<PAGE>
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 June 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 August 10, 1995
<PAGE>
2
FIRST REGIONAL BANCORP
----------------------
INDEX
-----
Page
----
<TABLE>
<CAPTION>
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Financial
Condition 3
Consolidated Statements of Income 4
Consolidated Statements Cash Flow 6
Notes to Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
Part II - Other Information
Item 1. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE>
3
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
June 30 December 31,
1995 1994
------------ -------------
ASSETS (unaudited)
- --------
<S> <C> <C>
Cash and due from banks $ 3,984 $ 4,677
Time deposits with other financial
institutions 5,249 6,627
Investment securities 6,926 11,807
Funds sold 34,500 21,300
Loans, net of allowance for losses of
$1,797,000 in 1995 and $1,390,000 in 1994 77,350 76,581
Premises and equipment, net of accumulated
depreciation 152 166
Other real estate owned 696 1,163
Accrued interest receivable and other assets 2,215 1,966
-------- --------
Total Assets $131,072 $124,287
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Demand deposits $ 18,723 $ 18,777
Savings deposits 4,677 5,147
Money market deposits 79,704 78,295
Time deposits 16,309 11,447
-------- --------
Total deposits 119,413 113,666
Securities sold under agreement to repurchase 2 0
Accrued interest payable and other liabilities 559 399
-------- --------
Total Liabilities 119,974 114,065
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 (254) (1,105)
Net unrealized gain (loss) on securities
available for sale 20 (5)
-------- --------
Total Shareholders' Equity 11,098 10,222
-------- --------
Total Liabilities and Shareholders' Equity $131,072 $124,287
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
4
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE FROM EARNING ASSETS:
Interest and fees on loans $ 2,237 $ 1,762 $ 4,432 $ 3,551
Interest on time deposits with
other financial institutions 93 83 195 147
Interest on investment securities 154 102 348 114
Interest on funds sold 303 133 512 278
------- ------- ------- -------
Total revenue from earning assets 2,787 2,080 5,487 4,090
COST OF FUNDS:
Interest on deposits 660 606 1,270 1,217
Interest on securities sold under
agreements to repurchase 0 0 0 0
------- ------- ------- -------
Total cost of funds 660 606 1,270 1,217
Net revenue from earning assets
before provision for loan losses 2,127 1,474 4,217 2,873
PROVISION FOR LOAN LOSSES 100 0 375 50
------- ------- ------- -------
Net revenue from earning assets 2,027 1,474 3,842 2,823
Net gain (loss) on sales of
securities 11 0 11 0
Other revenue 108 183 233 583
OPERATING EXPENSES:
Salaries and related benefits 565 484 1,086 987
Occupancy expense 82 88 165 179
Equipment expense 86 35 129 73
Promotion expense 46 27 83 57
Professional service expense 181 165 323 348
Customer service expense 297 290 585 635
Supply/communication expense 36 29 64 55
Other expenses 467 540 695 917
------- ------- ------- -------
Total operating expenses 1,760 1,658 3,130 3,251
------- ------- ------- -------
Income before provision for
income taxes 386 (1) 956 155
</TABLE>
<PAGE>
5
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands Except Per Share Amounts)
(Unaudited)
(continued)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PROVISION FOR INCOME TAXES 43 ( 3) 106 17
------- -------- ------- ------
NET INCOME $ 343 $ 2 $ 850 $ 138
======= ======= ======= =======
NET INCOME (LOSS) PER SHARE
(Note 2) $ 0.14 $ 0.00 $ 0.35 $ 0.06
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
6
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOW
------------------------------------
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 850 $ 138
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 375 50
Provision for depreciation and
amortization 29 29
Amortization of investment securities
net discounts (249) (2)
Decrease (increase) in interest
receivable (59) 404
Increase (decrease) in interest payable 19 (19)
Increase (decrease) in taxes payable 26 17
Net increase (decrease) in other
liabilities 115 162
---------- ---------
Net cash provided (used) by
operating activities $ 1,106 $ 779
INVESTING ACTIVITIES
Decrease (increase) in investment
securities $ 5,155 $ (10,924)
Decrease (increase) in time deposits
with other financial
institutions 1,378 (1,784)
Decrease (increase) in loans (1,144) 5,164
Purchases of premises and equipment (15) (34)
Net decrease (increase) in other real
estate owned 467 5,709
Net decrease (increase) in other assets (189) (204)
---------- ---------
Net cash provided by
investing activities $ 5,652 $ (2,073)
FINANCING ACTIVITIES
Net decrease in demand deposits,
savings accounts, and money
market accounts $ 885 $ (3,169)
Net increase in time deposits 4,862 (5,525)
</TABLE>
<PAGE>
7
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOW
------------------------------------
(In Thousands)
(Unaudited)
(continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1995 1994
---- ----
<S> <C> <C>
Increase (decrease) in securities sold
under agreement to repurchase 2 0
--------- --------
Net cash provided by
financing activities $ 5,749 $ (8,694)
Increase (decrease) in cash and cash
equivalents $ 12,507 $ (9,988)
Cash and cash equivalents, beginning of
period 25,977 22,971
---------- --------
Cash and cash equivalents, end of period $ 38,484 $ 12,983
========== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
8
FIRST REGIONAL BANCORP AND SUBSIDIARY
-------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
June 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 June 30, 1995 and December 31,
1994 and the results of operations for the three and six month periods
ended June 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 June 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, which was 2,398,800 in 1995 and 1994. No adjustment has
been made for outstanding stock options.
NOTE 3 - As of June 30, 1995 the Bank had a total of $300,000 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 June 30, 1995 the Company had identified loans having an
aggregate average balance of $939,337 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 established a general loss
reserve for each of the loans which at
<PAGE>
9
June 30, 1995 totalled $371,000 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 June 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 June 30, 1995 by $20,000 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.
<PAGE>
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
SUMMARY
- -------
First Regional Bancorp did not conduct any significant business activities
independent of First Regional Bank. The following discussion and analysis
relates primarily to the Bank.
At June 30, 1995 total assets were $131,072,000 compared to $124,287,000 at
December 31, 1994, an increase of $6,785,000 or 5%. This increase was due to
growth in deposits of $5,747,000, or 5%, to $119,413,000 on June 30, 1995 from
$113,666,000 at December 31, 1994. This increase in deposits was concentrated
in time deposits; other deposit categories, including demand deposits, savings
deposits, and money market accounts, were essentially stable during this period.
At the same time that deposits were growing, Net Loans also rose, but much more
modestly, increasing by $769,000 or 1% to $77,350,000 compared to $76,581,000 at
the end of 1994. Changes in the levels and the relationships in yield between
time deposits with other financial institutions, investment securities, and
funds sold resulted in lower levels of investment securities and time deposits;
time deposits with other financial institutions fell from $6,627,000 at December
31, 1994 to $5,249,000 at June 30, 1995, while investment securities fell from a
yearend 1994 level of $11,807,000 to $6,926,000 at June 30, 1995. The funds
which were freed by these asset reductions flowed into funds sold, which
increased from $21,300,000 at December 31, 1994 to $34,500,000 at June 30, 1995.
Most other categories of assets and liabilities experienced relatively minor
changes in the period from December 31, 1994 to June 30, 1995.
The Company earned a profit of $343,000 in the second quarter of 1995 compared
to $2,000 in the three months ended June 30, 1994. The results for the six
months ended June 30, 1995 were profits of $850,000 compared to a profit of
$138,000 for the corresponding period of 1994.
NET INTEREST INCOME
- -------------------
Net revenue from earning assets rose by $653,000 (44%) for the three months
ended June 30, 1995 compared to the same period in 1994. The results for the
six month period ending June 30, 1995 showed an increase of $1,344,000 (47%)
compared to the corresponding period in 1994. With regard to earning assets and
its associated interest revenue, total revenue increased due to higher levels of
earning assets, general stability in interest rates, and a dramatic reduction in
non-performing or non-earning assets. In the area of the cost of funds,
however, expense levels were quite stable, as growth in total deposits was
largely offset by slightly lower interest rates for these types of instruments
despite stability in asset yields.
<PAGE>
11
OTHER REVENUE
- -------------
Other revenue fell from $183,000 in the second quarter of 1994 to $108,000 for
the three months ended June 30, 1995, a 41% decrease. For the first half of
1995 other revenue was $233,000 compared to $583,000 for the six months ended
June 30, 1994, a decrease of $350,000 or 60%. The changes between 1995 and 1994
primarily reflect the 1994 receipt of rental income on an income property
acquired via foreclosure during the period preceding its eventual sale. Most
other categories of other revenue were largely unchanged between the two years.
During the second quarter of 1995, total gains of $11,000 were realized on the
sale of investment securities. No gains on securities sales were realized in
the first six months of 1994, or in the first quarter of 1995.
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.
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 $1,797,000 and $1,390,000 (or 2.27%
and 1.78% of gross outstanding loans) at June 30, 1995 and December 31, 1994
respectively. Although the credit quality of the Company's loan portfolio has
steadily improved, based on its ongoing analysis of the risks presented by its
loan portfolio and the expectation of future loan growth the Company made
provisions of $100,000 and $375,000, respectively, for the second quarter and
the first six months of 1995. By comparison, reflecting the substantial loan
loss provisions made in 1993, the Company's provisions for possible losses were
zero and $50,000 for the three and six month periods ended June 30, 1994,
respectively. In 1995, the Bank generated net loan recoveries of $14,000 and
$52,000, respectively, for the three and six month periods ended June 30, 1995;
by comparison, the Bank experienced net loan chargeoffs of $582,000 in the
second quarter of 1994 and net chargeoffs of $1,056,000 for the first six months
of 1994.
OPERATING EXPENSES
- ------------------
Overall, the Company experienced modest increases in operating expenses in 1995
compared to the prior year. As before, those increases were moderated by
management's continuing efforts to control non-interest expenses. Operating
expenses increased from a total of $1,658,000 for the three months ended June
30, 1994 to $1,760,000 for the same period in 1995. For the six months ended
June 30, 1995, operating expenses totaled $3,130,000, a slight decline from
$3,251,000 in the corresponding period in 1994.
Salary and related benefits increased from $484,000 for the three month period
ended June 30, 1994 to $565,000 for the same period in 1995, and also rose for
the six month periods ended June 30, to $1,086,000 in 1995 from $987,000 in
1994. The increases in salary expense reflect additions to staff required by
the Company's program to resume business development
<PAGE>
12
activity and the addition of new business customers. Occupancy expense remained
generally stable for the three and six month periods of 1994 and 1995, at the
levels resulting from the 1993 renegotiation of the lease agreement covering the
Bank's premises. While most of the remaining categories of expenses underwent
reductions or only slight increases in 1995 compared to 1994, there were one
important exceptions: other expenses fell substantially in 1995 compared to
1994, due to asset writedowns, carrying costs, and disposal expenses relating to
nonperforming loans and foreclosed properties which were incurred in 1994. With
the improved asset quality which prevailed in 1995 compared to 1994, no similar
level of expense was incurred in the latter year.
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 42.4% of total deposits at June 30, 1995. This compares with a level
of 39.1% which existed at December 31, 1994; this change reflects growth in the
level of liquid asset components at the same time that more modest growth was
taking place in the various deposit categories. In addition, at both June 30,
1995 and December 31, 1994, the Bank held approximately $23.4 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 65.0% and 67.4% as of June 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 U.S. Agency securities. As mentioned
above, a total of $11,000 in gains on securities sales were realized in the
second quarter of 1995; no gains were recorded on sales of securities in the
first six months of 1994 or the first quarter of 1995. At June 30, 1995 the
Bank's investment portfolio contained gross unrealized gains of $20,000 and no
gross unrealized losses; at December 31, 1994 the portfolio contained no
unrealized gains and unrealized losses of $1,000. As discussed more fully in
Note 5, the Company adopted SFAS No. 115 in 1994, with the result that the
unrealized gains of $20,000 gave rise to a corresponding $20,000 increase in the
Company's shareholders' equity. 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," and thus
there was no effect on the Company's income statement.
Because customer deposits are the Company's principal funding source outside of
its capital, management has attempted to match 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 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
<PAGE>
13
in an inverse change in net interest income.
<TABLE>
<CAPTION>
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
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fed funds sold 34,500 0 0 0 0 0 0 34,500
Time deposits with other banks 0 792 4,358 99 0 0 0 5,249
Investment securities 1,939 2,000 2,962 0 25 0 0 6,926
----- ----- ----- - -- - - -----
Subtotal 36,439 2,792 7,320 99 25 0 0 46,675
Loans 76,940 0 100 310 0 0 0 77,350
------ - --- --- - - - ------
Total earning assets 113,379 2,792 7,420 409 25 0 0 124,025
Cash and due from banks 0 0 0 0 0 0 3,984 3,984
Premises and equipment 0 0 0 0 0 0 152 152
Other real estate owned 0 0 0 0 0 0 696 696
Other assets 0 0 0 0 0 0 2,215 2,215
- - - - - - ----- -----
Total non-earning assets 0 0 0 0 0 0 7,047 7,047
- - - - - - ----- -----
Total assets 113,379 2,792 7,420 409 25 0 7,047 131,072
Funds purchased 2 0 0 0 0 0 0 2
Repurchase agreements 0 0 0 0 0 0 0 0
- - - - - - - -
Subtotal 2 0 0 0 0 0 0 2
Savings deposits 4,677 0 0 0 0 0 0 4,677
Money market deposits 79,704 0 0 0 0 0 0 79,704
Time deposits 0 6,734 7,591 1,859 125 0 0 16,309
- ----- ----- ----- --- - - ------
Total bearing liabilities 84,383 6,734 7,591 1,859 125 0 0 100,692
Demand deposits 0 0 0 0 0 0 18,723 18,723
Other liabilities 0 0 0 0 0 0 559 559
Equity capital 0 0 0 0 0 0 11,098 11,098
- - - - - - ------ ------
Total non-bearing liabilities 0 0 0 0 0 0 30,380 30,380
- - - - - - ------ ------
Total liabilities 84,383 6,734 7,591 1,859 125 0 30,380 131,072
GAP 28,996 (3,942) (171) (1,450) (100) 0 (23,333) 0
Cumulative GAP 28,996 25,054 24,883 23,433 23,333 23,333 0 0
</TABLE>
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 significant impact on
the Company's future operating results or liquidity.
The Company continues to enjoy a strong capital position. Total capital was
$11,098,000 and $10,222,000 as of June 30, 1995 and December 31, 1994,
respectively. The Company's capital ratios for those dates in comparison with
regulatory capital requirements were as follows:
<PAGE>
14
<TABLE>
<CAPTION>
06-30-95 12-31-94
-------- --------
<S> <C> <C>
Leverage Ratio (Tier I Capital
to Total Assets)
Regulatory requirement 3.00% 3.00%
First Regional Bancorp 8.41% 8.08%
</TABLE>
In addition, bank regulators have issued new risk-adjusted capital guidelines
which assign risk weights 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:
<TABLE>
<CAPTION>
06-30-95 12-31-94
-------- --------
<S> <C> <C>
Tier I Capital to Risk-Weighted Assets:
Regulatory requirement 4.00% 4.00%
First Regional Bancorp 15.83% 14.94%
06-30-95 12-31-94
-------- --------
Tier I + Tier II Capital to Risk-Weighted
Assets:
Regulatory requirement 8.00% 8.00%
First Regional Bancorp 17.09% 16.20%
</TABLE>
The "regulatory requirement" figures listed above represent the level of capital
required for Adequately Capitalized status. The Company believes that it will
continue to meet all applicable capital standards.
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.
<PAGE>
15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ---------------------------
Litigation
- ----------
The Company is a party as plaintiff or defendant to a number of lawsuits that
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 on
the Bank beyond what has already been provided in the financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------
The 1995 annual meeting of shareholders was held on May 18, 1995. The following
persons were nominated and elected to the Board of Directors to serve until the
1996 annual meeting of shareholders:
Alexander S. Lowy
Thomas E. McCullough
Frank R. Moothart
Mark Rubin
Lawrence J. Sherman
Jack A. Sweeney
Steven J. Sweeney
There was no other action taken at the meeting.
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 second quarter of 1995.
<PAGE>
16
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
August 10, 1995 /s/ Jack A. Sweeney
Date: ------------------- ------------------------------------------
Jack A. Sweeney, Chairman of the Board
and Chief Executive Officer
August 10, 1995 /s/ Thomas McCullough
Date: ------------------- ------------------------------------------
Thomas McCullough, Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,984,000
<INT-BEARING-DEPOSITS> 5,249,000
<FED-FUNDS-SOLD> 34,500,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,926,000
<INVESTMENTS-CARRYING> 6,926,000
<INVESTMENTS-MARKET> 6,946,000
<LOANS> 79,147,000
<ALLOWANCE> 1,797,000
<TOTAL-ASSETS> 131,072,000
<DEPOSITS> 119,413,000
<SHORT-TERM> 2,000
<LIABILITIES-OTHER> 559,000
<LONG-TERM> 0
<COMMON> 11,332,000
0
0
<OTHER-SE> (234,000)
<TOTAL-LIABILITIES-AND-EQUITY> 131,072,000
<INTEREST-LOAN> 4,432,000
<INTEREST-INVEST> 543,000
<INTEREST-OTHER> 512,000
<INTEREST-TOTAL> 5,487,000
<INTEREST-DEPOSIT> 1,270,000
<INTEREST-EXPENSE> 1,270,000
<INTEREST-INCOME-NET> 4,217,000
<LOAN-LOSSES> 375,000
<SECURITIES-GAINS> 11,000
<EXPENSE-OTHER> 3,130,000
<INCOME-PRETAX> 956,000
<INCOME-PRE-EXTRAORDINARY> 956,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 850,000
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
<YIELD-ACTUAL> 0.079
<LOANS-NON> 897,000
<LOANS-PAST> 2,105,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,391,000
<CHARGE-OFFS> 45,000
<RECOVERIES> 76,000
<ALLOWANCE-CLOSE> 1,797,000
<ALLOWANCE-DOMESTIC> 1,797,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
