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): May 15, 2006

DISCOVERY BANCORP

Incorporated Under the Laws of the State of California

333-122090	20-1814766
Commission File Number	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:

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	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 May 15, 2006 announcing its financial results for the quarter ended March 31, 2006. 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 First Quarter Earnings Press Release of Discovery Bancorp, dated May 15, 2006

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: May 19, 2006	By:	/s/ Martin McNabb
		Martin McNabb
		Chief Financial Officer

EX-99

Exhibit 99

May 15, 2006	For Further Information:
	Kenn Ulrich, APR (619) 397-5471

Discovery Bancorp Earnings Increase to $0.25 Per Share on Net income of $474 Thousand for First Quarter 2006

(San Marcos, California) Net earnings for Discovery Bancorp (OTCBB:DVBC) in the first quarter of 2006 were $474 thousand, or $0.25 per share, compared to $1 thousand, or $0.00 per share, in the same three months of 2005. Figures for 2006 include the addition of Celtic Capital, a commercial finance company acquired in September 2005.

Company assets rose to a record $178.8 million at March 31, 2006, up 8.6 percent from $164.7 million at Dec. 31, 2005. Net loans at the end of first quarter 2006 increased 6.5 percent to $143.1 million, from $134.3 million three months earlier. Total deposits grew 17.1 percent to $131.8 million as of March 31, 2006, compared to $112.6 million at Dec. 31, 2005.

“This was a solid three-month period for us,” said James P. Kelley, president and chief executive officer. “We focused on further integrating Celtic Capital into our business lending programs, and on the core competencies that drive our brand of community banking.”

Discovery Bank, founded in 2001, and Celtic Capital, headquartered in Santa Monica, Calif., operate as separate, wholly owned subsidiaries of Discovery Bancorp. The holding company was formed in June 2005 by shareholders of Discovery Bank, to support the bank’s goal of building shareholder value by owning and operating other banks and authorized non-bank businesses.

As of March 31 this year, Celtic’s loan portfolio had grown to $20.8 million net of reserves, 30.1 percent higher than at the time of Celtic’s acquisition.

In comparing the holding company’s first quarter of 2006 to the same period in 2005, assets were up by 49.7 percent from $119.5 million, net loans increased 53.2 percent from $93.4 million, and deposits were up 32.0 percent from $99.9 million.

“We came off a strong year in 2005, and by all indications that strength has carried over so far in 2006,” said Kelley.

The company’s pre-tax income jumped $831 thousand for the first quarter 2006 from $38 thousand for the same three months of 2005.

Sustained growth in loans led to interest income for the company of $3.8 million in the first quarter this year, a 131.7 percent increase from $1.6 million in first quarter 2005. Interest expense was up by 154.0 percent to $1.3 million for first quarter 2006 versus $506 thousand in the same period last year. Net interest income in the first three months of this year increased 121.8 percent to $2.5 million, from $1.1 million in the first three months of 2005.

Net interest income after the provision for loan losses was $2.4 million at March 31, 2006, or 146.6 percent more than the $982 thousand for the same period in the previous year.

First quarter taxes in 2006 totaled $357 thousand, a $320 thousand increase from $37 thousand in 2005.

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. The bank has offices in San Marcos and Poway, Calif., and Celtic Capital’s offices are in Santa Monica, Phoenix and Bellevue, Wash.

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DISCOVERY BANCORP FINANCIAL HIGHLIGHTS
	Discovery Bancorp and Subsidiaries
(dollars in thousands)		As of March 31,  2006		As of March 31, 2005		As of December 31,  2005
ASSETS
Cash & Cash Equivalents	$	17,583	$	12,375	$	14,854
Investments		8,528		6,008		8,008
Loans, net		143,074		93,398		134,326
Other Assets		9,629		7,695		9,518
TOTAL ASSETS	$	178,814	$	119,476	$	164,706
LIABILITIES AND EQUITY
Total Deposits	$	131,812	$	99,876	$	112,585
Borrowings Under Line of Credit		17,957		0		16,086
FHLB Advances		4,284		8,500		12,000
Other Liabilities		1,413		835		1,192
Stockholders’ Equity		23,348		10,265		22,843
TOTAL LIABILITIES &
STOCKHOLDERS’ EQUITY	$	178,814	$	119,476	$	164,706
		March 31,  2006 YTD		March 31, 2005 YTD		December 31, 2005 YTD
STATEMENTS OF INCOME
Interest Income	$	3,816	$	1,647	$	9,950
Interest Expense		1,285		506		3,132
NET INTEREST INCOME		2,531		1,141		6,818
PROVISION FOR LOAN LOSSES		106		159		786
Net Interest Income After
Provision for Loan Loss		2,425		982		6,032
Non-Interest Income		327		119		921
Non-Interest Expense		1,921		1,063		5,998
PRE-TAX INCOME		831		38		955
Taxes		357		37		402
Net Income	$	474	$	1	$	553
Basic Earnings Per Share	$	0.25	$	0.00	$	0.42

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 company. There is no assurance that future developments affecting the company 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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