
production office in Modesto. Its stock trades on the Nasdaq National Market
System under the symbol REFN with market makers such as: Van Kasper & Co.,
Hoefer & Arnett, and Sutro & Co.
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CERTAIN MATTERS DISCUSSED IN THIS NEWS RELEASE MAY BE FORWARD-LOOKING
STATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. SUCH RISKS AND
UNCERTAINTIES, WHICH COULD IMPACT FUTURE FINANCIAL PERFORMANCE, INCLUDE,
AMONG OTHERS, (1) COMPETITIVE PRESSURES IN THE BANKING INDUSTRY; (2) CHANGES
IN THE INTEREST RATE ENVIRONMENT; (3) GENERAL ECONOMIC CONDITIONS, EITHER
NATIONALLY OR REGIONALLY; (4) CHANGES IN THE REGULATORY ENVIRONMENT; (5)
CHANGES IN BUSINESS CONDITIONS AND INFLATION; AND (6) CHANGES IN SECURITIES
MARKETS. THEREFORE, THE INFORMATION SET FORTH HEREIN SHOULD BE CAREFULLY
CONSIDERED WHEN EVALUATING THE BUSINESS PROSPECTS OF THE COMPANY AND ITS
SUBSIDIARIES.
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Regency Bancorp -- Summary Financial Data
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For the three months ended Sep. 30, For the 9 months ended Sep. 30,
1998 1997 1998 1997
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RESULTS OF OPERATIONS: $(000)
Interest income 4,861 4,031 13,679 11,138
Interest expense 1,409 1,351 4,005 3,960
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Net interest income 3,452 2,680 9,674 7,178
Provision for credit losses 100 460 375 1,295
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Net interest income after provision 3,352 2,220 9,299 5,883
Non interest income 771 724 1,934 2,124
Non interest expense 2,260 2,420 7,379 10,771
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Income(loss) before income taxes 1,863 524 3,854 (2,764)
Income taxes/(benefit) 785 223 1,628 (1,168)
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Net income (loss) 1,078 310 2,226 (1,606)
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BALANCE SHEET: (END OF PERIOD)
Total Assets 223,818 188,948
Total Loans 144,305 119,836
Investments 45,291 37,460
Earning assets 207,762 157,990
Investments in real estate 0 8,911
Total deposits 198,725 174,987
Notes payable and capital leases 538 501
Shareholders' equity 21,109 12,445
FINANCIAL RATIOS: (PERIOD ANNUALIZED %)
Return on average assets 2.02 .63 1.49 (1.17)
Return on average equity 20.87 9.58 15.08 (16.04)
Average equity to average assets 9.67 6.62 9.87 7.28
Avg. earning assets to avg. assets 90.93 84.75 89.74 82.91
Efficiency ratio 53.52 71.10 63.57 115.79
Net interest margin 7.11 6.67 7.20 6.30
Non interest income to avg. assets 1.45 1.53 1.29 1.55
Non interest expense to avg. assets 4.23 5.09 4.93 7.84
Loan loss reserve to total loans 1.86 1.85
PER SHARE:
Earnings per share ($) .41 .16 .85 (.87)
Dividends ($) - - - -
Book value (end of period) ($) 8.04 6.65
Market value (end of period) ($) 13.81 9.50
Market to book value (%) 1.72 1.43
Price earnings (PE) ratio (%) 8.47 14.88 12.18 --
Shares outstanding 2,624,000 1,871,000
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OCTOBER 8, 1998 # # #
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