Exhibit 99
News Release
First Regional |
| 1801 Century Park East | Jack A. Sweeney |
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Bancorp |
| Century City, California 90067 | Board Chairman |
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| Telephone (310) 552-1776 | Chief Executive Officer |
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| Facsimile (310) 552-1772 |
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| IMMEDIATE RELEASE |
FIRST REGIONAL BANCORP REPORTS STRONG FINANCIAL RESULTS
FOR THE FIRST QUARTER OF 2007
Financial Highlights Include the Following:
· Net Income Rises to First Quarter High
· Total Assets, Deposits and Loans Advance From Prior Year Levels
· Revenues from Earning Assets Increase 13% to $41.3 Million
CENTURY CITY, CALIFORNIA (April 17, 2007) – First Regional Bancorp (NasdaqGM: FRGB) today reported record first quarter financial results for the three months ended March 31, 2007. Continuing to generate positive results, the company posted increases in net income, as well as total assets, total deposits, net loans and total capital.
Net income for the first three months of 2007 was $8,991,000, equal to 69 cents per diluted share, an increase of 6% from $8,484,000, or 65 cents per diluted share in the corresponding quarter of 2006. Results have been adjusted to reflect the 3-for-1 stock split effected in August, 2006.
Revenues from earning assets rose 13% to $41,325,000 from $36,607,000 in the previous year. Average total earning assets of $1.866 billion were approximately 5% above $1.771 billion in 2006. Operating results benefited from an improved yield on earning assets, reflecting generally higher prevailing interest rates in the current year. However, net interest margin was modestly lower due to interest expense resulting from the higher level of bearing liabilities.
At March 31, 2007, total assets were $2.027 billion, approximately 5% higher than the $1.925 billion total of a year earlier. Total deposits grew 8% to $1.587 billion from $1.468 billion on the same date in 2006. Net loans were $1.824 billion, compared with $1.789 billion in the prior year. Total capital rose 37% to $157.1 million from $115.0 million, primarily reflecting the retention of earnings.
Jack A. Sweeney, chairman and chief executive officer, commented: “It is gratifying to report another strong and profitable quarter as we made further progress toward our key objectives of sound growth, increased profitability and financial strength. Our team of experienced banking professionals continues to secure quality lending opportunities, and in line with our conservative philosophy, we are keeping prime emphasis on maintaining our excellent credit quality.”
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Reflecting the quality of the loan portfolio, no increases in reserves for loan losses were required during the quarter. The reserve for loan losses totaled $20.7 million at March 31, 2007, and nonperforming loans amounted to just $63,000 on that date.
Mr. Sweeney added: “First Regional continues to benefit from a generally robust southern California economy and in particular from ongoing opportunities within the areas served by our network of regional offices. Obviously, turmoil in the residential real estate market, particularly the troubled sub-prime lending segment, has generated much attention of late. Fortunately, First Regional has never been involved in sub-prime or other mortgage lending products that have recently been the subject of much adverse publicity. While real estate finance has always been a key focus for us due to our considerable expertise in this area, First Regional Bank has a large and diversified client base, and we serve the loan and deposit needs of a variety of market segments including manufacturers, professional firms, wholesalers and others.”
He concluded: “We remain alert and vigilant, and are prepared to take the steps necessary to meet whatever economic challenges may emerge. In this regard, we benefit greatly from our strong capital and liquid financial position, giving us the flexibility to react quickly to changing conditions. We remain optimistic based on our continued momentum, our portfolio of high-quality earning assets, our financial strength and our solid market position. As always, our primary objective remains clear – to maintain profitable growth on a prudent basis and, thereby, build further value for our shareholders.”
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)
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| (000’s omitted) |
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As of March 31 |
| 2007 |
| 2006 |
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ASSETS: |
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Cash and due from banks |
| $ | 108,118 |
| $ | 72,195 |
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Federal funds sold |
| 0 |
| 0 |
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Cash and cash equivalents |
| 108,118 |
| 72,195 |
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Investment securities |
| 30,577 |
| 9,376 |
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Federal Home Loan Bank stock - at cost |
| 10,947 |
| 13,677 |
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Loans - net |
| 1,823,526 |
| 1,788,862 |
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Premises and equipment - net |
| 4,345 |
| 3,579 |
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Other real estate owned |
| 0 |
| 0 |
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Accrued interest receivable and other assets |
| 49,722 |
| 37,686 |
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Total assets |
| $ | 2,027,235 |
| $ | 1,925,375 |
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LIABILITIES AND CAPITAL: |
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Demand deposits |
| $ | 412,788 |
| $ | 460,311 |
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Savings deposits |
| 53,500 |
| 47,912 |
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Money market deposits |
| 890,999 |
| 776,670 |
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Time deposits |
| 229,642 |
| 183,545 |
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Total deposits |
| 1,586,929 |
| 1,468,438 |
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Funds purchased |
| 0 |
| 0 |
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Federal Home Loan Bank advances |
| 170,000 |
| 230,000 |
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Subordinated debentures |
| 92,785 |
| 92,785 |
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Accrued interest payable and other liabilities |
| 20,400 |
| 19,124 |
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Total liabilities |
| 1,870,114 |
| 1,810,347 |
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Stated capital |
| 53,063 |
| 50,077 |
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Retained earnings |
| 103,858 |
| 65,018 |
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Net unrealized gain (losses) on available- for-sale securities |
| 200 |
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Total capital |
| 157,121 |
| 115,028 |
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Total liabilities and capital |
| $ | 2,027,235 |
| $ | 1,925,375 |
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Book value per share outstanding |
| $ | 12.84 |
| $ | 9.47 |
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Total shares outstanding |
| 12,234,656 |
| 12,147,399 |
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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| Three Months Ended |
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| March 31 |
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| 2007 |
| 2006 |
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Interest on loans |
| $ | 40,938 |
| $ | 36,507 |
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Interest on federal funds sold |
| 91 |
| 32 |
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Interest on securities |
| 296 |
| 68 |
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Total interest income |
| 41,325 |
| 36,607 |
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Interest on deposits |
| 11,523 |
| 7,373 |
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Interest on subordinated debentures |
| 1,683 |
| 1,043 |
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Interest on FHLB advances |
| 1,595 |
| 2,436 |
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Interest on funds purchased |
| 6 |
| 3 |
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Total interest expense |
| 14,807 |
| 10,855 |
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Net interest income |
| 26,518 |
| 25,752 |
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Provision for loan losses |
| 0 |
| 2,391 |
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Net interest income after provision for loan losses |
| 26,518 |
| 23,361 |
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Other operating income |
| 2,367 |
| 1,952 |
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Salaries and related benefits |
| 9,021 |
| 6,796 |
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Occupancy expenses |
| 819 |
| 622 |
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Other expenses |
| 3,479 |
| 2,983 |
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Total other operating expenses |
| 13,319 |
| 10,401 |
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Income before provision for income taxes |
| 15,566 |
| 14,912 |
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Provision for income taxes |
| 6,575 |
| 6,428 |
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Net income |
| 8,991 |
| $ | 8,484 |
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| Three Months Ended |
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| 2007 |
| 2006 |
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Net income per share |
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Basic |
| $ | 0.74 |
| $ | 0.70 |
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Diluted |
| $ | 0.69 |
| $ | 0.65 |
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Average shares outstanding |
| 12,215,675 |
| 12,126,237 |
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Diluted average shares |
| 13,079,261 |
| 12,953,679 |
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Average Equity |
| $ | 156,921 |
| $ | 110,489 |
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Average Assets |
| $ | 1,977,349 |
| $ | 1,868,059 |
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Return on Average Equity (%) |
| 23.24 |
| 31.14 |
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Return on Average Assets (%) |
| 1.84 |
| 1.84 |
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Efficiency Ratio (%) |
| 46.11 |
| 37.54 |
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Number of Employees |
| 271 |
| 229 |
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Assets per Employee (000s) |
| $ | 7,481 |
| $ | 8,408 |
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CREDIT QUALITY |
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Beginning Reserve for Loan Losses (000s) |
| $ | 20,624 |
| $ | 17,577 |
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Loan Loss Provisions |
| 0 |
| 2,391 |
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Loan Recoveries |
| 79 |
| 0 |
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Loan Chargeoffs |
| 0 |
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Net Change in Allowance for Unfunded Loan Commitments |
| (9 | ) | (52 | ) | ||
Ending Reserve for Loan Losses (000s) |
| $ | 20,694 |
| $ | 18,975 |
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Nonperforming Assets (000s) |
| $ | 63 |
| $ | 69 |
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Nonperforming Assets / Gross Loans (%) |
| 0.00 |
| 0.00 |
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Reserve for Loan Losses / Nonperforming Assets (%) |
| 32847.62 |
| 27500.00 |
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Reserve for Loan Losses / Gross Loans (%) |
| 1.12 |
| 1.05 |
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| For the Three Months Ended March 31, |
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| 2006 |
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| Average |
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| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
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Gross Loans |
| $ | 1,831,040 |
| $ | 40,938 |
| 9.07 |
| $ | 1,755,251 |
| $ | 36,507 |
| 8.44 |
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Funds Sold |
| 6,765 |
| 91 |
| 5.46 |
| 3,344 |
| 32 |
| 3.88 |
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Investment Securities |
| 28,554 |
| 296 |
| 4.20 |
| 11,945 |
| 68 |
| 2.31 |
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Total Earning Assets |
| $ | 1,866,359 |
| $ | 41,325 |
| 8.98 |
| $ | 1,770,540 |
| $ | 36,607 |
| 8.39 |
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Deposits |
| $ | 1,598,369 |
| $ | 11,523 |
| 2.92 |
| $ | 1,465,064 |
| $ | 7,373 |
| 2.04 |
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Federal Home Loan Bank Advances |
| 118,578 |
| 1,595 |
| 5.46 |
| 218,267 |
| 2,436 |
| 4.53 |
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Subordinated Debentures |
| 92,785 |
| 1,683 |
| 7.36 |
| 62,201 |
| 1,043 |
| 6.80 |
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Funds Purchased |
| 407 |
| 6 |
| 5.98 |
| 81 |
| 3 |
| 15.02 |
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Total Bearing Liabilities |
| $ | 1,810,139 |
| $ | 14,807 |
| 3.32 |
| $ | 1,745,613 |
| $ | 10,855 |
| 2.52 |
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Net Interest Spread (1) |
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| 5.66 |
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| 5.86 |
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Net Interest Margin (2) |
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| 5.76 |
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| 5.90 |
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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.
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The following is a schedule of new loans booked (not including loan renewals) by First Regional’s subsidiary, First Regional Bank, during each month of the first quarter of 2007:
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January |
| $ | 140,531 |
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February |
| 85,927 |
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March |
| 116,121 |
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First Quarter Total |
| $ | 342,579 |
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The following is a schedule describing the primary components of First Regional Bank’s loan portfolio as of March 31, 2007 and 2006:
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| Disbursed Balance |
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| Disbursed Balance |
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| as of March 31, |
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| as of March 31, |
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| 2007 |
| Percentage |
| 2006 |
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| (000’s omitted) |
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Commercial Real Estate Loans |
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Construction Loans |
| $ | 426,684 |
| 23.0 | % | $ | 265,064 |
| 14.6 | % |
Mini-Perm Loans |
| 277,016 |
| 15.0 | % | 310,479 |
| 17.1 | % | ||
Bridge Loans |
| 868,212 |
| 46.9 | % | 1,049,841 |
| 57.8 | % | ||
Other |
| 38,217 |
| 2.1 | % | 24,846 |
| 1.4 | % | ||
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| 1,610,129 |
| 86.9 | % | 1,650,230 |
| 90.9 | % | ||
Commercial Non-Real Estate |
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Secured Loans |
| $ | 241,864 |
| 13.1 | % | $ | 165,804 |
| 9.1 | % |
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Total loans |
| $ | 1,851,993 |
| 100.0 | % | 1,816,034 |
| 100.0 | % | |
Less - Allowance for loan losses |
| 20,694 |
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| 18,975 |
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- Deferred loan fees |
| 7,773 |
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| 8,197 |
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Net Loans |
| 1,823,526 |
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| 1,788,862 |
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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.
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