UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.              )

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Filed by a Party other than the Registrant  o
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x	Definitive Proxy Statement
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First Regional Bancorp
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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1801 CENTURY PARK EAST
CENTURY CITY, CALIFORNIA 90067

NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 16, 2006

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 2006 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 90067 on Tuesday, May 16, 2006, at 11:00 a.m., for the purpose of considering and voting upon the following matters:

1.     Election of Directors. Electing the following four (4) persons to the Board of Directors (Class 2 Directors) to serve until the 2008 Annual Meeting of Shareholders and until their successors are elected and have qualified.

Class 2

Fred M. Edwards
H. Anthony Gartshore
Lawrence J. Sherman
Jack A. Sweeney

2.     2005 Stock Option Plan.  Approving the Company's 2005 Stock Option Plan covering 200,000 shares of the Company's Common Stock, as more fully described in the Company's 2006 Proxy Statement.

3.     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, 2006 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,Corporate Secretary
	First Regional Bancorp
Dated: April 28, 2006

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

“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. YOU MAY REVOKE YOUR PROXY PRIOR TO THE TIME IT IS EXERCISED BY NOTIFYING THE SECRETARY OF THE COMPANY IN WRITING OF YOUR 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.

PROXY STATEMENT
2006 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2006

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of Proxies for use at the 2006 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 90067 on Tuesday, May 16, 2006, at 11:00 a.m., and at any and all adjournments thereof.

This Proxy Statement and the enclosed form of proxy were first sent to shareholders eligible to receive notice of and vote at the Meeting on or about April 28, 2006.

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

1.Election of Directors. Electing the following four (4) persons to the Board of Directors (Class 2 Directors) to serve until the 2008 Annual Meeting of Shareholders and until their successors are elected and have qualified.

Class 2

Fred M. Edwards
H. Anthony Gartshore
Lawrence J. Sherman
Jack A. Sweeney

2.     2005 Stock Option Plan.  Approving the Company's 2005 Stock Option Plan covering 200,000 shares of the Company's Common Stock, as more fully described in the Company's 2006 Proxy Statement.

3.Other Business. Transacting such other business as may properly come before the Annual 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 PROPOSAL 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 4,088,009 shares of the Company’s Common Stock on March 31, 2006, 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 1,500as 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. Pursuant to the Company’s bylaws, shares may not be cumulated for purposes of electing 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.

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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, 2006. The following table sets forth certain information, as of March 31, 2006, concerning the beneficial ownership of the Company’s outstanding Common Stock by each of the principal shareholders, the directors and director nominees of the Company and by all directors and named executive officers (1) of the Company as a group.

Name and Title	Common Stock Beneficially Owned(2)(3)			Percent of Class(3)
Fred M. Edwards		37,850	(4)		*
Director
H. Anthony Gartshore		108,138	(5)		2.59	%
President and Director
Gary M. Horgan		19,500	(6)		*
Director
Thomas E. McCullough		76,818	(7)		1.86	%
Corporate Secretary and Director
Richard E. Schreiber		7,142	(8)		*
Director
Lawrence J. Sherman		66,300	(9)		1.61	%
Vice Chairman of the Board
Jack A. Sweeney		1,194,640	(10)		28.61	%
Chairman of the Board, Chief Executive Officer and principal shareholder
Steven J. Sweeney		149,566	(11)		3.65	%
General Counsel
Elizabeth Thompson		5,446	(12)		*
Chief Financial Officer
All Directors and Officers as a Group (9 in Number)		1,665,400	(13)		37.99	%
Wellington Management Company, LLP		342,307	(14)		8.37	%
Capital Research and Management Company		229,710	(15)		5.62	%

      *   Less than 1%.

   (1)   The named executive officers, as determined pursuant to Item 402(a)(3) of Regulation S-K, include the Company’s Chairman of the Board and Chief Executive Officer, President, Corporate Secretary, General Counsel and Chief Financial Officer. The address of each director and named executive officer is c/o First Regional Bancorp, 1801 Century Park East, Century City, California 90067.

   (2)   This figure includes shares beneficially owned, as determined in accordance with Rule 13d-3 under the Securities and Exchange Act of 1934. 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.

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   (4)   This figure, as well as percentage of class, includes as if currently outstanding, 20,000 shares underlying vested but unexercised stock options granted to Mr. Edwards pursuant to the Company’s 1999 Stock Option Plan.

   (5)   This figure includes 3,873 shares of the Company’s Employee Stock Ownership Plan (the “ESOP”) and 4,314 shares held in the Company’s 401(k) Plan (“401(k) Plan”). This figure, as well as percentage of class, also includes as if currently outstanding, 87,428 shares underlying vested but unexercised stock options granted to Mr. Gartshore pursuant to the Company’s 1999 Stock Option Plan.

   (6)   This figure, as well as percentage of class, includes as if currently outstanding, 13,500 shares underlying vested but unexercised stock options granted to Mr. Horgan pursuant to the Company’s 1999 Stock Option Plan. Mr. Horgan disclaims beneficial interest in 80 shares held by him which are not included in this figure.

   (7)   This figure includes 4,027 shares in the ESOP and 8,910 shares held in the 401(k) Plan. This figure, as well as percentage of class, also includes as if currently outstanding, 44,856 shares underlying vested but unexercised stock options granted to Mr. McCullough pursuant to the Company’s 1999 Stock Option Plan.

   (8)   This figure includes 7,142 shares underlying vested but unexercised stock options granted to Mr. Schreiber pursuant to the Company’s 1999 Stock Option Plan.

(9)   This figure, as well as percentage of class, includes as if currently outstanding 28,000 shares underlying vested but unexercised stock options granted to Mr. Sherman pursuant to the Company’s 1999 Stock Option Plan.

(10)   This figure includes 32,000 shares held by the Sweeney Foundation, over which Mr. Sweeney shares voting and investment power, 31,374 shares held in the 401(k) Plan and 43,533 shares held as the trustee of the ESOP. While Mr. Sweeney exercises voting power over unallocated ESOP shares, Mr. Sweeney does not participate beneficially in the ESOP. Mr. Sweeney’s business address is 1801 Century Park East, 8th Floor, Century City, California 90067. This figure, as well as percentage of class, includes as if currently outstanding, 87,428 shares underlying vested but unexercised stock options granted to Mr. Sweeney pursuant to the Company’s 1999 Stock Option Plan.

(11)   This figure includes 33,000 shares held by the Steven John Sweeney Irrevocable Trust, of which Steven J. Sweeney is the sole trustee and sole beneficiary. This figure also includes 41,000 shares held by the Patricia Lynne Sweeney Irrevocable Trust and 36,000 shares held by the Cynthia Louise McLean Irrevocable Trust, of which trusts Steven J. Sweeney serves as sole trustee but not beneficiary. This figure also includes as if currently outstanding 7,142 shares underlying vested but unexercised stock options granted to Steven J. Sweeney pursuant to the Company’s 1999 Stock Option Plan. This figure also includes 424 shares in the ESOP and 32,000 shares held by the Sweeney Foundation, for which Steven J. Sweeney shares voting and investment power.

(12)   This figure, as well as percentage of class, includes as if currently outstanding 284 shares underlying vested but unexercised stock options granted to Ms. Thompson pursuant to the Company’s 1999 Stock Option Plan. This figure also includes 1,551 shares in the ESOP and 1,311 shares held in the 401(k) Plan.

(13)   This figure, as well as percent of class, also includes, as if currently outstanding, 295,780 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 1999 Stock Option Plan.

(14)   Wellington Management Company, LLP (“Wellington Management”) is an investment adviser registered under the Investment Advisers Act of 1940, as amended. Certain of Wellington Management’s client accounts hold securities of the Company. In its capacity as investment adviser or investment sub-adviser to such accounts, under Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 promulgated thereunder, Wellington Management may be deemed to share beneficial ownership of such securities. Wellington Management’s address is 75 State Street, Boston, Massachusetts 02109.

(15)   Capital Research and Management Company, an investment adviser registered under the Investment Advisers Act of 1940, acts as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. In such capacity, Capital Research and Management Company is deemed to be the beneficial owner of 229,710 shares or 5.62% of the 4,088,009 shares of the Company’s common stock outstanding as of March 31, 2006. Capital Research and Management Company’s address is 333 South Hope Street, 55th Floor, Los Angeles, California 90071.

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DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and certain information as of March 31, 2006, concerning the directors and the named executive officers of the Company:

	Age	Business Experience During the Past Five Years	Year First Appointed or Elected Director or Officer of the Company
Fred M. EdwardsDirector	71	Vice Chairman, Stern Fisher Edwards (securities brokerage); President, Fisher Edwards Investment Counsel (investment advisors)		1999
H. Anthony GartshorePresident and Director	62	President, First Regional Bancorp and First Regional Bank		1996
Gary M. Horgan Director	58	Partner, Horgan, Rosen, Beckham & Coren, L.L.P. (law firm)		1997
Thomas E. McCullough Corporate Secretary and Director	53	Corporate Secretary, First Regional Bancorp; Executive Vice President and Chief Operating Officer, First Regional Bank		1993
Richard E. Schreiber Director	65	Partner, Tatum, LLC (professional services firm) since June 2003; Director of Financial Projects of Kaiser Foundation Health Plan, Inc. (HMO), from February 1999 to February 2003		2003
Lawrence J. Sherman Vice Chairman of the Board	82	Vice Chairman, First Regional Bancorp		1981
Jack A. Sweeney Chairman of the Board and Chief Executive Officer	76	Chairman of the Board and Chief Executive Officer of First Regional Bancorp and First Regional Bank		1981
Steven J. Sweeney General Counsel	41	General Counsel, First Regional Bancorp; Executive Vice President and General Counsel, First Regional Bank		2003	(16)
Elizabeth Thompson Chief Financial Officer	45	Chief Financial Officer of First Regional Bancorp and First Regional Bank		2003	(17)

(16)   Steven J. Sweeney was appointed a Director of the Company’s subsidiary, First Regional Bank, in May 2003. Mr. Sweeney became the Bank’s Executive Vice President and General Counsel effective July 2003, and was later appointed General Counsel of First Regional Bancorp. From 1996 until June 2003, Mr. Sweeney, practiced law with the law firm of Skadden, Arps, Slate, Meagher & Flom LLP and in private practice.

(17)   Elizabeth Thompson was appointed the Company’s and the Bank’s Chief Financial Officer effective January 2003. From 1998 until December 2002, Ms. Thompson served as the Bank’s Controller.

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PROPOSAL 1

ELECTION OF DIRECTORS

Number of Directors; Classification of Board

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 Company’s Bylaws provide for a classified board of directors. In 2005, three Class 1 directors, Gary M. Horgan, Thomas E. McCullough and Richard E. Schreiber, were elected to terms expiring in 2007. The four Class 2 directors, Jack A. Sweeney, H. Anthony Gartshore, Lawrence J. Sherman and Fred M. Edwards, were elected in 2004 to terms expiring in 2006.

Nominees

The Board of Directors will nominate for election as Directors to serve until the 2008 Annual Meeting of Shareholders and until their successors are elected and have qualified:

Fred M. Edwards
H. Anthony Gartshore
Lawrence J. Sherman
Jack A. Sweeney

all of whom are currently members of the Company’s Board. 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.

Selection and Evaluation of Director Candidates

Nomination of Directors

The Company’s Board of Directors does not have a standing nominating committee. The independent members of the Board assume the responsibility for identifying candidates for membership on the Board and make determinations as to the qualifications of candidates based on their character, judgment, and business experience, as well as their ability to add to the Board’s existing strengths. After identifying appropriate candidates for membership on the Board, the independent directors recommend their candidates for nomination to the full Board. The independent directors are Fred M. Edwards, Gary M. Horgan, Lawrence J. Sherman and Richard E. Schreiber. The Board has adopted a resolution addressing the nominations process.

The Board’s policies with respect to director nominees have been to consider, among other factors: (a) the business experience of the candidate; (b) his or her reputation and influence in the community and

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standards of moral and ethical responsibility; and (c) availability and willingness to devote time to fully participate in the work of the Board and its committees.

In considering a candidate, the Board conducts a confidential background check, review of financial statements and business history, in-depth interviews with the candidate, and contacts with references and knowledgeable people in the local business and financial community. The criteria have also included having a reasonable level of education and business experience consistent with the duties and responsibilities of a financial institution director, at least some familiarity with banking, and a willingness to participate in training and educational opportunities for bank directors.

Shareholder Nominees

The Company’s Board of Directors will consider nominees to the Board proposed by shareholders, although the Board has no formal policy with regard to shareholder nominees as it considers all nominees on their merits, as discussed above. Any shareholder nominations proposed for consideration by the Board should include the nominee’s name and qualifications for Board membership and should be addressed to:

Thomas E. McCullough
Corporate Secretary
First Regional Bancorp
1801 Century Park East
Century City, California 90067

In addition, the Bylaws of the Company permit shareholders to nominate directors for consideration at an Annual Shareholders’ Meeting. For a description of the process for nominating directors in accordance with the Bylaws, please see the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.

Board of Directors and Committees of the Board

During 2005, the Board of Directors of each of the Company and the Bank held twelve (12) regular meetings and one (1) special meeting.

The Board of Directors of the Company has an Audit Committee composed of Messrs. Edwards, Schreiber 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 twenty-two (22) times during 2005.

The Company has a Compensation Committee, which consists of Messrs. Edwards, Horgan, Schreiber and Sherman. The Committee is responsible for reviewing and approving the Company’s overall compensation and benefit programs, and for administering the compensation of the Company’s and Bank’s executive and senior officers consistent with the Company’s business plans, strategies and goals. The Compensation Committee met four (4) times during 2005.

The Company’s Board of Directors does not have a standing nominating committee. After identifying appropriate candidates for membership on the Board, the independent directors recommend their candidates for nomination to the full Board. The independent directors are Fred M. Edwards, Gary M. Horgan, Lawrence J. Sherman and Richard E. Schreiber.

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During 2005, 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.

The Company’s Board of Directors has determined that a majority of the directors on the Board are “independent,” as that term is defined in the listing standards of the Nasdaq Stock Market, Inc. (“Nasdaq”). These independent directors include Fred M. Edwards, Gary M. Horgan, Richard E. Schreiber and Lawrence J. Sherman, comprising a majority of the Company’s Board of Directors, which currently has seven members.

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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. Currently, each outside director receives $2,500 for each regular meeting of the Board of Directors of the Bank attended, $500 for each special meeting of the Bank’s Board attended, and no compensation for meetings of the Company's Board.  In addition, outside directors who are members of the Company’s Audit Committee receive $500 for each meeting of the Audit Committee attended; and outside directors who are members of the Bank’s Senior Loan Committee receive $600 for each meeting of the Senior Loan Committee attended. Lawrence J. Sherman also receives a monthly retainer of $2,000 for serving as Vice Chairman. The directors of the Company received the following aggregate fees during 2005: Fred M. Edwards, $39,300; Gary M. Horgan, $16,500; Richard E. Schreiber, $40,700; and Lawrence J. Sherman, $67,300.

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 of the Company with compensation, paid or accrued, in excess of $100,000.

		Annual Compensation				All Other
Name and Principal Position	Year	Salary(18)		Bonus		Compensation(19)
Jack A. Sweeney	2005	$	799,535	$	425,000		$76,482	(20)
Chairman of the Board andChief Executive Officer	2004	$	659,770	$	300,000		$69,511	(20)
of the Company and the Bank	2003	$	492,391	$	180,000		$63,098	(20)
H. Anthony Gartshore	2005	$	444,097	$	300,000		N/A
President of the Company and the Bank	2004	$	337,437	$	245,000		N/A
	2003	$	271,619	$	150,000		N/A
Thomas E. McCullough	2005	$	321,096	$	250,000		N/A
Corporate Secretary of the Company; Executive Vice	2004	$	271,140	$	190,000		N/A
President and Chief Operating Officer of the Bank	2003	$	215,888	$	120,000		N/A
Steven J. Sweeney	2005	$	166,409	$	50,000		N/A
General Counsel of the Company; Executive Vice	2004	$	141,475	$	20,000		N/A
President and General Counsel of the Bank(21)	2003	$	60,000	$	0		N/A
Elizabeth Thompson	2005	$	124,601	$	15,000		N/A
Chief Financial Officer of the Company and the Bank	2004	$	116,304	$	5,000		N/A
	2003	$	104,507	$	9,000		N/A

(18)  These figures include the Company’s matching contributions to the 401(k) Plan ($7,235 (2005), $6,470 (2004), $5,891 (2003) for Mr. Jack Sweeney; $7,011, $6,486 and $5,665 for Mr. Gartshore; $7,010, $6,190 and $5,334 for Mr. McCullough; and $3,072, $2,923 and $2,755 for Ms. Thompson), the Company’s matching contribution to the Income Deferral Plan ($222,300 (2005), $183,300 (2004) and $136,500 (2003) for Mr. Jack Sweeney; $70,000, $28,000 and $23,000 for Mr. Gartshore; $27,000, $22,000 and $7,600 for Mr. McCullough; $2,062, $0 and $0 for Mr. Steven Sweeney; and $1,513, $0 and $0 for Ms. Thompson), and the fair market value of the shares of the Company’s common stock allocated pursuant to the Employee Stock Ownership Plan, based upon the closing price of the stock at the time the allocation was made ($17,086 (2005), $22,950 (2004) and $12,954 (2003) for Mr. Gartshore; $17,086, $22,950 and $12,954 for Mr. McCullough; $14,347, $11,475 and $0 for Mr. Steven Sweeney; and $10,015, $11,880 and $6,737 for Ms. Thompson).

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(19)  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 also provided and plans to continue to provide certain of its officers with specified life and medical insurance benefits. In addition, the Bank provided certain of its executive officers with memberships in various clubs and organizations, primarily for business development purposes. Since portions of the automobile expenses, insurance premiums and club memberships 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.

(20)  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. Of these amounts, Mr. Sweeney’s life insurance trust reimbursed the Company $45,090 for 2005, $40,980 for 2004 and $37,200 for 2003.

(21)Steven J. Sweeney joined the Bank as Executive Vice President and General Counsel on July 1, 2003.

Stock Options

No stock options were granted during 2005 to any officers or directors of the Company. The Company has not issued Stock Appreciation Rights (“SARs”).

The following table sets forth certain information regarding stock options exercised during 2005 by the Chief Executive Officer and all executive officers with Compensation in excess of $100,000.

					Number of Unexercised Options at 12/31/05	Value of Unexercised Options at 12/31/05
Name	Shares Acquired on Exercise		Value Realization		Exercisable/ Unexercisable	In the Money Exercisable/ Unexercisable(22)
Jack A. Sweeney		0		N/A	87,428/38,572	$	4,831,333 / 1,989,427
H. Anthony Gartshore		0		N/A	87,428/38,572	$	4,831,333 / 1,989,427
Thomas E. McCullough		0		N/A	44,856/22,144	$	2,469,067 / 1,128,353
Steven J. Sweeney		0		N/A	7,142/17,858	$	333,960 / 835,040
Elizabeth Thompson		3,000		147,750	284/716	$	13,280 / 33,480

(22)  Based on market price of $67.55 on December 31, 2005.

401(k) Plan and Employee Stock Ownership Plan

The Company sponsors a defined contribution 401(k) Plan benefitting substantially all employees. At the discretion of the Board of Directors, the Company matches employee contributions. Currently, the Company provides 50% matching with respect 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 $249,000 in 2005.

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.

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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 106,467 shares at December 31, 2005.

Compensation Committee Interlocks and Insider Participation

The Company’s Compensation Committee (the “Committee”) consists of Directors Edwards, Horgan, Schreiber and Sherman, none of whom serve as an officer of the Company. None of the Company’s executive officers served on the board of directors or compensation committee, or equivalent, of another entity, where one of such entity’s executive officers or board members served on the Company’s Committee or its Board of Directors.

Gary M. Horgan, a director of the Company and the Bank, is a partner in the law firm of Horgan, Rosen, Beckham & Coren, LLP. That firm, among other law firms, provides legal services to the Company and the Bank and was paid $89,892 by the Company and the Bank during 2005.

Compensation Committee Report on Executive Compensation

The Committee is responsible for reviewing and approving the Company’s overall compensation and benefit programs, and for administering the compensation of the Company’s executive and senior officers.

The Committee is also responsible for establishing the compensation for the senior executive officers of the Company and its subsidiaries consistent with the Company’s business plans, strategies and goals. The Committee establishes the factors and criteria upon which the executive officers’ compensation is based and how such compensation relates to the Company’s performance, general compensation policies, competitive realities and regulatory requirements.

The primary goal of the Company’s compensation philosophy is to link a substantial portion of executive compensation (particularly the compensation of the CEO and the senior executive officers) to the profitability of the Company. The Committee achieves this goal by tying the annual bonus to what it believes are the most significant measures of profitability: net income and earnings per share, return on equity, return on assets, and asset quality.

The second goal of the compensation philosophy is to attract and retain highly competent executives. The Committee achieves this objective by setting base compensation and incentives at competitive levels and by awarding these officers with stock option grants. Annually, the Committee reviews executive compensation levels paid by competitors of a similar asset size to the Company.

The Committee reviews the base compensation of the CEO and of the executive officers reporting to him. The Committee makes salary determinations for the CEO and, along with the CEO, makes salary recommendations for other members of the Company’s executive management team. The Committee does not tie its base compensation decisions to any particular formulas, measurements or criteria, but members take into account the Company’s performance and the compensation paid by comparable competitors.

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In determining the CEO’s salary for both 2005 and 2006, as well as the bonus for 2005, the Committee focused primarily on the Company’s overall profitability, with additional consideration given to the Company’s growth in net income per share, return on equity and return on assets, as well as asset quality. Based on those factors, the Committee determined that the CEO’s base salary and bonus were appropriate in light of his contribution to the Company’s financial performance.

The Company’s Stock Option Committee has granted stock options to a number of members of senior management, including all of the Company’s executive officers. All options were awarded at the market value of the Company’s common stock on the date of grant. The Company’s Stock Option Committee made these grants as additional incentives to the Company’s senior officers to improve performance and to increase the Company’s stock price. The options have a vesting schedule of at least five years, with an expiration of ten years.

The Committee believes that the Company’s compensation program and compensation levels are effective in attracting, motivating and retaining outstanding executive and senior officers and that they are consistent with the Company’s immediate and long-term goals.

Compensation Committee

Gary M. Horgan, Committee Chairman

Fred M. Edwards

Richard E. Schreiber

Lawrence J. Sherman

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Certain Relationships and Related 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. These transactions include lines of credit of $100,000 each which the Bank has extended to certain of the directors of the Company and the Bank, including Jack A. Sweeney, Lawrence J. Sherman, Fred M. Edwards, H. Anthony Gartshore, Thomas E. McCullough, Marilyn J. Sweeney and Steven J. Sweeney. In the Company’s opinion, all loans and commitments to lend included in such transactions were made in compliance with applicable banking regulations and other laws and 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. In addition, as of December 31, 2005 and 2004, deposits from directors, named executive officers and their affiliates amounted to $2,977,000 and $924,000, respectively.

Gary M. Horgan, a director of the Company and the Bank, is a partner in the law firm of Horgan, Rosen, Beckham & Coren, LLP. That firm, among other law firms, provides legal services to the Company and the Bank and was paid $89,892 by the Company and the Bank during 2005.

Marilyn J. Sweeney, who served as a director of the Company and the Bank, is the wife of Jack A. Sweeney, Chairman of the Board and Chief Executive Officer of the Company and the Bank. For her service as a director of the Company and the Bank, Marilyn J. Sweeney received aggregate fees of $38,900 during 2005.

Steven J. Sweeney, who serves as General Counsel of the Company and Executive Vice President and General Counsel of the Bank, and also as a director of the Bank, is the son of Jack A. Sweeney. During 2005, Steven J. Sweeney received aggregate compensation of $216,409.

During 2000, the Bank purchased two life insurance policies on behalf of Jack A. Sweeney. The policies were fully funded at purchase by payment of one-time premiums on the policies, aggregating $6,000,000, and no further premiums are owed on the policies. The Bank owns the cash surrender value of the policies, which is 100% of the equity value of the policies, with no cash surrender charge. The Bank and the insured’s estate are co-beneficiaries, with each receiving a certain amount upon the death of the insured. At such time, the insured’s estate will receive a death benefit of approximately $5,000,000. The insured reimburses the Bank for the cost of this benefit each year. Also at the time of the insured’s death, the Bank will receive its original investment of $6,000,000 plus an additional amount of return on its investment, currently equal to approximately $1,293,000.

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PROPOSAL 2
RATIFICATION AND APPROVAL OF
THE COMPANY'S 2005 STOCK OPTION PLAN

Introduction

On May 26, 2005, First Regional Bancorp’s Board of Directors adopted the First Regional Bancorp 2005 Stock Option Plan (the “2005 Plan”).  Under the plan, up to 200,000 shares of the Company’s Common Stock may be issued upon the exercise of options granted.  The plan is intended to allow the Company the ability to grant stock options to persons who had not previously been awarded option grants commensurate with their positions, primarily persons hired since the exhaustion of options available for grant under the Company’s previous stock option plans.  The Company’s Board of Directors believes that the plan will assist the Company in attracting and retaining high quality officers and staff, and will provide grantees under the plan with added incentive for high levels of performance and to assist in the effort to increase the Company’s earnings.

The 2005 Plan provides for the grant of "non-qualified stock options" only. The 2005 Plan provides for the issuance of up to 200,000 shares of the Company's Common Stock to officers, directors and key employees of the Company or any subsidiary of the Company, subject to adjustment in the event of certain changes in the capital structure of the Company.  The 2005 Plan is not subject to any of the provisions of the ERISA.

Options Granted Under the 2005 Plan

During May and July of 2005, the Company’s Board of Directors approved initial option grants under the 2005 Plan aggregating 59,000 option shares, all of which grants were made to officers of the company’s subsidiary, First Regional Bank.  None of the grants were made to directors or executive officers of the Company or to directors of First Regional Bank.  All such granted options will vest over seven years and will expire in 2015.  The exercise price of the granted options is $61.50 with respect to 49,000 of the options, and $75 with respect to 10,000 of the options.  Pursuant to such grant, one senior officer of the Company’s subsidiary, First Regional Bank, was awarded an option exercisable into 10,000 shares of the Company’s Common Stock at an exercise price of $61.50.  The 10,000 shares issuable under such option represent 5% of the 200,000 shares available for issuance under the 2005 Plan.  The senior Bank officer is neither a director or an officer of the Company, nor a director of First Regional Bank.  As of the date of this Proxy Statement, no option grants have been made under the 2005 Plan other than the options exercisable into up to 59,000 shares described above.

On April 27, 2006, the closing market price of the Company’s Common Stock on the Nasdaq Stock Market was $90.18.  Accordingly, the 59,000 unissued shares underlying the options granted would have an aggregate market value of $5,320,620 at such price.

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Summary of the 2005 Plan

The following description of the 2005 Plan is intended to highlight and summarize the principal terms of the 2005 Plan, and is qualified in its entirety by the text of the 2005 Plan, a copy of which is included as Appendix A to this Proxy Statement.

Administration.   The 2005 Plan is administered by the Stock Option Committee (the "Committee") consisting of four (4) directors of the Company, appointed from time to time by the Board.  Nonetheless, regardless of whether the Committee is appointed, the Board may act as the Committee, and any action taken by the Board shall be deemed to be action taken by the Committee. Options may be granted only to officers, directors and key employees of the Company and any subsidiary of the Company. Subject to the express provisions of the 2005 Plan, the Committee is authorized to construe and interpret the 2005 Plan, and make all the determinations necessary or advisable for its administration.

Eligible Participants.   The 2005 Plan provides that only officers, directors and key employees of the Company and any subsidiary of the Company are eligible to receive grants of stock options. The Committee is empowered to determine which eligible participants, if any, should receive options, the number of shares subject to each option, and the terms and provision of the option agreements.

Shares Subject to the 2005 Plan.   The 2005 Plan covers 200,000 shares, which constitutes approximately 5% of the current issued and outstanding shares of Common Stock.

Non-Qualified Stock Options.   The 2005 Plan provides for the grant of non-qualified options only. Subject to other limitations set forth in the 2005 Plan, the exercise price, permissible time or times of exercise, and the remaining terms pertaining to any option are determined by the Committee. Subject to limitations set forth in the 2005 Plan, the per share exercise price under any option, generally, shall not be less than 100% of the fair market value of the Common Stock represented by the shares subject to the option.

Terms and Conditions of Options.   Subject to the limitation set forth in the 2005 Plan, options granted thereunder may be exercised in such increments, which need not be equal, and upon such contingencies as the Committee may determine. If an optionee does not exercise an increment of an option in any period during which such increment becomes exercisable, the unexercised increment may be exercised at any time prior to expiration of the option unless the respective stock option agreement provides otherwise.

Subject to earlier termination as may be provided in any optionee's stock option agreement, options granted under the 2005 Plan will expire not later than ten years from the date of grant. Under the terms of the 2005 Plan, the date of grant is deemed to be either: (i) the date fixed by the Committee to be the date of grant; or (ii) if no such date is fixed, the date on which the Committee made its final determination to grant a stock option.

Options granted under the 2005 Plan may not be transferred otherwise than by will or by the laws of descent and distribution, and during his or her lifetime, only the optionee or, in the event of the disability of the optionee, his or her guardian or the conservator of his or her estate may exercise the option.

Subject to the restrictions set forth in the 2005 Plan, an option may be exercised in accordance with the terms of the individual stock option agreement. Full payment by the optionee for all shares as to which the option is being exercised is due and payable at the time of exercise of the option. Payment must be in

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cash and/or, with the prior written approval of the Committee, and subject to any required regulatory approval, in shares of Common Stock of the Company.

An option may be exercised with respect to whole shares only, although fractional share interests may be accumulated and exercised from time to time as whole shares during the term of the option. Options may only be exercised with respect to a minimum of ten whole shares, unless the option agreement requires that a larger number of shares be exercised at any one time or unless fewer than ten shares remain subject to the option at the time of the exercise. Any shares subject to an option which expires or terminates without being exercised become available again for issuance under the 2005 Plan.

Neither an eligible participant nor an optionee has any rights as a shareholder with respect to the shares of Common Stock covered by any option which may be or has been granted to such person, and which is thereafter exercised, until date of issuance of the stock certificate by the Company to such person.

Stock Option Agreement.   The 2005 Plan provides that every grant of an option will be evidenced by a written stock option agreement executed by the Company and the optionee.  Subject to the terms and conditions of the 2005 Plan, the stock option agreement will contain the terms and provisions pertaining to each option so granted, such as exercise price, permissible date or dates of exercise, termination date, and such other terms and conditions as the Committee deems desirable and not inconsistent with the 2005 Plan.

Termination of Employment or Affiliation.   In the event an optionee ceases to be affiliated with the Company or a subsidiary of the Company, for any reason other than disability, death or termination for cause, the stock options granted to such optionee shall expire at the earlier of the expiration dates specified for the options, or ninety (90) days after the optionee ceases to be so affiliated. During such period after cessation of affiliation, the optionee may exercise the option to the extent that it is exercisable as of the date of such termination, and thereafter the option expires in its entirety.

If an optionee's stock option agreement so provides, and if an optionee's status as an eligible participant is terminated for cause, the option held by such person will expire immediately upon such termination, although the Committee may, in its sole discretion, within thirty (30) days of such termination, reinstate the option. If the option is reinstated, the optionee will be permitted to exercise the option only to the extent, for such time, and upon such terms and conditions as if the optionee's status as an eligible participant had been terminated for a reason other than cause, disability or death, as described above.

Terminating Events.   The 2005 Plan and all options previously granted under the 2005 Plan shall terminate upon the consummation of: (i) a dissolution or liquidation of the Company; (ii) a consolidation, reorganization, or merger as a result of which the Company is not the surviving corporation; or (iii) the sale of all or substantially all of the assets of the Company, unless provision is made in connection with such terminating transactions for the assumption or substitution of options by the successor employer, if any.

Notwithstanding the foregoing or any provision in any stock option agreement pertaining to the time of exercise of shares subject to an option, all options granted under the 2005 Plan shall become immediately exercisable in their entirety upon adoption, by the requisite number of outstanding shares of Common Stock, of any plan of: (i) dissolution or liquidation of the Company; (ii) reorganization, merger,

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consolidation; or (iii) sale of all or substantially all of the Company's assets to another corporation which would, upon consummation, result in the termination of an option granted under the 2005 Plan. As a result of these acceleration provisions, even if an outstanding option were not fully vested as to all increments at the time of the event, that option will become fully vested and exercisable.

Amendment and Termination of the 2005 Plan.   The Board of Directors of the Company may at any time suspend, amend or terminate the 2005 Plan, and may, with the consent of the respective optionee, make such modifications to the terms and conditions of outstanding options as it shall deem advisable. The amendment, suspension or termination of the 2005 Plan will not, without the consent of the optionee, alter or impair any rights or obligations under any outstanding option under the 2005 Plan.

Adjustments Upon Changes in Capitalization.   The total number of shares covered by the 2005 Plan and the price, kind and number of shares subject to outstanding options thereunder, will be appropriately and proportionately adjusted by the Committee if the outstanding shares of Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, merger, recapitalization, reclassification, stock split, stock dividend, stock consolidation or otherwise, without consideration to the Company as provided in the 2005 Plan. Fractional share interests of such adjustments may be accumulated, although no fractional shares of stock will be issued under the 2005 Plan.

Please see the 2005 Stock Option Plan, which is included as Appendix A to this Proxy Statement.

Federal Income Tax Consequences

All options granted under the 2005 Plan are intended to be non-qualified stock options. Upon exercise of a stock option, the excess of the fair market value of the acquired shares at the time of exercise over the option exercise price will be treated as ordinary income to the optionee in the year of exercise. The optionee's basis in the shares of Common Stock received will be the sum of the option exercise price and the amount of ordinary income recognized by the optionee from the exercise of the stock option. The optionee's holding period in the shares of Common Stock received will begin on the date received. Upon exercise of such a stock option by transfer of shares of Common Stock already owned by the optionee, applicable Internal Revenue Service rulings provide that the optionee will be deemed to have received an equivalent number of shares of Common Stock in a non-taxable exchange (the "Substituted Common Stock") and the remainder, if any, of the shares of Common Stock will be deemed to have been received in a taxable transaction (the "Non-Substituted Common Stock").  The optionee's basis in the Substituted Common Stock will be the same as the optionee's basis in the previously owned shares, and the optionee's holding period will include the holding period of the previously owned shares. The optionee's basis in the Non-Substituted Common Stock will be the same as the amount of ordinary income recognized by the optionee. The Non-Substituted Common Stock will have a holding period which begins on the date when it is received.

On the disposition of shares of Common Stock received upon exercise of a stock option, the difference between the amount realized and the optionee's basis in the shares will be a long-term or short-term capital gain (or loss) depending on whether the optionee's holding period for the shares is more than 12 months prior to their disposition.

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The Company will be entitled to claim a deduction at the same time and in the same amount as income is recognized by the optionee exercising a stock option. No income will be recognized by the optionee, and no deduction shall be allowable to the Company, by reason of the grant of any stock options.

In addition to the foregoing, capital losses, whether long-term or short-term, may be used to offset up to 100% of capital gains in any single tax year. In the case of an individual taxpayer, up to $3,000 of any capital losses in excess of capital gains may be deductible from ordinary income. Any unused excess capital losses may be carried forward indefinitely by an individual taxpayer.

Long-term capital gains and losses are derived from the sales and exchanges of capital assets held for more than one year. Under the Internal Revenue Code, the maximum federal income tax rate on net long-term capital gains is typically 15%.  If the capital asset was held for less than twelve months, any resulting gain will be taxed at ordinary income rates. In addition, regardless of holding period, alternative minimum tax may be applicable for certain taxpayers.

The specific state tax consequences to each optionee under the 2005 Plan may vary, depending upon the laws of the various states and the individual circumstances of each optionee.

It is suggested that each optionee consult his or her personal tax advisor regarding both the federal and state tax consequences of the grant and exercise of options.

Recent Accounting Pronouncement Regarding Expensing of Options

As of January 1, 2006, the Company began to recognize compensation expense with respect to granted options for financial reporting purposes.  A summary of these requirements follows.

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123R, Share-Based Payment. This statement eliminates the ability for public companies to measure share-based compensation transactions at the intrinsic value as allowed by Accounting Principles Board Opinion No. 25, and requires that such transactions be accounted for based on the grant date fair value of the award.  This Statement also requires that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.  Under the intrinsic value method allowed under APB Opinion No. 25, the difference between the quoted market price as of the date of the grant and the contractual purchase price of the share is charged to operations over the vesting period, and no compensation expense is recognized for fixed stock options with exercise prices equal to the market price of the stock on the dates of grant. Under the fair value based method as prescribed by Statement No. 123R, the Company is required to charge the value of all newly granted stock-based compensation to expense over the vesting period based on the computed fair value of the award on the grant date. The statement does not specify a valuation technique to be used to estimate the fair value but states that the use of option-pricing models such as a lattice model (e.g. a binomial model) or a closed-end model (e.g. the Black-Scholes model) would be acceptable.

The Company adopted this standard effective January 1, 2006, using the modified prospective method, recording compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption.  The Company’s management does not anticipate that the expensing of options will have a material effect on the Company’s results of financial position, operations or cash flows. For the quarter ended March 31, 2006,

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the Company recognized approximately $50,000 in compensation expense related to the 59,000 options granted under the 2005 Plan for financial reporting purposes.  Also during the quarter ended March 31, 2006, the Company recognized approximately $90,000 in compensation expense related to options previously granted under the Company’s 1999 plan.

Shareholder Approval

The Board of Directors is seeking shareholder approval of the 2005 Plan by a majority of the shares represented and voting at the Meeting.  Under the Company’s bylaws, the presence at the Meeting, in person or by proxy, of the persons entitled to vote a majority of the shares issued and outstanding as of March 31, 2006 shall constitute a quorum for purposes of Proposal 2.  If a quorum is present at the meeting, the affirmative vote of the majority of the shares represented at the Meeting and entitled to vote shall be sufficient to ratify and approve the 2005 Plan.

The Board of Directors recommends a vote of "FOR" on Proposal 2.

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AUDIT COMMITTEE REPORT

The Company’s Audit Committee is a committee established by and amongst the Company’s Board of Directors for, among other things, the purpose of overseeing the Company’s accounting and financial reporting processes and audits of the Company’s financial statements. The members of the Audit Committee are Lawrence J. Sherman, Fred M. Edwards and Richard E. Schreiber. The Board of Directors, in its business judgment, has determined that all members of the Audit Committee were “independent” pursuant to Nasdaq’s listing standards. The Board of Directors has also determined that Director Richard E. Schreiber, who serves as a member of the Audit Committee, is qualified as an “audit committee financial expert” and is “independent” as those terms are defined by the applicable rules and regulations of the SEC and Nasdaq. On March 23, 2004, the Board of Directors approved an amended and restated charter for the Audit Committee, which is set forth as Appendix “A” to the Proxy Statement for the Company’s 2004 Annual Meeting of Shareholders, which statement was filed with the SEC on April 29, 2004.

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 has discussed with the independent auditors the independent auditor’s independence. 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, or that the financial statements are presented in accordance with generally accepted accounting principles. 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-K for the year ended December 31, 2005 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

Richard E. Schreiber

Dated: April 27, 2006

For Information regarding the Company’s independent accountants, as well as fees paid for audit and non-audit services please refer to the section entitled “INDEPENDENT ACCOUNTANTS,” below.

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INDEPENDENT ACCOUNTANTS

The firm of Deloitte & Touche, LLP, served as independent public accountants for the Company and the Bank for 2005 and 2004, and is expected to continue in those capacities in 2006. 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 non-audit professional services for and on behalf of the Company and its subsidiaries. All services rendered by Deloitte & Touche, LLP were approved by the Audit Committee of the Company, which considered the possible effect of each such service on the independence of Deloitte & Touche, LLP.

Audit Fees

The aggregate fees billed by Deloitte & Touche, LLP for professional services rendered by Deloitte & Touche LLP for the audit of the Company’s consolidated financial statements in the Form 10-K and review of the financial statements in the Form 10-Q’s, including examinations of management’s assertions as to the effectiveness of internal control over financial reporting and for services that are normally provided by an accountant in connection with statutory and regulatory filings or engagements for the years ended December 31, 2005 and 2004 amounted to $608,000 and $320,000, respectively.

Tax Fees

The aggregate fees billed for tax services (primarily tax consultation and compliance) rendered to the Company by Deloitte & Touche, LLP amounted to $38,000 and $28,000 for 2005 and 2004, respectively.

All Other Fees

In addition to the fees described above, the Company paid to Deloitte & Touche, LLP fees of $36,000 during 2005 and $40,000 during 2004. The fees related primarily to work performed in connection with the audits of the Bank’s 401(k) Plan and ESOP Plan during 2005, and to work performed in conjunction with the audit of the Bank’s 401(k) Plan and various registration statement filings made by the Company during 2004.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally effective for up to one year and any pre-approval is detailed as to particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated pre-approval authority to its Chairman when expedition of services is necessary. Any exercise of such pre-approval authority by the Chairman is required to be reported to the Audit Committee at the committee’s next scheduled meeting. The independent auditors and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent auditors, and the fees for the services performed to date. All services performed by Deloitte & Touche, LLP, including audit, audit-related, tax and other services, were approved in advance in accordance with the Audit Committee’s policy.

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STOCK PERFORMANCE GRAPH

The following graph presents the cumulative, five-year total return for the Company’s Common Stock compared with the Nasdaq Total Return Index, a broad market index of stocks traded in the Nasdaq National Market, and with the SNL Securities Index of Banks between $1 billion and $5 billion in total assets. The graph assumes the value of an investment in the Company’s Common Stock, the Nasdaq Index and the SNL Bank Index were $100 on December 31, 2000, and that all dividends were reinvested.

	Period Ending
Index	12/31/00	12/31/01	12/31/02	12/31/03	12/31/04	12/31/05
First Regional Bancorp	100.00	164.29	223.14	418.57	771.43	965.00
NASDAQ Composite	100.00	79.18	54.44	82.09	89.59	91.54
SNL $1B - $5B Bank Index	100.00	121.50	140.26	190.73	235.40	231.38

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COMMUNICATIONS WITH THE BOARD AND
ANNUAL MEETING ATTENDANCE

Individuals who wish to communicate with the Company’s Board may do so by sending an e-mail to the Company’s Board at bod@firstregional.com. Any communications intended for non-management directors should be sent to the e-mail address above to the attention of Mr. Lawrence J. Sherman, Chairman of the Audit Committee. The Company does not have a policy regarding Board member attendance at annual meetings of shareholders. At the Company’s 2005 Annual Meeting of Shareholders, all of the directors of the Company attended.

CODE OF ETHICS

The Company has adopted a Code of Ethics. The Code of Ethics is available on the Company’s website at www.firstregional.com. A copy of the Code of Ethics may also be obtained at no charge by written request to the attention of the Company’s Corporate Secretary at 1801 Century Park East, Century City, California 90067.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be considered for inclusion in the proxy statement for presentation at the 2007 Annual Meeting must be received by the Company by January 2, 2007. Any such proposal must be in accordance with the provisions of Rule 14a-8 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934.

SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING 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 during 2005.

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 2005 Annual Meeting on April 25, 2005 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 March 11, 2006.

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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 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, Corporate Secretary
	First Regional Bancorp
Dated: April 28, 2006

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APPENDIX A

FIRST REGIONAL BANCORP

2005 STOCK OPTION PLAN

Adopted May 26, 2005

1.     Purpose

The purpose of the First Regional Bancorp 2005 Stock Option Plan (the “Plan”) is to strengthen First Regional Bancorp (the “Corporation”) and those corporations which are or hereafter become subsidiary corporations (the “Subsidiary” or “Subsidiaries”) by providing additional means of attracting and retaining competent managerial personnel and by providing to participating directors, officers and key employees added incentive for high levels of performance and for unusual efforts to increase the earnings of the Corporation and any Subsidiaries. The Plan seeks to accomplish these purposes and achieve these results by providing a means whereby such directors, officers and key employees may purchase shares of the Common Stock of the Corporation pursuant to Stock Options granted in accordance with this Plan.

Stock Options granted pursuant to this Plan are intended to be Non-Qualified Stock Options.

2.     Definitions

For purposes of this Plan, the following terms shall have the following meanings:

(a)    “Common Stock.” This term shall mean shares of the Corporation’s common stock, no par value, subject to adjustment pursuant to Paragraph 15 (Adjustment Upon Changes in Capitalization) hereunder.

(b)   “Corporation.” This term shall mean First Regional Bancorp, a California Corporation.

(c)    “Eligible Participants.”   This term shall mean: (i) directors of the Corporation or any Subsidiary; (ii) all officers (whether or not they are also directors) of the Corporation or any Subsidiary; and (iii) all key employees (as such persons may be determined by the Stock Option Committee from time to time) of the Corporation or any Subsidiary; provided that such officers and key employees have a customary work week of at least forty hours in the employ of the Corporation or a Subsidiary.

(d)   “Fair Market Value.” This term shall mean the fair market value of the Common Stock as determined in accordance with any reasonable valuation method selected by the Stock Option Committee, including the valuation methods described in Treasury Regulations Section 20.2031-2.

(e)    “Non-Qualified Stock Option.” This term shall mean a Stock Option which is not an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

(f)    “Option Shares.” This term shall mean Common Stock covered by and subject to any outstanding unexercised Stock Option granted pursuant to this Plan.

(g)    “Optionee.” This term shall mean any Eligible Participant to whom a Stock Option has been granted pursuant to this Plan, provided that at least part of the Stock Option is outstanding and unexercised.

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(h)   “Plan.” This term shall mean the First Regional Bancorp 2005 Stock Option Plan as embodied herein and as may be amended from time to time in accordance with the terms hereof and applicable law.

(i)    “Stock Option.” This term shall mean the right to purchase Common Stock under this Plan in a specified number of shares, at a price and upon the terms and conditions determined by the Stock Option Committee.

(j)     “Stock Option Committee.” The Board of Directors of the Corporation may select and designate a Stock Option Committee consisting of three or more directors of the Corporation, having full authority to act in the matter. Regardless of whether a Stock Option Committee is selected, the Board of Directors of the Corporation may act as the Stock Option Committee and any action taken by said Board as such shall be deemed to be action taken by the Stock Option Committee. All references in the Plan to the “Stock Option Committee” shall be deemed to refer to the Board of Directors of the Corporation acting as the Stock Option Committee and to a duly appointed Stock Option Committee, if there be one. In the event of any conflict between action taken by the Board acting as a Stock Option Committee and action taken by a duly appointed Stock Option Committee, the action taken by the Board shall be controlling and the action taken by the duly appointed Stock Option Committee shall be disregarded.

(k)   “Subsidiary.” This term shall mean each “subsidiary corporation” (treating the Corporation as the employer corporation) as defined in Section 425(f) of the Internal Revenue Code.

3.     Administration

(a)    Stock Option Committee. This Plan shall be administered by the Stock Option Committee. The Board of Directors of the Corporation shall have the right, in its sole and absolute discretion, to remove or replace any person from or on the Stock Option Committee at any time for any reason whatsoever.

(b)   Administration of the Plan. Any action of the Stock Option Committee with respect to the administration of the Plan shall be taken pursuant to a majority vote, or pursuant to the unanimous written consent, of its members. Any such action taken by the Stock Option Committee in the administration of this Plan shall be valid and binding, so long as the same is not inconsistent with the terms and conditions of this Plan. Subject to compliance with the terms, conditions and restrictions set forth in this Plan, the Stock Option Committee shall have the exclusive right, in its sole and absolute discretion, to establish the terms and conditions of all Stock Options granted under the Plan, including, without meaning any limitation, the power to: (i) establish the number of Stock Options, if any, to be granted hereunder, in the aggregate and with regard to each Eligible Participant; (ii) determine the time or times when such Stock Options, or parts thereof, may be exercised; (iii) determine the Eligible Participants, if any, to whom Stock Options are granted; (v) determine the duration and purposes, if any, of leaves of absence which may be permitted to holders of unexercised, unexpired Stock Options without such constituting a termination of employment under the Plan; and (vi) prescribe and amend the terms, provisions and form of each instrument and agreement setting forth the terms and conditions of every Stock Option granted hereunder.

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(c)    Decisions and Determinations. Subject to the express provisions of the Plan, the Stock Option Committee shall have the authority to construe and interpret this Plan, to define the terms used herein, to prescribe, amend, and rescind rules and regulations relating to the administration of the Plan, and to make all other determinations necessary or advisable for administration of the Plan. Determinations of the Stock Option Committee on matters referred to in this Section 3 shall be final and conclusive so long as the same are not inconsistent with the terms of this Plan.

4.     Shares Subject to the Plan

Subject to adjustments as provided in Section 15 hereof, the maximum number of shares of Common Stock which may be issued upon exercise of all Stock Options granted under this Plan is limited to Two Hundred Thousand (200,000) shares, in the aggregate. If any Stock Option shall be cancelled, surrendered, or expire for any reason without having been exercised in full, the unpurchased Option Shares represented thereby shall again be available for grants of Stock Options under this Plan.

5.     Eligibility

Only Eligible Participants shall be eligible to receive grants of Stock Options under this Plan.

6.     Grants of Stock Options

(a)    Grant. Subject to the express provisions of the Plan, the Stock Option Committee, in its sole and absolute discretion, may grant Stock Options:

(i)    In the case of grants to Eligible Participants who are officers or key employees of the Corporation or any Subsidiary, for a number of Option Shares, at the price(s) and time(s), on the terms and conditions and to such Eligible Participants as it deems advisable and specifies in the respective grants; and

(ii)   In the case of grants to Eligible Participants who are directors and who are not officers or key employees of the Corporation or any Subsidiary, for a number of Option Shares, at the price(s) and time(s), and on the terms and conditions as it deems advisable and specifies in the respective grants; provided, however, that such grants may not exceed a maximum aggregate of Seventy-Five Thousand (75,000) Option Shares to all directors who are not officers or key employees of the Corporation or any Subsidiary. The foregoing maximum aggregate number of Option Shares which may be granted to all directors of the Corporation or any Subsidiary who are not officers or key employees thereof shall be adjusted in accordance with the provisions of Section 15 hereof.

The terms upon which and the times at which, or the periods within which, the Option Shares subject to such Stock Options may become acquired or such Stock Options may be acquired and exercised shall be as set forth in the Plan and the related Stock Option Agreements.

Subject to the limitations and restrictions set forth in the Plan, an Eligible Participant who has been granted a Stock Option may, if otherwise eligible, be granted additional Stock Options if the Stock Option Committee shall so determine.

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(b)   Date of Grant and Rights of Optionee. The determination of the Stock Option Committee to grant a Stock Option shall not in any way constitute or be deemed to constitute an obligation of the Corporation, or a right of the Eligible Participant who is the proposed subject of the grant, and shall not constitute or be deemed to constitute the grant of a Stock Option hereunder unless and until both the Corporation and the Eligible Participant have executed and delivered to the other a Stock Option Agreement in the form then required by the Stock Option Committee as evidencing the grant of the Stock Option, together with such other instrument or instruments as may be required by the Stock Option Committee pursuant to this Plan; provided, however, that the Stock Option Committee may fix the date of grant as any date on or after the date of its final determination to grant the Stock Option (or if no such date is fixed, then the date of grant shall be the date on which the determination was finally made by the Stock Option Committee to grant the Stock Option), and such date shall be set forth in the Stock Option Agreement. The date of grant as so determined shall be deemed the date of grant of the Stock Option for purposes of this Plan.

(c)    Substituted Stock Options. If all of the outstanding shares of common stock of another corporation are changed into or exchanged solely for Common Stock in a transaction to which Section 425(a) of the Internal Revenue Code of 1986, as amended, applies, then, subject to the approval of the Board of Directors of the Corporation, Stock Options under the Plan may be substituted (“Substituted Options”) in exchange for valid, unexercised and unexpired stock options of such other corporation.

7.     Stock Option Exercise Price

(a)    Minimum Price. The exercise price of any Option Shares shall be determined by the Stock Option Committee, in its sole and absolute discretion, upon the grant of a Stock Option. In the case of a Non-Qualified Stock Option, said exercise price shall not be less than an amount equal to one hundred percent (100%) of the Fair Market Value of the Common Stock represented by the Option Shares on the date of the grant of the related Stock Option.

(b)   Substituted Options. The exercise price of the Option Shares subject to each Substituted Option may be fixed at a price less than the minimum amount set forth in Section 7(a) above at the time such Substituted Option is granted if said exercise price has been computed to be not less than the exercise price set forth in the stock option of the other corporation for which it was exchanged, with appropriate adjustment to reflect the exchange ratio of the shares of stock of the other corporation into the shares of Common Stock.

8.     Exercise of Stock Options

(a)    Exercise. Except as otherwise provided elsewhere herein, each Stock Option shall be exercisable in such increments, which need not be equal, and upon such contingencies as the Stock Option Committee shall determine at the time of grant of the Stock Option; provided, however, that if an Optionee shall not in any given period exercise any part of a Stock Option which has become exercisable during that period, the Optionee’s right to exercise such part of the Stock Option shall continue until expiration of the Stock Option or any part thereof as may be provided in the related Stock Option Agreement. No Stock Option or part thereof shall be exercisable except with respect to whole shares of Common Stock, and fractional share interests shall be disregarded except that they may be accumulated.

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(b)   Notice and Payment. Stock Options granted hereunder shall be exercised by written notice delivered to the Corporation specifying the number of Option Shares with respect to which the Stock Option is being exercised, together with concurrent payment in full of the exercise price as hereinafter provided. If the Stock Option is being exercised by any person or persons other than the Optionee, said notice shall be accompanied by proof, satisfactory to the counsel for the Corporation, of the right of such person or persons to exercise the Stock Option. The Corporation’s receipt of a notice of exercise without concurrent receipt of the full amount of the exercise price shall not be deemed an exercise of a Stock Option by an Optionee, and the Corporation shall have no obligation to an Optionee for any Option Shares unless and until full payment of the exercise price is received by the Corporation and all of the terms and provisions of the Plan and the related Stock Option agreement have been fully complied with.

(c)    Payment of Exercise Price. The exercise price of any Option Shares purchased upon the proper exercise of a Stock Option shall be paid in full at the time of each exercise of a Stock Option in cash, (or bank, cashier’s or certified check) and/or, with the prior approval of the Stock Option Committee at or before the time of exercise, in Common Stock of the Corporation which, when added to the cash payment, if any, which has an aggregate Fair Market Value equal to the full amount of the exercise price of the Stock Option, or part thereof, then being exercised. Payment by an Optionee as provided herein shall be made in full concurrently with the Optionee’s notification to the Corporation of his intention to exercise all or part of a Stock Option. If all or any part of a payment is made in shares of Common Stock as heretofore provided, such payment shall be deemed to have been made only upon receipt by the Corporation of all required share certificates, and all stock powers and all other required transfer documents necessary to transfer the shares of Common Stock to the Corporation.

(d)   Minimum Exercise. Not less than ten (10) Option Shares may be purchased at any one time upon exercise of a Stock Option unless the number of shares purchased is the total number which remains to be purchased under the Stock Option.

(e)    Compliance With Law. No shares of Common Stock shall be issued upon exercise of any Stock Option, and an Optionee shall have no right or claim to such shares, unless and until: (i) payment in full as provided hereinabove has been received by the Corporation; (ii) in the opinion of the counsel for the Corporation, all applicable requirements of law and of regulatory bodies having jurisdiction over such issuance and delivery have been fully complied with; and (iii) if required by federal or state law or regulation, the Optionee shall have paid to the Corporation the amount, if any, required to be withheld on the amount deemed to be compensation to the Optionee as a result of the exercise of his or her Stock Option, or made other arrangements satisfactory to the Corporation, in its sole discretion, to satisfy applicable income tax withholding requirements.

9.     Nontransferability of Stock Options

Each Stock Option shall, by its terms, be nontransferable by the Optionee other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee’s lifetime only by the Optionee.

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10.   Continuation of Affiliation

Nothing contained in this Plan (or in any Stock Option Agreement) shall obligate the Corporation or any Subsidiary to employ or continue to employ or remain affiliated with any Optionee or any Eligible Participant for any period of time or interfere in any way with the right of the Corporation or a Subsidiary to reduce or increase the Optionee’s or Eligible Participant’s compensation.

11.   Cessation of Affiliation

Except as provided in Section 12 hereof, if, for any reason other than disability or death, an Optionee ceases to be affiliated with the Corporation or a Subsidiary, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or three (3) months after the Optionee ceases to be so affiliated, whichever is earlier. During such period after cessation of affiliation, such Stock Options shall be exercisable only as to those increments, if any, which had become exercisable as of the date on which such Optionee ceased to be affiliated with the Corporation or the Subsidiary and any Stock Options or increments which had not become exercisable as of such date shall expire automatically on such date.

12.   Termination for Cause

If the Stock Option Agreement so provides and if an Optionee’s employment by or affiliation with the Corporation or a Subsidiary is terminated for cause, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or thirty (30) days after termination for cause, whichever is earlier; provided, however, that the Stock Option Committee may, in its sole discretion, within thirty (30) days of such termination, reinstate such Stock Options by giving written notice of such reinstatement to the Optionee. In the event of such reinstatement, the Optionee may exercise the Stock Options only to such extent, for such time, and upon such terms and conditions as if the Optionee had ceased to be employed by or affiliated with the Corporation or a Subsidiary upon the date of such termination for a reason other than cause, disability or death. For purposes of this Plan, “cause” shall mean the Optionee’s malfeasance or gross misfeasance in the performance of his/her duties or his/her conviction of illegal activity in connection therewith and, in any event, the determination of the Stock Option Committee with respect thereto shall be final and conclusive.

13.   Death of Optionee

If an Optionee dies while employed by or affiliated with the Corporation or a Subsidiary or during the three-month period referred to in Section 11 hereof, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or one (1) year after the date of such death, whichever is earlier. After such death, but before such expiration, subject to the terms and provisions of the Plan and the related Stock Option Agreements, the person or persons to whom such Optionee’s rights under the Stock Options shall have passed by will or by the applicable laws of descent and distribution, or the executor or administrator of the Optionee’s estate, shall have the right to exercise such Stock Options to the extent that increments, if any, had become exercisable as of the date on which the Optionee died.

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14.   Disability of Optionee

If an Optionee is disabled while employed by or affiliated with the Corporation or a Subsidiary or during the three-month period referred to in Section 11 hereof, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or one (1) year after the date such disability occurred, whichever is earlier. After such disability occurs, but before such expiration, the Optionee or the guardian or conservator of the Optionee’s estate, as duly appointed by a court of competent jurisdiction, shall have the right to exercise such Stock Options to the extent that increments, if any, had become exercisable as of the date on which the Optionee became disabled or ceased to be employed by or affiliated with the Corporation or a Subsidiary as a result of the disability. An Optionee shall be deemed to be “disabled” if it shall appear to the Stock Option Committee, upon written certification delivered to the Corporation of a qualified licensed physician, that the Optionee has become permanently and totally unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in the Optionee’s death, or which has lasted or can be expected to last for a continuous period of not less than 12 months.

15.   Adjustment Upon Changes in Capitalization

If the outstanding shares of Common Stock of the Corporation are increased, decreased, or changed into or exchanged for a different number or kind of shares or securities of the Corporation, through a reorganization, merger, recapitalization, reclassification, stock split, stock dividend, stock consolidation, or otherwise, without consideration to the Corporation, an appropriate and proportionate adjustment shall be made in the number and kind of shares as to which Stock Options may be granted. A corresponding adjustment changing the number or kind of Option Shares and the exercise prices per share allocated to unexercised Stock Options, or portions thereof, which shall have been granted prior to any such change, shall likewise be made. Such adjustments shall be made without change in the total price applicable to the unexercised portion of the Stock Option, but with a corresponding adjustment in the price for each Option Share subject to the Stock Option. Adjustments under this Section shall be made by the Stock Option Committee, whose determination as to what adjustments shall be made, and the extent thereof, shall be final and conclusive. No fractional shares of stock shall be issued or made available under the Plan on account of such adjustments, and fractional share interests shall be disregarded, except that they may be accumulated.

16.   Terminating Events

Upon consummation of a plan of dissolution or liquidation of the Corporation, or upon consummation of a plan of reorganization, merger or consolidation of the Corporation with one or more corporations, as a result of which the Corporation is not the surviving entity, or upon the sale of all or substantially all the assets of the Corporation to another corporation, the Plan shall automatically terminate and all Stock Options theretofore granted shall be terminated, unless provision is made in connection with such transaction for assumption of Stock Options theretofore granted, or substitution for such Stock Options with new stock options covering stock of a successor employer corporation, or a parent or subsidiary corporation thereof, solely at the discretion of such successor corporation, or parent or subsidiary corporation, with appropriate adjustments as to number and kind of shares and prices.

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17. Amendment and Termination

The Board of Directors of the Corporation may at any time and from time to time suspend, amend, or terminate the Plan and may, with the consent of an Optionee, make such modifications of the terms and conditions of that Optionee’s Stock Option as it shall deem advisable.

No Stock Option may be granted during any suspension of the Plan or after termination of the Plan. Amendment, suspension, or termination of the Plan shall not (except as otherwise provided in Section 15 hereof), without the consent of the Optionee, alter or impair any rights or obligations under any Stock Option theretofore granted.

18.   Rights of Eligible Participants and Optionees

No Eligible Participant, Optionee or other person shall have any claim or right to be granted a Stock Option under this Plan, and neither this Plan nor any action taken hereunder shall be deemed to give or be construed as giving any Eligible Participant, Optionee or other person any right to be retained in the employ of the Corporation or any Subsidiary. Without limiting the generality of the foregoing, no person shall have any rights as a result of his or her classification as an Eligible Participant or Optionee, such classifications being made solely to describe, define and limit those persons who are eligible for consideration for privileges under the Plan.

19.   Privileges of Stock Ownership; Regulatory Law Compliance; Notice of Sale

No Optionee shall be entitled to the privileges of stock ownership as to any Option Shares not actually issued and delivered. No Option Shares may be purchased upon the exercise of a Stock Option unless and until all then applicable requirements of all regulatory agencies having jurisdiction and all applicable requirements of the securities exchanges upon which securities of the Corporation are listed (if any) shall have been fully complied with. The Optionee shall, not more than five (5) days after each sale or other disposition of shares of Common Stock acquired pursuant to the exercise of Stock Options, give the Corporation notice in writing of such sale or other disposition.

20.   Effective Date of the Plan

The Plan shall be deemed adopted as of May 26, 2005, and shall be effective immediately.

21.   Termination

Unless previously terminated as aforesaid, the Plan shall terminate ten (10) years from the adoption of the Plan by the Board of Directors of the Corporation. No Stock Options shall be granted under the Plan thereafter, but such termination shall not affect any Stock Option theretofore granted.

22.   Option Agreement

Each Stock Option granted under the Plan shall be evidenced by a written Stock Option Agreement executed by the Corporation and the Optionee, and shall contain each of the provisions and agreements herein specifically required to be contained therein, and such other terms and conditions as are deemed desirable by the Stock Option Committee and are not inconsistent with this Plan.

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23.   Stock Option Period

Each Stock Option and all rights and obligations thereunder shall expire on such date as the Stock Option Committee may determine, but not later than ten (10) years from the date such Stock Option is granted, and shall be subject to earlier termination as provided elsewhere in this Plan.

24.   Exculpation and Indemnification of Stock Option Committee

The present, former and future members of the Stock Option Committee, and each of them, who is or was a director, officer or employee of the Corporation shall be indemnified by the Corporation to the extent authorized in and permitted by the Corporation’s Certificate of Incorporation, and/or Bylaws in connection with all actions, suits and proceedings to which they or any of them may be a party by reason of any act or omission of any member of the Stock Option Committee under or in connection with the Plan or any Stock Option granted thereunder.

25.   Agreement and Representations of Optionee

Unless the shares of Common Stock covered by this Plan have been registered with the Securities and Exchange Commission pursuant to the registration requirements under the Securities Act of 1933, each Optionee shall: (i) by and upon accepting a Stock Option, represent and agree in writing, in the form of the letter attached hereto as Exhibit “A,” for himself or herself and his or her transferees by will or the laws of descent and distribution, that the Option Shares will be acquired for investment purposes and not for resale or distribution; and (ii) by and upon the exercise of a Stock Option, or a part thereof, furnish evidence satisfactory to counsel for the Corporation, including written and signed representations in the form of the letter attached hereto as Exhibit “B,” to the effect that the Option Shares are being acquired for investment purposes and not for resale or distribution, and that the Option Shares being acquired shall not be sold or otherwise transferred by the Optionee except in compliance with the registration provisions under the Securities Act of 1933, as amended, or an applicable exemption therefrom. Furthermore, the Corporation, at its sole discretion, to assure itself that any sale or distribution by the Optionee complies with this Plan and any applicable federal or state securities laws, may take all reasonable steps, including placing stop transfer instructions with the Corporation’s transfer agent prohibiting transfers in violation of the Plan and affixing the following legend (and/or such other legend or legends as the Stock Option Committee shall require) on certificates evidencing the shares:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR THE HOLDER THEREOF, WHICH OPINION SHALL BE ACCEPTABLE TO FIRST REGIONAL BANCORP, THAT REGISTRATION IS NOT REQUIRED.”

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At any time that an Optionee contemplates the disposition of any of the Option Shares (whether by sale, exchange, gift or other form of transfer), he or she shall first notify the Corporation of such proposed disposition and shall thereafter cooperate with the Corporation in complying with all applicable requirements of law which, in the opinion of counsel for the Corporation, must be satisfied prior to the making of such disposition. Before consummating such disposition, the Optionee shall provide to the Corporation an opinion of Optionee’s counsel, at the Corporation’s expense, of which both such opinion and such counsel shall be satisfactory to the Corporation, that such disposition will not result in a violation of any state or federal securities laws or regulations. The Corporation shall remove any legend affixed to certificates for Option Shares pursuant to this Section if and when all of the restrictions on the transfer of the Option Shares, whether imposed by this Plan or federal or state law, have terminated.

26.   Notices.

All notices and demands of any kind which the Stock Option Committee, any Optionee, Eligible Participant, or other person may be required or desires to give under the terms of this Plan shall be in writing and shall be delivered in hand to the person or persons to whom addressed (in the case of the Stock Option Committee, with the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Secretary of the Corporation), by leaving a copy of such notice or demand at the address of such person or persons as may be reflected in the records of the Corporation, or by mailing a copy thereof, properly addressed as above, by certified or registered mail, postage prepaid, with return receipt requested. Delivery by mail shall be deemed made upon receipt by the notifying party of the return receipt request acknowledging receipt of the notice or demand.

27.   Limitation on Obligations of the Corporation

All obligations of the Corporation arising under or as a result of this Plan or Stock Options granted hereunder shall constitute the general unsecured obligations of the Corporation, and not of the Board of Directors of the Corporation, any member thereof, the Stock Option Committee, any member thereof, any officer of the Corporation, or any other person or any Subsidiary, and none of the foregoing, except the Corporation, shall be liable for any debt, obligation, cost or expense hereunder.

28.   Limitation of Rights

The Stock Option Committee, in its sole and absolute discretion, is entitled to determine who, if anyone, is an Eligible Participant under this Plan, and which, if any, Eligible Participant shall receive any grant of a Stock Option. No oral or written agreement by any person on behalf of the Corporation relating to this Plan or any Stock Option granted hereunder is authorized, and such may not bind the Corporation or the Stock Option Committee to grant any Stock Option to any person.

29.   Severability

If any provision of this Plan as applied to any person or to any circumstance shall be adjudged by a court of competent jurisdiction to be void, invalid, or unenforceable, the same shall in no way affect any other provision hereof, the application of any such provision in any other circumstances, or the validity or enforceability hereof.

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30.   Construction

Where the context or construction requires, all words applied in the plural herein shall be deemed to have been used in the singular and vice versa, and the masculine gender shall include the feminine and the neuter and vice versa.

31.   Headings

The headings of the several paragraphs herein are inserted solely for convenience of reference and are not intended to form a part of and are not intended to govern, limit or aid in the construction of any term or provision hereof.

32.   Successors

This Plan shall be binding upon the respective successors, assigns, heirs, executors, administrators, guardians and personal representatives of the Corporation and Optionees.

33.   Governing Law

To the extent not governed by the laws of the United States, this Plan shall be governed by and construed in accordance with the laws of the State of California.

34.   Conflict

In the event of any conflict between the terms and provisions of this Plan, and any other document, agreement or instrument, including, without meaning any limitation, any Stock Option Agreement, the terms and provisions of this Plan shall control.

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Exhibit “A” to Appendix A

, 20

First Regional Bancorp
1801 Century Park East
Eighth Floor
Los Angeles, California 90067

Gentlemen:

On this day of , 20 , the undersigned has received, pursuant to the First Regional Bancorp 2005 Stock Option Plan (the “Plan”) and the Stock Option Agreement (the “Agreement”) by and between First Regional Bancorp (the “Corporation”) and the undersigned, dated , 20   an option to purchase shares of the common stock, no par value, of First Regional Bancorp (the “Stock”).

In consideration of the grant of such option by First Regional Bancorp:

1.      I hereby represent and warrant to you that the Stock to be acquired pursuant to the option will be acquired by me in good faith and for my own personal account, and not with a view to distributing the Stock to others or otherwise reselling the stock in violation of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.

2.      I hereby acknowledge and agree that: (a) the Stock to be acquired by me pursuant to the Plan has not been registered and that there is no obligation on the part of Corporation to register such Stock under the Securities Act of 1933, as amended, and the rules and regulations thereunder; and (b) the Stock to be acquired by me will not be freely tradeable unless the Stock is either registered under the Securities Act of 1933, as amended, or the holder presents a legal opinion acceptable to the Corporation that the transfer will not violate the federal securities laws.

3.      I understand that the Corporation is relying upon the truth and accuracy of the representations and agreements contained herein in determining to grant such options to me and upon subsequently issuing any Stock pursuant to the Plan without the Corporation first registering the same under the Securities Act of 1933, as amended.

4.      I understand that the certificate evidencing the Stock to be issued pursuant to the Plan will contain a legend upon the face thereof to the effect that the Stock is not registered under the Securities Act of 1933 and that stop transfer orders will be placed against the shares with the Corporation’s transfer agent.

5.      In further consideration for the grant of an option to purchase Stock of Corporation, the undersigned hereby agrees to indemnify you and hold you harmless against all liability, cost, or expenses (including reasonable attorney’s fees) arising out of or as a result of any distribution or resale of shares of Stock issued by the undersigned in violation of the securities laws. The agreements contained herein shall inure to the benefit of and be binding upon the respective legal representatives, successors and assigns of the undersigned and the Corporation.

Very truly yours,

(Signature)

(Type or Print Name)

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Exhibit “B” to Appendix A

, 20

First Regional Bancorp
1801 Century Park East
Eighth Floor
Los Angeles, California 90067

Gentlemen:

On this day of , 20, the undersigned has acquired, pursuant to the First Regional Bancorp 2005 Stock Option Plan (the “Plan”) and the Stock Option Agreement (the “Agreement”) by and between First Regional Bancorp (the “Corporation”) and the undersigned, dated , 20, () shares of the Common Stock, no par value, of First Regional Bancorp (the “Stock”). In consideration of the issuance by First Regional Bancorp to the undersigned of said shares of its Common Stock:

1.      I hereby represent and warrant to you that the Stock is being acquired by me in good faith for my own personal account, and not with a view to distributing the Stock to others or otherwise reselling the Stock in violation of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.

2.      I hereby acknowledge and agree that: (a) the Stock being acquired by me pursuant to the Plan has not been registered and that there is no obligation on the part of the Corporation to register such Stock under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; and (b) the Stock being acquired by me is not freely tradeable and must be held by me for investment purposes unless the Stock is either registered under the Securities Act of 1933 or transferred pursuant to an exemption from such registration, as accorded by the Securities Act of 1933 and under the rules and regulations promulgated thereunder. I further represent and acknowledge that I have been informed by legal counsel in connection with said Plan of the restrictions on my ability to transfer the Stock and that I understand the scope and effect of those restrictions.

3.      I understand that the effects of the above representations are the following: (i) that the undersigned does not presently intend to sell or otherwise dispose of all or any part of the shares of the Stock to any person or entity except in compliance with the terms described above, in the Plan and in the Agreement; and (ii) that the Corporation is relying upon the truth and accuracy of the representations and agreements contained herein in issuing said shares of the Stock to me without first registering the same under the Securities Act of 1933, as amended.

4.      I hereby agree that the certificate evidencing the Stock may contain the following legend stamped upon the face thereof to the effect that the Stock is not registered under the Securities Act of 1933, as amended, and that the Stock has been acquired pursuant to the representations and restrictions in this letter, the Plan and in the Agreement:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION SHALL BE

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ACCEPTABLE TO FIRST REGIONAL BANCORP, THAT REGISTRATION IS NOT REQUIRED.”

5.      I hereby agree and understand that the Corporation will place a stop transfer notice with its stock transfer agent to ensure that the restrictions on transfer described herein will be observed.

6.      In further consideration of the issuance of the Stock, the undersigned does hereby agree to indemnify you and hold you harmless against all liability, costs, or expenses (including reasonable attorney’s fees) arising out of or as a result of any distribution or resale by the undersigned of any of the Stock. The Agreements contained herein shall inure to the benefit of and be binding upon the respective legal representatives, successors and assigns of the undersigned and the Corporation.

Very truly yours,

(Signature)

(Type or Print Your Name)

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FIRST REGIONAL BANCORP
PROXY	2006 ANNUAL MEETING OF SHAREHOLDERS MAY 16, 2006	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 2006 Annual Meeting of Shareholders of the Company to be held on Tuesday, May 16, 2006, at 11:00 a.m. in the Board Room of First Regional Bank, 1801 Century Park East, Century City, California 90067, 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 four (4) persons named below and in the Proxy Statement dated April 28, 2006, accompanying the Notice of said Meeting, to serve until the 2008 Annual Meeting of Shareholders and until their successors are elected and have qualified:	AUTHORITY GIVEN o	AUTHORITY WITHHELD o
Fred M. Edwards,  H. Anthony Gartshore,  Lawrence J. Sherman  and  Jack A. 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:
	If you execute and return a proxy that does not withhold authority to vote for the election of any nominee, your proxy will be deemed to grant such authority.
	2.	2005 Stock Option Plan. Approving the Company’s 2005 Stock Option Plan covering 200,000 shares of the Company’s Common Stock, as more fully described in the Company’s 2006 Proxy Statement.	FOR o                     AGAINST o                      ABSTAIN o
	3.	Other Business. To transact such other business as may properly come before the Meeting and any adjournment or adjournments thereof.	AUTHORITY GIVENo	AUTHORITY WITHHELD o

PLEASE SIGN AND DATE THE OTHER SIDE

THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF “AUTHORITY GIVEN” ON PROPOSAL 1 AND PROPOSAL 3 AND A VOTE OF “FOR” ON PROPOSAL 2. WITH RESPECT TO PROPOSALS 1 AND 3, 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. WITH RESPECT TO PROPOSAL 1, THE PROXY ALSO CONFERS AUTHORITY TO CAST VOTES IN SUCH A WAY AS TO EFFECT THE ELECTION OF ALL FOUR NOMINEES. IN ALL MATTERS OTHER THAN PROPOSALS 1 AND 2, IF ANY, PROPERLY 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 o do not o expect to attend the Meeting.

Dated:	, 2006
(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. THIS PROXY 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.