PAGE 1 OF 17 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Quarter Ended September 30, 1995 ------------------------------------------------------------------ Commission File Number 0-10232 --------------------------------------------------------- FIRST REGIONAL BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 95-3582843 - -------------------------------------------------------------------------------- State or other jurisdiction of IRS Employer incorporation or organization Identification Number 1801 Century Park East, Los Angeles, California 90067 - -------------------------------------------------------------------------------- Address of principal executive offices Zip Code (310) 552-1776 - -------------------------------------------------------------------------------- Registrant's telephone number, including area code Not applicable - -------------------------------------------------------------------------------- Former name, former address, and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ ----- APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding in each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, No Par Value 2,398,800 -------------------------- ------------------------------- Class Outstanding on November 2, 1995 2 FIRST REGIONAL BANCORP ---------------------- INDEX ----- Page ---- Part I - Financial Information Item 1. Financial Statements Consolidated Statements of Financial Condition 3 Consolidated Statements of Income 5 Consolidated Statements Cash Flow 7 Notes to Consolidated Financial Statements 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II - Other Information Item 1. Legal Proceedings 16 Item 4. Submission of Matters to a Vote of Security Holders 16 Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17 3 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ---------------------------------------------- (In Thousands) September 30 December 31, 1995 1994 ------------ ------------ ASSETS (unaudited) - ------ Cash and due from banks $ 3,875 $ 4,677 Time deposits with other financial institutions 9,011 6,627 Investment securities 8,169 11,807 Funds sold 35,510 21,300 Federally guaranteed loans 25,225 22,852 Other loans, net of allowance for losses of $1,860,000 in 1995 and $1,390,000 in 1994 51,912 53,729 -------- -------- Total loans 77,137 76,581 Premises and equipment, net of accumulated depreciation 209 166 Other real estate owned 576 1,163 Accrued interest receivable and other assets 2,025 1,966 -------- -------- Total Assets $136,512 $124,287 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Liabilities: Demand deposits $ 18,980 $ 18,777 Savings deposits 3,733 5,147 Money market deposits 83,618 78,295 Time deposits 15,299 11,447 -------- -------- Total deposits 121,630 113,666 Securities sold under agreement to repurchase 2,465 0 Accrued interest payable and other liabilities 781 399 -------- -------- Total Liabilities 124,876 114,065 Shareholders' Equity: Common Stock, no par value, 50,000,000 shares authorized; 2,398,800 shares outstanding in 1995 and 1994, respectively 11,332 11,332 Retained earnings 285 (1,105) 4 September 30 December 31, 1995 1994 ------------ ------------ (unaudited) Net unrealized gain (loss) on securities available for sale 19 (5) ----------- ------------ Total Shareholders' Equity 11,636 10,222 ----------- ----------- Total Liabilities and Shareholders' Equity $136,512 $124,287 ========== =========== The accompanying notes are an integral part of these statements. 5 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands Except Per Share Amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30 ------------------- ----------------- 1995 1994 1995 1994 ---- ---- ---- ---- REVENUE FROM EARNING ASSETS: Interest and fees on loans $ 1,802 $ 2,094 $ 6,234 $5,645 Interest on time deposits with other financial institutions 109 78 304 225 Interest on investment securities 93 134 441 248 Interest on funds sold 527 140 1,039 418 ------ ------ ------ ------ Total revenue from earning assets 2,531 2,446 8,018 6,536 COST OF FUNDS: Interest on deposits 744 594 2,014 1,811 Interest on securities sold under agreements to repurchase 0 0 0 0 ------ ------ ------ ------ Total cost of funds 744 594 2,014 1,811 Net revenue from earning assets before provision for loan losses 1,787 1,852 6,004 4,725 PROVISION FOR LOAN LOSSES 160 50 535 100 ------ ------ ------ ------ Net revenue from earning assets 1,627 1,802 5,469 4,625 Net gain (loss) on sales of securities 0 0 0 0 Other revenue 99 108 343 691 OPERATING EXPENSES: Salaries and related benefits 558 473 1,644 1,460 Occupancy expense 91 97 256 276 Equipment expense 39 32 168 105 Promotion expense 38 45 121 102 Professional service expense 170 160 493 508 Customer service expense 308 294 893 929 Supply/communication expense 33 21 97 76 Other expenses (117) 484 578 1,401 ------ ------ ------ ------ Total operating expenses 1,120 1,606 4,250 4,857 ------ ------ ------ ------ Income before provision for income taxes 606 304 1,562 459 6 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands Except Per Share Amounts) (Unaudited) (continued) Three Months Ended Nine Months Ended September 30, September 30 ------------------ ------------------ 1995 1994 1995 1994 ---- ---- ---- ---- PROVISION FOR INCOME TAXES 67 35 173 52 -------- ------- ------- ------- NET INCOME $ 539 $ 269 $ 1,389 $ 407 ======== ======= ======= ======= NET INCOME (LOSS) PER SHARE (Note 2) $ 0.23 $ 0.11 $ 0.58 $ 0.17 ======== ======= ======= ======= The accompanying notes are an integral part of these statements. 7 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOW ------------------------------------ (In Thousands) (Unaudited) Nine Months Ended September 30, --------------------- 1995 1994 ---- ---- OPERATING ACTIVITIES Net income (loss) $ 1,389 $ 407 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 535 100 Provision for depreciation and amortization 41 43 Amortization of investment securities net discounts (309) (142) Decrease (increase) in interest receivable (52) 111 Increase (decrease) in interest payable 34 (14) Increase (decrease) in taxes payable 93 52 Net increase (decrease) in other liabilities 255 (51) ---------- ----------- Net cash provided (used) by operating activities $ 1,986 $ 506 INVESTING ACTIVITIES Decrease (increase) in investment securities $ 3,966 $(10,820) Decrease (increase) in time deposits with other financial institutions (2,384) 188 Decrease (increase) in loans (1,091) 7,590 Purchases of premises and equipment (84) (84) Net decrease (increase) in other assets 586 8,355 ---------- ----------- Net cash provided by investing activities $ 993 $ 5,229 FINANCING ACTIVITIES Net increase (decrease) in demand deposits, savings accounts, and money market accounts $ 4,112 $ (4,558) Net increase (decrease) in time deposits 3,852 (5,201) 8 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOW ------------------------------------ (In Thousands) (Unaudited) (continued) Nine Months Ended September 30, -------------------- 1995 1994 ---- ---- Increase (decrease) in securities sold under agreement to repurchase 2,465 0 --------- -------- Net cash provided by financing activities $ 10,429 $ (9,759) Increase (decrease) in cash and cash equivalents $ 13,408 $ (4,024) Cash and cash equivalents, beginning of period 25,977 22,971 --------- -------- Cash and cash equivalents, end of period $ 39,385 $ 18,947 ========= ======== The accompanying notes are an integral part of these statements. 9 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ September 30, 1995 (Unaudited) NOTE 1 - The consolidated financial statements include the accounts of First Regional Bancorp (the Company), a bank holding company, and its wholly-owned subsidiary, First Regional Bank (the Bank). In the opinion of management, the unaudited consolidated financial statements of First Regional Bancorp at September 30, 1995 and December 31, 1994 and the results of operations for the three and nine month periods ended September 30, 1995 and 1994 contain all adjustments (which consist only of normal recurring adjustments) necessary to present fairly the financial position of the Company. Certain items in the 1994 consolidated financial statements have been reclassified to conform to the 1995 presentation. The results of operations for the periods ended September 30, 1995 and 1994 are not necessarily indicative of operating results that may be expected for any other interim period or for the full year. While management believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Company's 1994 annual report. NOTE 2 - Per share information was based on the number of common shares outstanding. The number of shares outstanding was 2,398,800 in 1995 and 1994. NOTE 3 - As of September 30, 1995 the Bank had a total of $360,000 in standby letters of credit outstanding. No losses are anticipated as a result of these transactions. NOTE 4 - The Company adopted Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan," effective January 1, 1995. This Statement defines an impaired loan as one for which it is likely that an institution will be unable to collect all amounts due (that is, all principal and interest) according to the contractual terms of the loan. The Statement generally requires impaired loans to be measured at the present value of expected future cash flows discounted at the effective interest rate of the loan, or, as an expedient, at the loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. For the quarter ended September 30, 1995 the Company had identified loans having an aggregate average balance of $773,939 which it concluded were impaired under SFAS No. 114. The Company's policy is to discontinue the accrual of interest income on impaired loans, and to recognize income on such loans only after the loan principal has been repaid in full. Pursuant to this policy, the Company had already ceased to accrue interest on the impaired loans, and had 10 established a general loss reserve for each of the loans which at September 30, 1995 totalled $163,336 for the loans as a group. As the loss reserves established by the Company were greater than those called for under SFAS No. 114, the adoption of SFAS No. 114 had no effect on the Company's financial statements as of September 30, 1995. NOTE 5 - The Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Investments in Certain Debt and Equity Securities," effective January 1, 1994. This Statement supersedes SFAS No. 12, and significantly amends SFAS No. 65 and SFAS No. 60, the standards previously used by the Company. The effect of adopting SFAS No. 115 on the Company's financial statements was to increase shareholders' equity at September 30, 1995 by $19,000 from the level which would have existed had SFAS No. 115 not been adopted. Because the applicable investment securities are classified by the Company as "available for sale," there was no effect on the Company's income statement. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - -------------------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- SUMMARY - ------- First Regional Bancorp (the "Company") did not conduct any significant business activities independent of First Regional Bank (the "Bank"). The following discussion and analysis relates primarily to the Bank. At September 30, 1995 total assets were $136,512,000 compared to $124,287,000 at December 31, 1994, an increase of $12,225,000 or 10%. In 1995 the Company initiated an expanded program of marketing and business development activities, which resulted in growth in deposits of $7,964,000, or 7%, to $121,630,000 on September 30, 1995 from $113,666,000 at December 31, 1994. This increase in deposits occurred in most deposit categories, including demand deposits, money market accounts, and time deposits, with only savings deposits shrinking in comparison with the previous yearend level. At the same time that deposits were growing, Net Loans increased by $556,000 or 1% to $77,137,000 compared to $76,581,000 at the end of 1994. The modest growth in Net Loans reflected the difficulty in finding acceptable new loans in light of the low level of economic activity in the Bank's market area. The funds resulting from the growth in deposits and the much more modest increase in loans flowed into Funds Sold, which jumped from $21,300,000 at December 31, 1994 to $35,510,000 at September 30, 1995, and increase of $14,210,000 or 67%. Most other categories of assets and liabilities experienced relatively minor changes in the period from December 31, 1994 to September 30, 1995. The Company's successful program to increase asset levels while controlling expenses led to higher revenues and lower expenses, and as a result, the Company generated net income of $539,000 in the third quarter of 1995, compared to a profit of $269,000 in the three months ended September 30, 1994. The results for the nine months ended September 30, 1995 were profits of $1,389,000 versus a $407,000 profit for the like period in 1994. NET INTEREST INCOME - ------------------- Net revenue from earning assets fell by $175,000 (10%) for the three months ended September 30, 1995 compared to the same period in 1994. The apparent decline was due to the reclassification of approximately $235,000 in loan premium amortization from an expense account to a charge against the related loan income; if these charges are added back, the result is a modest increase in net interest income between the comparable periods. This result is consistent with the generally stable level of assets and interest rates which existed during the two periods. Despite the reclassification described, the net interest income for the nine month period ending September 30, 1995 showed a significant increase of $844,000 (18%) compared to the corresponding period in 1994. In this case, the higher levels of earning assets combined with stability in interest rates resulted in an increase in net revenue. For both the quarter and the first nine months of 1995, total revenue increased, reflecting higher levels of assets combined with the comparable levels of interest rates which prevailed between the two years. Not surprisingly, the stability in interest rates along with the growth in deposits led to increases in the cost of funds. For the three 12 months ended September 30, 1995, Total Cost of Funds rose from the 1994 level of $594,000 to $744,000, an increase of $150,000 (25%) from the 1994 level, while for the first nine months of 1995 funding costs rose by $203,000 (11%) to $2,014,000 from the 1994 total of $1,811,000. The modest increases in deposit interest expense, combined with the general stability in interest revenues, gave rise to the small net revenue declines which occurred. OTHER REVENUE - ------------- Other revenue was $99,000 for the three months ended September 30, 1995, for the most part unchanged from the $108,000 recorded in the third quarter of 1994. For the nine months ended September 30, 1995, other revenue was $343,000 versus a corresponding 1994 total of $691,000. Much of the shortfall in the 1995 year to date totals versus those of the prior year reflects the 1994 receipt of rental income on an income property acquired via foreclosure during the period preceding its eventual sale. As this property was sold in mid-1994, there is no corresponding 1995 income. The remaining changes between 1994 and 1995 primarily reflect increases in service charge income on various deposit accounts. PROVISION FOR POSSIBLE LOAN LOSSES - ---------------------------------- The allowance for possible loan losses is intended to reflect known and inherent risks in the loan portfolio. The allowance for possible loan losses is increased by provisions for possible loan losses, and is decreased by net loan chargeoffs. Management continues to evaluate the loan portfolio in light of many factors, including loan loss experience and current economic conditions. While the economic recession has had and will continue to have a significant impact on the Bank and its customers, management believes the allowance for possible loan losses is adequate to provide for losses that might be reasonably anticipated. The allowance for possible loan losses was $1,860,000 and $1,390,000 (or 2.35% and 1.78% of gross outstanding loans) at September 30, 1995 and December 31, 1994 respectively. Although credit quality continues to improve based on the Company's ongoing analysis of the risks presented by its loan portfolio, in anticipation of future loan growth provisions for possible losses were $160,000 and $535,000 for the three and nine month periods ended September 30, 1995 respectively, compared to provisions of $50,000 and $100,000 for the three and nine month periods ended September 30, 1994. The Company experienced net loan chargeoffs of $50,000 in the third quarter of 1994 and net chargeoffs of $1,106,000 for the first nine months of 1994; by comparison, for 1995 the Company experienced net chargeoffs of $465,000 in the quarter ended September 30, which brought the net chargeoff total through the third quarter of the year to $434,000. OPERATING EXPENSES - ------------------ Management's ongoing programs to limit non-interest expenses led to declines in most categories of operating expenses in 1995 compared to the prior year. As mentioned earlier, however, the Company embarked on a growth program in 1995 which required additions to the calling officer force, and as a result salary and related benefits increased by $85,000 for the three month period ended September 30, 1995 compared with the same period in 1994, and for the 13 same reason this category of expense also increased for the nine month period ended September 30, to $1,644,000 in 1995 from $1,460,000 in 1994. Occupancy expense remained essentially stable for the three month period ended September 30, 1995 versus the prior year, as there were no changes in the premises occupied by the Company or the lease agreements covering those premises. Most of the remaining categories of operating expenses either remained generally stable or declined slightly in 1995 versus 1994, both for the third quarter and for the full year to date. The only exception was in Other Expenses, which fell sharply in the third quarter of 1995 compared to 1994 due to the reclassification of loan premium amortizations described earlier. In addition, the success in reducing the amount of other real estate owned reduced the level of expenses associated with such properties as well as the amount of loss provisions required. For both the third quarter of 1995 and the first nine months of the year, the OREO loss provisions were $50,000. By comparison, these charges were $70,000 and $130,000 for the three and nine periods ended September 30, 1994 respectively. LIQUIDITY, SOURCES OF FUNDS, AND CAPITAL RESOURCES - -------------------------------------------------- The Company's financial position remains highly liquid. Total liquid assets (cash and due from banks, time deposits, investment securities, and funds sold) stood at 46.5% of total deposits at September 30, 1995. This compares with a level of 39.1% which existed at December 31, 1994; this change reflects the fact that, as deposits have risen during the course of 1995, most of the inflow of funds has taken place in the various liquid asset components. In addition, at September 30, 1995 and December 31, 1994 respectively, the Bank held approximately $25.2 million and $22.9 million of loans fully guaranteed by the United States government; due to the presence of an active secondary market for such loans, these loans represent an important additional source of liquidity. The ratio of net loans (including government guaranteed loans) to deposits was 63.4% and 67.3% as of September 30, 1995 and December 31, 1994, respectively. The Bank's investment portfolio continues to be composed of high quality, low risk securities, primarily U.S. Treasury or U.S. Agency securities. No gains or losses were recorded on sales of securities during the first nine months of 1995 or 1994. At September 30, 1995 the Bank's investment portfolio contained gross unrealized gains of $54,000 and gross unrealized losses of $35,000, for net unrealized gains of $19,000; at December 31, 1994 the portfolio contained no unrealized gains and unrealized losses of $5,000. As discussed more fully in Note 5, the Company adopted SFAS No. 115 in 1994, with the result that the net unrealized gains and losses gave rise to a $19,000 increase in the Company's shareholders' equity as of September 30, 1995, and a $5,000 decrease in shareholders' equity as of December 31, 1994. Because the Company's holdings of securities are intended to serve as a source of liquidity should conditions warrant, the securities have been classified by the Company as "available for sale." Because customer deposits are the Company's principal funding source outside of its capital, management has attempted to match the rates and maturities of its deposits with its investment and loan portfolios as part of its liquidity and asset and liability management policies. The objective of these policies is to limit the fluctuations of net interest income resulting from interest rate changes. The table which follows indicates the repricing 14 or maturity characteristics of the major categories of the Bank's assets and liabilities, and thus the relative sensitivity of the Bank's net interest income to changes in the overall level of interest rates. A positive "gap" for a period indicates that an upward or downward movement in the level of interest rates would cause a corresponding change in net interest income, while a negative "gap" implies that an interest rate movement would result in an inverse change in net interest income. One month Six months One year Non-interest Floating Less than but less than but less than but less than Five years earning Category Rate one month six months one year five years or more or bearing Total ==================================================================================================================================== Fed funds sold 35,510 0 0 0 0 0 0 35,510 Time deposits with other banks 0 2,279 4,953 1,779 0 0 0 9,011 Investment securities 4,188 0 3,956 0 25 0 0 8,169 ----- - ----- - -- - - ----- Subtotal 39,698 2,279 8,909 1,779 25 0 0 52,690 Loans 76,727 0 0 410 0 0 0 77,137 ------ - - --- - - - ------ Total earning assets 116,425 2,279 8,909 2,189 25 0 0 129,827 Cash and due from banks 0 0 0 0 0 0 3,875 3,875 Premises and equipment 0 0 0 0 0 0 209 209 Other real estate owned 0 0 0 0 0 0 576 576 Other assets 0 0 0 0 0 0 2,025 2,025 - - - - - - ----- ----- Total non-earning assets 0 0 0 0 0 0 6,685 6,685 - - - - - - ----- ----- Total assets 116,425 2,279 8,909 2,189 25 0 6,685 136,512 Funds purchased 0 0 0 0 0 0 0 0 Repurchase agreements 2,465 0 0 0 0 0 0 2,465 ----- - - - - - - ----- Subtotal 2,465 0 0 0 0 0 0 2,465 Savings deposits 3,733 0 0 0 0 0 0 3,733 Money market deposits 83,618 0 0 0 0 0 0 83,618 Time deposits 0 5,275 7,916 2,033 75 0 0 15,299 - ----- ----- ----- -- - - ------ Total bearing liabilities 89,816 5,275 7,916 2,033 75 0 0 105,115 Demand deposits 0 0 0 0 0 0 18,980 18,980 Other liabilities 0 0 0 0 0 0 781 781 Equity capital 0 0 0 0 0 0 11,636 11,636 - - - - - - ------ ------ Total non-bearing liabilities 0 0 0 0 0 0 31,397 31,397 - - - - - - ------ ------ Total liabilities 89,816 5,275 7,916 2,033 75 0 31,397 136,512 GAP 26,609 -2,996 993 156 -50 0 -24,712 0 Cumulative GAP 26,609 23,613 24,606 24,762 24,712 24,712 0 0 As the table indicates, the vast majority of the Company's assets are either floating rate or, if fixed rate, have extremely short maturities. Since the yields on these assets quickly adjust to reflect changes in the overall level of interest rates, there are no significant unrealized gains or losses with respect to the Company's assets, nor is there much likelihood of large realized or unrealized gains or losses developing in the future. For this reason, realized or unrealized gains or losses are not expected to have any 15 significant impact on the Company's future operating results or liquidity. The Company continues to enjoy a strong capital position. Total capital was $11,636,000 and $10,222,000 as of September 30, 1995 and December 31, 1994, respectively. The Company's capital ratios for those dates in comparison with regulatory capital requirements were as follows: 09-30-95 12-31-94 -------- -------- Leverage Ratio (Tier I Capital to Total Assets) Regulatory requirement 3.00% 3.00% First Regional Bancorp 8.47% 8.08% In addition, bank regulators have issued new risk-adjusted capital guidelines which assign risk weighting to assets and off-balance sheet items and place increased emphasis on common equity. The Company's risk adjusted capital ratios for the dates listed in comparison with the risk adjusted regulatory capital requirements were as follows: 09-30-95 12-31-94 -------- -------- Tier I Capital to Risk-Weighted Assets: Regulatory requirement 4.00% 4.00% First Regional Bancorp 16.05% 14.94% Tier I + Tier II Capital to Risk-Weighted Assets: Regulatory requirement 8.00% 8.00% First Regional Bancorp 17.32% 16.20% The "regulatory requirement" figures listed above represent the level of capital required for Adequately Capitalized status as established by federal regulators. The Company believes that it will continue to meet all applicable capital standards. REGULATORY MATTERS - ------------------ In February, 1993 the Company and the Bank each entered into agreements with their respective Federal regulators calling for the maintenance of capital strength, the improvement of asset quality, the development of various written policies and procedures, and the forwarding of periodic progress reports to the regulators. In the third quarter of 1995 the regulators each concluded that the terms of the agreements had been fully complied with, and accordingly the agreements were terminated by the regulators. INFLATION - --------- The impact of inflation on the Company differs significantly from other industries, since virtually all of its assets and liabilities are monetary. During periods of rising inflation, companies with net monetary assets will always experience a reduction in purchasing power. Inflation continues to have an impact on salary, supply, and rent expenses, but the rate of inflation in general and its impact on these expenses in particular has remained moderate in recent years. 16 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - --------------------------- Litigation - ---------- The Company is a party as plaintiff or defendant to a number of lawsuits which have arisen in connection with the normal conduct of its banking business. It is management's opinion, based upon advice of legal counsel, that none of the pending litigation will have a materially adverse effect on the Company or the Bank. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------- No matters were submitted to a vote of security holders during the third quarter of 1995. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------------------------------------------ Exhibits - -------- There are no exhibits to this report. Reports on Form 8-K - ------------------- No reports on Form 8-K were filed during the third quarter of 1995. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST REGIONAL BANCORP Date: November 2, 1995 /s/ Jack A. Sweeney ------------------ ------------------------------------------ Jack A. Sweeney, Chairman of the Board Chief Executive Officer November 2, 1995 /s/ Thomas McCullough ------------------ ------------------------------------------ Thomas McCullough, Chief Financial Officer