Exhibit 99
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 POSTS RECORD
THIRD-QUARTER AND NINE MONTH RESULTS
Quarterly Highlights Include:
• Third quarter net income highest in history
• 119% year-to-year increase in net income
• Total assets climb 56% to all time high
• Total deposits rise 41% to all time high
• Net loans increase 54% to all time high
• Company raises $20 million in capital through trust preferred securities
CENTURY CITY, CALIFORNIA, OCTOBER 6, 2005—First Regional Bancorp (Nasdaq-NM: FRGB) today reported record third quarter operating results, with three- and nine-month net income advancing by 119% and 174%, respectively, to reach the highest period totals in company history.
For the three months ended September 30, 2005, net income totaled $7.0 million, more than doubling from $3.2 million in the corresponding quarter of 2004, and eclipsing the previous all-time high achieved in this year’s second quarter. Diluted earnings per share surged to $1.63 per diluted share, more than double the $0.79 per diluted share recorded in the year-earlier period.
Net income for the initial three quarters of 2005 advanced to $18.6 million, equal to $4.34 per diluted share, which compares with $6.8 million, or $1.80 per diluted share, posted in the first nine months of 2004.
The company also announced sharp increases in total assets, total deposits and net loans, all of which reached record levels at the close of the most recent quarter. Assets advanced 56% to $1.6 billion from $1.1 billion at September 30, 2004. Net loans climbed to $1.5 billion, an increase of 54% from $973 million at the conclusion of the like quarter in 2004, while deposits rose to $1.3 billion, a 41% increase from $949 million one year earlier.
Jack A. Sweeney, Chairman and Chief Executive Officer, stated: “First Regional’s record operating results speak for themselves. We continue to execute our proven business strategy, which has led to our excellent performance and, in turn, has resulted in a sharp increase in shareholder value over the past several years.”
Mr. Sweeney continued: “Clearly, our company’s consistent growth has reflected strong performance in the California real estate sector, a major component of our business and a significant factor in our loan growth. Further, the series of interest rate increases by the Federal Reserve has had a favorable impact on our results by improving our bank’s net interest margins. Finally, the sustained growth of our institution has led to economies of scale that improve our efficiency and thus benefit our bottom line.”
1
Mr. Sweeney noted: “Last week, we announced that First Regional successfully concluded a pooled issuance of $20 million in trust preferred securities. The proceeds of this offering will further fortify our capital base and will support First Regional’s continued growth.”
Mr. Sweeney concluded: “Looking forward, we remain optimistic about our prospects, but are alert for potential challenges ahead. While the economy continues to grow steadily, unpredictable events such as rising oil prices, natural disasters like Hurricane Katrina, changes in economic conditions, and the effects of such events on corporate and consumer confidence can influence future performance. Our management team is mindful of these and other risk factors, and along with our dedicated and capable staff will continue to focus on the disciplined execution of First Regional’s business plan. We are confident about our course and anticipate reporting a successful 2005.”
First Regional Bancorp is a bank holding company headquartered in Century City, California. 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.
# # #
2
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
|
| (000’s omitted) |
| ||||
As of September 30 |
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
ASSETS: |
|
|
|
|
| ||
Cash and due from banks |
| $ | 102,858 |
| $ | 67,320 |
|
Investment securities |
| 7,870 |
| 5,968 |
| ||
Funds sold |
| 0 |
| 430 |
| ||
Federally guaranteed loans |
| 6,634 |
| 6,924 |
| ||
Other loans, net |
| 1,488,289 |
| 966,655 |
| ||
Premises and equipment |
| 3,645 |
| 2,580 |
| ||
Other real estate owned |
| 0 |
| 0 |
| ||
Other assets |
| 35,438 |
| 20,630 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 1,644,734 |
| $ | 1,070,507 |
|
|
|
|
|
|
| ||
LIABILITIES AND CAPITAL: |
|
|
|
|
| ||
Demand deposits |
| $ | 441,916 |
| $ | 358,816 |
|
Savings deposits |
| 47,667 |
| 35,568 |
| ||
Money market deposits |
| 672,852 |
| 412,639 |
| ||
Time deposits |
| 178,279 |
| 142,035 |
| ||
|
|
|
|
|
| ||
Total deposits |
| 1,340,714 |
| 949,058 |
| ||
|
|
|
|
|
| ||
Funds purchased |
| 0 |
| 0 |
| ||
Federal Home Loan Bank advances |
| 135,000 |
| 20,000 |
| ||
Subordinated debentures |
| 61,857 |
| 35,559 |
| ||
Other liabilities |
| 10,041 |
| 7,490 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 1,547,612 |
| 1,012,107 |
| ||
|
|
|
|
|
| ||
Stated capital |
| 48,518 |
| 32,662 |
| ||
Retained earnings |
| 48,630 |
| 25,737 |
| ||
Net unrealized gains (losses) on available-for-sale securities |
| (26 | ) | 1 |
| ||
|
|
|
|
|
| ||
Total capital |
| 97,122 |
| 58,400 |
| ||
|
|
|
|
|
| ||
Total liabilities and capital |
| $ | 1,644,734 |
| $ | 1,070,507 |
|
|
|
|
|
|
| ||
Book value per share outstanding |
| $ | 24.08 |
| $ | 16.96 |
|
|
|
|
|
|
| ||
Total shares outstanding |
| 4,032,518 |
| 3,442,655 |
|
3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2005 |
| 2004 |
| 2005 |
| 2004 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest and fees on loans |
| $ | 28,582 |
| $ | 14,343 |
| $ | 73,166 |
| $ | 37,031 |
|
Interest on funds sold |
| 19 |
| 47 |
| 148 |
| 110 |
| ||||
Interest on securities |
| 63 |
| 22 |
| 214 |
| 51 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue from earning assets |
| 28,664 |
| 14,412 |
| 73,528 |
| 37,192 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on deposits |
| 4,629 |
| 1,532 |
| 9,787 |
| 3,696 |
| ||||
Interest on subordinated debentures |
| 639 |
| 477 |
| 1,759 |
| 1,306 |
| ||||
Interest on FHLB advances |
| 1,077 |
| 109 |
| 2,793 |
| 364 |
| ||||
Interest on funds purchased |
| 3 |
| 0 |
| 4 |
| 2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of funds |
| 6,348 |
| 2,118 |
| 14,343 |
| 5,368 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
|
| 22,316 |
| 12,294 |
| 59,185 |
| 31,824 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for loan losses |
| 1,505 |
| 1,100 |
| 4,205 |
| 2,902 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net revenue from earning assets |
| 20,811 |
| 11,194 |
| 54,980 |
| 28,922 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other revenue |
| 1,690 |
| 1,333 |
| 4,746 |
| 3,885 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Salaries and related benefits |
| 6,437 |
| 4,452 |
| 17,327 |
| 13,693 |
| ||||
Occupancy expense |
| 597 |
| 427 |
| 1,991 |
| 1,280 |
| ||||
Equipment expense |
| 308 |
| 250 |
| 788 |
| 633 |
| ||||
Promotion expense |
| 140 |
| 91 |
| 374 |
| 252 |
| ||||
Professional service expense |
| 632 |
| 543 |
| 1,836 |
| 1,578 |
| ||||
Customer service expense |
| 355 |
| 246 |
| 1,043 |
| 672 |
| ||||
Supply/communication expense |
| 257 |
| 237 |
| 794 |
| 673 |
| ||||
Other operating expenses |
| 1,613 |
| 829 |
| 3,221 |
| 2,430 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
| 10,339 |
| 7,075 |
| 27,374 |
| 21,211 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before provision for taxes |
| 12,162 |
| 5,452 |
| 32,352 |
| 11,596 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for income taxes |
| 5,158 |
| 2,260 |
| 13,731 |
| 4,803 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 7,004 |
| $ | 3,192 |
| $ | 18,621 |
| $ | 6,793 |
|
4
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2005 |
| 2004 |
| 2005 |
| 2004 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 1.74 |
| $ | 0.93 |
| $ | 4.64 |
| $ | 2.09 |
|
Diluted |
| $ | 1.63 |
| $ | 0.79 |
| $ | 4.34 |
| $ | 1.80 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding |
| 4,026,210 |
| 3,436,790 |
| 4,014,381 |
| 3,257,946 |
| ||||
Diluted average shares |
| 4,304,677 |
| 4,185,222 |
| 4,287,438 |
| 4,003,958 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Average equity |
| $ | 93,420 |
| $ | 57,102 |
| $ | 86,854 |
| $ | 49,632 |
|
Average assets |
| $ | 1,536,143 |
| $ | 1,026,406 |
| $ | 1,407,063 |
| $ | 920,774 |
|
Return on average equity (%) |
| 29.74 |
| 22.18 |
| 28.66 |
| 18.30 |
| ||||
Return on average assets (%) |
| 1.81 |
| 1.23 |
| 1.77 |
| 0.99 |
| ||||
Efficiency ratio (%) |
| 43.07 |
| 51.92 |
| 42.82 |
| 59.40 |
| ||||
Number of employees |
| 219 |
| 178 |
|
|
|
|
| ||||
Assets per employee (000s) |
| $ | 7,510 |
| $ | 6,014 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
CREDIT QUALITY |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Beginning reserve for loan losses (000s) |
| $ | 14,817 |
| $ | 9,035 |
| $ | 11,825 |
| $ | 7,800 |
|
Loan loss provisions |
| 1,505 |
| 1,100 |
| 4,205 |
| 2,902 |
| ||||
Loan recoveries |
| 0 |
| 0 |
| 130 |
| 113 |
| ||||
Loan chargeoffs |
| 0 |
| 0 |
| 35 |
| 515 |
| ||||
Net change in allowance for unfunded loan commitments |
| -47 |
| -51 |
| 150 |
| -216 |
| ||||
Ending reserve for loan losses (000s) |
| $ | 16,275 |
| $ | 10,084 |
| $ | 16,275 |
| $ | 10,084 |
|
|
|
|
|
|
|
|
|
|
| ||||
Nonperforming assets (000s) |
| $ | 872 |
| $ | 49 |
|
|
|
|
| ||
Nonperforming assets / gross loans (%) |
| 0.06 |
| 0.00 |
|
|
|
|
| ||||
Reserve for loan losses / nonperforming assets (%) |
| 1866.40 |
| 20579.59 |
|
|
|
|
| ||||
Reserve for loan losses / gross loans (%) |
| 1.08 |
| 1.03 |
|
|
|
|
|
5
|
| (000s omitted) |
| ||||||||||||||
|
| For the Three Months Ended September 30, |
| ||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross loans |
| $ | 1,440,304 |
| $ | 28,582 |
| 7.87 |
| $ | 947,181 |
| $ | 14,343 |
| 6.01 |
|
Funds sold |
| 2,183 |
| 19 |
| 3.45 |
| 13,164 |
| 47 |
| 1.42 |
| ||||
Investment securities |
| 11,428 |
| 63 |
| 2.19 |
| 7,170 |
| 22 |
| 1.22 |
| ||||
Total earning assets |
| $ | 1,453,915 |
| $ | 28,664 |
| 7.82 |
| $ | 967,515 |
| $ | 14,412 |
| 5.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,270,378 |
| $ | 4,629 |
| 1.45 |
| $ | 900,978 |
| $ | 1,532 |
| 0.67 |
|
Federal Home Loan Bank advances |
| 120,761 |
| 1,077 |
| 3.54 |
| 27,935 |
| 109 |
| 1.55 |
| ||||
Subordinated debentures |
| 41,910 |
| 639 |
| 6.05 |
| 35,559 |
| 477 |
| 5.32 |
| ||||
Funds purchased |
| 102 |
| 3 |
| 11.67 |
| 42 |
| 0 |
| 0.00 |
| ||||
Total bearing liabilities |
| $ | 1,433,151 |
| $ | 6,348 |
| 1.76 |
| $ | 964,514 |
| $ | 2,118 |
| 0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest spread (1) |
|
|
|
|
| 6.06 |
|
|
|
|
| 5.04 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest margin (2) |
|
|
|
|
| 6.09 |
|
|
|
|
| 5.04 |
|
(1) Net interest spread represents the average yield earned on earning assets less the average cost of bearing liabilities.
(2) Net interest margin represents net interest income divided by average earning assets.
6
|
| (000s omitted) |
| ||||||||||||||
|
| For the Nine Months Ended September 30, |
| ||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Loans |
| $ | 1,309,550 |
| $ | 73,166 |
| 7.47 |
| $ | 847,178 |
| $ | 37,031 |
| 5.84 |
|
Funds Sold |
| 7,716 |
| 148 |
| 2.56 |
| 12,710 |
| 110 |
| 1.16 |
| ||||
Investment Securities |
| 12,510 |
| 214 |
| 2.29 |
| 6,347 |
| 51 |
| 1.07 |
| ||||
Total Earning Assets |
| $ | 1,329,776 |
| $ | 73,528 |
| 7.39 |
| $ | 866,235 |
| $ | 37,192 |
| 5.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,148,602 |
| $ | 9,787 |
| 1.14 |
| $ | 791,837 |
| $ | 3,696 |
| 0.62 |
|
Federal Home Loan Bank Advances |
| 122,652 |
| 2,793 |
| 3.04 |
| 41,505 |
| 364 |
| 1.17 |
| ||||
Subordinated Debentures |
| 41,465 |
| 1,759 |
| 5.67 |
| 35,559 |
| 1,306 |
| 4.91 |
| ||||
Funds Purchased |
| 155 |
| 4 |
| 3.45 |
| 422 |
| 2 |
| 0.63 |
| ||||
Total Bearing Liabilities |
| $ | 1,312,874 |
| $ | 14,343 |
| 1.46 |
| $ | 869,323 |
| $ | 5,368 |
| 0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Spread (1) |
|
|
|
|
| 5.93 |
|
|
|
|
| 4.91 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Margin (2) |
|
|
|
|
| 5.95 |
|
|
|
|
| 4.91 |
|
(1) Net interest spread represents the average yield earned on earning assets less the average cost of bearing liabilities.
(2) Net interest margin represents net interest income divided by average earning assets.
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.
7