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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 9, 1998
REGENCY BANCORP
(Exact name of registrant as specified in its charter)
California 000-23815 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.
The Registrant issued a press release dated July 9, 1998 announcing
its record mid-year earnings, which states earnings of $1.15 million
or $0.44 per share in the first six months 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 July 9, 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: July 10, 1998 /s/ STEVEN R. CANFIELD
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Steven R. Canfield
EVP & CFO
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EXHIBIT INDEX
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Sequential
Exhibit No. Description Page No.
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99.1 Press Release dated July 9, 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 MID-YEAR EARNINGS
FRESNO, JULY 9 -- Fresno-based Regency Bancorp, parent company of Regency
Bank and Regency Investment Advisors, Inc., today announced that it earned $1.15
million or $0.44 per share in the first six months of 1998. This was an
increase of $3.05 million over the same period last year when it recorded a loss
of $1.91 million or $1.03 per share.
At mid-year 1997, the company wrote down the assets of its real estate
development subsidiary, Regency Service Corporations (RSC), and expanded its
reserves against the subsidiary's losses anticipated in finalizing its
FDIC-mandated divestiture of those assets. This action resulted in the second
quarter loss of 1997 and for the year itself.
RSC, at June 30, 1997, held 260 single family real estate units for sale,
representing assets of $11 million. In the 12 months since that date, RSC has
sold 255 of these homes and lots leaving five units remaining at June 30, 1998.
The carrying value of those five units has been reduced to zero on the company's
books. This is the first time since the end of 1984 that the company has not
carried real estate investment assets on its balance sheet.
Steve Hertel, chairman, president and chief executive officer of Regency
Bancorp, stated that "the elimination of RSC's holdings has allowed Regency to
dramatically increase its earning assets, most significantly in its loan
portfolio. Total loans increased to a record $142.4 million at the end of the
second quarter, up 26.6% from June 30, 1997. In the last year, earning assets
have grown by $27.2 million while total assets are up $19.2 million to a record
$205.6 million at June 30, 1998. This
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tremendous growth in loans and other earning assets has allowed the company to
improve its net interest margin to 7.65% from 6.09% a year ago."
Hertel also announced that "Regency Investment Advisors, Inc., our S.E.C.-
registered money management subsidiary, closed out the second quarter by
exceeding the $100 million mark in assets under management. This represents a
421% increase in assets under management since the firm was established in
August of 1993.
"In the first half of this year," he continued, "Regency Bancorp was
accepted as a member of the Nasdaq National Market where its stock now trades
under the symbol REFN. The bank also took steps to become both a Federal
Reserve and Federal Home Loan Bank member.
Regency Bancorp's net income for the second quarter of 1998 was $628,000,
the fourth consecutive quarter of such growth. Following the second quarter of
1997, the company has earned $301,000, $333,000, and $519,000 in succeeding
quarters.
In conjunction with record loans and assets, the company reported that
total deposits also reached a new high of $182.3 million, an increase of $11.5
million from the end of the same period a year ago. Shareholders' equity
reached an all time high at June 30, 1998, at $19.9 million as compared to $12.0
million a year ago. Discounting $5.9 million in additional capital raised at
the end of 1997, the increase as a result of the company's excellent performance
was 16.7%.
"In addition to improving revenue," Hertel added, "we have successfully
focused on expenses. Our goal is to continually improve our efficiency by
controlling operational costs as the company grows. Over the past year,
operating efficiency has shown steady improvement. Non interest expense to
average assets, one key measurement of efficiency, has dropped from 9.28% for
the first six months of 1997 to 5.31% at June 30, 1998. Also, our efficiency
ratio has improved from 151.62 a year ago to 63.71 at this year's mid point.
Both improvements are a direct result of eliminating RSC's land development
activities."
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In surpassing the $140 million plateau in total loans, the bank achieved a
78.1% loan to deposit ratio at mid-year. Its loan loss reserve grew from 1.68%
of total loans a year ago to 1.84% at June 30, 1998, and non performing loans as
a percentage of total loans dropped from 2.22 last year to 1.22 at mid-year,
1998. Of this 1.22%, 0.70% were RSC loans made to facilitate the sale of the
subsidiary's properties, only 0.52% were Regency Bank loans.
The company's return on average assets for the second quarter improved to
1.27% compared to a negative 4.61% for the same period last year. Return on
average common equity for this year's second quarter was 12.82% versus a
negative 61.30% for last year's second quarter.
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 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., as well as other
financial firms such as Banc Stock Financial Services.
# # #
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 FOR THE 6 MONTHS
ENDED JUNE 30, ENDED JUNE 30,
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RESULTS OF OPERATIONS: $(000)
Interest income 4,694 3,659 8,818 7,107
Interest expense 1,313 1,330 2,596 2,609
Net interest income 3,381 2,329 6,222 4,498
Provision for credit losses 150 835 275 835
Net interest income after 3,231 1,494 5,947 3,663
Non interest income 676 619 1,163 1,400
Non interest expense 2,815 5,806 5,119 8,351
Income/(loss) before income 1,092 (3,693) 1.991 (3,288)
Income taxes/(benefit) 463 (1,551) 843 (1,381)
Net income/(loss) 629 (2,142) 1,148 (1,907)
BALANCE SHEET: (END OF PERIOD)
Total Assets 205,632 186,870
Total Loans 142,381 112,434
Investments 37,098 37,199
Earning assets 182,076 154,917
Investments in real estate 0 11,260
Total deposits 182,318 170,862
Notes payable and capital 528 2,545
Shareholders' equity 19,918 12,045
FINANCIAL RATIOS: (PERIOD ANNL.
Return on average assets 1.27 (4.61) 1.19 (2.12)
Return on average equity 12.82 (61.30) 11.96 (27.77)
Average equity to average 9.93 7.53 9.96 7.63
Avg. earning assets to avg. 89.49 82.39 89.15 81.99
Efficiency ratio 63.26 221.65 63.71 151.62
Net interest margin 7.65 6.09 7.24 6.09
Non interest income to avg. 1.37 1.33 1.21 1.56
Non interest expense to avg. 5.69 12.50 5.31 9.28
Loan loss reserve to total 1.84 1.68
PER SHARE:
Earnings per share ($) .24 (1.15) .44 (1.03)
Dividends ($) .00 .00 .00 .00
Book value (end of period) ($) 7.59 6.44
Market value (end of period) ($) 13.88 9.38
Market to book value (%) 1.83 1.46
Price earnings (PE) ratio (%) 14.45 ---- 15.76 ----
Shares outstanding 2,624,374 1,871,125
JULY 9, 1998
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