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 BANCORP’S NET INCOME INCREASES 139% IN 2005
AS COMPANY REGISTERS HIGHEST-EVER QUARTERLY RESULTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2005
Financial Highlights Include:
• Fourth quarter net income highest in company’s 26-year history
• 139% year-to-year increase in net income
• Total assets rise 39% to new record level
• Total deposits climb 42% and net loans rose 48%, setting new highs
• Equity capital posts 37% growth
CENTURY CITY, CALIFORNIA, JANUARY 25, 2006—First Regional Bancorp (Nasdaq: FRGB) today reported that fourth quarter net income advanced 84% as the company again set a new quarterly earnings record, surpassing the previous mark set in the immediately preceding third quarter. Net income for the full year climbed 139% to a new all-time high and marked the sixth consecutive year of record earnings.
For the fourth quarter ended December 31, 2005, net income totaled $7.9 million, or $1.83 per diluted share, an 84% increase from earnings of $4.3 million (equal to $1.06 per diluted share) a year ago. For the full year of 2005, net income rose to a record $26.5 million, equal to $6.18 per diluted share, from $11.1 million, or $2.84 per diluted share, in 2004.
Jack A. Sweeney, chairman and chief executive officer, commented: “It is gratifying to see our hard work reflected in First Regional’s outstanding results for 2005. The year’s results were exceptional, with profits, assets and other key financial measures all setting new highs. Our 2005 results will serve as a solid foundation to continue building First Regional.”
He noted: “First Regional added more than $507 million in new assets during the year, reaching $1.8 billion, a 39% increase from $1.3 billion last year. Deposits grew by $420 million, a 42% rise, to $1.4 billion from $1.0 billion at December 31, 2004. The bank also recorded substantial growth in net loans, which increased by $544 million, advancing 48% to $1.7 billion from $1.1 billion a year ago.”
Mr. Sweeney continued: “Our successful performance was a direct result of our continued adherence to our long-standing strategic focus of meeting the financial services needs of businesses and professionals. We also benefited from continued strong performance in the Southern California business and real estate sectors, plus actions by the Federal Reserve to raise interest rates and thus increase our net interest margins during the year.
“First Regional has built a successful network, with nine regional offices located in important business centers throughout southern California, along with the complementary activities of our Trust and Investment
(over)
1
Division and our Trust Administrative Services and First Regional Merchant Services business units. Our expanding team of skilled bankers continues to forge important relationships with customers in the real estate, professional services, manufacturing, and wholesale sectors. Our clients value the quality of our personalized, professional services. Also of prime importance, we remain focused on further expanding our financial strength and flexibility. First Regional’s equity capital was $106.0 million at year-end, a 37% increase from $77.4 million twelve months earlier.”
Mr. Sweeney concluded: “While we are enthusiastic about First Regional Bancorp’s prospects, we must note that factors such as a decline in business activity in our key markets could have an adverse impact on our future results. Our management team is prepared to react swiftly to such possibilities consistent with our conservative, risk-averse philosophy.
“Despite these caveats, we have the people, financial strength, and infrastructure in place to successfully execute our strategy. For the longer-term, we continue to strive for further increases in shareholder value through carefully controlled growth and the maintenance of high asset quality.”
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 December 31 |
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
ASSETS: |
|
|
|
|
| ||
Cash and due from banks |
| $ | 67,964 |
| $ | 51,480 |
|
Investment securities |
| 7,507 |
| 6,670 |
| ||
Funds sold |
| 0 |
| 68,025 |
| ||
Federal Home Loan Bank Stock |
| 9,870 |
| 8,304 |
| ||
Federally guaranteed loans |
| 7,369 |
| 6,001 |
| ||
Other loans, net |
| 1,680,988 |
| 1,138,228 |
| ||
Premises and equipment |
| 3,581 |
| 3,091 |
| ||
Other real estate owned |
| 0 |
| 0 |
| ||
Other assets |
| 35,654 |
| 24,319 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 1,812,933 |
| $ | 1,306,118 |
|
|
|
|
|
|
| ||
LIABILITIES AND CAPITAL: |
|
|
|
|
| ||
Demand deposits |
| $ | 446,098 |
| $ | 361,873 |
|
Savings deposits |
| 55,394 |
| 38,914 |
| ||
Money market deposits |
| 735,237 |
| 437,761 |
| ||
Time deposits |
| 183,492 |
| 161,504 |
| ||
|
|
|
|
|
| ||
Total deposits |
| 1,420,221 |
| 1,000,052 |
| ||
|
|
|
|
|
| ||
Funds purchased |
| 0 |
| 0 |
| ||
Federal Home Loan Bank advances |
| 210,000 |
| 176,687 |
| ||
Subordinated debentures |
| 61,857 |
| 41,238 |
| ||
Other liabilities |
| 14,821 |
| 10,695 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 1,706,899 |
| 1,228,672 |
| ||
|
|
|
|
|
| ||
Stated capital |
| 49,527 |
| 47,437 |
| ||
Retained earnings |
| 56,534 |
| 30,009 |
| ||
Net unrealized gains (losses) |
|
|
|
|
| ||
on available-for-sale securities |
| (27 | ) | 0 |
| ||
|
|
|
|
|
| ||
Total capital |
| 106,034 |
| 77,446 |
| ||
|
|
|
|
|
| ||
Total liabilities and capital |
| $ | 1,812,933 |
| $ | 1,306,118 |
|
|
|
|
|
|
| ||
Book value per share outstanding |
| $ | 26.27 |
| $ | 19.40 |
|
|
|
|
|
|
| ||
Total shares outstanding |
| 4,036,775 |
| 3,992,381 |
|
3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| December 31 |
| December 31 |
| ||||||||
|
| 2005 |
| 2004 |
| 2005 |
| 2004 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest and fees on loans |
| $ | 32,581 |
| $ | 18,246 |
| $ | 105,747 |
| $ | 55,277 |
|
Interest on funds sold |
| 26 |
| 36 |
| 174 |
| 146 |
| ||||
Interest on securities |
| 51 |
| 26 |
| 265 |
| 77 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue from earning assets |
| 32,658 |
| 18,308 |
| 106,186 |
| 55,500 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on deposits |
| 6,437 |
| 1,857 |
| 16,224 |
| 5,553 |
| ||||
Interest on subordinated debentures |
| 967 |
| 507 |
| 2,726 |
| 1,813 |
| ||||
Interest on FHLB advances |
| 992 |
| 469 |
| 3,785 |
| 833 |
| ||||
Interest on funds purchased |
| 0 |
| 0 |
| 4 |
| 2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of funds |
| 8,396 |
| 2,833 |
| 22,739 |
| 8,201 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
|
| 24,262 |
| 15,475 |
| 83,447 |
| 47,299 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for loan losses |
| 1,490 |
| 2,000 |
| 5,695 |
| 4,902 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net revenue from earning assets |
| 22,772 |
| 13,475 |
| 77,752 |
| 42,397 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other revenue |
| 1,678 |
| 1,404 |
| 6,424 |
| 5,289 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Salaries and related benefits |
| 7,099 |
| 4,745 |
| 24,426 |
| 18,438 |
| ||||
Occupancy expense |
| 612 |
| 486 |
| 2,603 |
| 1,766 |
| ||||
Equipment expense |
| 272 |
| 224 |
| 1,060 |
| 857 |
| ||||
Promotion expense |
| 105 |
| 79 |
| 479 |
| 331 |
| ||||
Professional service expense |
| 700 |
| 524 |
| 2,536 |
| 2,102 |
| ||||
Customer service expense |
| 347 |
| 289 |
| 1,390 |
| 961 |
| ||||
Supply/communication expense |
| 315 |
| 264 |
| 1,109 |
| 937 |
| ||||
Other operating expenses |
| 1,232 |
| 888 |
| 4,453 |
| 3,318 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
| 10,682 |
| 7,499 |
| 38,056 |
| 28,710 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before provision for taxes |
| 13,768 |
| 7,380 |
| 46,120 |
| 18,976 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for income taxes |
| 5,864 |
| 3,089 |
| 19,595 |
| 7,892 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 7,904 |
| $ | 4,291 |
| $ | 26,525 |
| $ | 11,084 |
|
4
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| December 31 |
| December 31 |
| ||||||||
|
| 2005 |
| 2004 |
| 2005 |
| 2004 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 1.96 |
| $ | 1.22 |
| $ | 6.60 |
| $ | 3.31 |
|
Diluted |
| $ | 1.83 |
| $ | 1.06 |
| $ | 6.18 |
| $ | 2.84 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding |
| 4,034,721 |
| 3,514,167 |
| 4,019,245 |
| 3,343,470 |
| ||||
Diluted average shares |
| 4,311,540 |
| 4,216,990 |
| 4,291,939 |
| 4,074,653 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Average equity |
| $ | 101,142 |
| $ | 63,410 |
| $ | 90,456 |
| $ | 53,097 |
|
Average assets |
| $ | 1,685,533 |
| $ | 1,184,793 |
| $ | 1,477,252 |
| $ | 987,139 |
|
Return on average equity (%) |
| 31.00 |
| 26.85 |
| 29.32 |
| 20.88 |
| ||||
Return on average assets (%) |
| 1.86 |
| 1.44 |
| 1.80 |
| 1.12 |
| ||||
Efficiency ratio (%) |
| 41.18 |
| 44.43 |
| 42.35 |
| 54.59 |
| ||||
Number of employees |
| 219 |
| 157 |
|
|
|
|
| ||||
Assets per employee (000s) |
| $ | 8,278 |
| $ | 8,319 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
CREDIT QUALITY |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Beginning reserve for loan losses (000s) |
| $ | 16,275 |
| $ | 10,084 |
| $ | 11,825 |
| $ | 7,660 |
|
Loan loss provisions |
| 1,490 |
| 2,000 |
| 5,695 |
| 4,902 |
| ||||
Loan recoveries |
| 10 |
| 0 |
| 140 |
| 113 |
| ||||
Loan chargeoffs |
| 0 |
| 0 |
| 35 |
| 515 |
| ||||
Net change in allowance for unfunded loan commitments |
| -198 |
| -259 |
| -48 |
| -335 |
| ||||
Ending reserve for loan losses (000s) |
| $ | 17,577 |
| $ | 11,825 |
| $ | 17,577 |
| $ | 11,825 |
|
|
|
|
|
|
|
|
|
|
| ||||
Nonperforming assets (000s) |
| $ | 2,212 |
| $ | 45 |
|
|
|
|
| ||
Nonperforming assets / gross loans (%) |
| 0.13 |
| 0.00 |
|
|
|
|
| ||||
Reserve for loan losses / nonperforming assets (%) |
| 794.62 |
| 26277.78 |
|
|
|
|
| ||||
Reserve for loan losses / gross loans (%) |
| 1.03 |
| 1.02 |
|
|
|
|
|
5
|
| (000s omitted) |
| ||||||||||||||
|
| For the Three Months Ended December 31, |
| ||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross loans |
| $ | 1,592,002 |
| $ | 32,581 |
| 8.12 |
| $ | 1,105,635 |
| $ | 18,246 |
| 6.55 |
|
Funds sold |
| 2,609 |
| 26 |
| 3.95 |
| 7,003 |
| 36 |
| 2.04 |
| ||||
Investment securities |
| 7,760 |
| 51 |
| 2.61 |
| 6,364 |
| 26 |
| 1.62 |
| ||||
Total earning assets |
| $ | 1,602,371 |
| $ | 32,658 |
| 8.09 |
| $ | 1,119,002 |
| $ | 18,308 |
| 6.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,420,641 |
| $ | 6,437 |
| 1.80 |
| $ | 988,423 |
| $ | 1,857 |
| 0.75 |
|
Federal Home Loan Bank advances |
| 95,142 |
| 992 |
| 4.14 |
| 90,073 |
| 469 |
| 2.07 |
| ||||
Subordinated debentures |
| 61,857 |
| 967 |
| 6.20 |
| 36,566 |
| 507 |
| 5.50 |
| ||||
Funds purchased |
| 4 |
| 0 |
| 0.00 |
| 58 |
| 0 |
| 0.00 |
| ||||
Total bearing liabilities |
| $ | 1,577,644 |
| $ | 8,396 |
| 2.11 |
| $ | 1,115,120 |
| $ | 2,833 |
| 1.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest spread (1) |
|
|
|
|
| 5.97 |
|
|
|
|
| 5.48 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest margin (2) |
|
|
|
|
| 6.01 |
|
|
|
|
| 5.49 |
|
(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 Twelve Months Ended December 31, |
| ||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Loans |
| $ | 1,380,743 |
| $ | 105,747 |
| 7.66 |
| $ | 912,146 |
| $ | 55,277 |
| 6.06 |
|
Funds Sold |
| 6,429 |
| 174 |
| 2.71 |
| 11,276 |
| 146 |
| 1.29 |
| ||||
Investment Securities |
| 11,284 |
| 265 |
| 2.35 |
| 6,352 |
| 77 |
| 1.21 |
| ||||
Total Earning Assets |
| $ | 1,398,456 |
| $ | 106,186 |
| 7.59 |
| $ | 929,774 |
| $ | 55,500 |
| 5.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,217,171 |
| $ | 16,224 |
| 1.33 |
| $ | 841,252 |
| $ | 5,553 |
| 0.66 |
|
Federal Home Loan Bank Advances |
| 115,717 |
| 3,785 |
| 3.27 |
| 53,714 |
| 833 |
| 1.55 |
| ||||
Subordinated Debentures |
| 46,605 |
| 2,726 |
| 5.85 |
| 34,242 |
| 1,813 |
| 5.29 |
| ||||
Funds Purchased |
| 117 |
| 4 |
| 3.42 |
| 330 |
| 2 |
| 0.61 |
| ||||
Total Bearing Liabilities |
| $ | 1,379,610 |
| $ | 22,739 |
| 1.65 |
| $ | 929,538 |
| $ | 8,201 |
| 0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Spread (1) |
|
|
|
|
| 5.94 |
|
|
|
|
| 5.09 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Margin (2) |
|
|
|
|
| 5.97 |
|
|
|
|
| 5.09 |
|
(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