8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report: April 17, 2007

(Date of earliest event reported)

First Regional Bancorp

(Exact name of registrant as specified in its charter)

California	000-10232	95-3582843
(State of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

1801 Century Park East, Suite 800

Los Angeles, California 90067

(Address of principal executive offices, including zip code)

(310) 552-1776

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

(a)First Regional Bancorp issued a press release on April 17, 2007 announcing its financial results for the quarter ended March 31, 2007. The press release is furnished as Exhibit 99 and is hereby incorporated by reference in its entirety.

Item 7.01 Regulation FD Disclosure.

Executive management of First Regional Bancorp has provided the following information in response to questions received from securities analysts and others.

Question:Why did salaries and related benefits rise from $8,354,000 for the fourth quarter of 2006 to $9,021,000 in the first quarter of 2007?

Answer:The Bank added eight full-time employees during the first quarter of 2007. In addition, we incurred approximately $200,000 in payroll taxes during the first quarter of 2007, which will not recur in future quarters of 2007. This is related to the resumption of FICA and certain other payroll taxes and also to the payment of bonuses during January.

In addition, the Company effected a change in accrual for bonus payments effective as of the beginning of 2007. Based on direction from the Compensation Committee, the Company now accrues funds for a discretionary bonus pool at a rate of ten percent of net profit after the first $5 million of annual profit. This is determined at the end of each month based on actual profit for the period. These incentive provisions will adjust up or down as our net income fluctuates.

Question:How much does management expect in new loan production for 2007?

Answer:This is difficult to predict and subject to many variables out of our control. If we had to guess, it may be similar to net loan growth during 2006. Net loan growth of $10 million per month may not be unreasonable.

Question:We note that the Company booked a net recovery during the first quarter. What is the Company’s expectation for future quarters in terms of recoveries?

Answer:We did achieve a $75,000 recovery related to a charged-off commercial loan during the first quarter of 2007. In relation to the same loan, we received an additional $14,500 in interest in early April 2007, which reflects the final settlement of that matter. Of the $63,000 in non-performing loans reported as of March 31, 2007, $50,000 was charged off in early April, leaving us with a current balance of only $13,000 in non-performing assets. We do not anticipate any additional recoveries for the remainder of 2007.

Question:              Why did the Bank not make any provision for its loan loss reserve during the first quarter?

Answer:Because the Bank experienced only modest loan growth during the first quarter of 2007, and because the Bank suffered no material increase in non-performing assets during the quarter (and even enjoyed a net recovery), the Bank determined that its loan loss reserve remained adequate during the first quarter and that no additional provision was required.  We note that the ratio of loan loss reserve to gross loans was 1.12% at March 31, 2007; down only slightly from 1.13% at December 31, 2006 as a result of modest loan growth during the quarter.

Question:What is the status of the Bank’s collection efforts with respect to its account receivable related to its prior activities supplying cash to ATM machines?

The Bank entered into a full and final settlement of litigation related to an account receivable arising out of the Bank’s Merchant Services Division. This account receivable of approximately $1.5 million was due from an outside service provider, which arose in connection with the Bank’s former engagement in the business of supplying cash to ATM machines, which activity was terminated in 2004. As of December 31, 2006, all but $555,000 of this receivable had previously been reserved against. The Bank recovered $388,500 from the defendant in full

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settlement of the matter, which resulted in a charge of approximately $166,500, or $87,000 after tax, for the quarter. This charge is reflected in the “Other operating expense” in the “Consolidated Statements of Operations” for the three months ended March 31, 2007.

Question:              We also note that total deposits declined from $1.628 billion at December 31, 2006 to $1.587 billion as of March 31, 2007, with demand deposits down from $469 million to $413 million.  What is the reason for this and what are the Company’s expectations for the remaining quarters of 2007?

Answer:Part of the reason is that deposits attributable to our Merchant Services division were down by approximately $30 million, in part because of the loss of deposits from certain “e-wallet” merchant which withdrew their balances after the enactment of recent legislation making the facilitation of on-line gaming transactions illegal.  In addition, we believe that part of the Bank’s reduced deposit levels for the first quarter may represent a return to a seasonal change in first quarter deposit levels.  This seasonal pattern was not evident during recent years of rapid growth.  The lower demand deposits for the first quarter led to a shift in our funding costs toward higher rate deposits and Federal Home Loan Bank borrowings.  Assuming the seasonal phenomenon corrects itself in future quarters, we should see these funding costs come down.

Question:We also note that the Bank’s net interest margin decreased from 5.91% for the fourth quarter of 2006 to 5.76% for the first quarter of 2007. What is the Company’s expectation for the remaining quarters of 2007?

Answer:The net interest margin is a function of interest rates and thus, primarily driven by Federal Reserve action and out of our control. We would expect our net interest margin to remain relatively steady for the foreseeable future. In any case, we would expect future declines, if any, to be much more moderate than the reduction seen in the first quarter of 2007 as compared to the fourth quarter of 2006.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

99Press Release of First Regional Bancorp, dated April 17, 2007, announcing financial results for the quarter ended March 31, 2007.

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein may constitute forward-looking statements. Although First Regional believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from First Regional’s expectations include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which First Regional conducts its operations. Statements made herein are made as of the date hereof only. The Company shall have no obligation to update information and forward-looking statements presented herein.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 23, 2007
	FIRST REGIONAL BANCORP
	By:	/s/ Thomas E. McCullough
		Thomas E. McCullough
		Corporate Secretary

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EX-99

Exhibit 99

News Release

First Regional	1801 Century Park East	Jack A. Sweeney
Bancorp	Century City, California 90067	Board Chairman
	Telephone (310) 552-1776	Chief Executive Officer
	Facsimile (310) 552-1772
			IMMEDIATE RELEASE

FIRST REGIONAL BANCORP REPORTS STRONG FINANCIAL RESULTS

FOR THE FIRST QUARTER OF 2007

Financial Highlights Include the Following:

·Net Income Rises to First Quarter High

·Total Assets, Deposits and Loans Advance From Prior Year Levels

·Revenues from Earning Assets Increase 13% to $41.3 Million

CENTURY CITY, CALIFORNIA (April 17, 2007) – First Regional Bancorp (NasdaqGM: FRGB) today reported record first quarter financial results for the three months ended March 31, 2007.  Continuing to generate positive results, the company posted increases in net income, as well as total assets, total deposits, net loans and total capital.

Net income for the first three months of 2007 was $8,991,000, equal to 69 cents per diluted share, an increase of 6% from $8,484,000, or 65 cents per diluted share in the corresponding quarter of 2006.  Results have been adjusted to reflect the 3-for-1 stock split effected in August, 2006.

Revenues from earning assets rose 13% to $41,325,000 from $36,607,000 in the previous year.  Average total earning assets of $1.866 billion were approximately 5% above $1.771 billion in 2006. Operating results benefited from an improved yield on earning assets, reflecting generally higher prevailing interest rates in the current year.  However, net interest margin was modestly lower due to interest expense resulting from the higher level of bearing liabilities.

At March 31, 2007, total assets were $2.027 billion, approximately 5% higher than the $1.925 billion total of a year earlier.  Total deposits grew 8% to $1.587 billion from $1.468 billion on the same date in 2006.   Net loans were $1.824 billion, compared with $1.789 billion in the prior year.  Total capital rose 37% to $157.1 million from $115.0 million, primarily reflecting the retention of earnings.

Jack A. Sweeney, chairman and chief executive officer, commented:  “It is gratifying to report another strong and profitable quarter as we made further progress toward our key objectives of sound growth, increased profitability and financial strength.  Our team of experienced banking professionals continues to secure quality lending opportunities, and in line with our conservative philosophy, we are keeping prime emphasis on maintaining our excellent credit quality.”

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Reflecting the quality of the loan portfolio, no increases in reserves for loan losses were required during the quarter.  The reserve for loan losses totaled $20.7 million at March 31, 2007, and nonperforming loans amounted to just $63,000 on that date.

Mr. Sweeney added:  “First Regional continues to benefit from a generally robust southern California economy and in particular from ongoing opportunities within the areas served by our network of regional offices.  Obviously, turmoil in the residential real estate market, particularly the troubled sub-prime lending segment, has generated much attention of late.  Fortunately, First Regional has never been involved in sub-prime or other mortgage lending products that have recently been the subject of much adverse publicity.  While real estate finance has always been a key focus for us due to our considerable expertise in this area, First Regional Bank has a large and diversified client base, and we serve the loan and deposit needs of a variety of market segments including manufacturers, professional firms, wholesalers and others.”

He concluded:  “We remain alert and vigilant, and are prepared to take the steps necessary to meet whatever economic challenges may emerge.  In this regard, we benefit greatly from our strong capital and liquid financial position, giving us the flexibility to react quickly to changing conditions.  We remain optimistic based on our continued momentum, our portfolio of high-quality earning assets, our financial strength and our solid market position.  As always, our primary objective remains clear – to maintain profitable growth on a prudent basis and, thereby, build further value for our shareholders.”

First Regional Bancorp is a bank holding company headquartered in Century City, California.  Its subsidiary, First Regional Bank, specializes in providing businesses and professionals with the management expertise of a major bank and the personalized service of an independent.

# # #

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CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)

	(000’s omitted)
As of March 31	2007		2006
ASSETS:
Cash and due from banks	$	108,118	$	72,195
Federal funds sold	0		0
Cash and cash equivalents	108,118		72,195
Investment securities	30,577		9,376
Federal Home Loan Bank stock - at cost	10,947		13,677
Loans - net	1,823,526		1,788,862
Premises and equipment - net	4,345		3,579
Other real estate owned	0		0
Accrued interest receivable and other assets	49,722		37,686
Total assets	$	2,027,235	$	1,925,375
LIABILITIES AND CAPITAL:
Demand deposits	$	412,788	$	460,311
Savings deposits	53,500		47,912
Money market deposits	890,999		776,670
Time deposits	229,642		183,545
Total deposits	1,586,929		1,468,438
Funds purchased	0		0
Federal Home Loan Bank advances	170,000		230,000
Subordinated debentures	92,785		92,785
Accrued interest payable and other liabilities	20,400		19,124
Total liabilities	1,870,114		1,810,347
Stated capital	53,063		50,077
Retained earnings	103,858		65,018
Net unrealized gain (losses) on available- for-sale securities	200		(67		)
Total capital	157,121		115,028
Total liabilities and capital	$	2,027,235	$	1,925,375
Book value per share outstanding	$	12.84	$	9.47
Total shares outstanding	12,234,656		12,147,399

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	(000’s omitted)
	Three Months Ended
	March 31
	2007		2006
Interest on loans	$	40,938	$	36,507
Interest on federal funds sold	91		32
Interest on securities	296		68
Total interest income	41,325		36,607
Interest on deposits	11,523		7,373
Interest on subordinated debentures	1,683		1,043
Interest on FHLB advances	1,595		2,436
Interest on funds purchased	6		3
Total interest expense	14,807		10,855
Net interest income	26,518		25,752
Provision for loan losses	0		2,391
Net interest income after provision for loan losses	26,518		23,361
Other operating income	2,367		1,952
	.		.
Salaries and related benefits	9,021		6,796
Occupancy expenses	819		622
Other expenses	3,479		2,983
Total other operating expenses	13,319		10,401
Income before provision for income taxes	15,566		14,912
Provision for income taxes	6,575		6,428
Net income	8,991		$	8,484

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	(000’s omitted)
	Three Months Ended
	March 31
	2007			2006
Net income per share
Basic	$	0.74		$	0.70
Diluted	$	0.69		$	0.65
Average shares outstanding	12,215,675			12,126,237
Diluted average shares	13,079,261			12,953,679
Average Equity	$	156,921		$	110,489
Average Assets	$	1,977,349		$	1,868,059
Return on Average Equity (%)	23.24			31.14
Return on Average Assets (%)	1.84			1.84
Efficiency Ratio (%)	46.11			37.54
Number of Employees	271			229
Assets per Employee (000s)	$	7,481		$	8,408
CREDIT QUALITY
Beginning Reserve for Loan Losses (000s)	$	20,624		$	17,577
Loan Loss Provisions	0			2,391
Loan Recoveries	79			0
Loan Chargeoffs	0			(941		)
Net Change in Allowance for Unfunded Loan Commitments	(9		)	(52		)
Ending Reserve for Loan Losses (000s)	$	20,694		$	18,975
Nonperforming Assets (000s)	$	63		$	69
Nonperforming Assets / Gross Loans (%)	0.00			0.00
Reserve for Loan Losses / Nonperforming Assets (%)	32847.62			27500.00
Reserve for Loan Losses / Gross Loans (%)	1.12			1.05

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	(000’s Omitted)
	For the Three Months Ended March 31,
	2007					2006
	Average				Average	Average				Average
	Balance		Interest		Yield/Cost (%)	Balance		Interest		Yield/Cost (%)
Gross Loans	$	1,831,040	$	40,938	9.07	$	1,755,251	$	36,507	8.44
Funds Sold	6,765		91		5.46	3,344		32		3.88
Investment Securities	28,554		296		4.20	11,945		68		2.31
Total Earning Assets	$	1,866,359	$	41,325	8.98	$	1,770,540	$	36,607	8.39
Deposits	$	1,598,369	$	11,523	2.92	$	1,465,064	$	7,373	2.04
Federal Home Loan Bank Advances	118,578		1,595		5.46	218,267		2,436		4.53
Subordinated Debentures	92,785		1,683		7.36	62,201		1,043		6.80
Funds Purchased	407		6		5.98	81		3		15.02
Total Bearing Liabilities	$	1,810,139	$	14,807	3.32	$	1,745,613	$	10,855	2.52
Net Interest Spread (1)					5.66					5.86
Net Interest Margin (2)					5.76					5.90

(1) Net interest spread represents the average yield earned on Earning Assets less the average cost of Bearing Liabilities.

(2) Net interest margin represents Net Interest Income divided by average Earning Assets.

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The following is a schedule of new loans booked (not including loan renewals) by First Regional’s subsidiary, First Regional Bank, during each month of the first quarter of 2007:

Month	New Loans Booked
	(000’s omitted)
January	$	140,531
February	85,927
March	116,121
First Quarter Total	$	342,579

The following is a schedule describing the primary components of First Regional Bank’s loan portfolio as of March 31, 2007 and  2006:

	Disbursed Balance				Disbursed Balance
	as of March 31,				as of March 31,
	2007		Percentage		2006		Percentage
	(000’s omitted)		of Total		(000’s omitted)		of Total
Commercial Real Estate Loans
Construction Loans	$	426,684	23.0	%	$	265,064	14.6	%
Mini-Perm Loans	277,016		15.0	%	310,479		17.1	%
Bridge Loans	868,212		46.9	%	1,049,841		57.8	%
Other	38,217		2.1	%	24,846		1.4	%
	1,610,129		86.9	%	1,650,230		90.9	%
Commercial Non-Real Estate
Secured Loans	$	241,864	13.1	%	$	165,804	9.1	%
					$
Total loans	$	1,851,993	100.0	%	1,816,034		100.0	%
Less - Allowance for loan losses	20,694				18,975
- Deferred loan fees	7,773				8,197
Net Loans	1,823,526				1,788,862

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical fact, included herein may constitute forward-looking statements.  Although First Regional believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.  Important factors that could cause actual results to differ materially from First Regional’s expectations include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which First Regional conducts its operations.

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