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 POSTS RECORD NET INCOME IN BOTH THE THIRD
QUARTER AND FOR THE NINE MONTH PERIOD
Three- and Nine-Month 2006 Financial Highlights Include:
· Third quarter net income highest profit in history
· Nine month net income 51% higher than 2005
· Total assets up 24% to record high
· Total deposits up 17% to record high
· Net loans up 22% to record high
CENTURY CITY, CALIFORNIA, Oct. 24, 2006 - First Regional Bancorp (Nasdaq-GM: FRGB) today reported that net income for both the third quarter and nine months ended September 30, 2006 climbed to the highest levels in company history.
For the third quarter, net income reached $10.0 million, equal to $0.77 per diluted share, a 43% increase from $7.0 million, or $0.54 per diluted share in the corresponding period last year. Net income for first three quarters of 2006 was $28.1 million, or $2.16 per diluted share, rising 51% from $18.6 million, or $1.45 per diluted share in last year’s initial nine months. Per share amounts have been adjusted to reflect the 3-for-1 stock split effected Aug. 21, 2006.
In making the announcement, Jack A. Sweeney, chairman and chief executive officer, said: “We are truly pleased with First Regional’s continued upward earnings trend, including fifty consecutive quarterly periods of comparative net income growth. First Regional’s third quarter was the most profitable in our history, and our quarterly and nine-month results are substantially ahead of last year’s corresponding periods.
Mr. Sweeney noted that total assets exceeded $2 billion at the close of the third quarter, rising 24% to $2.037 billion from $1.6 billion in the corresponding period of 2005. Deposits grew 17% to $1.6 billion from $1.3 billion in last year’s third quarter, while net loans jumped to $1.8 billion, surging 22% from $1.5 billion in the year-earlier period.
Mr. Sweeney continued: “Our operating results continue to reflect our disciplined and focused strategy. Real estate finance remains one of our bank’s core competencies, but while we have benefited from the strength of the Southern California real-estate industry, we have continued to build a diversified business base serving manufacturing, professional services, wholesale, and other sectors vital to the regional economy. This success reflects the diligent efforts of our skilled bankers, who continue to forge solid relationships with important clients who value the personalized service and quality products that have long been First Regional hallmarks.”
1
Mr. Sweeney pointed out that non-performing loans were only $22,000 as of September 30, 2006. In light of First Regional’s high asset quality and substantial amount of existing reserves, no additional loans loss provision was required for the third quarter of 2006.
Mr. Sweeney concluded: “We remain diligent in monitoring the California and national economies, and are alert for possible challenges that may arise. We will continue our long-standing focus on high quality assets, strong capital, and prudent reserves. We have the right team in place to take advantage of emerging business opportunities, and the financial strength and flexibility to pursue our strategic agenda. First Regional intends to stay on course as we continue to build value for our shareholders.”
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.
# # #
2
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
|
| (000’s omitted) |
| ||||
As of September 30 |
| 2006 |
| 2005 |
| ||
|
|
|
|
|
| ||
ASSETS: |
|
|
|
|
| ||
Cash and due from banks |
| $ | 81,893 |
| $ | 102,858 |
|
Federal funds sold |
| 60,055 |
| 0 |
| ||
Cash and cash equivalents |
| 141,948 |
| 102,858 |
| ||
|
|
|
|
|
| ||
Investment securities |
| 18,178 |
| 7,870 |
| ||
Federal Home Loan Bank stock - at cost |
| 12,748 |
| 7,253 |
| ||
Federally guaranteed loans |
| 5,349 |
| 6,634 |
| ||
Other loans, net |
| 1,816,305 |
| 1,488,289 |
| ||
Premises and equipment - net |
| 3,793 |
| 3,645 |
| ||
Other real estate owned |
| 0 |
| 0 |
| ||
Accrued interest receivable and other assets |
| 38,529 |
| 28,185 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 2,036,850 |
| $ | 1,644,734 |
|
|
|
|
|
|
| ||
LIABILITIES AND CAPITAL: |
|
|
|
|
| ||
Demand deposits |
| $ | 470,492 |
| $ | 441,916 |
|
Savings deposits |
| 49,182 |
| 47,667 |
| ||
Money market deposits |
| 836,476 |
| 672,852 |
| ||
Time deposits |
| 216,537 |
| 178,279 |
| ||
|
|
|
|
|
| ||
Total deposits |
| 1,572,687 |
| 1,340,714 |
| ||
|
|
|
|
|
| ||
Funds purchased |
| 0 |
| 0 |
| ||
Federal Home Loan Bank advances |
| 220,000 |
| 135,000 |
| ||
Subordinated debentures |
| 92,785 |
| 61,857 |
| ||
Accrued interest payable and other liabilities |
| 15,094 |
| 10,041 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 1,900,566 |
| 1,547,612 |
| ||
|
|
|
|
|
| ||
Stated capital |
| 51,630 |
| 48,518 |
| ||
Retained earnings |
| 84,649 |
| 48,630 |
| ||
Net unrealized gains (losses) on available-for-sale securities |
| 5 |
| (26 | ) | ||
|
|
|
|
|
| ||
Total capital |
| 136,284 |
| 97,122 |
| ||
|
|
|
|
|
| ||
Total liabilities and capital |
| $ | 2,036,850 |
| $ | 1,644,734 |
|
|
|
|
|
|
| ||
Book value per share outstanding (1) |
| $ | 11.18 |
| $ | 8.03 |
|
|
|
|
|
|
| ||
Total shares outstanding (1) |
| 12,186,119 |
| 12,097,554 |
|
(1) Amounts have been restated to reflect 3-for-1 stock split effected August 21, 2006.
3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| September 30 |
| September 30 |
| ||||||||
|
| 2006 |
| 2005 |
| 2006 |
| 2005 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on loans |
| $ | 42,141 |
| $ | 28,582 |
| $ | 118,317 |
| $ | 73,166 |
|
Interest on federal funds sold |
| 54 |
| 19 |
| 129 |
| 148 |
| ||||
Interest on investment securities |
| 222 |
| 63 |
| 419 |
| 214 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total interest income |
| 42,417 |
| 28,664 |
| 118,865 |
| 73,528 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on deposits |
| 10,756 |
| 4,629 |
| 26,968 |
| 9,787 |
| ||||
Interest on subordinated debentures |
| 1,825 |
| 639 |
| 4,509 |
| 1,759 |
| ||||
Interest on FHLB advances |
| 2,047 |
| 1,077 |
| 6,942 |
| 2,793 |
| ||||
Interest on other borrowings |
| 0 |
| 3 |
| 4 |
| 4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total interest expense |
| 14,628 |
| 6,348 |
| 38,423 |
| 14,343 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
| 27,789 |
| 22,316 |
| 80,442 |
| 59,185 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for loan losses |
| 0 |
| 1,505 |
| 3,891 |
| 4,205 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net interest income after provision for loan losses |
| 27,789 |
| 20,811 |
| 76,551 |
| 54,980 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other operating income |
| 1,930 |
| 1,690 |
| 6,380 |
| 4,746 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Salaries and related benefits |
| 8,116 |
| 6,437 |
| 21,895 |
| 17,327 |
| ||||
Occupancy expenses |
| 754 |
| 597 |
| 2,058 |
| 1,991 |
| ||||
Other expenses |
| 3,230 |
| 3,305 |
| 9,602 |
| 8,056 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total other operating expenses |
| 12,100 |
| 10,339 |
| 33,555 |
| 27,374 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before provision for income taxes |
| 17,619 |
| 12,162 |
| 49,376 |
| 32,352 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for income taxes |
| 7,580 |
| 5,158 |
| 21,260 |
| 13,731 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 10,039 |
| $ | 7,004 |
| $ | 28,116 |
| $ | 18,621 |
|
4
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| September 30 |
| September 30 |
| ||||||||
|
| 2006 |
| 2005 |
| 2006 |
| 2005 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income per share (1) |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.82 |
| $ | 0.58 |
| $ | 2.31 |
| $ | 1.55 |
|
Diluted |
| $ | 0.77 |
| $ | 0.54 |
| $ | 2.16 |
| $ | 1.45 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding (1) |
| 12,178,163 |
| 12,078,630 |
| 12,153,387 |
| 12,043,143 |
| ||||
Diluted average shares (1) |
| 13,025,291 |
| 12,914,031 |
| 12,988,816 |
| 12,862,314 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Average equity |
| $ | 130,953 |
| $ | 93,420 |
| $ | 120,553 |
| $ | 86,854 |
|
Average assets |
| $ | 1,965,099 |
| $ | 1,536,143 |
| $ | 1,920,169 |
| $ | 1,407,063 |
|
Return on average equity (%) |
| 30.41 |
| 29.74 |
| 31.18 |
| 28.66 |
| ||||
Return on average assets (%) |
| 2.03 |
| 1.81 |
| 1.96 |
| 1.77 |
| ||||
Efficiency ratio (%) |
| 40.71 |
| 43.07 |
| 38.65 |
| 42.82 |
| ||||
Number of employees |
| 250 |
| 219 |
|
|
|
|
| ||||
Assets per employee (000s) |
| $ | 8,147 |
| $ | 7,510 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
CREDIT QUALITY |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Beginning reserve for loan losses (000s) |
| $ | 20,313 |
| $ | 14,817 |
| $ | 17,577 |
| $ | 11,825 |
|
Loan loss provisions |
| 0 |
| 1,505 |
| 3,891 |
| 4,205 |
| ||||
Loan recoveries |
| 0 |
| 0 |
| 0 |
| 130 |
| ||||
Loan chargeoffs |
| 87 |
| 0 |
| 1,028 |
| 35 |
| ||||
Net change in allowance for unfunded loan commitments |
| (95 | ) | (47 | ) | (309 | ) | 150 |
| ||||
Ending reserve for loan losses (000s) |
| $ | 20,131 |
| $ | 16,275 |
| $ | 20,131 |
| $ | 16,275 |
|
|
|
|
|
|
|
|
|
|
| ||||
Nonperforming assets (000s) |
| $ | 22 |
| $ | 872 |
|
|
|
|
| ||
Nonperforming assets / gross loans (%) |
| 0.00 |
| 0.06 |
|
|
|
|
| ||||
Reserve for loan losses / nonperforming assets (%) |
| 91504.55 |
| 1866.40 |
|
|
|
|
| ||||
Reserve for loan losses / gross loans (%) |
| 1.09 |
| 1.08 |
|
|
|
|
|
(1) Amounts have been restated to reflect 3-for-1 stock split effected August 21, 2006.
5
|
| (000s omitted) |
| ||||||||||||||
|
| For the Three Months Ended September 30, |
| ||||||||||||||
|
| 2006 |
| 2005 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross loans |
| $ | 1,833,988 |
| $ | 42,141 |
| 9.12 |
| $ | 1,440,304 |
| $ | 28,582 |
| 7.87 |
|
Funds sold |
| 4,836 |
| 54 |
| 4.43 |
| 2,183 |
| 19 |
| 3.45 |
| ||||
Investment securities |
| 19,602 |
| 222 |
| 4.49 |
| 11,428 |
| 63 |
| 2.19 |
| ||||
Total earning assets |
| $ | 1,858,425 |
| $ | 42,417 |
| 9.06 |
| $ | 1,453,915 |
| $ | 28,664 |
| 7.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,579,731 |
| $ | 10,756 |
| 2.70 |
| $ | 1,270,378 |
| $ | 4,629 |
| 1.45 |
|
Federal Home Loan Bank advances |
| 151,250 |
| 2,047 |
| 5.37 |
| 120,761 |
| 1,077 |
| 3.54 |
| ||||
Subordinated debentures |
| 92,785 |
| 1,825 |
| 7.80 |
| 41,910 |
| 639 |
| 6.05 |
| ||||
Funds purchased |
| 0 |
| 0 |
| 0.00 |
| 102 |
| 3 |
| 11.67 |
| ||||
Total bearing liabilities |
| $ | 1,823,766 |
| $ | 14,628 |
| 3.18 |
| $ | 1,433,151 |
| $ | 6,348 |
| 1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest spread (1) |
|
|
|
|
| 5.87 |
|
|
|
|
| 6.06 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest margin (2) |
|
|
|
|
| 5.93 |
|
|
|
|
| 6.09 |
|
(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.
6
|
| (000s omitted) |
| ||||||||||||||
|
| For the Nine Months Ended September 30, |
| ||||||||||||||
|
| 2006 |
| 2005 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Loans |
| $ | 1,798,773 |
| $ | 118,317 |
| 8.79 |
| $ | 1,309,550 |
| $ | 73,166 |
| 7.47 |
|
Funds Sold |
| 3,939 |
| 129 |
| 4.38 |
| 7,716 |
| 148 |
| 2.56 |
| ||||
Investment Securities |
| 14,143 |
| 419 |
| 3.96 |
| 12,510 |
| 214 |
| 2.29 |
| ||||
Total Earning Assets |
| $ | 1,816,855 |
| $ | 118,865 |
| 8.75 |
| $ | 1,329,776 |
| $ | 73,528 |
| 7.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,517,790 |
| $ | 26,968 |
| 2.38 |
| $ | 1,148,602 |
| $ | 9,787 |
| 1.14 |
|
Federal Home Loan Bank Advances |
| 188,707 |
| 6,942 |
| 4.92 |
| 122,652 |
| 2,793 |
| 3.04 |
| ||||
Subordinated Debentures |
| 82,816 |
| 4,509 |
| 7.28 |
| 41,465 |
| 1,759 |
| 5.67 |
| ||||
Funds Purchased |
| 45 |
| 4 |
| 11.88 |
| 155 |
| 4 |
| 3.45 |
| ||||
Total Bearing Liabilities |
| $ | 1,789,358 |
| $ | 38,423 |
| 2.87 |
| $ | 1,312,874 |
| $ | 14,343 |
| 1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Spread (1) |
|
|
|
|
| 5.88 |
|
|
|
|
| 5.93 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Margin (2) |
|
|
|
|
| 5.92 |
|
|
|
|
| 5.95 |
|
(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