8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 14, 2005

DISCOVERY BANCORP

Incorporated Under the Laws of the State of California

333-122090
Commission File Number 20-1814766
I.R.S. Employer Identification Number

338 Via Vera Cruz
San Marcos, California 92078
(760) 736-8900

Not Applicable
(Former name or former address, if changed since last report)

     Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 2.02 Results of Operations and Financial Condition.

     (a) Discovery Bancorp issued a press release on December 14, 2005 announcing its financial results for the quarter ended September 30, 2005. The press release is furnished as Exhibit 99 and is hereby incorproated by reference in its entirety. Discovery Bancorp does not intend for this Item 2.02 or Exhibit 99 to be incorporated by reference into filings under the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

99 Third Quarter Earnings Press Release of Discovery Bancorp, dated December 14, 2005

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DISCOVERY BANCORP
Date: December 16, 2005	By:	/s/ Martin McNabb
		Martin McNabb
		Chief Financial Officer

EX-99

Exhibit 99

December 14, 2005 For Further Information
Kenn Ulrich, APR
619-397-5471

Discovery Bancorp Completes Offering and Acquisition; Announces 3^rd Quarter Earnings

     (San Marcos, CA) Net earnings for Discovery Bancorp (OTCBB:DVBC) were $222,637, or $0.20 per share, for the first nine months of 2005, following one-time expenses of $340,000 in the acquisition of Celtic Capital Corp.

     “Although our bottom line was impacted, the acquisition of Celtic Capital is a very significant step for our company’s future,” said James P. Kelley, president and chief executive officer of Discovery Bancorp. “Celtic extends the reach of our core focus – serving the financial needs of small to medium-size businesses. The combination of Discovery Bank and Celtic Capital means business customers have an even broader choice of financing options than ever before.”

     Celtic Capital specializes in helping business owners leverage company assets to secure financing for a variety of competitive needs, and has a loan portfolio throughout the western United States.

     Kelley also pointed to another significant step during the quarter: completion of a $12.8 million stock offering, which included $0.8 million toward the asset acquisition of Celtic Capital.

     The holding company’s September 2005 year-to-date figures compare to earnings of $479,951, or $0.46 per share, for the bank’s first nine months of 2004.

     For the third quarter of 2005, the company’s net earnings were $13,224, or $0.01 per share after the $340,000 in one-time expenses associated with the Celtic acquisition, versus $384,976 for the bank, or $0.37 per share, for the same period of 2004. Additionally, the 2004 net earnings reflected the benefit of prior periods’ net operating loss carryforwards which now have been fully utilized.

     Net proceeds from the offering were $11.1 million, which boosted shareholder equity to $22.5 million at Sept. 30, 2005, compared to $10.2 million at Sept. 30, 2004. In addition to the offering, the rise in shareholder equity represents the company’s sustained profitability during the previous 12 months.

     Key indicators of continuing growth climbed to new highs during the quarter. Assets rose to $159.7 million at Sept. 30, 2005, or 25.4 percent higher than $127.4 million at June 30, 2005. Net loans at the end of third quarter, including Celtic’s newly acquired portfolio, increased 24.1 percent to $126.7 million, from $102.1 million three months earlier. Total deposits were $109.2 million at Sept. 30, or 2.7 percent above $106.3 million at June 30 this year.

     Comparing the first nine months of 2005 with the same period in 2004, assets increased 62.7 percent from $98.2 million; net loans rose 62.3 percent from $78.1 million, and deposits grew by 36.3 percent from $80.1 million.

     Pre-tax income for September YTD 2005 was $384,586, compared to $269,126 for the same period in 2004. Bolstered by a strong demand for loans, interest income for the nine months ended Sept. 30, 2005, was $6.4 million, versus $3.5 million for the same period in 2004.

     Net interest income also rose for the first nine months of 2005 to $4.3 million, or 59.2 percent higher than $2.7 million for the same period last year.

     Provision for loan loss totaled $632,822 for the nine months ended Sept. 30, 2005, an increase of $424,124 over the provision for the same period in 2004. Included in the loan loss provision is $234,000 set aside as an initial reserve associated with the acquisition of Celtic Capital’s $16 million commercial loan portfolio.

     The company’s non-interest income rose to $702,332 for the nine months ended Sept. 30, 2005, compared to $106,396 at the same period in 2004. Non-interest expense for the nine months ended Sept. 30, 2005, totaled $4.0 million in 2005 compared to $2.4 million for the same period in 2004.

     Discovery Bancorp is a bank holding company serving the financial needs of small to medium-sized businesses, professionals and individuals through two principal subsidiaries – Discovery Bank and Celtic Capital Corp. Its headquarters are in San Marcos, Calif., a northern suburb of San Diego.

Discovery Bancorp Financial Highlights

	Company		Bank		Bank
	Sep-05		Dec-04		Sep-04
	YTD		YTD		YTD
ASSETS
Cash & Cash Equivalents		17,155,032		6,583,876		7,628,817
Investments		6,498,670		5,397,357		5,882,686
Loans, Net		126,684,348		80,036,566		78,055,952
Other Assets		9,374,077		7,188,189		6,612,873
TOTAL ASSETS		159,712,127		99,205,988		98,180,328
LIABILITIES
Total Deposits		109,216,349		79,672,126		80,135,484
Borrowings Under Line of Credit		14,976,988		0		0
FHLB Advances		12,000,000		9,000,000		7,600,000
Other Liabilities		1,047,645		234,370		279,609
STOCKHOLDERS’ EQUITY		22,471,145		10,299,492		10,165,235
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		159,712,127		99,205,988		98,180,328

	Company		Company		Bank			Bank
	Sep-05		Sep-05		Sep-04			Sep-04
	YTD		3rd Quarter		YTD			3rd Quarter
STATEMENT OF OPERATIONS
Interest Income		6,376,080		2,684,138		3,549,626			1,328,331
Interest Expense		2,059,994		868,240		812,440			327,070
NET INTEREST INCOME		4,316,086		1,815,898		2,737,186			1,001,261
PROVISION FOR LOAN LOSSES		632,822		350,395		208,698			57,497
Net Interest Profit After Provision for Loan Losses		3,683,264		1,465,503		2,528,488			943,764
Non-Interest Income		702,332		220,694		106,396			34,599
Non-Interest Expense		4,001,010		1,650,839		2,365,758			824,706
PRE TAX INCOME		384,586		35,358		269,126			153,657
Income Tax Provision (Benefit)		161,949		22,134		(210,825	)		(231,319	)
NET INCOME (LOSS)		222,637		13,224		479,951			384,976
Basic Earnings Per Share		0.20		0.01		0.46			0.37

Forward-Looking Statements – Statements in this release that are not historical facts are forward-looking statements based on management’s current expectations and beliefs on future developments and their potential effects on the bank. There is no assurance that future developments affecting the bank will be those anticipated by management. Forward-looking statements involve risks and uncertainties, and actual results may differ from those projected in the forward-looking statements due to credit, market, operational, liquidity, interest rate and other risks.

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