<PAGE>

                                   UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549
                                          
                                     FORM 10-Q


[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the quarterly period ended           June 30, 1998               .
                                      ---------------------------------------

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the transition period from                       to           .
                                       ----------------------   ----------

                         COMMISSION FILE NUMBER  000-23815
                                               ------------

                                  REGENCY BANCORP
                                  ---------------
               (Exact name of registrant as specified in its charter)

             CALIFORNIA                                          77-0378956
             ----------                                          ----------
      (State or other jurisdiction of                        (I.R.S. Employer
      Incorporation or organizations)                        Identification No.)

  7060 N. FRESNO STREET, FRESNO, CALIFORNIA                        93720
  -----------------------------------------                        -----
   (Address of principal executive offices)                      (Zip code)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE  (209) 438-2600.
                                                           ----------------
                                        None
                                        ----

   (Former name, former address and fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for the shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes   X    No      .  
                                                     ----     ----

As of July 28,1998, the registrant had 2,624,374 shares of Common Stock 
outstanding.

The Exhibit Index is located on page 37.

This report contains a total of 47 pages of which this is page one.

<PAGE>


                                  REGENCY BANCORP
                                          
                                 TABLE OF CONTENTS
                                          
<TABLE>
<CAPTION>

 PART I.      FINANCIAL INFORMATION                                                    PAGE 
<S>           <C>                                                                      <C>

      Item 1. Financial Statements  (unaudited)

              Consolidated Balance Sheets
              June 30, 1998, and December 31, 1997. . . . . . . . . . . . . . . . . .       3

              Consolidated Statements of Income and Comprehensive Income
              Three Months Ended and Six Months Ended June 30, 1998 and 1997  . . . .       4

              Consolidated Statements of Shareholders' Equity
              Six Months Ended June 30, 1998 and 1997 . . . . . . . . . . . . . . . .       5

              Consolidated Statements of Cash Flows 
              Six Months Ended June 30, 1998 and 1997 . . . . . . . . . . . . . . . .       6

              Notes  to Consolidated Financial Statements . . . . . . . . . . . . . .       7

      Item 2. Management's Discussion and Analysis of Financial
              Condition and Results of Operations . . . . . . . . . . . . . . . . . .      11

 PART II.     OTHER INFORMATION

      Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . .      34

      Item 2.   Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . .      34

      Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . .      34

      Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . .      34

      Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . .      34

      Item 6. Exhibits  and Reports on Form 8-K . . . . . . . . . . . . . . . . . . .      35

</TABLE>

                                          2

<PAGE>


                         REGENCY BANCORP AND SUBSIDIARIES
PART  I  ITEM 1.              FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT SHARE DATA)                             JUNE 30, 1998        DECEMBER 31, 1997
----------------------------------------------------------------------------------------------------
<S>                                                           <C>                  <C>
 ASSETS
 Cash and due from banks                                            $ 13,608             $ 16,893
 Federal funds sold                                                    3,500                3,000
----------------------------------------------------------------------------------------------------
 Total Cash and Equivalents                                           17,108               19,893
----------------------------------------------------------------------------------------------------
 Interest bearing deposits in other banks                                 76                  232
 Securities available-for-sale                                        37,098               36,986
 Loans                                                               142,381              129,635
 Allowance for credit losses                                          (2,614)              (2,219)
 Deferred loan fees & discounts                                         (979)                (986)
----------------------------------------------------------------------------------------------------
 Net Loans                                                           138,788              126,430
----------------------------------------------------------------------------------------------------
 Investments in real estate                                                -                4,338
 Other real estate owned                                                 572                  503
 Cash surrender value of life insurance                                3,108                3,038
 Premises and equipment, net                                           1,639                1,751
 Accrued interest receivable and other assets                          7,243                5,070
----------------------------------------------------------------------------------------------------
 Total Assets                                                      $ 205,632            $ 198,241
----------------------------------------------------------------------------------------------------
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Deposits:
 Noninterest bearing transaction accounts                           $ 44,448             $ 46,744
 Interest bearing transaction accounts                                51,731               48,616
 Savings accounts                                                     38,546               36,498
 Time Deposits $100,000 and over                                      31,524               28,643
 Other time deposits                                                  16,069               15,778
----------------------------------------------------------------------------------------------------
 Total Deposits                                                      182,318              176,279
 Short term borrowings                                                     -                    -
 Notes Payable and capital lease obligation                              528                  509
 Other liabilities                                                     2,868                2,719
----------------------------------------------------------------------------------------------------
 Total Liabilities                                                 $ 185,714            $ 179,507
----------------------------------------------------------------------------------------------------
 Commitments and contingent liabilities (Note 6)
 Shareholders' Equity:
 Preferred stock, no par value;
 1,000,000 shares authorized;
 no shares issued or outstanding
 Common stock, no par value; 5,000,000 
   shares authorized, 2,624,374 and 2,621,125 shares                  15,229               15,203
   issued and outstanding in 1998 and 1997, 
   respectively                                                        4,475                3,327
 Retained earnings                                                       214                  204
 Net unrealized gain on available-for-sale securities,
    net of  taxes of $155 in 1998 and $148 in 1997
----------------------------------------------------------------------------------------------------
 Total  Shareholders' Equity                                          19,918               18,734
----------------------------------------------------------------------------------------------------
 Total Liabilities and Shareholders' Equity                        $ 205,632            $ 198,241
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements

                                      3

<PAGE>


                       REGENCY BANCORP AND SUBSIDIARIES
                                                                     
      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)                       FOR THE THREE  MONTHS      FOR THE SIX  MONTHS
------------------------------------------------------------------------------------------------------------------
                                                                      ENDED JUNE 30,           ENDED JUNE 30,
------------------------------------------------------------------------------------------------------------------
                                                                   1998         1997          1998          1997
------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>           <C>          <C>           <C>
 INTEREST INCOME
 Loans (including fees)                                         $ 4,111        $ 2,904       $ 7,654       $ 5,704
 Investment securities:
   Taxable                                                          431            580           907         1,094
   Tax exempt                                                        80             34           151            54
------------------------------------------------------------------------------------------------------------------
 Total Investment  Interest Income                                  511            614         1,058         1,148
 Other                                                               72            141           106           255
------------------------------------------------------------------------------------------------------------------
 Total Interest Income                                            4,694          3,659         8,818         7,107
------------------------------------------------------------------------------------------------------------------
 INTEREST EXPENSE
 Interest on deposits                                             1,292          1,310         2,534         2,569
 Other                                                               21             20            62            40
------------------------------------------------------------------------------------------------------------------
 Total 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
    provision for credit losses                                   3,231          1,494         5,947         3,663
------------------------------------------------------------------------------------------------------------------
 NONINTEREST INCOME
 Gain-on-sale of loans                                              207            216           222           486
 Depositor service charges                                          118             96           230           194
 Income from investment management services                         229            188           445           402
 Gain (loss) on-sale of securities                                    -            (36)            5           (34)
 Gain-on-sale of assets                                               -              -             -             4
 Servicing fees on loans sold                                        10             81            79           167
 Other                                                              112             74           182           181
------------------------------------------------------------------------------------------------------------------
 Total Noninterest Income                                           676            619         1,163         1,400
------------------------------------------------------------------------------------------------------------------
 NONINTEREST EXPENSE
 Loss from investments in real estate                               221          3,350           214         3,590
 Salaries and related benefits                                    1,245          1,233         2,441         2,397
 Occupancy                                                          379            411           739           814
 FDIC insurance and regulatory assessments                          115             22           228            44
 Marketing                                                          144            142           270           232
 Professional services                                              159            157           331           278
 Director's fees and expenses                                        46             80            99           176
 Management fees for real estate projects                             -              4             -           112
 Supplies, telephone & postage                                       83             84           164           163
 Other                                                              423            323           633           545
------------------------------------------------------------------------------------------------------------------
 Total Noninterest Expense                                        2,815          5,806         5,119         8,351
------------------------------------------------------------------------------------------------------------------
 Income before income taxes (benefit)                             1,092         (3,693)        1,991        (3,288)
 Provision (benefit) for income taxes                               463         (1,551)          843        (1,381)
------------------------------------------------------------------------------------------------------------------
 Net Income/(loss)                                                  629         (2,142)        1,148        (1,907)
 Other comprehensive income, net of tax:
   Unrealized gain on securities                                      5            215            10            74
------------------------------------------------------------------------------------------------------------------
 Comprehensive income/(loss)                                     $  634      $  (1,927)      $  1,158    $  (1,833)

 Earnings (loss)  per common share                               $  .24      $   (1.15)        $  .44    $   (1.03)
 Basic                                                           $  .22      $   (1.15)        $  .41    $   (1.03)
 Diluted
 Shares on which earnings per common share were based         2,624,000      1,859,000     2,623,000     1,845,000
 Basic                                                        2,807,000      1,859,000     2,796,000     1,845,000
 Diluted
------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements

                                                4

<PAGE>

                                REGENCY BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
 FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
--------------------------------------------------------------------------------------------------------------------------
                                                     Common         Common                             Net
                                                      Stock          Stock        Retained       Unrealized
 (In thousands)                            Number of Shares         Amount        Earnings      Gain (Loss)          Total
--------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                    <C>             <C>           <C>              <C>

 Balance, December 31, 1996                           1,818        $ 8,868         $ 4,601             $ 1        $ 13,470
--------------------------------------------------------------------------------------------------------------------------
 Issuance of common stock
    to employee stock ownership plan                     36            333               -               -             333

 Issuance of common stock                                                                                 
    under stock option plan                              17             75               -               -              75

 Net change in unrealized gain on                          
    available-for-sale securities net of
     taxes of $53,000                                     -              -               -              74              74

 Net (loss)                                               -              -         (1,907)              -          (1,907)
--------------------------------------------------------------------------------------------------------------------------
 Balance, June 30, 1997                               1,871        $ 9,276        $  2,694            $ 75        $ 12,045
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                   Common          Common                              Net
                                           Stock Number of          Stock         Retained      Unrealized
 (In thousands)                                     Shares         Amount         Earnings     Gain (Loss)           Total
--------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                    <C>             <C>           <C>              <C>

 Balance, December 31, 1997                          2,621        $ 15,203         $ 3,327           $ 204        $ 18,734
--------------------------------------------------------------------------------------------------------------------------
 Issuance of common stock
    under stock option plan                              3              26               -               -              26

 Net change in unrealized gain on
    available-for-sale securities net of
     taxes of $7,000                                     -               -               -              10              10

 Net Income                                              -               -           1,148               -           1,148
--------------------------------------------------------------------------------------------------------------------------
 Balance, June 30, 1998                              2,624        $ 15,229         $ 4,475           $ 214        $ 19,918
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements
                   
                                                  5

<PAGE>

                                   REGENCY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
 (IN THOUSANDS) FOR THE SIX MONTHS ENDED  JUNE 30,                       1998                   1997
----------------------------------------------------------------------------------------------------
<S>                                                                 <C>                  <C>
 OPERATING ACTIVITIES:
 Increase (decrease) in cash equivalents:
 Net income/(loss)                                                   $  1,148              $ (1,907)
 Adjustments:
 Provision for credit losses                                              275                    835
 Provision for losses on real estate                                        -                    635
 Provision for OREO losses                                                131                     29
 Depreciation and amortization                                            263                    315
 Deferred income taxes                                                    359                  (286)
 (Increase) decrease in interest receivable and other assets            (188)                  1,096
 Increase in surrender value of life insurance                           (70)                   (65)
 Distributions of  income from real estate partnerships                   213                      7
 Equity in loss of real estate partnerships                                38                    218
 Decrease in real estate held for sale                                  4,087                  4,169
 Increase (decrease)  in other liabilities                                168                (1,392)
 Gain on sale of loans held-for-sale                                    (221)                  (227)
 Proceeds from sale of loans held-for-sale                              7,481                  5,587
 Additions to loans held-for-sale                                    (10,202)                (3,884)
 Gain on sale of premises and equipment and OREO                            -                    (6)
 Loss on sale of furniture and equipment                                    -                     16
 (Gain)/loss on sale of investment securities                             (5)                     36
----------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                    3,477                  5,176
----------------------------------------------------------------------------------------------------
 INVESTING ACTIVITIES:
 Purchase of available-for-sale securities                          (12,422)               (12,820)
 Proceeds from sales of available-for-sale securities                      5                  2,102
 Proceeds from maturities of available-for-sale securities            12,283                  6,848
 Net increase in loans                                              (12,686)               (12,159)
 Net decrease (increase) in other short-term investments                 156                     98
 Proceeds from sale of OREO                                              444                    203
 Capital distributions from real estate partnerships                       -                    200
 Purchases of premises and equipment                                   (107)                   (82)
 Proceeds from sale of premises and equipment                              -                     34
----------------------------------------------------------------------------------------------------
 Net cash provided by (used in) investing activities                (12,327)               (15,576)
----------------------------------------------------------------------------------------------------
 FINANCING ACTIVITIES:
 Net increase in time deposits accounts                                3,171                 13,875
 Net increase (decrease) in other deposits                             2,868                (2,815)
 Payments on notes payable                                                 -                (4,610)
 Proceeds from notes payable                                               -                  2,179
 Proceeds from the issuance of common stock under
    employee stock option plan                                            26                     75
 Proceeds from the issuance of common stock to 
    employee stock ownership plan                                          -                    333
----------------------------------------------------------------------------------------------------
 Net cash provided by (used in) financing activities                   6,065                  9,037
----------------------------------------------------------------------------------------------------
 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (2,785)                (1,363)
----------------------------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     19,893                 19,833
----------------------------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT  END OF PERIOD                          17,108               $ 18,470
----------------------------------------------------------------------------------------------------
 CASH  PAID DURING THE PERIOD:
    Interest                                                        $  2,875               $  1,762
    Income taxes                                                          28                      -
 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND 
   FINANCING ACTIVITIES:
    Transfer of loans held-for-sale to accounts receivable             2,350                      -
    Transfer of loans to other real estate owned                         644                    233
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements
 
                                              6

<PAGE>


                          REGENCY BANCORP AND SUBSIDIARIES
                NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. - BASIS OF PRESENTATION

       The accompanying consolidated financial statements include the 
accounts of Regency Bancorp and its wholly-owned subsidiaries (the 
"Company").  Regency Bancorp is a California corporation organized to act as 
the holding company for Regency Bank (the "Bank") and Regency Investment 
Advisors, Inc. ("RIA").  RIA provides investment management and consulting 
services.  The Bank has one wholly-owned subsidiary, Regency Service 
Corporation, a California corporation ("RSC"), that has engaged in the 
business of real estate development primarily in the Fresno/Clovis area.  All 
significant intercompany balances and transactions have been eliminated in 
consolidation.

       These unaudited consolidated financial statements have been prepared 
in accordance with generally accepted accounting principles on a basis 
consistent with the accounting policies reflected in the audited consolidated 
financial statements of the Company included in the Annual Report on Form 
10-K for the year ended December 31, 1997.  They do not, however, include all 
of the information and footnotes required by generally accepted accounting 
principles for complete financial statements.  In the opinion of management, 
the unaudited interim consolidated financial statements reflect all 
adjustments (all of which are of a normal, recurring nature) necessary for a 
fair presentation of the results for the interim periods presented.  
Operating results for the interim periods presented are not necessarily 
indicative of the results that may be expected for any other interim period 
or for the year as a whole.

NOTE 2. - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

       Effective January 1, 1998, the Company adopted Statement of Financial 
Accounting Standards ("SFAS") No. 130, "Reporting of Comprehensive Income." 
This Statement requires that all items recognized under accounting standards 
as components of comprehensive earnings be reported in an annual financial 
statement that is displayed with the same prominence as other annual 
financial statements.  This Statement also requires that an entity classify 
items of other comprehensive earnings by their nature in an annual financial 
statement. Accordingly, the Company included unrealized gains and losses on 
available-for-sale securities in comprehensive earnings in the accompanying 
statement of operations for the three and six months ended June 30, 1998 and 
1997.

       In June 1997, the FASB adopted SFAS No. 131, "Disclosures about 
Segments of an Enterprise and Related Information," which establishes annual 
and interim reporting standards for an enterprises business segments and 
related disclosures about its products, services, geographic areas and major 
customers.  This Statement is effective for fiscal years after December 15, 
1997.  In the initial year of adoption, the Statement applies to annual 
financial statements only and does not apply to interim financial statements. 
In the year subsequent to adoption, interim financial statements will be 
required to include segment information.  Adoption 

                                  7

<PAGE>

of this Statement will not impact the Company's consolidated financial 
position, results of operations or cash flows.    

NOTE 3. - Investment Securities

       During the period between December 31, 1997, and June 30, 1998, the 
Company recorded a net increase in the value of its available-for-sale 
portfolio of $10,000 net of applicable taxes.  This change is reflected as a 
change in shareholders' equity in the Consolidated Statement of Shareholders' 
Equity. 

Following is a comparison of the amortized cost and approximate fair value of 
securities available-for-sale:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
 AVAILABLE-FOR-SALE SECURITIES           JUNE 30, 1998       DECEMBER 31, 1997
--------------------------------------------------------------------------------
                                     Amortized       Fair  Amortized        Fair
 (In thousands)                           Cost      Value       Cost       Value
--------------------------------------------------------------------------------
<S>                                  <C>         <C>       <C>          <C>

 U.S. Treasuries                      $  2,000   $  2,002   $  2,007    $  2,012
 U.S. Government Agencies               16,449     16,520     17,431      17,489
 Mortgage-backed securities             11,157      7,104     11,541      11,647
 State and Political Subdivisions        6,909     11,258      5,441       5,624
 Equity Securities                         214        214        214         214
--------------------------------------------------------------------------------
 Total                                $ 36,729   $ 37,098   $ 36,634    $ 36,986
--------------------------------------------------------------------------------
</TABLE>


At June 30, 1998 and December 31, 1997, the Company held no securities 
classified as held-to-maturity.

                                   8

<PAGE>

NOTE 4. -  LOANS

The following table presents a breakdown of the Company's loan portfolio in 
both dollars outstanding, as well as, a percentage of total loans.  Further 
discussion of the Company's loan portfolio can be found in "Item No. 2 
-Management's Discussion and Analysis of Financial Condition and Results of 
Operations - Balance Sheet Analysis".

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT PERCENTAGES)           JUNE 30, 1998               DECEMBER 31, 1997
---------------------------------------------------------------------------------------------
                                                     Percent of                    Percent of
                                          Amount    Total Loans         Amount    Total Loans
---------------------------------------------------------------------------------------------
<S>                                     <C>          <C>            <C>          <C>

 Commercial                              $ 92,438         64.9%      $  75,487          58.3%
 Real estate mortgage                      17,181         12.1%         14,900          11.5%
 Real estate construction                  22,972         16.1%         30,128          23.2%
 Consumer and other                         9,790          6.9%          9,120           7.0%
 Subtotal                                $142,381        100.0%      $ 129,635         100.0%
---------------------------------------------------------------------------------------------
 Less:
 Unearned discount                            547                          623
 Deferred loan fees                           432                          363
 Allowances for credit losses               2,614                        2,219
---------------------------------------------------------------------------------------------
 Total loans, net                        $138,788                    $ 126,430
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
</TABLE>

NOTE 5. - EARNINGS PER SHARE

       Basic earnings per share is computed by dividing net income available 
to common shareholders by the weighted average number of common shares 
outstanding during the period. Diluted earnings per share is computed by 
dividing net income available to common shareholders by the weighted average 
common shares outstanding during the period plus potential common shares 
outstanding.  Diluted EPS reflects the potential dilution that could occur if 
securities or other contracts to issue common stock were exercised or 
converted into common stock or resulted in the issuance of common stock that 
then shared in the earnings of the Company.   Diluted loss per common share 
is equal to basic loss per common share for the three and six month periods 
ended June 30, 1997 because the effect of potentially dilutive securities 
under the stock option plans were antidilutive. 

                              9

<PAGE>

The following table provides a reconciliation of the numerator and 
denominator of the basic EPS computation with the numerator and denominator 
of the diluted EPS computation for the three and six month periods ended June 
30, 1998 and 1997: 

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
                                                                  FOR THE THREE MONTHS       FOR THE SIX MONTHS
(IN THOUSANDS, EXCEPT PER SHARE DATA)                                   ENDED JUNE 30,           ENDED JUNE 30,
-------------------------------------------------               -----------------------  ----------------------
                                                                     1998         1997        1998         1997
-------------------------------------------------               ----------    ---------  ---------    ---------
<S>                                                             <C>          <C>         <C>          <C>
Basic EPS Computation:
  Net income (loss)                                                 $ 629    $  (2,142)    $ 1,148    $  (1,907)
  Average common shares outstanding                             2,624,000    1,859,000   2,623,000    1,845,000
-------------------------------------------------               ----------    ---------  ---------    ---------
Basic EPS                                                           $ .24      $ (1.15)      $ .44    $   (1.03)
-------------------------------------------------               ----------    ---------  ---------    ---------
Diluted EPS Computation:
  Net income (loss)                                                 $ 629     $ (2,142)    $ 1,148    $  (1,907)
  Average common shares outstanding                             2,624,000    1,859,000   2,623,000    1,845,000
  Stock options and warrants                                      183,000            -     173,000            -
-------------------------------------------------               ----------    ---------  ---------    ---------
                                                                2,807,000    1,859,000   2,796,000    1,845,000
-------------------------------------------------               ----------    ---------  ---------    ---------
Diluted EPS                                                         $ .22     $  (1.15)       $.41    $   (1.03)
-------------------------------------------------               ----------    ---------  ---------    ---------
-------------------------------------------------               ----------    ---------  ---------    ---------
</TABLE>

               Options to purchase 40,000 and 70,000 shares of common stock 
at various prices per share were outstanding at June 30, 1998 and 1997, 
respectively, but were not included in diluted EPS because the options 
exercise price was greater than the average market price of the common shares 
for the periods then ended. 

NOTE 6. - COMMITMENTS AND CONTINGENT LIABILITIES   

       As a result of an examination of the Bank as of June 30, 1997, the 
FDIC determined that the Company required special supervisory attention.  The 
Bank consented to an FDIC Order on October 28, 1997.  The FDIC Order is a 
"cease-and-desist order" for the purposes of Section 8 of the Federal Deposit 
Insurance Act, and violation of the FDIC Order by the Bank can give rise to 
enforcement proceedings under Section 8 of the Federal Deposit Insurance Act. 
In addition, as a result of an examination of the Bank as of June 30, 1997, 
the California Department of Financial Institutions ("CDFI") and the Bank 
have stipulated to the issuance of the State Order by the Department of 
Financial Institutions which State Order is a final order pursuant to Section 
1913 of the California Financial Code.  These orders, their specific 
conditions, and the Banks actions to comply are discussed in greater detail 
under the heading "Administrative Orders" on pages 12 and 13, below.

                                  10

<PAGE>


ITEM 2.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                          
     Certain matters discussed in this Report on Form 10-Q are 
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 include, but are not limited to, those described in 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations.  Changes to such risks and uncertainties, which could impact 
future financial performance, include, among other things, (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 security markets.  
Therefore, the information set forth therein should be carefully considered 
when evaluating the business prospects of the Company and the Bank.

     FINANCIAL SUMMARY

     The first six months of 1998 were marked by substantially improved 
earnings, record asset levels, record loan levels, and the reduction of RSC's 
real estate investment assets from $11 million at June 30, 1997 to a net 
balance of $0 at June 30, 1998.  Additionally, RIA's client assets under 
management topped $100 million for the first time, the Bank took steps to 
become both a Federal Reserve and Federal Home Loan Bank member, and Regency 
Bancorp stock began trading on the Nasdaq national market system. 

     At June 30, 1997, RSC held 260 single family real estate units for sale 
representing assets of $11,000,000.  During the last twelve months, RSC has 
sold 255 of these homes and lots leaving five units remaining at June 30, 
1998.  More importantly the carrying value of the five units remaining has 
been reduced to $0 on the Company's books.  This is the first time since the 
end of 1984, thirteen and a half years ago, that the Company has not carried 
real estate investment assets on its balance sheet. 

     The reduction of RSC's holdings has allowed the Company to increase its 
earning assets, most significantly in the loan portfolio.  Total loans 
increased to $142,381,000 at June 30, 1998, up 9.9% from year-end and up 
26.6% in the last twelve months.  During the last twelve months ending June 
30, 1998, interest earning assets have increased by $27,200,000, while the 
Company's total assets have grown by $18,700,000 reaching a record 
$205,632,000 at quarter end.  The tremendous growth in loans and other 
earning assets has allowed the Company to improve its interest margin and 
subsequently its bottom line income. 

     For the first six months ending June 30, 1998, consolidated net income 
totaled $1,148,000 compared to a net loss of $(1,907,000) for the period 
ended June 30, 1997, an increase of $3,052,000.  Net income for the second 
quarter of 1998 increased to $629,000 as compared to a net loss of 
$(2,142,000) in the second quarter of 1997. Earnings/(loss) per weighted 
average common share were $.24  for the second quarter of 1998 and $.44 for 
the first six months of 1998, compared to a $(1.15) per share loss in the 
second quarter of 1997 and $(1.03) for the six month period ended 


                            11

<PAGE>

June 30, 1997.  The Company paid no cash dividends in either the second 
quarter of 1998 or 1997. The Company's return on average assets improved to 
1.19% for the first six months of 1998 compared to (2.12)% for the first six 
months of 1997.  Return on average common equity for the first six months of 
1998 was 12.0% compared to (27.8)% for the same period in 1997.

     In addition to improving the revenue side of the income statement, 
management and staff have focused attention on expenses with the goal to 
continually improve efficiency by controlling operating expense as the 
Company grows.  Over the past year, operating efficiency has shown steady 
improvement. Noninterest expense to average assets, one measurement of 
efficiency, has dropped from 9.28% for the first six months of 1997 to 5.31% 
for the first six months of 1998.  Detail for the various expense items that 
make up total noninterest expense can be found on  pages 23 and 24.  At June 
30, 1998, the Company's total risk-based capital ratio was 14.90% while the 
leverage ratio was 9.20%. 

     During the second quarter of 1998, the Bank filed an application to 
become a member of the Federal Reserve System. In May 1998, the Federal 
Reserve Bank ("FRB") conducted a pre-membership examination and concurrently 
the California Department of Financial Institutions ("CDFI") conducted their 
regularly scheduled exam as well.  Based upon the comments made at the 
conclusion of the examination, the Bank anticipates becoming a member of the 
Federal Reserve System during the third quarter of 1998.  Additionally, 
management anticipates that the administrative orders, described below, will 
be removed prior to year end 1998. 

     ADMINISTRATIVE ORDERS

     As a result of an examination of the Bank as of June 30, 1997, the FDIC 
determined that the Company required special supervisory attention.  The Bank 
consented to an FDIC Order on October 28, 1997.  The FDIC Order is a 
"cease-and-desist order" for the purposes of Section 8 of the Federal Deposit 
Insurance Act, and violation of the FDIC Order by the Bank can give rise to 
enforcement proceedings under Section 8 of the Federal Deposit Insurance Act.

     The FDIC Order provides that the Bank must: (a) retain qualified 
management; (b) increase on or before December 31, 1997, and thereafter 
maintain Tier 1 capital equal to the greater of $14,000,000 or the equivalent 
of a Tier 1 capital to average assets ratio of at least 7.0%; (c) eliminate 
from its books classified assets not previously collected or charged off; (d) 
not extend additional credit to borrowers with previous classified or charged 
off credits which are uncollected; (e) not engage in any activities not 
permissible for a national bank subsidiary, except that the Bank and RSC may 
continue real estate activities as permitted by the FDIC's letter of November 
29, 1996, to the Bank requiring, among other things, that RSC divest all 
properties held by it not later than December 31, 1998;  (f) review the 
adequacy of the Bank's allowance for loan and lease losses and establish a 
comprehensive policy for determining its adequacy on a quarterly basis; (g) 
develop a plan to control overhead and other expenses and restore the Bank to 
profitability; (h) prepare a business/strategic plan for the operation of the 
Bank acceptable to the FDIC; (i) not pay cash dividends in any amount except 
with the prior written consent of the FDIC and the CDFI; and (j) furnish 
quarterly written progress reports to 

                                12

<PAGE>

the FDIC and the CDFI detailing the form and manner of any actions taken to 
comply with the Administrative Orders.

     As a result of an examination of the Bank as of June 30, 1997, the CDFI 
and the Bank have stipulated to the issuance of the State Order by the 
Department of Financial Institutions which State Order is a final order 
pursuant to Section 1913 of the California Financial Code.

     The State Order provides that the Bank must: (a) retain management and 
maintain a Board of Directors for the Bank and RSC acceptable to the CDFI and 
FDIC; (b) increase and maintain tangible shareholders' equity (shareholders' 
equity less intangible assets) to an amount not less than the greater of (i) 
7% of its tangible assets (total assets less intangible assets) or (ii) 
$14,000,000; (c) maintain an adequate allowance for loan and lease losses;  
(d) cause RSC to maintain an adequate reserve for losses on its real estate 
investments; (e) cause RSC to reduce the assets classified as substandard so 
that the amount of such assets shall not exceed $10,115,000 by December 31, 
1997, $8,750,000 by March 31, 1998, $7,100,000 by June 30, 1998 and 
$4,900,000 by September 30, 1998; (f) develop, adopt and implement a plan 
acceptable to the CDFI for divestiture of RSC and all of RSC's real estate 
investments by not later than December 31, 1998; (g) not make any 
distribution to shareholders except with the prior written approval of the 
CDFI; and (h) furnish written progress reports within thirty (30) days after 
the end of each quarter to the CDFI and the FDIC describing actions to comply 
with the State Order.

     As of the date of this Form 10-Q, the Company and the Bank have taken 
certain actions to comply with the Administrative Orders, which included 
raising capital through a private offering, which closed in the fourth 
quarter of 1997.   Based upon comments made at the conclusion of the FRB/CDFI 
joint examination in the second quarter of 1998, management believes the Bank 
is in full compliance with the orders and anticipates the orders being 
removed prior to year-end 1998. 

     NET INTEREST INCOME

     The Company's operating results depend primarily on net interest income 
(the difference between the interest earned on loans and investments less 
interest expense on deposit accounts and borrowings).  A primary factor 
affecting the level of net interest income is the Company's interest rate 
margin, the difference between the yield earned on interest earning assets 
and the rate paid on interest bearing liabilities, as well as the difference 
between the relative amounts of average interest earning assets and interest 
bearing liabilities.

The following table presents, for the periods indicated, the Company's total
dollar amount of interest income from average interest earning assets and the
resultant yields, as well as the interest expense on average interest bearing
liabilities and the resultant cost, expressed both in dollars and rates.  The
table also sets forth the net interest income and the net earning balance for
the periods indicated.

                               13

<PAGE>

  CONSOLIDATED AVERAGE BALANCE SHEETS, NET INTEREST INCOME AND   INTEREST RATES

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT FOR PERCENTAGES)
 FOR THE THREE MONTHS ENDED JUNE 30,                               1998                                 1997
---------------------------------------------------------------------------------------------------------------------------
                                                        Average     Yield/                  Average    Yield/
                                                        Balance       Rate    Interest      Balance      Rate     Interest
---------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>        <C>         <C>          <C>         <C>         <C>
 ASSETS
 Interest-earning assets:
 Loans (1)                                            $ 137,823     11.96%     $ 4,111    $ 105,732    11.02%      $ 2,904
 Investment securities (2)                               34,140      6.01%         511       37,381     6.59%          614
 Federal funds sold & other                               5,315      5.49%          72       10,274     5.50%          141
---------------------------------------------------------------------------------------------------------------------------
 Total Interest-earning assets                        $ 177,278     10.62%     $ 4,694    $ 153,387     9.57%      $ 3,659
---------------------------------------------------------------------------------------------------------------------------
 Noninterest-earning assets:
 Allowance for credit losses                            (2,386)                             (1,677)
 Cash and due from banks                                 11,486                               9,000
 Real estate investments                                  1,118                              15,453
 OREO                                                       872                                 409
 Premises and equivalent, net                             1,678                               2,143
 Cash surrender value of life insurance                   3,086                               2,949
 Accrued interest receivable and other assets             4,967                               4,570
---------------------------------------------------------------------------------------------------------------------------
 Total Average Assets                                 $ 198,099                           $ 186,234
---------------------------------------------------------------------------------------------------------------------------
 LIABILITIES AND SHAREHOLDERS'
   EQUITY
 Interest-bearing liabilities:
 Transaction accounts                                  $ 48,977      2.35%       $ 286    $ 48,913      2.50%        $ 305
 Savings accounts                                        37,849      4.04%         381      33,552      4.04%          338
 Time deposits                                           46,532      5.38%         625      48,590      5.51%          667
 Federal funds purchased , notes payable
    and other                                               522     16.48%          21       3,864      2.08%           20
---------------------------------------------------------------------------------------------------------------------------
 Total  Interest-bearing liabilities                  $ 133,880      3.94%     $ 1,313    $ 134,919     3.95%      $ 1,330
---------------------------------------------------------------------------------------------------------------------------
 Noninterest-bearing liabilities:
 Transaction accounts                                    41,416                              35,042
 Other liabilities                                        3,140                               2,257
---------------------------------------------------------------------------------------------------------------------------
 Total liabilities                                      178,436                             172,218
 Shareholders' Equity:
 Common stock                                            15,230                               9,208
 Retained earnings                                        4,243                               4,922
 Unrealized gain / (loss)  on investment
    securities                                              190                               (114)
---------------------------------------------------------------------------------------------------------------------------
 Total Shareholders Equity                               19,663                            $ 14,016
---------------------------------------------------------------------------------------------------------------------------
 Total average liabilities and
    shareholders' equity                              $ 198,099                           $ 186,234
---------------------------------------------------------------------------------------------------------------------------
 Net Interest Income                                                           $ 3,381                             $ 2,329
---------------------------------------------------------------------------------------------------------------------------
 Interest income as a percentage of average
    interest-earning assets                                         10.62%                              9.57%
 Interest expense as a percentage of average
    interest-earning assets                                        (2.97%)                            (3.48%)
---------------------------------------------------------------------------------------------------------------------------
 Net Interest Margin                                                 7.65%                              6.09%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Loan amounts include nonaccrual loans, but the related interest income 
has been included only for the  period prior to the loan being placed on  a 
nonaccrual basis.  Loan interest income includes loan fees of approximately 
$298,000 and $320,000 for the three months ended June 30, 1998 and 1997, 
respectively.
  
(2)  Applicable nontaxable securities yields have not been calculated on a 
taxable-equivalent basis because they are not material to the Company's 
results of operations.

                                 14

<PAGE>

  CONSOLIDATED AVERAGE BALANCE SHEETS, NET INTEREST INCOME AND   INTEREST RATES

<TABLE>
<CAPTION>


---------------------------------------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT FOR PERCENTAGES)
 FOR THE THREE MONTHS ENDED JUNE 30,                               1998                                 1997
---------------------------------------------------------------------------------------------------------------------------
                                                        Average     Yield/                  Average    Yield/
                                                        Balance       Rate    Interest      Balance      Rate     Interest
---------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>        <C>         <C>          <C>         <C>         <C>
 ASSETS
 Interest-earning assets:
 Loans (1)                                            $ 134,362    11.49%     $7,654      $ 104,159    11.04%   $ 5,704
 Investment securities (2)                               34,881     6.12%      1,058         35,092     6.60%     1,148
 Federal funds sold & other                               3,969     5.39%        106          9,532     5.39%       255
---------------------------------------------------------------------------------------------------------------------------
 Total Interest-earning assets                        $ 173,212    10.26%    $ 8,818      $ 148,783     9.63%   $ 7,107
---------------------------------------------------------------------------------------------------------------------------
 Noninterest-earning assets:
 Allowance for credit losses                            (2,335)                             (1,675)
 Cash and due from banks                                 11,056                               8,834
 Real estate investments                                  1,952                              15,744
 OREO                                                       686                                 413
 Premises and equivalent, net                             1,714                               2,196
 Cash surrender value of life insurance                   3,068                               2,932
 Accrued interest receivable and other assets             4,917                               4,260
---------------------------------------------------------------------------------------------------------------------------
 Total Average Assets                                   194,270                           $ 181,487
---------------------------------------------------------------------------------------------------------------------------
 LIABILITIES AND SHAREHOLDERS'
   EQUITY
 Interest-bearing liabilities:
 Transaction accounts                                  $ 48,146     2.35%      $ 561       $ 47,999     2.55%        $ 607
 Savings accounts                                        37,220     4.05%        748         31,378     4.07%          634
 Time deposits                                           45,950     5.38%      1,225         48,690     5.50%        1,328
 Federal funds purchased, notes payable
    and other                                             1,212    10.67%         62          4,259     1.89%           40
---------------------------------------------------------------------------------------------------------------------------
 Total  Interest-bearing liabilities                  $ 132,528     3.95%    $ 2,596      $ 132,326     3.98%      $ 2,609
---------------------------------------------------------------------------------------------------------------------------
 Noninterest-bearing liabilities:
 Transaction accounts                                    39,733                              33,021
 Other liabilities                                        2,652                               2,291
---------------------------------------------------------------------------------------------------------------------------
 Total liabilities                                      174,913                             167,638
 Shareholders' Equity:
 Common stock                                            15,217                               9,096
 Retained earnings                                        3,919                               4,815
 Unrealized gain / (loss)  on investment
    securities                                              221                                (62)
---------------------------------------------------------------------------------------------------------------------------
 Total Shareholders Equity                             $ 19,357                            $ 13,849
---------------------------------------------------------------------------------------------------------------------------
 Total average liabilities and
    shareholders' equity                              $ 194,270                           $ 181,487
---------------------------------------------------------------------------------------------------------------------------
 Net Interest Income                                                         $ 6,222                               $ 4,498
---------------------------------------------------------------------------------------------------------------------------
 Interest income as a percentage of average
    interest-earning assets                                        10.26%                               9.63%
 Interest expense as a percentage of average
    interest-earning assets                                       (3.02%)                             (3.54%)
---------------------------------------------------------------------------------------------------------------------------
 Net Interest Margin                                                7.24%                               6.09%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1)  Loan amounts include nonaccrual loans, but the related interest income 
has been included only for the  period prior to the loan being placed on  a 
nonaccrual basis.  Loan interest income includes loan fees of approximately 
$576,000 and $606,000 for the six months ended June 30, 1998, and 1997, 
respectively.
     
(2)  Applicable nontaxable securities yields have not been calculated on a 
taxable-equivalent basis because they are not material to the Company's 
results of operations.
                                15

<PAGE>


     Changes in the interest margin can be attributed to changes in the yield 
on interest earning assets, the rate paid on interest bearing liabilities, as 
well as, changes in the volume of interest earning assets and interest 
bearing liabilities. The following tables present the dollar amount of 
certain changes in interest income and expense for each major component of 
interest earning assets and interest bearing liabilities and the difference 
attributable to changes in average rates and volumes for the periods 
indicated.

     VOLUME/RATE ANALYSIS

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------
 (IN THOUSANDS) 
 FOR THE THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO 1997    VOLUME (1)      RATE (1)         TOTAL
-----------------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>            <C>
 Net Interest Earnings Variance Analysis
 Increase (decrease) in interest income:
 Loans                                                            $  940       $  267      $  1,207
 Investment securities (2)                                          (51)         (52)         (103)
 Federal funds sold and other                                       (67)          (2)          (69)
-----------------------------------------------------------------------------------------------------
 Total                                                               822          213         1,035
-----------------------------------------------------------------------------------------------------
 Increase (decrease) in interest expense:
 Transaction accounts                                                  -         (19)          (19)
 Savings accounts                                                     43            -            43
 Certificates of deposit                                            (28)         (14)          (42)
 Federal funds purchased and other                                     -            1             1
-----------------------------------------------------------------------------------------------------
 Total                                                                15         (32)          (17)
-----------------------------------------------------------------------------------------------------
 Increase (decrease) in net interest income                       $  807       $  245      $  1,052
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
</TABLE>

(1) A change due to both volume and rate has been allocated to the change in 
volume and rate in proportion to the relationship of the dollar amount of the 
change in each.

(2) Changes calculated on nontaxable securities have not considered tax 
equivalent effects.

     Net interest income before the provision for credit losses was 
$3,381,000 for the second quarter of 1998 as compared to $2,329,000 for the 
comparable period of 1997, an increase of $1,052,000 or 45.2%.   The net 
interest margin for the second quarter ended June 30, 1998 was 7.65% compared 
to 6.09% during the comparable period in 1997.  The increase in net interest 
income and net interest margin was primarily attributable to a larger earning 
asset base, as well as, a significant increase in the net interest margin.  
The increase in earning assets, primarily in the loan portfolio, was the 
result of the Bank holding new production SBA and B&I loans rather than 
selling these loans on the secondary market.  This shift to a greater 
proportion of loans compared to lower yielding investments and federal funds 
sold resulted in the Company's earning asset yield rising to 10.62% during 
the second quarter of 1998, compared to 9.57% in the second quarter of 1997.  
The yield on earning assets was also augmented by a lower number of 
nonaccrual loans and the recovery of a significant amount of interest on RSC 
loans that had previously been on nonaccrual.  This recovery of interest 
during 1998's second quarter had the effect of increasing the net interest 
margin approximately 67 basis points on average.   In addition to the 
increase in earning assets and earning asset yield, the Company was able to 
lower its cost of funds primarily through the use of cash liberated from the 
sale of RSC's real estate investments. 

                              16

<PAGE>

     Average interest-earning assets for the second quarter ended June 30, 
1998 increased to $177,278,000 from $153,387,000 for the comparable period in 
1997 an increase of $23,891,000 or 15.6%.  Average loans increased by 
$32,091,000 to $137,823,000 representing 77.7% of average interest-earning 
assets for the second quarter of 1998, compared to $105,732,000 or 68.9% for 
the second quarter of 1997.  The yield on average loans increased to 11.96% 
for the second quarter of 1998, from 11.02% for the comparable period in 
1997, primarily due to recoveries of nonaccrued interest on RSC loans.
     
     Other interest-earning assets consist of investment securities, 
overnight federal funds sold and other short-term investments. These 
investments are maintained to meet the liquidity requirements of the Company, 
as well as, pledging requirements on certain deposits and typically have a 
lower yield than loans.  The yield on investments decreased to 6.01% for the 
second quarter ended June 30, 1998, from 6.59% in the comparable period in 
1997.  On a fully tax equivalent basis the yield on investments was 6.55% for 
the second quarter ended June 30, 1998 compared to 6.74% for the second 
quarter ended June 30, 1997.  The primary causes of the decline in investment 
yield were older, higher yielding bonds maturing and being replaced by lower 
yielding investments due to lower interest rates in the bond market and a 
flat yield curve.  Excess liquidity is invested in federal funds sold on an 
overnight basis.  During 1998, lower balances were maintained in federal 
funds sold in an effort to maximize the net interest margin.  The yield on 
federal funds sold was 5.49% in the second quarter of 1998 compared to 5.50% 
in the comparable period in 1997.

     Average interest-bearing liabilities for the second quarter ended June 
30, 1998 decreased to $133,880,000 from $134,919,000 for the comparable 
period in 1997, a decline of $1,039,000 or 0.8%.  For the second quarter 
ended June 30, 1998, the average interest rate paid on interest-bearing 
liabilities decreased slightly to 3.94% from an average rate of 3.95% paid 
during the second quarter of 1997.

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 
FOR THE SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO 1997          VOLUME (1)      RATE (1)         TOTAL
--------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>              <C>
Net Interest Earnings Variance Analysis
Increase (decrease) in interest income:
Loans                                                              $  1,712      $  238        $  1,950
Investment securities (2)                                               (7)        (83)            (90)
Federal funds sold and other                                          (149)           -           (149)
--------------------------------------------------------------------------------------------------------
Total                                                                 1,556         155           1,711
--------------------------------------------------------------------------------------------------------
Increase (decrease) in interest expense:
Transaction accounts                                                      2        (48)            (46)
Savings accounts                                                        117         (3)             114
Certificates of deposit                                                (74)        (29)           (103)
Federal funds purchased and other                                       (4)          26              22
--------------------------------------------------------------------------------------------------------
Total                                                                    41        (54)            (13)
--------------------------------------------------------------------------------------------------------
Increase (decrease) in net interest income                         $  1,515      $  209        $  1,724
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

</TABLE>

(1) A change due to both volume and rate has been allocated to the change in
volume and rate in proportion to the relationship of the dollar amount of the
change in each.

(2) Changes calculated on nontaxable securities have not considered tax
equivalent effects.

                                  17

<PAGE>

     Net interest income before the provision for credit losses was 
$6,222,000 for the first six months of 1998 as compared to $4,498,000 for the 
first six months of 1997, an increase of $1,724,000 or 38.3%.  The increase 
was primarily attributable to a larger earning asset base, as well as, an 
increase in the net interest margin.  The increase in earning assets, 
primarily in the loan portfolio, was the result of the Bank retaining SBA and 
B&I loans rather than selling these loans on the secondary market.  This 
shift of assets into a larger loan portfolio resulted in the Company's 
earning asset yield rising to 10.26% during the first six months of 1998, 
compared to 9.63% for the first six months of 1997.  The net interest margin 
for the six months ended June 30, 1998 was 7.24% compared to 6.09% during the 
comparable period in 1997.  The increased yield on earning assets and net 
interest margin was augmented by a lower number of nonaccrual loans and the 
recovery of interest that had previously been on nonaccrual.  This recovery 
of interest during 1998's second quarter had the effect of increasing the net 
interest margin approximately 34 basis points on average for the first six 
months of 1998

     Average interest-earning assets for the six months ended June 30, 1998 
increased to $173,212,000 from $148,783,000 for the comparable period in 
1997, an increase of $24,429,000 or 16.4%.  Average loans increased by 
$30,203,000 to $134,362,000 representing 77.6% of average interest-earning 
assets for the first six months of 1998, compared to $104,159,000  or 70.0% 
for the first six months of 1997.  The yield on average loans increased to 
11.49% for the first six months of 1998, from 11.04% for the comparable 
period in 1997, primarily due to recoveries of nonaccrued interest on RSC 
loans.
     
     Other interest-earning assets consist of investment securities, 
overnight federal funds sold and other short-term investments. These 
investments are maintained to meet the liquidity requirements of the Company, 
as well as, pledging requirements on certain deposits and typically have a 
lower yield than loans. The yield on investments decreased to 6.12% for the 
six-month period ended June 30, 1998, from 6.60% in the comparable period in 
1997.  On a fully tax equivalent basis the yield on investments was 6.57% for 
the six months ended June 30, 1998, compared to 6.76% for the six months 
ended June 30, 1997.  The primary cause of the decline in investment yield 
was lower interest rates in the bond market and a flat yield curve.  
Additionally, the Company increased the percentage of tax free municipal 
bonds held in its investment portfolio.  These bonds typically carry lower 
coupons, however the interest earned is exempt from federal tax. Excess 
liquidity is invested in federal funds sold on an overnight basis.  During 
1998, lower balances were maintained in federal funds sold in an effort to 
maximize the net interest margin. The yield on federal funds sold for the 
first six months of 1998 and 1997 was identical at 5.39%.

     Average interest-bearing liabilities for the six months ended June 30, 
1998 grew very little to $132,528,000 from $132,326,000 for the comparable 
period in 1997, an increase of $202,000 or 0.2%.  For the first six months 
ended June 30, 1998, the average interest rate paid on interest-bearing 
liabilities decreased to 3.95% from an average rate of 3.98% paid during the 
first six months of 1997.

                              18

<PAGE>


     NONINTEREST INCOME

     The Company receives a significant portion of its income from 
noninterest sources related both to activities conducted by the Bank (SBA 
loan originations and servicing and depositor service charges), as well as, 
from the Company's investment advisory firm, RIA.

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
                                                           FOR THE THREE MONTHS             FOR  THE SIX MONTHS
 (IN THOUSANDS)                                               ENDED JUNE 30,                  ENDED JUNE 30,
---------------------------------------------------       ---------    ------------    ------------  -------------
                                                            1998            1997            1998           1997
---------------------------------------------------       ---------    ------------    ------------  -------------
<S>                                                       <C>          <C>              <C>           <C>
 Other Noninterest Income:
 Gain-on-sale of loans                                    $  207       $     216          $  222        $   486
 Depositor service charges                                   118              96             230            194
 Income from investment management services                  229             188             445            402
 Gain/(loss)-on-sale of securities                             -            (36)               5           (34)
 Gain-on-sale of assets                                        -               -               -              4
 Servicing fees on loans sold                                 10              81              79            167
 Other                                                       112              74             182            181
---------------------------------------------------       ---------    ------------    ------------  -------------
 Total                                                    $  676           $ 619         $ 1,163        $ 1,400
---------------------------------------------------       ---------    ------------    ------------  -------------
---------------------------------------------------       ---------    ------------    ------------  -------------
</TABLE>


     During the second quarter of 1998, the Company recognized noninterest 
income of $676,000, compared to $619,000 for the same period in 1997, an 
increase of $57,000 or 9.2%.   For the first six months of 1998, noninterest 
income was $1,163,000, compared to $1,400,000 for the first six months of 
1997, a decrease of  $237,000 or 16.9%.  The decline for the first six months 
was primarily attributable to lower gains on the sale of loans due to the 
decision to retain a larger portfolio of these loans in the Bank's loan 
portfolio, as well as, a decline in income from servicing fees on the loans 
sold. 

     LOAN ORIGINATION & SALES

     The Bank originates various types of loans that may be sold on active 
secondary markets. Types of loans originated that are saleable include: loans 
made under the U.S. Small Business Administration ("SBA") program that 
generally provide for SBA guarantees of 70% to 90% of each loan; loans made 
under the U.S. Department of Agriculture's Business and Industry ("B & I") 
loan program; and conventional real estate mortgage loans.  Historically, the 
majority of the Bank's gain on sale of loans has come from SBA loan sales.  
During 1997, the Company decided to hold the majority of SBA and B&I loans 
originated to more rapidly build its loan portfolio and increase interest 
income.

     From time to time the Bank evaluates the valuations available on various 
groups of loans and may sell groups of loans in an effort to maximize value.  
During the quarter ended June 30, 1998, the Bank sold one pool of SBA loans 
totaling approximately $2,300,000, in addition to its mortgage origination 
activity.  Net income from loans sold in the second quarter of 1998 was 
$207,000 compared to $216,000 in the second quarter of 1997.  For the six 
months ended June 30, 1998, gains on the sale of loans was $222,000 compared 
to $486,000 during the first six months of 1997, a decrease of $264,000.  The 
primary cause of the decline in income from the sale of loans for the first 
six months of 1998 compared to the first six months of 1997 was the decision 
to hold a larger portfolio of  SBA guaranteed loans in the Bank's portfolio.


                                19

<PAGE>

     An additional source of income related to the Bank's SBA loan 
origination activities is reflected in income from the ongoing servicing of 
loans sold. During the second quarter ended June 30, 1998, servicing income 
totaled $10,000, compared to servicing income of $81,000 during the quarter 
ended June 30, 1997. For the six months ended June 30, 1998, servicing income 
totaled $79,000, a decrease of $88,000 compared to $167,000 during the first 
six months of 1997. The decline in servicing income in 1998 compared to 1997 
was the result of a smaller portfolio of loans serviced during 1998 and the 
amortization of capitalized servicing fees on previously sold loans that have 
pre-paid at an accelerated rate.

     REGENCY SERVICE CORPORATION

     The Bank's wholly owned subsidiary, Regency Service Corporation ("RSC"), 
has engaged in real estate development activities since 1986.  Under FDIC 
regulations, banks were required to divest their real estate development 
investments as quickly as prudently possible but in no event later than 
December 19, 1996, and submit a plan to the FDIC regarding divestiture of 
such investments.  In December 1995, the Bank and RSC submitted a request to 
extend the mandatory time period in which it must divest its real estate 
development interests.  In December 1996, the FDIC, responding to the Bank's 
request, granted the Bank and RSC a two-year extension, until December 31, 
1998, to continue its divestiture activities.

     During the second quarter of 1998, RSC continued its effort toward total 
divestiture of its real estate holdings with the sale of 14 additional homes 
and lots.  As of June 30, 1998, RSC had only five units remaining compared to 
66 units remaining at December 31, 1997 and 260 units remaining at June 30, 
1997. In the quarter ended  June 30, 1998, RSC recorded a loss from the sale 
of the 14 properties of $221,000 compared to a loss of $3,350,000 in the 
second quarter of 1997.

     When viewed on a stand-alone basis, RSC's activities (losses from the 
sale of properties plus operating expenses plus income) combined to produce a 
net loss at RSC of only $8,000 for the first six months of 1998.  During the 
most recent quarter RSC was able to recover interest from loans previously on 
nonaccrual as well as $125,000 of principal from previously charged-off 
loans. The recovery of principal increased the Company and RSC's reserve for 
credit losses.  

     Management expects that RSC's performance for the remainder of 1998 will 
be similar to the first six months and that any losses recorded on the sale 
of properties will be generally offset by income or previously established 
reserves. Additional discussion of loans made by RSC to facilitate the sale 
of its properties and, in general, of the Company's investment in RSC, is 
contained in this report under the headings, "Nonperforming Loans" and 
"Investments in Real Estate."

                              20

<PAGE>

     REGENCY INVESTMENT ADVISORS

     The Company's other wholly-owned subsidiary, Regency Investment Advisors 
("RIA"), was formed in August 1993 through the acquisition by the Bank of the 
assets, including the client list, of a fee-only investment management and 
consulting firm. RIA provides investment management and consulting services, 
including comprehensive financial and retirement planning and investment 
advice to individuals and corporate clients for an annual fee that varies 
depending upon the size of a client account.
 
     Revenue from RIA for the second quarter of 1998 increased to $229,000 
from $188,000 in the same period of 1997, an increase of $41,000 or 21.8%.  
On a stand alone basis, RIA's activities, (income from investment management 
activities less operating expenses), provided the Company with after-tax 
income of $37,000 in the second quarter of 1998 compared to after-tax income 
of $21,000 in the second quarter of 1997.

     For the six months ended June 30, 1998, revenue from RIA increased to 
$445,000 from $402,000 for  the same period in 1997, an increase of $43,000 
or 10.7%.  On a stand alone basis, RIA's activities, (income from investment 
management activities less operating expenses), provided the Company with 
after-tax income of $69,000 for the six months ended June 30, 1998,  compared 
to after tax income of $48,000 for the same period in 1997, and increase of 
43.8%.  RIA's operating expenses have been consolidated with similar 
operating expenses in the Company's consolidated statement of income.

     RIA's ability to generate and increase income comes, in large part, from 
the volume of assets under management. As of June 30, 1998, RIA had 
$100,200,000 in assets under management, an increase of $19,900,000, or 24.8% 
compared to $80,300,000 as of June 30, 1997.  Assets in client accounts 
managed by RIA are not reflected in the consolidated assets of the Company. 

                               21

<PAGE>

     SECOND  QUARTER  NONINTEREST  EXPENSE 

     Noninterest expense reflects the costs of products and services, 
systems, facilities and personnel for the Company.  The major components of 
other operating expenses stated both as dollars and as a percentage of 
average assets are as follows: 

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT PERCENTAGES)
 FOR THE THREE MONTHS ENDED  JUNE 30,                         1998                         1997
----------------------------------------------------------------------------------------------------------------
                                                                        Percent of                    Percent of
                                                                          Average                       Average
                                                             Amount        Assets         Amount         Assets
----------------------------------------------------------------------------------------------------------------
<S>                                                        <C>         <C>              <C>         <C>

 Noninterest Expense:
 Loss from investments in real estate                        $  221          .45%        $ 3,350          7.21%
 Salaries and related benefits                                1,245         2.51%          1,233          2.65%
 Occupancy                                                      379          .77%            411          0.88%
 FDIC insurance and regulatory assessments                      115          .23%             22          0.05%
 Marketing                                                      144          .29%            142          0.31%
 Professional services                                          159          .32%            157          0.34%
 Director's fees and expenses                                    46          .09%             80          0.17%
 Management fees for real estate projects                         -            -               4          0.01%
 Supplies, telephone & postage                                   83          .17%             84          0.18%
 Other                                                          423          .86%            323          0.70%
----------------------------------------------------------------------------------------------------------------
 TOTAL                                                      $ 2,815         5.69%        $ 5,806         12.50%
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
</TABLE>

     Noninterest expense decreased substantially by $2,991,000 or 51.5% to 
$2,815,000 for the three months ended June 30, 1998, compared to $5,806,000 
during the same period of 1997.  The large drop in noninterest expense 
between the second quarter of 1997 and 1998 was due to significantly lower 
losses on RSC's investment in real estate between the two periods.  The loss 
in 1997 on investments in real estate resulted from expense for additional 
reserves as well as the direct writedown of properties to facilitate the 
rapid disposition of RSC's remaining assets.  When compared to average assets 
for the respective periods, noninterest expense decreased to 5.69% in the 
second quarter of 1998 compared to 12.50% in the comparable period in 1997. 

     The reduction of noninterest expense as a percentage of average assets 
is a central part of the Company's overall plan to increase earnings through 
improved efficiency.  As a percentage of average assets, most expense 
categories decreased over the past twelve months.  However, certain 
categories showed an increase;  FDIC insurance and regulatory assessments 
increased by more than 400% or $93,000 to $115,000 for the quarter ended June 
30, 1998, compared to only $22,000 during the comparable quarter in 1997.  
This substantial increase is the direct result of the FDIC and CDFI 
administrative orders, as well as, the Bank's average capital level during 
the third and fourth quarters of 1997.  Management expects the Bank's 
insurance premiums to decrease during the second half of 1998 due to higher 
capital levels and progress made related to the disposal of RSC assets.  The 
other category of noninterest expense increased to $423,000, for the second 
quarter of 1998, an increase of $100,000, or 31% from $323,000 in the 
comparable period of 1997.  The primary cause of this increase was related to 
costs associated with the Bank's OREO properties which were $103,000 higher 
in the second quarter of 1998 compared to the same period in 1997.

                               22

<PAGE>

     All other noninterest expense categories declined as a percentage of 
average assets with salaries and related benefits, the Company's largest 
noninterest expense category, declining from 2.66% in the second quarter of 
1997 to 2.53% in the second quarter of 1998.  The Company has been able to 
maintain the number of full time equivalent employees at or near levels of a 
year ago while average assets have grown by 6.4%. 
 
 NONINTEREST EXPENSE  YEAR-TO-DATE 

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
 (IN THOUSANDS, EXCEPT PERCENTAGES)
 FOR THE Six MONTHS ENDED  JUNE 30,                           1998                         1997
------------------------------------------------------------------------------------------------------------------
                                                                        Percent of                    Percent of
                                                                          Average                       Average
                                                             Amount        Assets         Amount         Assets
------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>         <C>             <C>         <C>

Other Expense:
Loss from investments in real estate                       $   214          .22%        $ 3,590          3.99%
Salaries and related benefits                                2,441         2.53%          2,397          2.66%
Occupancy                                                      739          .77%            814          0.90%
FDIC insurance and regulatory assessments                      228          .24%             44          0.05%
Marketing                                                      270          .28%            232          0.26%
Professional services                                          331          .34%            278          0.31%
Director's fees and expenses                                    99          .10%            176          0.20%
Management fees for real estate projects                         -            -             112          0.12%
Supplies, telephone & postage                                  164          .17%            163          0.18%
Other                                                          633          .66%            545          0.61%
------------------------------------------------------------------------------------------------------------------
TOTAL                                                      $ 5,119         5.31%        $ 8,351          9.28%
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
</TABLE>

     As with the second quarter, 1998's year-to-date noninterest expense 
decreased substantially primarily as a result of lower losses from 
investments in real estate.  For the first six months of 1998, RSC's losses 
on real estate were $214,000, a decline of $3,376,000 or 94% from $3,590,000 
in the first six months of 1997.  The large losses in 1997 resulted from 
expense for reserves and the writedown of properties to facilitate the rapid 
disposition of RSC's remaining assets.  FDIC insurance and regulatory 
assessments increased by more than 400% or $184,000 to $228,000 for the first 
six months of 1998, compared to $44,000 during the comparable period in 1997. 
This substantial increase is the direct result of the FDIC and CDFI 
administrative orders, as well as, the Bank's average capital level during 
the third and fourth quarters of 1997.  Salaries and related benefits, 
professional services and marketing grew modestly in the six months ended 
June 30, 1998 compared to 1997 respectively, however, as a percentage of 
average assets they declined by a cumulative .08%.  The Other noninterest 
expense category increased to $633,000, for the first six months of 1998, an 
increase of $88,000 compared to the first six months of 1997, as a result of 
higher expenses related to the sale of Bank OREO properties. Occupancy 
expense, director fees and expense, and management fees for real estate 
projects all declined.  Overall,  the Company's non-interest expense to 
average assets for the first six months of 1998 declined to 5.31% compared to 
9.28% for the comparable period of 1997.


                                  23

<PAGE>

     BALANCE SHEET ANALYSIS

     Total assets at June 30, 1998 were $205,632,000 an increase of 4.0% or 
$7,391,000  from $198,241,000 at December 31, 1997.   At June 30, 1998, the 
Company's loan portfolio grew to $142,381,000, an increase of $12,746,000 or 
9.8% since December 31, 1997.  Loan growth was substantially a result of the 
decision to hold the majority of newly originated SBA and B&I  loans, rather 
than sell them on the secondary market, in an effort to increase higher 
yielding assets and interest income.  Total deposits were $182,318,000 at 
June 30, 1998, up $6,039,000 or 3.4% from $176,279,000 at December 31, 1997.  
At June 30, 1998, the Company's net investment in real estate was reduced to 
$0 from $4,338,000 at December 31, 1997. 

     LOANS

     The three areas in which the Bank has directed virtually all of its 
lending activities are: (a) commercial loans; (b) real estate loans 
(including residential construction  and mortgage loans); and (c) consumer 
loans.  The Company's loans are primarily made within its defined market area 
of Fresno and Madera counties.  The Bank also maintains a loan production 
office in Modesto, California.

     Commercial loans, including SBA and B&I loans, comprised approximately 
64.9% of the Company's loan portfolio at June 30, 1998, compared to 58.3% at 
December 31, 1997 and 58.2% at June 30, 1997. These loans are generally made 
to small and mid-size businesses and professionals.  Commercial loans are 
diversified as to industries and types of business with no material industry 
concentrations.   Most of these loans have floating rates based upon 
underwriting analysis. The primary source of repayment on most commercial 
loans is cash flow from the primary business.  Additional collateral in the 
form of real estate, cash, accounts receivable, inventory or other financial 
instruments is often obtained as a secondary source of repayment.

     Real estate construction lending comprised 16.1% of the Company's loan 
portfolio at June 30, 1998, compared to 23.2% of the Company's loan portfolio 
at December 31, 1997, and 21.4% at June 30, 1997.  These loans are primarily 
made for the construction of single family residential housing.  Loans in 
this category may be made to the home buyer or to the developer.  
Construction loans are secured by deeds of trust on the primary property.  
The majority of construction loans have floating rates based upon 
underwriting analysis.  A significant portion of the borrowers' ability to 
repay these loans is dependent upon the sale of the property which is 
affected by, among other factors, the residential real estate market.  In 
this regard, the Company's potential risks include a general decline in the 
value of the underlying property, as well as, cost overruns or delays in the 
sale or completion of a property. 

     Real estate mortgage loans comprised 12.1% of the loan portfolio at June 
30, 1998, compared to 11.5% at December 31, 1997, and 12.4% of the loan 
portfolio at June 30, 1997.  Real estate mortgage loans are made up of 
approximately 75% non-residential properties and 25% single-family, 
residential mortgages. The non-residential loans generally are "mini-perm" 
(medium-term) commercial real estate mortgages with maturities under seven 
years. The residential mortgages are secured by first trust deeds and have 
varying maturities.  Both types of loans may 

                               24

<PAGE>


have either fixed or floating rates, of which, the majority are floating.   
Risks associated with non-residential loans include the decline in value of 
commercial property values; economic conditions surrounding commercial real 
estate properties; and vacancy rates.  The repayment of single-family 
residential mortgage loans is generally dependent upon the income of the 
borrower from other sources, however, declines in the underlying property 
value may create risk in these loans.

          Consumer loans represented the remainder of the loan portfolio at 
June 30, 1998, comprising 6.9% of the loan portfolio compared to 7.0% of 
total loans at December 31, 1997 and 8.0% at June 30, 1997.  This category 
includes traditional consumer loans, home equity lines of credit, and Visa 
card loans. Consumer loans are generally secured by third trust deeds on 
single-family residences or personal property, while Visa cards are 
unsecured. 

     RISK ELEMENTS 

     The Company assesses and manages credit risk on an ongoing basis through 
stringent credit review and approval policies, extensive internal monitoring, 
and established formal lending policies.  Additionally, the Bank contracts 
with an outside loan review consultant to periodically grade new loans and to 
review the existing loan portfolio.   Management believes its ability to 
identify and assess risk and return characteristics of the Company's loan 
portfolio is critical for profitability and growth.   Management strives to 
continue the historically low level of credit losses by continuing its 
emphasis on credit quality in the loan approval process, active credit 
administration, and regular monitoring.  With this in mind, management has 
designed and implemented a comprehensive loan review and grading system that 
functions to continually assess the credit risk inherent in the loan 
portfolio.   Additionally, management believes its ability to manage 
portfolio credit risk is enhanced by knowledge of the Bank's service area by 
the Bank's lending personnel and Board of Directors. 

     NONPERFORMING LOANS

     The Company's current policy is to cease accruing interest when a loan 
becomes 90-days past due as to principal or interest; when the full, timely 
collection of interest or principal becomes uncertain; or when a portion of 
the principal balance has been charged off, unless the loan is well secured 
and in the process of collection.  When a loan is placed on nonaccrual 
status, the accrued and uncollected interest receivable is reversed and the 
loan is accounted for on the cash or cost recovery method thereafter, until 
qualifying for return to accrual status.  Generally, a loan may be returned 
to accrual status when all delinquent interest and principal become current 
in accordance with the terms of the loan agreement or when the loan is both 
well secured and in process of collection.  

     At June 30, 1998, nonperforming loans amounted to $1,752,000 or 1.23% of 
total loans compared to $1,736,000 or 1.34% at December 31, 1997, and 
$2,496,000 or 2.22% at June 30, 1997.  Other real estate owned was $572,000 
at June 30, 1998, compared to $503,000 at December 31, 1997.  Total 
nonperforming loans at June 30, 1998, compared to December 31, 1997, were 
little changed in terms of dollars outstanding, however, as a percentage of 
total loans, nonperformings dropped slightly as a result of growth in the 
loan portfolio.  Of the total nonperforming loans, 

                             25

<PAGE>

$1,012,000 represented loans RSC made to facilitate the sale of former 
partnership properties that have loan to value ratios higher than would 
normally be made by the Bank.  Without the non-accrual loans made by RSC, the 
Bank's loan portfolio at June 30, 1998 had $740,000 in non-accrual loans or 
0.52%, compared to $598,000 in non-accrual loans or 0.46% at December 31, 
1997. Of the Bank's non-accrual loans (excluding RSC loans) at June 30, 1998, 
$431,000 represented the portion of SBA loans that are guaranteed by the SBA. 
 Beginning in 1997, the SBA changed the requirements for Bank's originating 
SBA loans which are subsequently sold in the secondary market.  Under the new 
requirement, if a borrower defaults on an SBA guaranteed loan, the 
originating bank is required to buy the guaranteed portion back and hold it 
in its portfolio until collection efforts are exhausted.  While this 
guaranteed portion is backed by the full faith and credit of the U.S. 
government and poses little risk of loss to the originating bank, the 
originating bank does incur loss of the use of the funds while awaiting 
payoff from the SBA or other loan collateral.  Expense from the loss of use 
of the funds is expected to be minimal; however, due to this new requirement, 
it is expected that SBA non-accrual loan levels will be slightly higher.
                                                       
Following is a table presenting the nonperforming loans for the periods 
ending June 30, 1998 and December 31, 1997, respectively. 

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PERCENTAGES)                                     JUNE 30, 1998         DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                      <C>

Nonperforming Assets:
Nonaccrual RSC loans                                                         $ 1,012                   $ 1,138
Nonaccrual bank loans                                                            740                       598
---------------------------------------------------------------------------------------------------------------
Nonperforming loans                                                            1,752                     1,736
Other real estate owned                                                          572                       503
---------------------------------------------------------------------------------------------------------------
Total nonperforming assets                                                     2,324                     2,239
---------------------------------------------------------------------------------------------------------------
Accruing loans 90 days past due                                                  141                        48
---------------------------------------------------------------------------------------------------------------
Total loans before allowance for credit losses                             $ 142,381                 $ 129,635
Total assets                                                                 205,632                   198,241
Allowance for possible credit losses                                         (2,614)                   (2,219)
---------------------------------------------------------------------------------------------------------------
Ratios:
Nonperforming loans to total loans                                             1.23%                     1.34%
Nonperforming loans to total loans (excluding RSC loans)                        .52%                      .46%
Nonperforming assets to:
Total loans                                                                    1.63%                     1.73%
Total loans and OREO                                                           1.62%                     1.72%
Total assets                                                                   1.13%                     1.13%
Allowance for possible credit losses  to total  nonperforming                112.47%                    99.11%
assets                                       
Allowance for possible credit losses to loans                                  1.84%                     1.71%
---------------------------------------------------------------------------------------------------------------
</TABLE>

     At June 30, 1998 and December 31, 1997, the Company's recorded 
investments in loans for which an impairment had been recognized totaled 
$1,498,000 and $1,410,000, respectively. These amounts were evaluated for 
impairment using the fair value of collateral.  At June 30, 1998, the related 
SFAS No. 114 allowance for credit losses considered impaired was $320,000. 
The Company uses the cash basis method of income recognition for impaired 
loans.  For the six months ended June 30, 1998 and 1997, the Company did not 
recognize any income on such loans. 

                             26

<PAGE>

     ALLOWANCE FOR CREDIT LOSSES

     The allowance for credit losses reflects management's judgment as to the 
level which is considered adequate to absorb potential losses inherent in the 
loan portfolio.  This allowance is increased by provisions charged to expense 
and reduced by loan charge-offs net of recoveries. Management determines an 
appropriate provision based on information currently available to analyze 
credit loss potential, including: (a) the loan portfolio growth in the 
period, (b) a comprehensive grading and review of new and existing loans 
outstanding, (c) actual previous charge-offs, and (d) changes in economic 
conditions. 

     The allowance for credit losses totaled $2,614,000 or 1.84% of total 
loans at June 30, 1998, compared to $2,219,000 or 1.71% at December 31, 1997. 
This increase is the result of  additional provisions for credit losses of 
$275,000 in the six months ended June 30, 1998, along with net recoveries of 
previously charged off loans of $120,000.  During the second quarter of 1998, 
RSC recovered $125,000 that had been charged off in prior years. It is the 
policy of management to maintain the allowance for credit losses at a level 
adequate for known and future risks inherent in the loan portfolio.  Based on 
information currently available to analyze credit loss potential, including 
economic factors, overall credit quality, historical delinquency and a 
history of actual charge-offs, management believes that the credit loss 
provision and allowance is adequate.  However, no prediction of the ultimate 
level of loans charged-off in future years can be made with any certainty. 

Following is a table presenting the activity within the Company's provision 
for credit losses for the period between December 31, 1997 and June 30, 1998.

<TABLE>
<CAPTION>

------------------------------------------------------------
(In thousands)
------------------------------------------------------------
<S>                                               <C>

Balance, December 31, 1997                         $ 2,219
------------------------------------------------------------
Provision charged to expense                           275
Loans charged off                                     (67)
Recoveries                                             187
------------------------------------------------------------
Balance, June 30, 1998                               2,614
------------------------------------------------------------
------------------------------------------------------------
</TABLE>

     INVESTMENTS IN REAL ESTATE

     The Company's investment in real estate consists of the Bank's 
investment of capital and retained earnings in RSC.  RSC is currently the 
sole owner of one residential lot and is a limited partner in two projects 
with a total of four model homes remaining for sale.  The number of units 
remaining for sale declined to five at June 30, 1998, from 66 at December 31, 
1997, and 260 units one year ago.  During the six month period ended June 30, 
1998, RSC reduced its net investment in real estate to $0, from $4,067,000 at 
December 31, 1997 and from $10,989,000 at June 30, 1997. 

                               27

<PAGE>

 The following table represents the condensed financial information relative 
to RSC for the period ending June 30, 1998 and December 31, 1997, 
respectively. 

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------
(IN THOUSANDS)                                    JUNE 30, 1998   DECEMBER 31, 1997
-------------------------------------------------------------------------------------
<S>                                               <C>              <C>
Financial Position:
Investments in real estate
Real estate held-for-sale                              $ 147          $ 4,420
Equity in partnerships                                   450              702
-------------------------------------------------------------------------------------
Investment in real estate before allowance               597            5,122
Allowance for real estate losses                       (597)          (1,055)
-------------------------------------------------------------------------------------
Investment in real estate                                $ 0          $ 4,067
-------------------------------------------------------------------------------------
Loans to real estate partnerships and projects         1,329            1,768
Allowance for loan  losses                             (490)            (364)
-------------------------------------------------------------------------------------
Net Loans                                                839            1,404
-------------------------------------------------------------------------------------
Other Assets                                           1,242            2,524
-------------------------------------------------------------------------------------
Liabilities                                            (147)            (144)
-------------------------------------------------------------------------------------
Bank's investment in RSC                              $1,934          $ 7,851
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
</TABLE>

     FUNDING SOURCES

     Deposits represent the Bank's principal source of funds for investment. 
Deposits are primarily core deposits in that they are demand, savings, and 
time deposits generated from local businesses and individuals.  These sources 
are considered to be relatively more stable, long-term deposit relationships 
thereby enhancing steady growth of the deposit base without major 
fluctuations in overall deposit balances.   In order to assist in meeting its 
funding needs, the Bank maintains federal funds lines with correspondent 
banks in addition to using its investment portfolio to raise funds through 
repurchase agreements.  In addition, the Bank may, from time to time, obtain 
additional deposits through the use of brokered time deposits.  As of June 
30, 1998, the Bank held no brokered time deposits and had no borrowings from 
correspondent banks against its federal funds lines.

The following table presents the composition of the deposit mix for the 
period ending June 30, 1998 and December 31, 1997, respectively. 

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)                                          JUNE 30, 1998                    DECEMBER 31, 1997
--------------------------------------------------------------------------------------------------------------
                                                                Percent of                          Percent of
                                                 Amount     Total Deposits            Amount    Total Deposits
--------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>                     <C>          <C>

Noninterest-bearing transaction accounts       $ 44,448              24.4%          $ 46,744             26.5%
Now and MMI                                      51,731              28.3%            48,616             27.6%
Savings                                          38,546              21.2%            36,498             20.7%
Time under $100,000                              16,069               8.8%            15,778              9.0%
Time $100,000 and over                           31,524              17.3%            28,643             16.2%
--------------------------------------------------------------------------------------------------------------
Total  Interest-bearing Deposits                137,870              75.6%           129,535             73.5%
--------------------------------------------------------------------------------------------------------------
Total Deposits                                 $182,318             100.0%         $ 176,279            100.0%
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                       28

<PAGE>

     LIQUIDITY

     Liquidity management refers to the Bank's ability to provide funds on an 
ongoing basis to meet fluctuations in deposit levels as well as the credit 
needs and requirements of its clients.  Both assets and liabilities 
contribute to the Bank's liquidity position.  Federal funds lines, short-term 
investments and securities, and loan repayments contribute to liquidity, 
along with deposit increases, while loan funding and deposit withdrawals 
decrease liquidity.  The Bank assesses the likelihood of projected funding 
requirements by reviewing historical funding patterns, current and forecasted 
economic conditions and individual client funding needs.  The Bank maintains 
a line of credit with a correspondent bank for up to $5,000,000 available on 
a short-term basis and has applied for membership to the Federal Home Loan 
Bank ("FHLB") which will provide additional borrowing capacity in the future. 
 Additionally, the Bank maintains a substantial portfolio of SBA loans either 
available for sale or in its portfolio that could be sold should additional 
liquidity be required.

     INTEREST RATE SENSITIVITY 

     Interest rate sensitivity is a measure of the exposure to fluctuations 
in the Bank's future earnings caused by fluctuations in interest rates.  
Generally, if assets and liabilities do not reprice simultaneously and in 
equal volumes, the potential for such exposure exists.  It is management's 
objective to maintain stability in the net interest margin in times of 
fluctuating interest rates by maintaining an appropriate mix of interest 
sensitive assets and liabilities.  To achieve this goal, the Bank prices the 
majority of its interest-bearing liabilities at variable rates.  At the same 
time, the majority of its interest-earning assets are also priced at variable 
rates, the majority of which float with the Prime Rate.  This pricing 
structure tends to stabilize the net interest margin percentage earned by the 
Bank.  

The following table sets forth the interest rate sensitivity and repricing 
schedule of the Company's interest-earning assets and interest-bearing 
liabilities, the interest rate sensitivity gap, the cumulative interest rate 
sensitivity gap, and the cumulative interest rate sensitivity gap ratio. 

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
                                                               NEXT DAY     AFTER THREE          AFTER
                                                             BUT WITHIN          MONTHS       ONE YEAR
 (IN THOUSANDS, EXCEPT PERCENTAGES)                               THREE      BUT WITHIN     BUT WITHIN          AFTER
 AS OF JUNE 30, 1998                          IMMEDIATELY        MONTHS       12 MONTHS     FIVE YEARS     FIVE YEARS         TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>           <C>            <C>             <C>           <C>

 Interest Rate Sensitivity Gap:
 Loans (1)                                      $  52,194     $  51,181       $  8,617      $  23,362      $   5,275     $ 140,629
 Investment securities and other                      214        13,063         10,411          6,679          6,362        36,729
-----------------------------------------------------------------------------------------------------------------------------------
 Total Earning Assets                           $  52,408     $  64,244      $  19,028      $  30,041      $  11,637     $ 177,358
-----------------------------------------------------------------------------------------------------------------------------------
 Interest-bearing transaction accounts             51,732             -              -              -              -        51,732
 Savings accounts                                  35,460         3,086              -              -              -        38,546
 Time deposits                                          -        17,045         20,331          9,297            919        47,592
 Federal funds  purchased                               -             -              -              -              -             -
-----------------------------------------------------------------------------------------------------------------------------------
 Total  Interest-Bearing Liabilities            $  87,192     $  20,131      $  20,331       $  9,297       $    919     $ 137,870
-----------------------------------------------------------------------------------------------------------------------------------
 Interest rate sensitivity gap                   (34,784)        44,113        (1,303)         20,744         10,718
 Cumulative gap                                  (34,784)         9,329          8,026         28,770         39,488
 Cumulative gap percentage to
    interest earning assets                      (19.61%)         5.26%          4.53%         16.22%         22.26%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Amounts exclude nonaccrual loans of $1,752,000.

                                         29

<PAGE>

     The above table indicates the time periods in which interest-earning 
assets and interest-bearing liabilities will mature or reprice in accordance 
with their contractual terms.  The table does not necessarily indicate the 
impact of general interest rate movements on the net interest margin since 
the repricing of various categories of assets and liabilities is subject to 
competitive pressures. Additionally, this table does not take into 
consideration changing balances in forward periods as a result of normal 
amortization, principal paydowns, changes in deposit mix or other such 
movements of funds as a result of changing interest rate environments.

     CAPITAL RESOURCES

     The Board of Governors of the Federal Reserve System and the FDIC have 
adopted risk-based capital guidelines for evaluating the capital adequacy of 
bank holding companies and banks.  The guidelines are designed to make 
capital requirements sensitive to differences in risk profiles among banking 
organizations, to take into account off-balance sheet exposures, and to aid 
in making the definition of bank capital uniform internationally.  Under the 
guidelines, the Company and the Bank are required to maintain capital equal 
to at least 8.0% of its assets and commitments to extend credit, weighted by 
risk, of which at least 4.0%, must consist primarily of common equity 
(including retained earnings) and the remainder may consist of subordinated 
debt, cumulative preferred stock, or a limited amount of loan loss reserves.  
Assets, commitments to extend credit, and off-balance sheet items are 
categorized according to risk and certain assets considered to present less 
risk than others permit maintenance of capital at less than the 8% ratio.

     The guidelines establish two categories of qualifying capital: Tier 1 
capital comprising core capital elements and Tier 2 comprising supplementary 
capital requirements.  At least one-half of the required capital must be 
maintained in the form of Tier 1 capital.  Tier 1 capital includes common 
shareholder's equity and qualifying perpetual preferred stock less intangible 
assets and certain other adjustments.    However, no more than 25% of the 
Company's total Tier 1 capital may consist of perpetual preferred stock.  The 
definition of Tier 1 capital for the Bank is the same, except that perpetual 
preferred stock may be included only if it is noncumulative.  Tier 2 capital 
includes, among other items, limited life (and in the case of banks, 
cumulative) preferred stock, mandatory convertible securities, subordinated 
debt, and a limited amount of reserves for credit losses.

     The Board of Governors also adopted a 3.0% minimum leverage ratio for 
banking organizations as a supplement to the risk-weighted capital 
guidelines. The leverage ratio is generally calculated using Tier 1 capital 
(as defined under risk-based capital guidelines) divided by quarterly average 
net total assets (excluding intangible assets and certain other adjustments).

     The Board of Governors emphasized that the leverage ratio constitutes a 
minimum requirement for well-run banking organizations having diversified 
risk. Banking organizations experiencing or anticipating significant growth, 
as well as those organizations which do not exhibit the characteristics of a 
strong, well-run banking organization above, will be required to maintain 
minimum capital ranging generally from 100 to 200 basis points in excess of 
the leverage ratio.  The FDIC adopted a substantially similar leverage ratio 
for state non-member banks.

                               30

<PAGE>

     On December 19, 1991, the President signed the Federal Deposit Insurance 
Corporation Improvement Act of 1991 ("FDICIA").  The FDICIA, among other 
matters, substantially revised banking regulations and established a 
framework for determination of capital adequacy of financial institutions.  
Under the FDICIA, financial institutions are placed into one of five capital 
adequacy categories as follows: (1) "Well capitalized" - consisting of 
institutions with a total risk-based capital ratio of 10% or greater, a Tier 
1 risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or 
greater, and the institution is not subject to an order, written agreement, 
capital directive or prompt corrective action directive; (2) "Adequately 
capitalized" - consisting of institutions with a total risk-based capital 
ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater 
and a leverage ratio of 4% or greater, and the institution does not meet the 
definition of a "well capitalized" institution; (3) "Undercapitalized" - 
consisting of institutions with a total risk-based capital ratio less than 
8%, a Tier 1 risk-based capital ratio of less than 4%, or a leverage ratio of 
less than 4%; (4) "Significantly undercapitalized" - consisting of 
institutions with a total risk-based capital ratio of less than 6%, a Tier 1 
risk-based capital ratio of less than 3%, or a leverage ratio of less than 
3%; (5) "Critically undercapitalized" - consisting of an institution with a 
ratio of tangible equity to total assets that is equal to or less than 2%.

                               31

<PAGE>

     Financial institutions classified as undercapitalized or below are 
subject to various limitations including, among other matters, certain 
supervisory actions by bank regulatory authorities and restrictions related 
to (a) growth of assets, (b) payment of interest on subordinated 
indebtedness, (c) payment of dividends or other capital distributions, and 
(d) payment of management fees to a parent holding company.  The FDICIA 
requires the bank regulatory authorities to initiate corrective action 
regarding financial institutions which fail to meet minimum capital 
requirements.  Such action may be taken in order to, among other matters, 
augment capital and reduce total assets.  Critically undercapitalized 
financial institutions may also be subject to appointment of a receiver or 
conservator unless the financial institution submits an adequate 
capitalization plan.

     In addition to the capital guidelines described above, the Company and 
Bank's Board of Directors, in consenting to administrative orders issued by 
the FDIC and CDFI, have agreed that the Bank will maintain Tier 1 capital 
equal to the greater of $14,000,000 or the equivalent of a Tier 1 capital to 
average assets ratio of at least 7.0%.

     The Company and Bank's actual capital amounts (in thousands) and ratios, 
as of June 30, 1998, are also presented in the following table:

<TABLE>
<CAPTION>

                                                                                                          TO BE WELL
                                                                                                        CAPITALIZED UNDER
                                                                         FOR  CAPITAL ADEQUACY          PROMPT CORRECTIVE 
                                                                                PURPOSES                ACTION PROVISIONS
------------------------------------------------------------------------------------------------------------------------------
AS OF JUNE 30, 1998                            AMOUNT       RATIO          AMOUNT         RATIO          AMOUNT         RATIO
------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>            <C>             <C>            <C>           <C>

Total Capital (to Risk Weighted Assets:)
  Company                                       $19,750       14.90%        >=$10,603       >=8.00%               N/A
  Regency Bank                                  $16,919       12.76%        >=$10,608       >=8.00%      >=$ 13,260     >=10.00%
                                                       
Tier 1 Capital (to Risk Weighted Assets):                                            
  Company                                       $18,081       13.64%        >=$ 5,302       >=4.00%               N/A
  Regency Bank                                  $15,250       11.50%        >=$ 5,304       >=4.00%      >=$ 7,956      >=6.00%

Tier 1 Capital (to Average Assets):
  Company                                       $18,081        9.20%        >=$ 7,859       >=4.00%               N/A
  Regency Bank                                  $15,250        7.78%        >=$ 7,843       >=4.00%      >=$ 9,804      >=5.00%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                 32

<PAGE>

     RETURN ON EQUITY  AND ASSETS

The following table sets forth the ratios of net income to average assets and 
average shareholders' equity, and average shareholders' equity to average 
assets.  Also indicated is the Company's dividend payout ratio.  (For 
purposes of calculating average shareholders' equity as used in these ratios, 
unrealized losses on the Company's available-for-sale securities portfolio 
have been included and the percentages shown have been annualized).

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                          FOR THE THREE MONTHS           FOR THE SIX MONTHS 
                                                             ENDED JUNE 30,                ENDED JUNE 30, 
--------------------------------------------------------------------------------------------------------------------
                                                         1998                 1997       1998                1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                 <C>        <C>                 <C>

 Return on average assets                               1.27%              (4.61)%      1.19%             (2.12)%
--------------------------------------------------------------------------------------------------------------------
 Return on average shareholders' equity                12.82%             (61.30)%     11.96%            (27.77)%
--------------------------------------------------------------------------------------------------------------------
 Average shareholders' equity to average assets         9.93%                7.53%      9.96%               7.63%
--------------------------------------------------------------------------------------------------------------------
 Dividend payout ratio                                      -                    -          -                   -
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
</TABLE>

     YEAR 2000 COMPLIANCE

     The inability of most computers, software, and other equipment utilizing 
microprocessors to distinguish the year 1900 from the year 2000 poses 
substantial risks to all financial institutions including the Company.  The 
year 2000 problem is pervasive and complex.  Virtually every financial 
institution, service provider, and vendor will have its computing operations 
affected in some way by the rollover of the two-digit year value to 00 if 
action is not taken to fix the problem before the year 2000 arrives.

     The Company is currently engaged in a five-phase management program 
which includes awareness, assessment, renovation, validation, and 
implementation.  The Company has identified all major applications and 
systems that may require modification to ensure "Year 2000 Compliance."  The 
scope of the project covers all computer systems including PC and network 
hardware and software, and mainframe and mainframe software.  It also covers 
all equipment and other systems utilized in bank operations or in the 
premises from which the Company operates.

     In addition, the Company has communicated with its large borrowers, 
corporate customers, and major vendors upon which it relies to determine the 
extent to which the Company is vulnerable to those third parties if they fail 
to resolve their Year 2000 issues.  However, there can be no guarantee that 
the systems of other companies on which the Company's systems rely will be 
converted on time, or that a failure to convert by another company, or a 
conversion that is incompatible with the Company's systems, would not have a 
materially adverse effect on the Company.

     The Company will utilize both internal and external resources to 
implement its Year 2000 Project.  The Company expects to complete the 
majority of its efforts by the end of 1998, leaving adequate time to assess 
and correct any significant issues that may materialize.  Purchased hardware 
and software will be capitalized in accordance with normal policy.  Personnel 
and all other costs related to the project are being expensed as incurred.  
The majority of these costs are expected to be incurred during 1998, and are 
not expected to have a material impact on the Company's cash flows, results 
of operations, or financial condition.  

                                   33

<PAGE>

PART II    OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS
           None

ITEM 2.    CHANGES IN SECURITIES
           None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
           None

ITEM 4.    SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS

      (a)  The 1998 Annual Meeting of Shareholders (the "Annual Meeting")
           was held on May 12, 1998.

      (b)  The following nine directors, all of whom are incumbent
           directors, and  Mr. Steve Freeland  (the employee director
           nominee) were elected at the Annual Meeting by the following
           vote: 

<TABLE>
<CAPTION>


                                                                  VOTES AGAINST
                                          VOTES FOR             OR WITHHELD
                                          ---------          --------------
           <S>                            <C>                <C>

           William J. Alessini            1,655,727                   2,100
           Joseph L,  Castanos            1,655,727                   2,100
           Steve D. Freeland              1,655,727                   2,100
           Steven F. Hertel               1,655,727                   2,100
           Roy Jura                       1,655,727                   2,100
           Barbara Palmquist              1,655,727                   2,100
           David N. Price                 1,655,727                   2,100
           William J. Ruh                 1,655,727                   2,100
           Daniel R. Suchy                1,655,727                   2,100
           Waymon E. Watts                1,655,727                   2,100

</TABLE>

      (c)  The appointment of Deloitte & Touche LLP as the Company's
           independent public accountants for the 1998 fiscal year was
           ratified by the following vote:

           Votes for -  1,656,677   Votes against or withheld -   1,150

ITEM 5.    OTHER INFORMATION
           None

                                    34

<PAGE>

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

                     (10.1)   Agreement between Regency Bancorp and Belle 
                              Plaine Financial, LLC, to act as the exclusive 
                              financial advisor to Regency Bancorp and its 
                              various entities in connection with its efforts 
                              to acquire, invest in, or sell depository 
                              and/or other businesses.  William J. Ruh, a 
                              director of Regency Bancorp is also a principal 
                              in Belle Plaine Financial, LLC.

                    (27.1)    Financial Data Schedule

          (b)  Reports on Form 8-K

               The Company filed a Form 8-K dated May 8, 1998, in which it 
               reported that the Registrant received approval from NASDAQ to 
               begin trading on the NASDAQ national market system effective 
               May 8, 1998.

                                  35

<PAGE>

                                     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 thereunto duly authorized.

                                        REGENCY BANCORP
<TABLE>
<S>                                <C>

Date: July 28, 1998                 By: /s/  STEVEN F. HERTEL
                                        --------------------------------------
                                        Steven F. Hertel
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)



Date: July 28, 1998                 By: /s/  STEVEN R. CANFIELD   
                                        --------------------------------------
                                        Steven R. Canfield
                                        Executive Vice President and
                                        Chief Financial Officer (Principal 
                                        Financial and Accounting Officer)
</TABLE>

                                    36

<PAGE>

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>

 EXHIBIT                                                           SEQUENTIAL
 NUMBER                           DESCRIPTION                      PAGE NUMBER
<S>           <C>                                                  <C>

 10.1         Agreement  between Regency Bancorp and Belle Plaine      38
              Financial, LLC

 27.1         Financial Data Schedule                                  47
</TABLE>

                                     37