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1801 CENTURY PARK EAST
CENTURY CITY, CALIFORNIA 90067


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 2001


    NOTICE IS HEREBY GIVEN TO THE SHAREHOLDERS OF FIRST REGIONAL BANCORP (the "Company") that, pursuant to the Bylaws of the Company and the call of its Board of Directors, the Annual Meeting of Shareholders of First Regional Bancorp will be held in the Board Room of First Regional Bank, 8th Floor, 1801 Century Park East, Century City, California on Thursday, May 17, 2001, at 11:00 a.m., for the purpose of considering and voting upon the following matters:

    1.
    Election of Directors. Electing the following seven (7) persons to the Board of Directors to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have qualified:

Fred M. Edwards   Thomas E. McCullough
H. Anthony Gartshore   Lawrence J. Sherman
Gary M. Horgan   Jack A. Sweeney
    Marilyn J. Sweeney
    2.
    Other Business. Transacting such other business as may properly come before the Annual Meeting and any adjournment or adjournments thereof.

    The Board of Directors has fixed the close of business on March 31, 2001 as the record date for determination of shareholders entitled to notice of, and to vote at, the Meeting.

  By Order of the Board of Directors

 

Thomas E. McCullough, Secretary
  First Regional Bancorp

Dated: April 10, 2001

 

    The Bylaws of the Company provide for the nomination of directors in the following matter:

    "Section 2.11. Nomination of Directors. Nominations for election of members of the board of directors may be made by the board of directors or by any shareholder of any outstanding class of capital stock of the corporation entitled to vote for the election of directors. Notice of intention to make any nominations (other than for persons named in the notice of the meeting at which such nominations are to be made) shall be made in writing and shall be delivered or mailed to the president of the corporation by the later of the close of business twenty-one (21) days prior to any meeting of shareholders called for the election of directors or ten (10) days after the date of mailing of notice of the meeting to shareholders. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the number of shares of capital stock of the corporation owned by each proposed nominee; (d) the name and residence address of the notifying shareholder; (e) the number of shares of capital stock of the corporation owned by the notifying shareholder; (f) with the written consent of the proposed nominee, a copy of which shall be furnished with the notification, whether the proposed nominee has ever been convicted of or pleaded nolo contendere to any criminal offense involving dishonesty or breach of trust, filed a petition in bankruptcy, or been adjudged bankrupt. The notice shall be signed by the nominating shareholder and by the nominee. Nominations not made in accordance herewith shall be disregarded by the chairman of the meeting and, upon his instructions, the inspectors of election shall disregard all votes cast for each such nominee. The restrictions set forth in this paragraph shall not apply to the nomination of a person to replace a proposed nominee who had died or otherwise become incapacitated to serve as a director between the last day for giving notice hereunder and the date of election of directors if the procedure called for in this paragraph was followed with respect to the nomination of the proposed nominee."

    YOU ARE URGED TO VOTE IN FAVOR OF THE PROPOSALS OF THE COMPANY'S BOARD OF DIRECTORS BY SIGNING AND RETURNING THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE IT PRIOR TO THE TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE COMPANY IN WRITING OF REVOCATION OF YOUR PROXY, OR BY FILING A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON. PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING.


LOGO


PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 17, 2001

INTRODUCTION

    This Proxy Statement is furnished in connection with the solicitation of Proxies for use at the Annual Meeting of Shareholders (the "Meeting") of First Regional Bancorp (the "Company") to be held in the Board Room of First Regional Bank, 8th Floor, 1801 Century Park East, Century City, California, on Thursday, May 17, 2001, at 11:00 a.m. and at any and all adjournments thereof.

    It is anticipated that this Proxy Statement will be mailed to shareholders eligible to receive notice of and vote at the Meeting on or about April 10, 2001.

    The matters to be considered and voted upon at the Meeting will be:

    1.
    Election of Directors. Electing the following seven (7) persons to the Board of Directors to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have qualified:

Fred M. Edwards   Thomas E. McCullough
H. Anthony Gartshore   Lawrence J. Sherman
Gary M. Horgan   Jack A. Sweeney
    Marilyn J. Sweeney
    2.
    Other Business. Transacting such other business as may properly come before the Meeting and any adjournment or adjournments thereof.

Revocability of Proxies

    A form of Proxy for voting your shares at the Meeting is enclosed. Any shareholder who executes and delivers such a Proxy has the right to and may revoke it at any time before it is exercised by filing with the Secretary of the Company an instrument revoking it or a duly executed Proxy bearing a later date. In addition, the powers of the Proxy Holders will be revoked if the person executing the Proxy is present at the Meeting and elects to vote in person by advising the Chairman of the Meeting of his/her election to vote in person, and by voting in person at the Meeting. Subject to such revocation, all shares represented by a properly executed Proxy received in time for the Meeting will be voted by the Proxy Holders in accordance with the instructions on the Proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED IN THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE COMPANY'S BOARD OF DIRECTORS.

Persons Making The Solicitation

    This solicitation of Proxies is being made by the Board of Directors of the Company. The expense of preparing, assembling, printing and mailing this Proxy Statement and the materials used in the solicitation of Proxies for the Meeting will be borne by the Company. It is contemplated that Proxies will be solicited principally through the use of the mail, but officers, directors and employees of the Company and its subsidiary, First Regional Bank (the "Bank"), may solicit Proxies personally or by


telephone, without receiving special compensation therefor. Although there is no formal agreement to do so, the Company may reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding these Proxy Materials to shareholders whose stock in the Company is held of record by such entities. In addition, the Company may use the services of individuals or companies it does not regularly employ in connection with this solicitation of Proxies, if Management determines it advisable.


VOTING SECURITIES

    There were issued and outstanding 2,755,220 shares of the Company's Common Stock on March 31, 2001, which has been fixed as the record date for the purpose of determining the shareholders entitled to notice of and to vote at the Meeting. Each holder of Common Stock, of which there were more than 690 as of the record date, will be entitled to one vote, in person or by Proxy, for each share of Common Stock held of record on the books of the Company as of the record date for the Meeting on any matter submitted to the vote of the shareholders, except that in connection with the election of directors, the shares may be voted cumulatively if a shareholder present and voting at the Meeting gives notice at the Meeting and prior to the voting of his or her intention to so vote. Cumulative voting means that a shareholder has the right to vote the number of shares he or she owns as of the record date, multiplied by the number of directors to be elected. This total number of votes may be cast for one nominee or it may be distributed on the same principle among nominees as the shareholder sees fit. If cumulative voting is declared at the Meeting, votes represented by Proxies delivered pursuant to this Proxy Statement may be cumulated in the discretion of the Proxy Holders, in accordance with the recommendations of the Board of Directors.

    Directors are elected by plurality vote. Abstentions and broker non-votes do not have the effect of a vote in opposition to the election of a director. Abstentions are counted toward a quorum which requires a bare majority of outstanding shares.

2



SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    Management of the Company does not know of any persons other than those set forth below who are the beneficial owners of more than 5% of the Company's outstanding Common Stock as of March 31, 2001. The following table sets forth certain information, as of March 31, 2001, concerning the beneficial ownership of the Company's outstanding Common Stock by each of the principal shareholders, the directors and nominees for director of the Company and by all directors and officers(1) of the Company as a group.

Name and Title Other Than Director

  Common
Stock
Beneficially
Owned(2)(3)

  Percent
of
Class(3)

 
Fred M. Edwards   16,571 (4) .60 %
H. Anthony Gartshore   38,719 (5) 1.40 %
  President          
Gary M. Horgan   5,571 (6) .20 %
Thomas E. McCullough   32,573 (7) 1.18 %
  Chief Financial Officer and Secretary          
Lawrence J. Sherman   68,600 (8) 2.49 %
  Vice Chairman of the Board          
Jack A. Sweeney   1,322,796 (9) 47.76 %
  Chairman of the Board, Chief Executive Officer and principal shareholder          
Marilyn J. Sweeney   21,200   .77 %
All Directors and Officers as a Group (7 in Number)   1,506,030 (10) 53.73 %

Barry L. Gutterman as Special Trustee of the New Moon Trust

 

192,000

(11)

6.97

%
  Principal shareholder          
Lottie Walker and Nate Walker and Linda Goodrich as trustees of the
Six Point Trust
  214,200 (12) 7.77 %
  Principal shareholder          
Steven J. Sweeney as Trustee of the Steven John Sweeney Trust, the Patricia Lynne Sweeney Trust and the Cynthia Louise McLean Trust   154,400 (13) 5.60 %
  Principal shareholder          

(1)
The term "officer" means the Chairman of the Board and Chief Executive Officer; and the President; and the Chief Financial Officer and Secretary.

(2)
This figure includes shares beneficially owned, directly or indirectly, together with associates or by or on behalf of minor children or children living at the residence of the director or officer. Unless otherwise indicated, the persons named herein have sole voting power over shares reported.

(3)
Shares subject to options held by directors and officers that were exercisable within 60 days after the Record Date ("vested"), are treated as outstanding for the purpose of computing the number and percentage of outstanding securities of the class owned by such person but not for the purpose of computing the percentage of the class owned by any other person.

(4)
This figure, as well as percent of class, includes, as if currently outstanding, 3,571 shares vested to Mr. Edwards, but which have not been exercised pursuant to the Company's Stock Option Plan.

(5)
This figure, as well as percent of class, includes, as if currently outstanding, 14,285 shares vested to Mr. Gartshore, but which have not been exercised pursuant to the Company's Stock Option Plan. This figure also includes 1,541 shares of the Company's Employee Stock Ownership Plan (the "ESOP") and 2,870 shares held in the Company's 401(k) Plan ("401(k) Plan").

3


(6)
This figure, as well as percent of class, includes, as if currently outstanding, 3,571 shares vested to Mr. Horgan, but which have not been exercised pursuant to the Company's Stock Option Plan. Mr. Horgan disclaims beneficial interest in 80 shares held by him which are not included in this figure.

(7)
This figure, as well as percent of class, includes, as if currently outstanding, 7,142 shares vested to Mr. McCullough, but which have not been exercised pursuant to the Company's Stock Option Plan. This figure also includes 1,708 shares in the ESOP and 4,698 shares held in the 401(k) Plan.

(8)
This figure, as well as percent of class, includes, as if currently outstanding, 5,000 shares vested to Mr. Sherman, but which have not been exercised pursuant to the Company's Stock Option Plan.

(9)
This figure, as well as percent of class, includes, as if currently outstanding, 14,285 shares vested to Mr. Sweeney, but which have not been exercised pursuant to the Company's Stock Option Plan. This figure includes 40,000 shares held by the Sweeney Foundation, 31,319 shares held in the 401(k) Plan and 122,683 shares held as the trustee of the ESOP (the trustee has voting rights over those shares to the extent not exercised by the ESOP participants). While Mr. Sweeney exercises certain voting authority over the ESOP shares, Mr. Sweeney does not participate in the ESOP. Mr. Sweeney's business address is 1801 Century Park East, 8th Floor, Century City, California 90067.

(10)
This figure, as well as percent of class, includes, as if currently outstanding, 47,854 shares vested, or which will vest within sixty (60) days of the Record Date to all officers and directors as a group, but which have not been exercised pursuant to the Company's Stock Option Plan.

(11)
New Moon Trust's business address is c/o Barry L. Gutterman, Special Trustee, 1875 Century Park East, Suite 1500, Los Angeles, California 90067.

(12)
Six Point Trust's business address is 20525 Chatsboro Dr. Woodland Hills, California 91364

(13)
Steven Sweeney has voting power over 154,400 shares but disclaims beneficial interest in all but 49,800 shares. Steven Sweeney's business address is c/o First Regional Bank, 1801 Century Park East, Suite 800, Century City, California 90067.

4



DIRECTORS AND EXECUTIVE OFFICERS

    The following table sets forth the names and certain information as of March 31, 2001, concerning the directors and the officers of the Company:

Name and Title (Other Than Director)

  Age
  Business Experience
During the Past Five Years

  Year First
Appointed
or Elected
Director
of the
Company

Fred M. Edwards   66   Vice Chairman, Stern Fisher Edwards (securities brokerage) President, Fisher Edwards Investment Counsel (investment advisors)   1999

H. Anthony Gartshore
President

 

57

 

President, First Regional Bancorp and First Regional Bank

 

1996

Gary M. Horgan

 

53

 

Attorney, Horgan, Rosen, Beckham & Coren, L.L.P.

 

1997

Thomas E. McCullough
Chief Financial Officer and Secretary

 

48

 

Chief Financial Officer and Secretary, First Regional Bancorp; Executive Vice President, Chief Operating Officer and Chief Financial Officer, First Regional Bank

 

1993

Lawrence J. Sherman
Vice Chairman of the Board

 

77

 

President, Sherman Industries, Inc. (investments)

 

1981

Jack A. Sweeney
Chairman of the Board and Chief Executive Officer

 

71

 

Chairman of the Board and Chief Executive Officer, First Regional Bancorp; Chairman of the Board and Chief Executive Officer, First Regional Bank

 

1981

Marilyn J. Sweeney

 

60

 

Health Care Professional

 

2001

5



PROPOSAL 1
ELECTION OF DIRECTORS

Nominees

    The Company's Bylaws currently provide for a range of five (5) to nine (9) directors, and permit the exact number of directors of the Company to be fixed by Board or shareholder action. The Board of Directors has fixed the number of directors at seven (7). The seven (7) persons named below, all of whom are currently members of the Company's Board of Directors, will be nominated for election as directors to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have qualified. Votes will be cast in such a way as to effect the election of all seven (7) nominees, or as many thereof as possible under the rules of cumulative voting (see "Voting Securities" herein). In the event that less than all seven nominees can be elected under cumulative voting, votes represented by proxies solicited by the Board of Directors will be cast as determined by majority vote of the Board of Directors and the proxy holders shall be obligated to follow the instructions of the Board pertaining thereto. In the event that any of the nominees should be unable to serve as a director, it is intended that the Proxy will be voted for the election of such substitute nominees, if any, as shall be designated by the Board of Directors. The Board of Directors has no reason to believe that any of the nominees will be unavailable to serve if elected. Additional nominations can only be made by complying with the notice provision set forth in the Bylaws of the Company, an extract of which is included in the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement. This Bylaw provision is designed to give the Board of Directors advance notice of competing nominations, if any, and the qualifications of competing nominees, and may have the effect of precluding third-party nominations if the notice provisions are not followed.

    None of the directors or officers of the Company were selected pursuant to any arrangement or understanding, other than with the directors and officers of the Company and the Bank, acting within their capacities as such. Except with respect to Jack A. Sweeney and Marilyn J. Sweeney, who are husband and wife, there are no family relationships between the directors and officers of the Company, and none of the directors or officers of the Company serve as directors of any company which has a class of securities registered under, or which is subject to the periodic reporting requirements of, the Securities Exchange Act of 1934. Mr. Edwards is a principal in a company registered under the Investment Company Act of 1940 (see "Directors and Executive Officers," pg. 5).

    The following seven persons are the nominees for election to the Company's Board of Directors:

Fred M. Edwards   Thomas E. McCullough
H. Anthony Gartshore   Lawrence J. Sherman
Gary M. Horgan   Jack A. Sweeney
    Marilyn J. Sweeney

Board of Directors and Committees of the Board

    During 2000, the Board of Directors of the Company held twelve (12) regular meetings and the Board of Directors of the Bank held twelve (12) regular meetings.

    The Boards of Directors of the Company has an Audit Committee composed of Messrs. Edwards, Horgan and Sherman. This committee is responsible for overseeing internal audit functions and for interfacing with the Company's independent certified public accountants, Deloitte & Touche LLP. The Audit Committee met twelve (12) times during 2000.

    The Company has a Stock Option Committee, which consists of Messrs. Edwards, Horgan and Sherman. The Committee makes recommendations regarding the granting of stock options, authorizes specific grants and establishes the terms and conditions upon which stock options can be exercised.

    The Company's Board of Directors does not have a standing nominating committee.

    During 2000 no director of the Company attended less than 75% of the aggregate meetings of the Company's Board of Directors and its Committees on which such director served during the period for which they had been a director.

6



COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT

    Directors who are also officers of the Bank or the Company do not receive fees for service on the Board or the Committees. During 2000, each outside director received $400 for each regular meeting of the Board of Directors of the Bank attended; $100 for each meeting of the Company's Board attended; and $300 for each meeting of the Loan Committee attended. Lawrence J. Sherman receives a monthly payment of $1,500 for his work as director of the Company's shareholder relations program. On this basis, the directors received the following aggregate fees during 2000: Fred M. Edwards, $19,200; Gary M. Horgan, $9,900; and Lawrence J. Sherman, $38,700.

    The following table sets forth a summary of annual and long term compensation for the Chief Executive Officer of the Company and all executive officers with compensation, paid or accrued, in excess of $100,000.

 
   
   
   
   
  Long Term Compensation
   
 
 
  Annual Compensation
  Awards
  Payouts
   
 
Name and Principal Position

  Year
  Salary(14)
  Bonus
  Other Annual Compensation(15)
  Restricted
Stock
Awards

  Option
Shares
SAR's(16)

  LTIP
Payouts

  All Other
Compensation

 
Jack A. Sweeney
Chairman of the Board and
Chief Executive of the
Company and the Bank
  2000
1999
1998
  $
$
$
317,804
282,906
265,237
  $
$
$
140,000
25,000
20,000
  N/A
N/A
N/A
  None
None
None
  None
None
None
  N/A
N/A
N/A
  $


49,345

N/A
N/A
(17)



H. Anthony Gartshore
President of the Company
and the Bank

 

2000
1999
1998

 

$
$
$

190,098
165,957
139,717

 

$
$
$

115,000
20,000
15,000

 

N/A
N/A
N/A

 

None
None
None

 

None
None
None

 

N/A
N/A
N/A

 

 

N/A
N/A
N/A

 

Thomas E. McCullough
Chief Financial Officer and
Secretary of the Company,
Executive Vice President and
Chief Operating Officer of
the Bank

 

2000
1999
1998

 

$
$
$

168,515
154,500
138,939

 

$
$
$

120,000
15,000
15,000

 

N/A
N/A
N/A

 

None
None
None

 

None
None
None

 

N/A
N/A
N/A

 

 

N/A
N/A
N/A

 

(14)
These figures include the Company's matching contributions to the 401(k) Plan ($5,054 (2000), $4,906 (1999), and $5,004 (1998) for Mr. Sweeney; $4,213, $4,454, and $3,194 for Mr. Gartshore; and $4,310, $4,026, and $0 for Mr. McCullough), the Company's matching contributions to the Income Deferral Plan ($87,750, $78,000, and $70,200 for Mr. Sweeney; $5,100, $4,500, and $3,900 for Mr. Gartshore; and $2,250, $2,100, and $2,010 for Mr. McCullough), and the fair market value ($7.00 per share) of the shares of the Company's common stock allocated to Messrs. Gartshore ($10,786, $7,003, and $2,092) and McCullough ($11,955, $8,374, and $2,647) pursuant to the Employee Stock Ownership Plan in 2000, 1999 and 1998, respectively.

(15)
The Bank furnishes and plans to continue to furnish to certain officers the use of Bank-owned automobiles which are used primarily for Bank business purposes. The Bank has provided and plans to continue to provide certain of its officers with specified life and medical insurance benefits. Since portions of the automobile expenses and insurance premiums attributable to personal use are not believed to exceed $50,000 or ten percent (10%) of the compensation reported in the table per individual, such amounts have not been included in the foregoing figures.

(16)
Option shares only; the Company has not issued any Stock Appreciation Rights ("SARs").

(17)
Income attributed to the economic value of that portion of a split dollar insurance policy which benefits a life insurance trust established by Mr. Sweeney. The trust reimbursed the Company for $27,140 of this amount.

7


Stock Options

    The following table sets forth certain information regarding stock options granted during 2000 to the Chief Executive Officer and all executive officers with compensation in excess of $100,000. When these options were granted, the same number of options which had been granted in December 1999 were cancelled. The Company has not issued Stock Appreciation Rights ("SARs").

Name

  Options
Granted
During
2000

  Percentage
of Total
Options
Granted to
Employees
During 2000

  Exercise
Price

  Expiration
Date

Jack A. Sweeney   100,000   36.36 % $ 7.25   1/20/10
H. Anthony Gartshore   100,000   36.36 %   7.25   1/20/10
Thomas E. McCullough   50,000   18.18 %   7.25   1/20/10

    The following table sets forth certain information regarding stock options exercised during 2000 by the Chief Executive Officer and all executive officers with compensation in excess of $100,000.

 
   
   
   
  Value of Unexercised
In the Money
Options at 12/31/00(21)

 
   
   
  Number of Unexercised
Options at 12/31/00

 
  Shares
Acquired
on Exercise

   
Name

  Value
Realization

  Exercisable/
Unexercisable

  Exercisable/
Unexercisable

Jack A. Sweeney   30,000   $ 151,800 (18) 0/100,000   0/$93,750
H. Anthony Gartshore   18,373   $ 121,629 (19) 0/100,000   0/$93,750
Thomas E. McCullough   3,596   $ 25,622 (20) 0/50,000   0/$46,875

(18)
Based on a fair market price of $7.06 per share at time of exercise.

(19)
Based on a fair market price range of $7.13—8.50 per share at time of exercise.

(20)
Based on a fair market price of $7.125 per share at time of exercise.

(21)
Based on a closing price on December 31, 2000 of $8.1875 per share.

401(k) Plan and Employee Stock Ownership Plan

    The Company sponsors a defined contribution 401(k) Plan benefiting substantially all employees. At the discretion of the Board of Directors, the Company matches employee contributions. Currently, the Company provides 50% matching up to the first 6% of wages contributed by an employee. Company contributions are used to buy the Company's common stock on the open market for allocation to the employee's accounts in the 401(k) Plan. The Company contributed approximately $88,000 in 2000.

    In 1998, the Company established for eligible employees an Employee Stock Ownership Plan and Trust ("ESOP"). Eligible full-time and part-time employees employed with the Bank who have been credited with at least 1,000 hours during a 12-month period and who have attained age 21 are eligible to participate.

    Shares of the Company's common stock purchased by the ESOP are held in a trust account for allocation among participants as the loan is repaid. The number of shares allocated each plan year is dependent upon the ratio of that year's total loan payment to the aggregate payments scheduled to occur throughout the term of the loan. The annual allocation of shares is apportioned among participants on the basis of compensation in the year of allocation. ESOP benefits generally become 100% vested after an employee completes seven years of credited service. Benefits are payable upon death, retirement, or disability. The number of shares of common stock allocated to employee accounts was 27,317 shares at December 31, 2000.

8


Certain Transactions

    Some of the directors, officers and principal shareholders of the Company and companies with which they are associated are customers of, and have had banking transactions with, the Bank in the ordinary course of the Bank's business and the Bank expects to have banking transactions with such persons in the future. In Management's opinion, all loans and commitments to lend included in such transactions were made in compliance with applicable laws on substantially the same terms, including interest rates, collateral and repayment schedule, as those prevailing for comparable transactions with other persons of similar creditworthiness and did not involve more than a normal risk of collectibility nor contained terms unfavorable to the Bank.

    Mr. Horgan, a director of the Company and the Bank, is a partner in the law firm of Horgan, Rosen, Beckham & Coren. That firm, among other law firms, provides legal services to the Company and the Bank and was paid $15,647 by the Company and $73,694 by the Bank during 2000.

9



AUDIT COMMITTEE REPORT

    The role of the Company's Audit Committee is to assist the Board of Directors in its oversight of the Company's financial reporting process. The Board of Directors, in its business judgment, has determined that all members of the Audit Committee are "independent" pursuant to the applicable listing standards of the National Association of Securities Dealers. The Board of Directors has not adopted a written charter for the Audit Committee.

    In the performance of its oversight function, the Audit Committee has considered and discussed the audited financial statements with management and the independent auditors. The Audit Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standard No. 61, Communication with Audit Committees, as currently in effect. Finally, the Audit Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board No. 1, Independence Discussions with Audit Committees, as currently in effect, and written confirmations from management with respect to other non-audit services provided by the auditors. The Audit Committee has considered whether other non-audit services provided by the independent auditors to the Company are compatible with maintaining the auditors' independence and has discussed with the auditors their independence.

    Members of the Audit Committee rely, without independent verification, on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the Audit Committee's oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee's considerations and discussions referred to above do not assure that the audit of the Company's financial statements have been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles, or that the Company's auditors are in fact "independent." The Audit Committee relies upon the independent auditors to make such evaluations.

    Based on the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000 to be filed with the Securities and Exchange Commission.

  SUBMITTED BY THE AUDIT COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS

 

Lawrence J. Sherman, Committee Chairman
  Fred M. Edwards
  Gary M. Horgan

 

Dated: April 10, 2001

10



INDEPENDENT ACCOUNTANTS

    The firm of Deloitte & Touche, LLP, served as independent public accountants for the Company and the Bank for 2000, and will continue in those capacities in 2001. It is anticipated that a representative of Deloitte & Touche, LLP will be present at the Meeting to respond to appropriate questions from shareholders. In addition to audit services, Deloitte & Touche, LLP performed selected non-audit services, including assisting in the preparation of the Company's tax returns, review of quarterly reports filed with the Securities and Exchange Commission on Form 10-Q and other regulatory reports. All services rendered by Deloitte & Touche, LLP were approved by the Audit Committee of the Company who considered the possible effect of each such service on the independence of Deloitte & Touche, LLP.

Audit Fees

    The aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements for the year ended December 31, 2000, including reviews of the financial statements included in the Company's Quarterly Reports on Form 10-Q, amounted to $64,500.

Financial Information Systems Design and Implementation of Fees

    The Company did not incur any fees with respect to services rendered by its independent accountants regarding financial systems design and implementation.

All Other Fees

    The aggregate fees billed for all other services (principally the preparation of tax returns) rendered to the Company by Deloitte & Touche, LLP amounted to $23,550.


SHAREHOLDER PROPOSALS

    The deadline for shareholders to submit proposals to be considered for inclusion in the Proxy Statement for the Company's 2002 Annual meeting of Shareholders is December 31, 2001.


SECTION 16 (a) COMPLIANCE

    Pursuant to Section 16 (a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission ("SEC") regulations, the Company's directors, certain officers, and greater than 10 percent shareholders are required to file reports of ownership and changes in ownership with the SEC and to furnish the Company with copies of all such reports they file.

    Based solely on its review of copies of such reports received or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors, officers and 10 percent shareholders were satisfied.


OTHER MATTERS

    The Proxy confers discretionary authority to vote on any matter if the Company did not have notice of the matter at least 45 days before the date on which the Company first mailed its Proxy Materials for the prior year's Annual Meeting of Shareholders. The Company mailed its Proxy Materials for the 2000 Annual Meeting on April 10, 2000 and, accordingly, discretionary authority is conferred to the persons named in the accompanying Proxy to vote on any matter notice of which is not received until after February 24, 2001.

    The Company's Board of Directors does not know of any matters to be presented at the Meeting other than those set forth above. However, if other matters come before the Meeting, it is the intention

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of the persons named in the accompanying Proxy to vote said Proxy in accordance with the recommendations of the Company's Board of Directors on such matters, and discretionary authority to do so is included in the Proxy.

    MANAGEMENT OF THE COMPANY WILL SUPPLY WITHOUT COST, UPON WRITTEN REQUEST, A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K INCLUDING FINANCIAL STATEMENTS AND SCHEDULES BUT WITHOUT EXHIBITS. SAID REQUEST SHOULD BE DIRECTED TO JACK A. SWEENEY, CHAIRMAN, FIRST REGIONAL BANCORP, 1801 CENTURY PARK EAST, 8TH FLOOR, CENTURY CITY, CALIFORNIA 90067.

  First Regional Bancorp

 

Thomas E. McCullough, Secretary
  First Regional Bancorp

Dated: April 10, 2001

 

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FIRST REGIONAL BANCORP
PROXY   ANNUAL MEETING OF SHAREHOLDERS MAY 17, 2001   PROXY

  The undersigned shareholder of First Regional Bancorp (the "Company") hereby nominates, constitutes and appoints Jack A. Sweeney and Lawrence J. Sherman, and each of them, the attorney, agent, and proxy of the undersigned, with full powers of substitution, to vote all stock of the Company which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Company to be held on Thursday, May 17, 2001, at 11:00 a.m. in the Board Room of First Regional Bank, 8th Floor, 1801 Century Park East, Century City, California, and at any and all adjournments thereof, as fully and with the same force and effect as the undersigned might or could do if personally present thereat, as follows:

Please mark your votes as indicated in this example /x/
1.   Election of Directors. Electing the following seven persons named below and in the Proxy Statement dated April 10, 2001, accompanying the Notice of said Meeting, to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have qualified:   AUTHORITY GIVEN / /   AUTHORITY WITHHELD / /

Fred M. Edwards, H. Anthony Gartshore, Gary M. Horgan, Thomas E. McCullough, Lawrence J. Sherman, Jack A. Sweeney, Marilyn J. Sweeney

(INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME, BUT NOT ALL OF THE NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX "AUTHORITY GIVEN" AND YOU SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE IN THE SPACE PROVIDED BELOW:


2.   Other Business. To transact such other business as may properly come before the Meeting and any adjournment or adjournments thereof.

PLEASE SIGN AND DATE THE OTHER SIDE


THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON PROPOSAL 1. THE PROXY CONFERS AUTHORITY AND SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS, UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTION. THE PROXY ALSO CONFERS AUTHORITY TO CAST VOTES IN SUCH A WAY AS TO EFFECT THE ELECTION OF ALL SEVEN NOMINEES, OR AS MANY THEREOF AS POSSIBLE UNDER THE RULES OF CUMULATIVE VOTING, IF SHARES ARE VOTED CUMULATIVELY AT THE MEETING. IN ALL OTHER MATTERS, IF ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.

  (Please date this Proxy and sign your name as it appears on the stock certificates. Executors, administrators, trustees, etc., should give their full titles. All joint owners should sign.)

  I do / /  do not / / expect to attend the Meeting.

  Dated:     , 2001
     
 

 


(Number of Shares)

 


(Please Print Your Name)

 


(Signature of Shareholder)

 


(Please Print Your Name)

 


(Signature of Shareholder)
  THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND MAY BE REVOKED BY THE SHAREHOLDER DELIVERING IT PRIOR TO ITS EXERCISE BY FILING WITH THE CORPORATE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY APPEARING AND VOTING IN PERSON AT THE MEETING.



QuickLinks

PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 2001 INTRODUCTION
VOTING SECURITIES
SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
PROPOSAL 1 ELECTION OF DIRECTORS
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
AUDIT COMMITTEE REPORT
INDEPENDENT ACCOUNTANTS
SHAREHOLDER PROPOSALS
SECTION 16 (a) COMPLIANCE
OTHER MATTERS