-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BxqFC2S0KVFnhdSGLkU66Yp+nCzPpLqVIZ8wFWxaGKmczGAEWlMwJDVpOMQSVIgg zHLgh3mAQAjezCiMC4R8Zg== 0000898430-96-001888.txt : 19960802 0000898430-96-001888.hdr.sgml : 19960802 ACCESSION NUMBER: 0000898430-96-001888 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST REGIONAL BANCORP CENTRAL INDEX KEY: 0000356708 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 953582843 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10232 FILM NUMBER: 96564363 BUSINESS ADDRESS: STREET 1: 1801 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 3105521776 MAIL ADDRESS: STREET 1: 1801 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: GREAT AMERICAN BANCORP DATE OF NAME CHANGE: 19880309 10-Q 1 FORM 10-Q PAGE 1 OF 18 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 March 31, 1996 ------------------------------------------------------------- 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 May 10, 1996 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 of Cash Flows 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 17 Item 4. Submission of Matters to a Vote of Security Holders 17 Item 6. Exhibits and Reports on Form 8-K 17 Signatures 18
3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - - ----------------------------- FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ---------------------------------------------- (In Thousands) (unaudited)
March 31 December 31, 1996 1995 -------- ------------ ASSETS - - ------ Cash and due from banks $ 3,567 $ 6,777 Time deposits with other financial institutions 4,655 8,121 Investment securities 19,021 13,882 Funds sold 22,500 20,690 Federally guaranteed loans 25,544 27,660 Other loans, net of allowance for losses of $2,143,000 in 1996 and $2,000,000 in 1995 56,965 57,667 Premises and equipment, net of accumulated depreciation 190 200 Other real estate owned 360 392 Accrued interest receivable and other assets 3,105 2,421 -------- -------- Total Assets $135,907 $137,810 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ Liabilities: Demand deposits $ 21,255 $ 24,005 Savings deposits 4,567 4,706 Money market deposits 80,426 82,998 Time deposits 15,044 13,015 -------- -------- Total deposits 121,292 124,724 Securities sold under agreement to repurchase 21 36 Accrued interest payable and other liabilities 1,759 791 -------- -------- Total Liabilities 123,072 125,551 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 1,456 922
4
March 31 December 31, 1996 1995 -------- ------------ Net unrealized gain (loss) on securities available for sale 47 5 -------- -------- Total Shareholders' Equity 12,835 12,259 -------- -------- Total Liabilities and Shareholders' Equity $135,907 $137,810 ======== ========
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 March 31, ------------------ 1996 1995 ---- ---- REVENUE FROM EARNING ASSETS: Interest and fees on loans $2,120 $2,195 Interest on time deposits with other financial institutions 97 102 Interest on investment securities 263 194 Interest on funds sold 294 209 ------ ------ Total revenue from earning assets 2,774 2,700 COST OF FUNDS: Interest on deposits 724 610 Interest on securities sold under agreements to repurchase 4 0 Total cost of funds ------ ------ 728 610 Net revenue from earning assets before provision for loan losses 2,046 2,090 PROVISION FOR LOAN LOSSES 100 275 ------ ------ Net revenue from earning assets 1,946 1,815 OPERATING INCOME Net gains (losses) on sales of investment securities (20) 0 Other revenue 105 125 ------ ------ Total operating income 85 125 OPERATING EXPENSES: Salaries and related benefits 625 521 Occupancy expense 89 83 Equipment expense 33 43 Promotion expense 30 37 Professional service expense 171 142 Customer service expense 318 288 Supply/communication expense 42 28 Other expenses 123 228 Total operating expenses ------ ------ 1,431 1,370 Income before provision for income taxes 600 570 PROVISION FOR INCOME TAXES 66 63 ------ ------
6
Three Months Ended March 31, ------------------ 1996 1995 ---- ---- NET INCOME $ 534 $ 507 ====== ====== NET INCOME PER SHARE (Note 2) $ 0.22 $ 0.21 ====== ======
The accompanying notes are an integral part of these statements. 7 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (In Thousands) (Unaudited)
Three Months Ended March 31, ------------------ 1996 1995 ---- ---- OPERATING ACTIVITIES Net Income $ 534 $ 507 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 100 275 Provision for depreciation and amortization 12 14 Amortization of investment security and guaranteed loan premiums 111 0 Accretion of investment security discounts (42) (151) Decrease (increase) in interest receivable 19 (98) Increase (decrease) in interest payable 138 (7) Increase (decrease) in taxes payable 66 63 Net increase (decrease) in other liabilities 764 23 ------- ------- Net cash provided by operating activities $ 1,702 $ 626 INVESTING ACTIVITIES Increase in investments in time deposits with other financial institutions $ 3,466 $ 99 Decrease (increase) in investment securities (5,055) (1,694) Decrease (increase) in guaranteed loans 2,005 (856) Net decrease (increase) in other loans 602 (1,091) Decrease (increase) in premises and equipment (2) (1) Decrease (increase) in other real estate owned 32 44 Net decrease (increase) in other assets (703) (330) ------- ------- Net cash provided by investing activities $ 345 $(3,829)
8
Three Months Ended March 31, ------------------ 1996 1995 ---- ---- FINANCING ACTIVITIES Net increase (decrease) in demand deposits, savings accounts, and money market accounts $(5,461) $ (7,302) Net increase (decrease) in time deposits 2,029 (680) Increase (decrease) in securities sold under agreement to repurchase (15) 0 ------- -------- Net cash provided by financing activities $(3,447) $ (7,982) Increase (decrease) in cash and cash equivalents $(1,400) $(11,185) Cash and cash equivalents, beginning of period 27,467 25,977 ------- -------- Cash and cash equivalents, end of period $26,067 $ 14,792 ======= ========
The accompanying notes are an integral part of these statements. 9 FIRST REGIONAL BANCORP AND SUBSIDIARY ------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ March 31, 1996 (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). Certain amounts in the 1995 financial statements have been reclassified to be comparable with the classifications used in the 1996 financial statements. In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments (which consist only of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 1996 and December 31, 1995 and the results of operations for the three month periods ended March 31, 1996 and 1995. While the Company 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 1995 annual report. NOTE 2 - Per share information is based on the number of common shares outstanding, which was 2,398,800 for 1996 and 1995. No adjustment has been made for outstanding stock options. NOTE 3 - As of March 31, 1996 the Bank had a total of $330,000 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 March 31, 1996 the Company had identified loans having an aggregate average balance of $983,000 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 March 31, 1996 totalled $283,000 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 10 SFAS No. 114 had no effect on the Company's financial statements as of March 31, 1996. 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 March 31, 1996 by $47,000 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 did not conduct any significant business activities independent of First Regional Bank. The following discussion and analysis relates primarily to the Bank. At March 31, 1996 total assets were $135,907,000 compared to $137,810,000 at December 31, 1995, a decrease of $1,903,000 or 1%. Still, the March 31, 1996 total reflects considerable growth over the $116,904,000 in total assets which existed on the same date in 1995. The asset shrinkage which took place in the first quarter of 1996 is typical, in that the Bank's assets customarily shrink modestly in the first quarter after growing at the end of the preceding year. For the most part, this year's shrinkage was the result of a decrease in deposits of $3,432,000 or 3%, to $121,292,000 on March 31, 1996 from $124,724,000 at December 31, 1995; the reduction was centered in demand deposits, although smaller decreases were experienced in the areas of savings deposits and money market deposits. Time deposits grew in the first quarter, partially offsetting the declines which took place in the other deposit categories. The composition of the Bank's assets was reasonably stable during the first quarter. Federally guaranteed loans fell by $2,116,000 due to payoffs of loans by borrowers, while other loans likewise fell by $702,000. These reductions brought the Bank's total loans to $82,509,000 at March 31, 1996 from the December 31, 1995 total of $85,327,000. Because the shrinkage in deposits was essentially offset by the reduction in loans, total liquid assets remained basically unchanged, although there were changes in the composition of those liquid assets. In particular, investment securities rose due to new investment opportunities, while time deposits with other financial institutions dropped due to the inability to find acceptable yields on investments meeting the Bank's quality standards. The Company earned a profit of $534,000 in the three months ended March 31, 1996, compared to earnings of $507,000 for the first quarter of 1995. The increase in earnings primarily reflects modest growth in net interest revenue resulting from the growth in the level of earning assets over the prior year, which offset the narrowing of the historically large difference between the Company's yield on average assets and its cost of funds. In addition, the continued improvement in asset quality led to lower provisions to the reserve for loan losses. NET INTEREST INCOME - - ------------------- Total revenue from earning assets rose by $74,000 (3%) for the three months ended March 31, 1996 compared to the same period in 1995. This revenue increase came in part because of the higher level of earning assets which prevailed in 1996 compared to the prior year, although reductions in interest rates which occurred late in 1995 and in the first quarter of 1996 served to reduce the effects of the growth. While yields on earning assets fell over the past few months, however, the cost of funds has been much more stable, with the result that growth in deposits over the past year has resulted in a substantial increase in interest expense, which rose from 12 $610,000 in the first quarter of 1995 to $728,000 for the same period in 1996, and increase of $118,000 or 19%. Thus, in the first quarter of 1996 the cost of interest bearing liabilities rose sharply, but interest revenues remained essentially stable. The combined effect of these changes was a slight drop in net revenue from earning assets from $2,090,000 in the first quarter of 1995 to $2,046,000 for the first three months of 1996. OPERATING INCOME - - ---------------- Other revenue fell to $105,000 in the first quarter of 1996 compared to $125,000 in the three months ended March 31, 1995. The decrease in this category of income was largely due to somewhat lower service charge income on deposit accounts. Other income categories in this area were virtually unchanged from prior year levels. During the first quarter of 1996, changes in the relative levels of interest rates made it advisable for one of the Bank's investment securities to be sold, and a loss of $20,000 was incurred on the sale. No gains or losses on securities sales were realized in the first quarter of 1995. PROVISION FOR POSSIBLE LOSSES - - ----------------------------- The allowance for possible losses is intended to reflect known and inherent risks in a portfolio. The allowance for possible losses is increased by provisions for possible losses, and is decreased by net chargeoffs. Management continues to evaluate the portfolio in light of many factors, including loss experience and current economic conditions. Management believes the allowance for possible losses is adequate to provide for losses that might be reasonably anticipated. The allowance for possible losses was $2,143,000 and $2,000,000 (or 2.53% and 2.29% of gross outstanding loans) at March 31, 1996 and December 31, 1995 respectively. Reflecting the Company's ongoing analysis of the risks presented by its loan portfolio, provisions for possible losses were $100,000 in the first quarter of 1996, compared to $275,000 for the three month period ended March 31, 1995. For the three months ended March 31, 1995, the Company generated net recoveries of previous loan chargeoffs of $43,000; by comparison, in the first quarter of 1995 the Company experienced net loan recoveries of $38,000. In addition, 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 March 31, 1996 the Company had identified loans having an aggregate average balance of $983,000 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 13 established a general loss reserve for each of the loans which at March 31, 1996 totalled $283,000 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 March 31, 1996. OPERATING EXPENSES - - ------------------ Overall operating expenses increased in the first quarter of 1996 compared to the same period of 1995, although some categories of expense actually decreased from the levels of previous periods. Operating expenses rose to a total of $1,431,000 for the first quarter of 1996 from $1,370,000 for the three months ended March 31, 1995. Salary and related benefits increased significantly, rising from a total of $521,000 for the first quarter of 1995 to $625,000 for the same period in 1996. The increase principally reflects increases in staffing which took place in 1995 as part of the Bank's program to increase its level of assets. Occupancy expense remained generally stable, rising slightly to $89,000 for the three months ended March 31, 1996 from $83,000 in the first quarter of 1995. This category of expense has fallen sharply in recent years following the renegotiation of the Company's premises leases in mid-1993. Other operating expenses fell somewhat in 1996 compared to the prior year, falling from $766,000 for the first quarter of 1995 to $717,000 for the first three months of 1996. In addition to the benefits of the Bank's ongoing program of expense control, the expense reduction reflects the absence in 1996 of premiums for deposit insurance. The combined effects of the above-described factors resulted in income before taxes of $600,000 for the three months ended March 31, 1996 compared to $570,000 for the first quarter of 1995. Reflecting the higher income level, the Company's provision for taxes for the first quarter rose to $66,000 in 1996 from $63,000 in 1995. This brought Net Income for the first quarter of 1996 to $534,000 compared to $507,000 for the same period in 1995. LIQUIDITY, SOURCES OF FUNDS, AND CAPITAL RESOURCES - - -------------------------------------------------- The Company's financial position remains liquid. Total liquid assets (cash and due from banks, time deposits with other financial institutions, investment securities, and funds sold) stood at 41.0% of total deposits at March 31, 1996. This level represents a slight increase from the 39.7% liquidity level which existed on December 31, 1995. In addition, at March 31, 1996 over $25 million of the Bank's total loans consisted of government guaranteed loans, which represent a significant source of liquidity due to the active secondary market which exists for these assets. The ratio of net loans (including government guaranteed loans) to deposits was 68.0% and 68.4% as of March 31, 1996 and December 31, 1995, respectively. 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 14 indicates the repricing or maturity characteristics of the major categories of the Bank's assets and liabilities as of March 31, 1996, 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 22,500 0 0 0 0 0 0 22,500 Time deposits with other banks 0 1,878 2,777 0 0 0 0 4,655 Investment securities 10,512 0 6,051 1,234 1,224 0 0 19,021 ------ - ----- ----- ----- - - ------ Subtotal 33,012 1,878 8,828 1,234 1,224 0 0 46,176 Loans 80,531 0 235 1,743 0 0 0 82,509 ------ - ----- ----- - - - ------ Total earning assets 113,543 1,878 9,063 2,977 1,224 0 0 128,685 Cash and due from banks 0 0 0 0 0 0 3,567 3,567 Premises and equipment 0 0 0 0 0 0 190 190 Other real estate owned 0 0 0 0 0 0 360 360 Other assets 0 0 0 0 0 0 3,105 3,105 - - - - - - ------ ------ Total non-earning assets 0 0 0 0 0 0 7,222 7,222 - - - - - - ------ ------ Total assets 113,543 1,878 9,063 2,977 1,224 0 7,222 135,907 Funds purchased 21 0 0 0 0 0 0 21 Repurchase agreements 0 0 0 0 0 0 0 0 - - - - - - - - Subtotal 21 0 0 0 0 0 0 21 Savings deposits 4,567 0 0 0 0 0 0 4,567 Money market deposits 80,426 0 0 0 0 0 0 80,426 Time deposits 0 7,412 5,520 2,049 3 0 0 15,044 - ----- ----- ----- - - - ------ Total bearing liabilities 85,014 7,412 5,520 2,049 3 0 0 100,058 Demand deposits 0 0 0 0 0 0 21,255 21,255 Other liabilities 0 0 0 0 0 0 1,759 1,759 Equity capital 0 0 0 0 0 0 12,835 12,835 - - - - - - ------ ------ Total non-bearing liabilities 0 0 0 0 0 0 35,849 35,849 - - - - - - ------ ------ Total liabilities 85,014 7,412 5,520 2,049 63 0 35,849 135,907 GAP 28,529 (5,534) 3,543 928 1,161 0 (28,627) 0 Cumulative GAP 28,529 22,995 26,538 27,466 28,627 28,627 0 0
As the table indicates, the vast majority of the Company's assets are 15 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 Bank's investment portfolio continues to be composed of high quality, low risk securities, primarily U.S. Treasury or Agency obligations. As mentioned above, a loss of $20,000 was incurred on a security sale in the first quarter of 1996; no gains or losses were recorded on securities sales in the first quarter of 1995. As of March 31, 1996 the Bank's investment portfolio contained gross unrealized gains of $51,000 and gross unrealized losses of $4,000, whereas at March 31, 1995 the Bank's investment portfolio contained gross unrealized gains of $7,000 and no gross unrealized losses. As discussed more fully in Note 5, the Company adopted SFAS No. 115 in 1994, with the result that the unrealized net gain of $47,000 gave rise to a $47,000 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." The Company continues to enjoy a strong capital position. Total capital was $12,835,000 and $12,259,000 as of March 31, 1996 and December 31, 1995, respectively. The Company's capital ratios for those dates in comparison with regulatory capital requirements were as follows:
3-31-96 12-31-95 ------- -------- Leverage Ratio (Tier I Capital to Assets): Regulatory requirement 4.00% 4.00% First Regional Bancorp 9.38% 8.96%
The "regulatory requirement" listed represents the level of capital required for Adequately Capitalized status. In addition, bank regulators have issued 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:
3-31-96 12-31-95 ------- -------- Tier I Capital to Assets: Regulatory requirement 4.00% 4.00% First Regional Bancorp 15.97% 15.91% Tier I + Tier II Capital to Assets: Regulatory requirement 8.00% 8.00% First Regional Bancorp 17.20% 17.17%
16 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. 17 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 the Bank. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - - ------------------------------------------------------------ No items were submitted to a vote of the Company's shareholders during the first quarter of 1996. 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 first quarter of 1996. 18 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: May 10, 1996 /s/ Jack A. Sweeney ------------------------------------------ Jack A. Sweeney, Chairman of the Board and Chief Executive Officer Date: May 10, 1996 /s/ Thomas McCullough ------------------------------------------ Thomas McCullough, Chief Financial Officer EX-27 2 ARTICLE 9 FDS
9 1,000 3-MOS DEC-31-1995 JAN-01-1996 MAR-31-1996 3,567 4,655 22,500 0 19,021 18,974 19,021 84,652 (2,143) 135,907 121,292 21 1,759 0 11,332 0 0 1,456 135,907 2,120 360 294 2,774 724 728 2,046 100 (20) 1,431 600 600 0 0 534 0.22 0 0.086 983 2,654 0 0 2,000 74 116 2,143 2,143 0 0
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