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 ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER AND FIRST HALF OF 2007
Financial Highlights include the following:
· Company continues strong profitability
· Total assets, deposits and loans increase to new record highs
· First half revenues from earning assets post 10% increase to $83.7 million
· Total capital grows 32% to $165.9 million
· Credit quality remains exceptionally strong
CENTURY CITY, CALIF. (July 18, 2007) – First Regional Bancorp (NasdaqGM: FRGB) today reported strong net income for the second quarter ended June 30, 2007. Total assets, deposits and net loans all posted increases over the prior year, although net income for the first six months of 2007 was approximately 2.4% below last year’s record first half.
Net income for the second quarter of 2007 was $8.6 million, equal to 66 cents per diluted share, compared with $9.6 million or 74 cents per diluted share in the corresponding quarter of 2006. For the six months ended June 30, 2007, net income totaled $17.6 million, equal to $1.35 per diluted share, compared with $18.1 million or $1.39 per diluted share in the same months last year. Results for all periods have been adjusted to reflect the 3-for-1 stock split effected in August 2006. Revenues from earning assets for the first half of 2007 totaled $83.7 million, up 10% from $76.4 million in the first half of 2006.
At June 30, 2007, total assets amounted to $2.058 billion, approximately 3% higher than $1.999 billion a year earlier. Total deposits grew 7% to $1.640 billion from $1.537 billion on the same date in 2006. Net loans were $1.885 billion, a 7% increase from $1.761 billion in the prior year.
Jack A. Sweeney, chairman and CEO, commented: “First Regional continues to achieve solid profitability despite a challenging environment. Our results represent another strong and profitable quarter, although they reflect a modest decline from the record profits of last year’s corresponding quarter. Throughout the industry, financial institutions are presently beset by slower growth, higher expenses and shrinking net interest margins. While we continue to outperform others in the industry, we are not immune from these pressures.
Mr. Sweeney continued: “Our management philosophy remains fundamentally conservative and risk-averse. We have always placed primary emphasis on financial strength and the maintenance of high credit quality. For example, we have taken care to avoid such risky areas of the real estate market as subprime
1
lending. In the present environment, these attributes serve us well and represent the basis of our optimism regarding First Regional’s future.”
To keep pace with loan growth, First Regional added $300,000 to its loan loss reserve in the second quarter of 2007. This brought the balance of the reserve to $21.1 million at June 30, 2007, compared with nonperforming assets of just $13,000 as of the same date. With respect to financial strength, total capital at the close of the second quarter amounted to $165.9 million, up 32% from $125.5 million at June 30, 2006.
Mr. Sweeney concluded: “For the past several years, our bank has achieved an exceptional record of sound, profitable growth, and despite current challenges, we remain confident of First Regional’s positioning and prospects for long-term success. Our talented management and staff have a wealth of experience and has demonstrated the ability to manage successfully in good times and bad. We remain constantly vigilant and, should conditions warrant, are prepared to take swift, decisive action to meet any challenges that may arise as well as to capitalize on opportunities that present themselves.
“As always, we remain dedicated to building long-term shareholder value, maintaining financial strength and high credit quality, and providing our customers with excellence in service.”
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 June 30 |
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
ASSETS: |
|
|
|
|
| ||
Cash and due from banks |
| $ | 76,508 |
| $ | 167,224 |
|
Federal funds sold |
| 0 |
| 0 |
| ||
Cash and cash equivalents |
| 76,508 |
| 167,224 |
| ||
|
|
|
|
|
| ||
Investment securities |
| 31,685 |
| 17,646 |
| ||
Federal Home Loan Bank stock - at cost |
| 9,326 |
| 12,581 |
| ||
Loans - net |
| 1,885,288 |
| 1,760,931 |
| ||
Premises and equipment - net |
| 5,012 |
| 3,821 |
| ||
Other real estate owned |
| 0 |
| 0 |
| ||
Accrued interest receivable and other assets |
| 50,479 |
| 37,741 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 2,058,298 |
| $ | 1,999,944 |
|
|
|
|
|
|
| ||
LIABILITIES AND CAPITAL: |
|
|
|
|
| ||
Demand deposits |
| $ | 416,961 |
| $ | 482,458 |
|
Savings deposits |
| 58,049 |
| 50,160 |
| ||
Money market deposits |
| 938,029 |
| 816,585 |
| ||
Time deposits |
| 226,701 |
| 188,170 |
| ||
|
|
|
|
|
| ||
Total deposits |
| 1,639,740 |
| 1,537,373 |
| ||
|
|
|
|
|
| ||
Funds purchased |
| 0 |
| 0 |
| ||
Federal Home Loan Bank advances |
| 140,000 |
| 230,000 |
| ||
Subordinated debentures |
| 92,785 |
| 92,785 |
| ||
Accrued interest payable and other liabilities |
| 19,923 |
| 14,317 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 1,892,448 |
| 1,874,475 |
| ||
|
|
|
|
|
| ||
Stated capital |
| 53,597 |
| 50,974 |
| ||
Retained earnings |
| 112,502 |
| 74,611 |
| ||
Net unrealized gains (losses) on available-for-sale securities |
| (249 | ) | (116 | ) | ||
|
|
|
|
|
| ||
Total capital |
| 165,850 |
| 125,469 |
| ||
|
|
|
|
|
| ||
Total liabilities and capital |
| $ | 2,058,298 |
| $ | 1,999,944 |
|
|
|
|
|
|
| ||
Book value per share outstanding |
| $ | 13.54 |
| $ | 10.31 |
|
|
|
|
|
|
| ||
Total shares outstanding |
| 12,250,728 |
| 12,166,170 |
|
3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30 |
| June 30 |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on loans |
| $ | 41,814 |
| $ | 39,669 |
| $ | 82,752 |
| $ | 76,176 |
|
Interest on federal funds sold |
| 121 |
| 43 |
| 212 |
| 75 |
| ||||
Interest on investment securities |
| 422 |
| 129 |
| 718 |
| 197 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total interest income |
| 42,357 |
| 39,841 |
| 83,682 |
| 76,448 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest on deposits |
| 12,355 |
| 8,839 |
| 23,878 |
| 16,212 |
| ||||
Interest on subordinated debentures |
| 1,716 |
| 1,641 |
| 3,399 |
| 2,684 |
| ||||
Interest on FHLB advances |
| 1,599 |
| 2,459 |
| 3,194 |
| 4,895 |
| ||||
Interest on other borrowings |
| 3 |
| 1 |
| 9 |
| 4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total interest expense |
| 15,673 |
| 12,940 |
| 30,480 |
| 23,795 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
| 26,684 |
| 26,901 |
| 53,202 |
| 52,653 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for loan losses |
| 300 |
| 1,500 |
| 300 |
| 3,891 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net interest income after provision for loan losses |
| 26,384 |
| 25,401 |
| 52,902 |
| 48,762 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other operating income |
| 2,048 |
| 2,498 |
| 4,415 |
| 4,450 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Salaries and related benefits |
| 8,627 |
| 6,983 |
| 17,648 |
| 13,779 |
| ||||
Occupancy expenses |
| 962 |
| 682 |
| 1,781 |
| 1,304 |
| ||||
Other expenses |
| 3,830 |
| 3,389 |
| 7,309 |
| 6,372 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total other operating expenses |
| 13,419 |
| 11,054 |
| 26,738 |
| 21,455 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before provision for income taxes |
| 15,013 |
| 16,845 |
| 30,579 |
| 31,757 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Provision for income taxes |
| 6,369 |
| 7,252 |
| 12,944 |
| 13,680 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 8,644 |
| $ | 9,593 |
| $ | 17,635 |
| $ | 18,077 |
|
4
|
| (000’s omitted) |
| (000’s omitted) |
| ||||||||
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30 |
| June 30 |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.71 |
| $ | 0.79 |
| $ | 1.44 |
| $ | 1.49 |
|
Diluted |
| $ | 0.66 |
| $ | 0.74 |
| $ | 1.35 |
| $ | 1.39 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding |
| 12,242,692 |
| 12,156,933 |
| 12,228,402 |
| 12,141,054 |
| ||||
Diluted average shares |
| 13,063,210 |
| 12,993,282 |
| 13,073,395 |
| 12,967,884 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Average equity |
| $ | 161,537 |
| $ | 119,992 |
| $ | 156,725 |
| $ | 115,267 |
|
Average assets |
| $ | 2,016,344 |
| $ | 1,926,284 |
| $ | 1,996,948 |
| $ | 1,897,332 |
|
Return on average equity (%) |
| 21.46 |
| 32.07 |
| 22.69 |
| 31.63 |
| ||||
Return on average assets (%) |
| 1.72 |
| 2.00 |
| 1.78 |
| 1.92 |
| ||||
Efficiency ratio (%) |
| 46.70 |
| 37.60 |
| 46.41 |
| 37.57 |
| ||||
Number of employees |
| 279 |
| 243 |
|
|
|
|
| ||||
Assets per employee (000s) |
| $ | 7,377 |
| $ | 8,230 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
CREDIT QUALITY |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Beginning reserve for loan losses (000s) |
| $ | 20,694 |
| $ | 18,975 |
| $ | 20,624 |
| $ | 17,577 |
|
Loan loss provisions |
| 300 |
| 1,500 |
| 300 |
| 3,891 |
| ||||
Loan recoveries |
| 15 |
| 0 |
| 94 |
| 0 |
| ||||
Loan chargeoffs |
| 50 |
| 0 |
| 50 |
| 941 |
| ||||
Net change in allowance for unfunded loan commitments |
| 164 |
| (162 | ) | 155 |
| (214 | ) | ||||
Ending reserve for loan losses (000s) |
| $ | 21,123 |
| $ | 20,313 |
| $ | 21,123 |
| $ | 20,313 |
|
|
|
|
|
|
|
|
|
|
| ||||
Nonperforming assets (000s) |
| $ | 13 |
| $ | 62 |
|
|
|
|
| ||
Nonperforming assets / gross loans (%) |
| 0.00 |
| 0.00 |
|
|
|
|
| ||||
Reserve for loan losses / nonperforming assets (%) |
| 162484.62 |
| 32762.90 |
|
|
|
|
| ||||
Reserve for loan losses / gross loans (%) |
| 1.11 |
| 1.14 |
|
|
|
|
|
5
|
| (000s omitted) |
| ||||||||||||||
|
| For the Three Months Ended June 30, |
| ||||||||||||||
|
| 2007 |
| 2006 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross loans |
| $ | 1,868,461 |
| $ | 41,814 |
| 8.98 |
| $ | 1,806,214 |
| $ | 39,669 |
| 8.81 |
|
Funds sold |
| 7,285 |
| 121 |
| 6.66 |
| 3,620 |
| 43 |
| 4.76 |
| ||||
Investment securities |
| 30,913 |
| 422 |
| 5.48 |
| 13,762 |
| 129 |
| 3.76 |
| ||||
Total earning assets |
| $ | 1,906,659 |
| $ | 42,357 |
| 8.91 |
| $ | 1,823,596 |
| $ | 39,841 |
| 8.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,629,011 |
| $ | 12,355 |
| 3.04 |
| $ | 1,507,316 |
| $ | 8,839 |
| 2.35 |
|
Federal Home Loan Bank advances |
| 121,575 |
| 1,599 |
| 5.28 |
| 197,341 |
| 2,459 |
| 5.00 |
| ||||
Subordinated debentures |
| 92,785 |
| 1,716 |
| 7.42 |
| 92,785 |
| 1,641 |
| 7.09 |
| ||||
Funds purchased |
| 145 |
| 3 |
| 8.30 |
| 99 |
| 1 |
| 4.05 |
| ||||
Total bearing liabilities |
| $ | 1,843,516 |
| $ | 15,673 |
| 3.41 |
| $ | 1,797,541 |
| $ | 12,940 |
| 2.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest spread (1) |
|
|
|
|
| 5.50 |
|
|
|
|
| 5.88 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest margin (2) |
|
|
|
|
| 5.61 |
|
|
|
|
| 5.85 |
|
(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 Six Months Ended June 30, |
| ||||||||||||||
|
| 2007 |
| 2006 |
| ||||||||||||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| ||||
|
| Balance |
| Interest |
| Yield/Cost (%) |
| Balance |
| Interest |
| Yield/Cost (%) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Loans |
| $ | 1,849,854 |
| $ | 82,752 |
| 9.02 |
| $ | 1,780,873 |
| $ | 76,176 |
| 8.63 |
|
Funds Sold |
| 7,025 |
| 212 |
| 6.09 |
| 3,483 |
| 75 |
| 4.34 |
| ||||
Investment Securities |
| 29,739 |
| 718 |
| 4.87 |
| 11,367 |
| 197 |
| 3.49 |
| ||||
Total Earning Assets |
| $ | 1,886,618 |
| $ | 83,682 |
| 8.94 |
| $ | 1,795,723 |
| $ | 76,448 |
| 8.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits |
| $ | 1,613,775 |
| $ | 23,878 |
| 2.98 |
| $ | 1,486,307 |
| $ | 16,212 |
| 2.20 |
|
Federal Home Loan Bank Advances |
| 120,085 |
| 3,194 |
| 5.36 |
| 207,746 |
| 4,895 |
| 4.75 |
| ||||
Subordinated Debentures |
| 92,785 |
| 3,399 |
| 7.39 |
| 77,577 |
| 2,684 |
| 6.98 |
| ||||
Other Borrowings |
| 283 |
| 9 |
| 6.41 |
| 90 |
| 4 |
| 8.96 |
| ||||
Total Bearing Liabilities |
| $ | 1,826,928 |
| $ | 30,480 |
| 3.36 |
| $ | 1,771,720 |
| $ | 23,795 |
| 2.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Spread (1) |
|
|
|
|
| 5.58 |
|
|
|
|
| 5.88 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Interest Margin (2) |
|
|
|
|
| 5.69 |
|
|
|
|
| 5.91 |
|
(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.
7
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 second quarter of 2007:
Month |
| New Loans Booked |
| |
|
| (000’s omitted) |
| |
|
|
|
| |
April |
| $ | 62,094 |
|
May |
| 123,274 |
| |
June |
| 183,665 |
| |
Total For Second Quarter |
| $ | 369,033 |
|
The following schedule describes the primary components of First Regional Bank’s loan portfolio as of June 30, 2007 and 2006:
|
| Disbursed Balance as of |
| Percentage |
| Disbursed Balance as of |
| Percentage |
| ||
|
| June 30, 2007 |
| of Total |
| June 30, 2006 |
| of Total |
| ||
|
| (000’s omitted) |
|
|
| (000’s omitted) |
|
|
| ||
Commercial Real Estate Loans |
|
|
|
|
|
|
|
|
| ||
Construction Loans |
| $ | 511,641 |
| 26.7 | % | $ | 300,545 |
| 16.8 | % |
Mini-Perm Loans |
| 268,728 |
| 14.0 | % | 266,735 |
| 14.9 | % | ||
Bridge Loans |
| 869,329 |
| 45.4 | % | 1,018,430 |
| 56.9 | % | ||
Other |
| 31,808 |
| 1.7 | % | 24,370 |
| 1.4 | % | ||
|
| 1,681,506 |
| 87.8 | % | 1,610,080 |
| 90.0 | % | ||
Commercial Non-Real Estate |
|
|
|
|
|
|
|
|
| ||
Secured Loans |
| $ | 233,754 |
| 12.2 | % | $ | 179,354 |
| 10.0 | % |
|
|
|
|
|
| $ |
|
|
|
| |
Total loans |
| $ | 1,915,260 |
| 100.0 | % | 1,789,434 |
| 100.0 | % | |
Less - Allowance for loan losses |
| 21,123 |
|
|
| 20,313 |
|
|
| ||
- Deferred loan fees |
| 8,849 |
|
|
| 8,190 |
|
|
| ||
Net Loans |
| 1,885,288 |
|
|
| 1,760,931 |
|
|
|
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.
8