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 NEW QUARTERLY FINANCIAL RECORDS
FOR THREE MONTHS ENDED MARCH 31, 2006
Financial Highlights Include:
• First-period net income rises 62% from year earlier to new quarterly high
• Total Assets climb 41% to $1.9 billion from $1.4 billion last year
• Total deposits grow by $369 million, or 34%, to $1.5 billion
• Net loans reach $1.8 billion, an increase of 45% from one-year earlier
CENTURY CITY, CALIFORNIA (April 18, 2006)—First Regional Bancorp (Nasdaq-NMS: FRGB) today announced that net income for the three months ended March 31, 2006 represented the highest quarterly profit in the company’s history. Total assets, total deposits, net loans, and equity capital all reached new highs.
Net income for the quarter ended March 31, 2006 totaled $8.5 million, equal to $1.96 per diluted share, compared with $5.2 million, or $1.23 per diluted share one year ago. Net income per diluted share advanced by 59% from the prior year quarter and increased significantly from the previous quarterly earnings record established in the immediately preceding fourth quarter of 2005.
Jack A. Sweeney, chairman and chief executive officer, stated: “First Regional recorded another banner quarter, continuing the positive momentum that characterizes our business. First quarter revenue from earning assets rose 78% to $36.6 million from $20.6 million in the corresponding period last year. These higher revenues reflect our strong growth in assets combined with today’s higher interest rate environment, and more than offset increases in our cost of funds as well as the newly-required recognition of stock option-related expenses of $144,000 for the quarter.”
He noted that First Regional added $559 million in new assets since the first quarter of 2005, as total assets rose to $1.925 billion at March 31, 2006 for an increase of 41% from $1.367 billion one year ago. Over the same period total deposits rose by $369 million, or 34%, to $1.468 billion from $1.099 billion, and the bank added $551 million in net loans, an increase of 45%. Net loans grew to $1.789 billion from $1.238 billion twelve months earlier.
Mr. Sweeney stated: “High asset quality has always been a hallmark of First Regional, and our nonperforming assets totaled just $69,000 at March 31, 2006. This achievement in part reflects our successful resolution of two nonperforming assets through the sale of these notes in arms-length transactions, with a one-time special provision to our reserve for loan losses of approximately $150,000. In addition, we have continued to make significant regular provisions to our reserve for loan losses in order to keep pace with the growth of First Regional’s loan portfolio.
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Mr. Sweeney continued: “We are continuing to add high quality new loans to our portfolio, supported by strong deposit growth and generally higher net interest margins. At the same time, we remain focused on further improving our operating efficiency. We have enjoyed considerable success in this area, as our staffing and other non-interest expenses rose at a slower pace than did our assets. Assets per employee, a key measure of productivity, grew 16% to $8.4 million from $7.3 million in the prior year, and our efficiency ratio improved to 38% in the first quarter of 2006.
He noted: “First Regional continues to strengthen its capital base to support its ongoing growth. At March 31, 2006, shareholders’ equity was $115 million, an increase of 38% from $83 million in 2005. Further demonstrating First Regional’s solid performance, our return on average equity was 31% for the quarter. In addition, at the close of the first quarter First Regional added to its financial strength with the successful completion of a $30 million pooled “trust preferred” securities offering. Listed as subordinated debentures on our balance sheet, trust preferred securities are treated as capital for regulatory purposes but bear interest that is deductible for income tax purposes.
“The year is off to an excellent start,” Mr. Sweeney concluded, “and we will be working hard to maintain our growth momentum. We are registering strong, profitable growth as our team effectively executes our business strategy, which is based on our ability to add quality assets while consistently delivering responsive, innovative services to an expanding customer base.
“At the same time, we have an experienced and conservative management team. All of us remain constantly attuned to economic events which may signal changing business conditions, and we are prepared to take swift and appropriate action to meet whatever challenges may lie ahead.”
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.
# # #
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CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
|
| (000’s omitted) |
| ||||
As of March 31 |
| 2006 |
| 2005 |
| ||
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ASSETS: |
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|
|
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Cash and due from banks |
| $ | 72,195 |
| $ | 61,184 |
|
Federal funds sold |
| 0 |
| 12,450 |
| ||
Cash and cash equivalents |
| 72,195 |
| 73,634 |
| ||
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|
|
|
|
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Investment securities |
| 9,376 |
| 18,328 |
| ||
Federal Home Loan Bank stock - at cost |
| 13,677 |
| 8,304 |
| ||
Federally guaranteed loans |
| 6,952 |
| 5,464 |
| ||
Other loans - net |
| 1,781,910 |
| 1,232,511 |
| ||
Premises and equipment - net |
| 3,579 |
| 3,632 |
| ||
Other real estate owned |
| 0 |
| 0 |
| ||
Accrued interest receivable and other assets |
| 37,686 |
| 24,691 |
| ||
|
|
|
|
|
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Total assets |
| $ | 1,925,375 |
| $ | 1,366,564 |
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LIABILITIES AND CAPITAL: |
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|
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|
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Demand deposits |
| $ | 460,311 |
| $ | 428,534 |
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Savings deposits |
| 47,912 |
| 35,513 |
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Money market deposits |
| 776,670 |
| 463,816 |
| ||
Time deposits |
| 183,545 |
| 171,183 |
| ||
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|
|
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Total deposits |
| 1,468,438 |
| 1,099,046 |
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|
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Funds purchased |
| 0 |
| 0 |
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Federal Home Loan Bank advances |
| 230,000 |
| 130,000 |
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Subordinated debentures |
| 92,785 |
| 41,238 |
| ||
Accrued interest payable and other liabilities |
| 19,124 |
| 13,222 |
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|
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Total liabilities |
| 1,810,347 |
| 1,283,506 |
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|
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Stated capital |
| 50,077 |
| 47,809 |
| ||
Retained earnings |
| 65,018 |
| 35,251 |
| ||
Net unrealized losses on available- for-sale securities |
| (67 | ) | (2 | ) | ||
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|
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Total capital |
| 115,028 |
| 83,058 |
| ||
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Total liabilities and capital |
| $ | 1,925,375 |
| $ | 1,366,564 |
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Book value per share outstanding |
| $ | 28.41 |
| $ | 20.72 |
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Total shares outstanding |
| 4,048,433 |
| 4,008,339 |
|
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
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| Three Months Ended |
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| 2006 |
| 2005 |
| ||
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|
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|
|
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Interest on loans |
| $ | 36,507 |
| $ | 20,454 |
|
Interest on federal funds sold |
| 32 |
| 102 |
| ||
Interest on securities |
| 68 |
| 37 |
| ||
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|
|
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Total interest income |
| 36,607 |
| 20,593 |
| ||
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|
|
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Interest on deposits |
| 7,373 |
| 2,231 |
| ||
Interest on subordinated debentures |
| 1,043 |
| 525 |
| ||
Interest on FHLB advances |
| 2,436 |
| 694 |
| ||
Interest on funds purchased |
| 3 |
| 0 |
| ||
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|
|
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Total interest expense |
| 10,855 |
| 3,450 |
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Net interest income |
| 25,752 |
| 17,143 |
| ||
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Provision for loan losses |
| 2,391 |
| 1,200 |
| ||
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|
|
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Net interest income after provision for loan losses |
| 23,361 |
| 15,943 |
| ||
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|
|
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Other operating income |
| 1,952 |
| 1,481 |
| ||
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|
|
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Salaries and related benefits |
| 6,796 |
| 5,317 |
| ||
Occupancy expenses |
| 622 |
| 796 |
| ||
Other expenses |
| 2,983 |
| 2,209 |
| ||
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|
|
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Total other operating expenses |
| 10,401 |
| 8,322 |
| ||
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Income before provision for income taxes |
| 14,912 |
| 9,102 |
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Provision for income taxes |
| 6,428 |
| 3,860 |
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Net income |
| 8,484 |
| $ | 5,242 |
| |
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|
| (000’s omitted) |
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| Three Months Ended |
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| 2006 |
| 2005 |
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Net income per share |
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Basic |
| $ | 2.10 |
| $ | 1.31 |
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Diluted |
| $ | 1.96 |
| $ | 1.23 |
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|
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Average shares outstanding |
| 4,042,079 |
| 4,001,010 |
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Diluted average shares |
| 4,317,893 |
| 4,270,887 |
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Average Equity |
| $ | 110,082 |
| $ | 80,528 |
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Average Assets |
| $ | 1,868,059 |
| $ | 1,283,563 |
|
Return on Average Equity (%) |
| 31.26 |
| 26.40 |
| ||
Return on Average Assets (%) |
| 1.84 |
| 1.66 |
| ||
Efficiency Ratio (%) |
| 37.54 |
| 44.68 |
| ||
Number of Employees |
| 229 |
| 188 |
| ||
Assets per Employee (000s) |
| $ | 8,408 |
| $ | 7,269 |
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CREDIT QUALITY |
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Beginning Reserve for Loan Losses (000s) |
| $ | 17,577 |
| $ | 11,825 |
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Loan Loss Provisions |
| 2,391 |
| 1,200 |
| ||
Loan Recoveries |
| 0 |
| 130 |
| ||
Loan Chargeoffs |
| -941 |
| 0 |
| ||
Net Change in Allowance for Unfunded Loan Commitments |
| -52 |
| 200 |
| ||
Ending Reserve for Loan Losses (000s) |
| $ | 18,975 |
| $ | 13,355 |
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Nonperforming Assets (000s) |
| $ | 69 |
| $ | 603 |
|
Nonperforming Assets / Gross Loans (%) |
| 0.00 |
| 0.05 |
| ||
Reserve for Loan Losses / Nonperforming Assets (%) |
| 27500.00 |
| 2214.76 |
| ||
Reserve for Loan Losses / Gross Loans (%) |
| 1.05 |
| 1.07 |
|
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| (000’s Omitted) |
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| For the Three Months Ended March 31, |
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| 2006 |
| 2005 |
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| Average |
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| Average |
| Average |
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| Average |
| ||||
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| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
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Gross Loans |
| $ | 1,755,251 |
| $ | 36,507 |
| 8.44 |
| $ | 1,188,165 |
| $ | 20,454 |
| 6.98 |
|
Funds Sold |
| 3,344 |
| 32 |
| 3.88 |
| 17,572 |
| 102 |
| 2.35 |
| ||||
Investment Securities |
| 11,945 |
| 68 |
| 2.31 |
| 7,671 |
| 37 |
| 1.96 |
| ||||
Total Earning Assets |
| $ | 1,770,540 |
| $ | 36,607 |
| 8.39 |
| $ | 1,213,408 |
| $ | 20,593 |
| 6.88 |
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Deposits |
| $ | 1,465,064 |
| $ | 7,373 |
| 2.04 |
| $ | 1,044,485 |
| $ | 2,231 |
| 0.87 |
|
Federal Home Loan Bank Advances |
| 218,267 |
| 2,436 |
| 4.53 |
| 111,821 |
| 694 |
| 2.52 |
| ||||
Subordinated Debentures |
| 62,201 |
| 1,043 |
| 6.80 |
| 41,238 |
| 525 |
| 5.16 |
| ||||
Funds Purchased |
| 81 |
| 3 |
| 15.02 |
| 91 |
| 0 |
| 0.00 |
| ||||
Total Bearing Liabilities |
| $ | 1,745,613 |
| $ | 10,855 |
| 2.52 |
| $ | 1,197,635 |
| $ | 3,450 |
| 1.17 |
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Net Interest Spread (1) |
|
|
|
|
| 5.86 |
|
|
|
|
| 5.71 |
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Net Interest Margin (2) |
|
|
|
|
| 5.83 |
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|
|
|
| 5.67 |
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(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.
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