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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) January 12, 1999
REGENCY BANCORP
(Exact name of registrant as specified in its charter)
California 000-23815 77-0378956
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) 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 January 12, 1999
announcing record performance for 1998, and reporting net after-tax
income of $3.67 million or $1.40 per share for 1998. For the fourth
quarter of 1998, the company earned $1.45 million or $0.55 per share.
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 January 12, 1999
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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: January 12, 1999 /s/ STEVEN R. CANFIELD
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Steven R. Canfield
EVP & CFO
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated January 12, 1999
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Wil Goodrich, Vice President-Director of Marketing - (800) 562-6449,
Ext. 208
REGENCY BANCORP REPORTS RECORD PERFORMANCE FOR 1998
FRESNO, JANUARY 12 -- Fresno (CA)-based Regency Bancorp (Nasdaq REFN),
parent company of Regency Bank and Regency Investment Advisors, Inc., today
reported net after-tax income of $3.67 million or $1.40 per share for 1998.
This represents a $4.94 million increase from the $0.49 per share loss incurred
in 1997 as a result of the company's mandated divestiture of its real estate
investment activities.
For the fourth quarter of 1998, the company earned $1.45 million or $.55
per share as compared to $333,000 or $.13 per share a year earlier. Return on
average assets for 1998 was 1.77 percent versus a negative 0.68 percent the
previous year. Regency's return on average equity increased to 18.2 percent in
1998 from a negative 9.6 percent in 1997.
The holding company also reported record assets of $232 million, a 17.0
percent increase from total assets of $198.2 million at the end of 1997.
Additionally, total loans and total deposits reached record levels in 1998. As
of December 31, 1998, total loans were $151.2 million versus $129.6 million a
year earlier and total deposits were $206.6 million as compared to $176.3
million the previous year, representing increases of 17.2 percent and 16.6
percent respectively. Shareholders' equity grew 19.8 percent to $22.5 million
from $18.7 million a year earlier.
"We were confident that our restructuring plan would turn the company
around when we increased reserves and wrote down property values at mid-year
1997," said Regency Bancorp
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Chairman, President, and Chief Executive Officer Steve Hertel, "but we have been
pleasantly surprised with the impressive growth we have been able to achieve in
the last year and a half.
"We've seen our net income grow an average of 38.7 percent in each of the
six succeeding quarters," he added. "Our net interest margin has improved to
7.04 percent, and our efficiency ratio has declined to 58.6 percent."
"Credit quality was a highlight for the company in 1998," said Executive
Vice President and Chief Credit Officer Robert Longatti. "The bank's net loan
losses were only 0.08 percent of average loans while we actually recovered some
of RSC's (Regency Service Corporation, the bank's real estate investment
subsidiary) previously charged off loans."
For the seventh consecutive year, Regency Bank was the leading lender in
dollar volume of U.S. Small Business Administration guaranteed loans in the
15-county central California area. It originated 70 loans totaling $19.2
million. In a newer category of government guaranteed loans for the bank,
Regency was named California's top lender of U.S. Department of Agriculture
Rural Development Business and Industry Loans. During the USDA's fiscal year,
the bank originated 11 loans totaling $9.3 million to lead California which, in
turn, was the top state nationally.
"By any measure, the company's financial performance this year was its best
ever," said Regency's Chief Financial Officer and Executive Vice President,
Steve Canfield. "In addition to our very strong core earnings, we were pleased
to recover a portion of the specific reserves dedicated toward the divestiture
of our real estate investment activities during the third and fourth quarters of
1998, adding approximately $736,000 to net income for the year. Without these
one-time recoveries, the company's annual net income still would have exceeded
its previous record by nearly $1.0 million."
Hertel also disclosed that the holding company's S.E.C.-registered money
management subsidiary, Regency Investment Advisors, Inc. (RIA), had another
excellent year in spite of market
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volatility. Its assets under management grew by 25.1 percent while adding
several new endowment, retirement, and benefit investment clients. The largest
new client was Fresno-based Gottschalks Inc., which has an employee base of more
than 6,000 at 46 locations in four western states.
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.
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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
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DEC. 31, FOR THE 12 MONTHS ENDED DEC. 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Results of Operations: $(000)
Interest income 4,958 4,146 18,636 15,286
Interest expense 1,448 1,360 5,452 5,321
Net interest income 3,510 2,786 13,184 9,965
Provision for credit losses 0 58 375 1,353
Net interest income after provision 3,510 2,728 12,809 8,612
Non interest income 1,027 563 2,962 2,687
Non interest expense 2,076 2,633 9,455 13,406
Income(loss) before income taxes 2,461 658 6,316 (2,107)
Income taxes/(benefit) 1,013 325 2,643 (833)
Net income (loss) 1,448 333 3,673 (1,274)
Balance Sheet: (end of period) $(000)
Total Assets 231,967 198,241
Total Loans 151,151 129,635
Investments 48,160 36,986
Earning assets 204,248 168,909
Investments in real estate 0 4,338
Total deposits 206,636 176,279
Notes payable and capital leases 547 509
Shareholders' equity 22,449 18,734
Financial Ratios: (period annualized %) %))
Return on average assets 2.50 .68 1.77 (.68)
Return on average equity 26.51 10.22 18.17 (9.60)
Ending equity to average assets 9.79 9.68 10.82 10.06
Avg. earning assets to avg. assets 91.63 86.48 90.30 83.86
Efficiency ratio 45.75 78.62 58.56 105.96
Net interest margin 6.63 6.60 7.04 6.38
Non interest income to avg. assets 1.78 1.15 1.43 1.44
Non interest expense to avg. assets 3.59 5.40 4.56 7.20
Loan loss reserve to total loans 1.74 1.71 1.74 1.71
Per Share:
Earnings per share ($) .55 .13 1.40 (.49)
Dividends ($) - - - - - - - -
Book value (end of period) ($) 8.55 7.15 8.55 7.15
Market value (end of period) ($) 14.96 10.44 14.94 10.44
Market to book value (%) 1.75 1.46 1.75 1.46
Price earnings (PE) ratio (%) 6.83 20.72 10.67 - -
Shares outstanding 2,624,374 2,621,125 2,624,374 2,621,125
</TABLE>
JANUARY 12, 1999 # # #
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