Exhibit 99.1
News Release
First Regional | 1801 Century Park East | Jack A. Sweeney |
Bancorp | Century City, California 90067 | Board Chairman |
| Telephone (310) 552-1776 | Chief Executive Officer |
| Facsimile (310) 552-1772 |
|
IMMEDIATE RELEASE
FIRST REGIONAL BANCORP REPORTS INCREASED EARNINGS FOR 2003 WITH
SUBSTANTIAL GROWTH IN ASSETS, DEPOSITS, AND NET LOANS
CENTURY CITY, CALIFORNIA, JANUARY 8, 2004- First Regional Bancorp (Nasdaq: FRGB) today announced record earnings for 2003, driven by a strong increase in lending activity. Assets, deposits, and net loans all rose dramatically from the levels of a year ago.
For the twelve months ended December 31, 2003, net income was $4,615,000, or $1.59 per share (diluted), compared to $3,037,000, or $1.14 per share (diluted), for 2002. In the fourth quarter, also ended December 31, 2003, net income was $1,346,000, or $0.45 per share (diluted), versus $920,000, or 34 cents per share (diluted), for the same three months of 2002.
Jack A. Sweeney, chairman and chief executive officer, said “2003 was a year of great achievement for First Regional Bancorp. Total assets rose by 65% during the year, deposits rose 57%, and loans rose by 76% in 2003. This balance sheet growth led First Regional to achieve record earnings in 2003. Our net income of $4,615,000 represented a 52% increase over the results of the prior year. Also contributing to our increased profitability were our regional offices and business units. Each of these profit centers increased its contribution to First Regional’s success in 2003, and we anticipate further improvement in the future as these units continue to penetrate these respective markets.”
Mr. Sweeney continued: “During the year, we established new regional offices in Hollywood and Westlake Village, enabling us to bring our proven business banking expertise to a broader base of business clients. In order to keep pace with our strong asset growth, First Regional Bancorp further strengthened its capital base during 2003. Early in the year, we obtained approximately $3 million of equity capital through a private placement of common stock, and in October we generated additional capital through the private placement of $15 million in convertible subordinated debentures. In each case, the majority of the new capital was contributed to First Regional Bank to support its future growth.
Mr. Sweeney concluded: “While 2003 was a most successful year for First Regional, we are optimistic that further improvement can be achieved in 2004 and beyond. Of course, unforeseen events such as an economic slowdown or further interest rate reductions by the Federal Reserve could impact future results, but nonetheless we believe that First Regional’s future is bright. We further believe that our proven business model characterized by strong asset quality, capital strength, and prudent reserves is the most effective way to deal with the inevitable economic uncertainties and to maximize shareholder value over time.”
First Regional Bancorp is a bank holding company headquartered in Century City. Its subsidiary, First Regional Bank, specializes in providing businesses and professionals with the management expertise of a major bank and the personalized service of an independent.
(over)
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1
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
|
| (000’s omitted) |
| ||||
As of December 31 |
| 2003 |
| 2002 |
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ASSETS: |
|
|
|
|
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Cash and due from banks |
| $ | 43,006 |
| $ | 28,014 |
|
Investment securities |
| 7,456 |
| 2,739 |
| ||
Funds sold |
| 0 |
| 21,960 |
| ||
Federally guaranteed loans |
| 9,398 |
| 16,260 |
| ||
Other loans, net |
| 695,788 |
| 383,593 |
| ||
Premises and equipment |
| 1,866 |
| 1,558 |
| ||
Other assets |
| 15,725 |
| 13,130 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 773,239 |
| $ | 467,254 |
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|
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LIABILITIES AND CAPITAL: |
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Demand deposits |
| $ | 251,976 |
| $ | 173,192 |
|
Savings deposits |
| 33,072 |
| 24,207 |
| ||
Money market deposits |
| 251,380 |
| 178,563 |
| ||
Time deposits |
| 127,518 |
| 46,168 |
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|
|
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Total deposits |
| 663,946 |
| 422,130 |
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Funds purchased |
| 0 |
| 161 |
| ||
Federal Home Loan Bank advances |
| 42,000 |
| 0 |
| ||
Subordinated debentures |
| 27,500 |
| 12,500 |
| ||
Other liabilities |
| 4,761 |
| 4,633 |
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Total liabilities |
| 738,207 |
| 439,424 |
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Stated capital |
| 15,877 |
| 12,908 |
| ||
Retained earnings |
| 19,155 |
| 14,921 |
| ||
Net unrealized gains (losses) on available for sale securities |
| 0 |
| 1 |
| ||
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|
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|
|
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Total capital |
| 35,032 |
| 27,830 |
| ||
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|
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Total liabilities and capital |
| $ | 773,239 |
| $ | 467,254 |
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Book value per share outstanding |
| $ | 12.29 |
| $ | 10.57 |
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Total shares outstanding |
| 2,850,736 |
| 2,633,996 |
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2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
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| Three Months Ended |
| Twelve Months Ended |
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|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
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Interest and fees on loans |
| $ | 9,188 |
| $ | 5,937 |
| $ | 31,350 |
| $ | 21,800 |
|
Interest on funds sold |
| 46 |
| 151 |
| 237 |
| 484 |
| ||||
Interest on securities |
| 14 |
| 11 |
| 67 |
| 56 |
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Revenue from earning assets |
| 9,248 |
| 6,099 |
| 31,654 |
| 22,340 |
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Interest on deposits |
| 792 |
| 596 |
| 2,687 |
| 2,535 |
| ||||
Interest on subordinated debentures |
| 316 |
| 171 |
| 766 |
| 383 |
| ||||
Interest on FHLB advances |
| 22 |
| 0 |
| 59 |
| 0 |
| ||||
Interest on funds purchased |
| 2 |
| 1 |
| 8 |
| 8 |
| ||||
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Cost of funds |
| 1,132 |
| 768 |
| 3,520 |
| 2,926 |
| ||||
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|
|
|
|
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|
| 8,116 |
| 5,331 |
| 28,134 |
| 19,414 |
| ||||
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Provision for loan losses |
| 1,308 |
| 150 |
| 3,058 |
| 500 |
| ||||
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Net revenue from earning assets |
| 6,808 |
| 5,181 |
| 25,076 |
| 18,914 |
| ||||
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Other revenue |
| 1,433 |
| 1,010 |
| 4,696 |
| 3,544 |
| ||||
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|
|
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Salaries and related benefits |
| 3,659 |
| 2,971 |
| 13,781 |
| 10,831 |
| ||||
Occupancy expense |
| 419 |
| 343 |
| 1,490 |
| 1,318 |
| ||||
Other operating expenses |
| 1,862 |
| 1,655 |
| 6,636 |
| 5,487 |
| ||||
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|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
| 5,940 |
| 4,969 |
| 21,907 |
| 17,636 |
| ||||
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Income before provision for taxes |
| 2,301 |
| 1,222 |
| 7,865 |
| 4,822 |
| ||||
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Provision for income taxes |
| 955 |
| 302 |
| 3,250 |
| 1,785 |
| ||||
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|
|
|
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Net income |
| 1,346 |
| 920 |
| 4,615 |
| 3,037 |
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3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
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| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
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Net income per share |
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Basic |
| $ | 0.47 |
| $ | 0.35 |
| $ | 1.65 |
| $ | 1.15 |
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Diluted |
| $ | 0.45 |
| $ | 0.34 |
| $ | 1.59 |
| $ | 1.14 |
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Average shares outstanding |
| 2,848,757 |
| 2,632,017 |
| 2,790,980 |
| 2,630,312 |
| ||||
Diluted average shares |
| 3,006,014 |
| 2,674,584 |
| 2,901,349 |
| 2,662,086 |
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RATIO ANALYSIS |
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Return on Average Equity (%) |
| 16.11 |
| 13.78 |
| 14.66 |
| 11.52 |
| ||||
Return on Average Assets (%) |
| 0.76 |
| 0.80 |
| 0.78 |
| 0.75 |
| ||||
Efficiency Ratio (%) |
| 62.21 |
| 78.36 |
| 66.73 |
| 76.82 |
| ||||
Assets per Employee ($000s) |
| 4,925 |
| 3,513 |
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Nonperforming Assets ($000s) |
| 826 |
| 91 |
|
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|
|
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Reserve for Loan Losses ($000s) |
| 7,800 |
| 5,500 |
|
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|
|
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Nonperforming Assets / Gross Loans (%) |
| 0.12 |
| 0.02 |
|
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|
|
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Reserve for Loan Losses / Nonperforming Assets (%) |
| 944.31 |
| 6043.96 |
|
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Reserve for Loan Losses / Gross Loans (%) |
| 1.09 |
| 1.36 |
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“This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein may constitute forward-looking statements. Although First Regional believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from First Regional’s expectations include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which First Regional conducts its operations”.
4