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:  February 4, 2009

(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 February 4, 2009 announcing its financial results for the quarter and year ended December 31, 2008.  The press release is furnished as Exhibit 99 and is hereby incorporated by reference in its entirety.

Item 7.01Regulation FD Disclosure.

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

First Regional has stated that it meets all financial ratio requirements for “Well Capitalized” status.  What are those standards, and how do First Regional’s capital ratios compare to the standards?

Under the Prompt Corrective Action program, banking regulators have established different levels of capital adequacy based on the capital ratios of financial institutions.  The highest capital level under this program is “Well Capitalized.”  The computation of the December 31, 2008 capital ratios of First Regional Bancorp and its subsidiary, First Regional Bank, along with the Well Capitalized ratio standards are as follows:

		Well		First		First
		Capitalized		Regional		Regional
		Standard		Bancorp		Bank
	Equity Capital			150,970,000		225,085,000
	Less: Unrealized Gains			-303,000		-303,000
	Plus: Trust Preferred Securities Qualifying as Tier I Capital			50,222,333		0
Line 1	Tier I Capital			200,889,333		224,782,000
	Plus: Trust Preferred Securities Qualifying as Tier II Capital			42,278,000		0
	Plus: Portion of Loan Loss Reserve Qualifying as Tier II  Capital			31,952,000		31,938,000
Line 2	Total Capital			275,119,333		256,720,000
Line 3	Average Total Assets			2,439,628,000		2,437,989,000
Line 4	Average Risk-weighted Assets			2,520,813,000		2,518,894,000
	Tier I Leverage Ratio
	(Line 1 / Line 3)	5.00	%	8.23	%	9.22	%
	Tier I Capital Ratio
	(Line 1 / Line 4)	6.00	%	7.97	%	8.92	%
	Total Capital Ratio
	(Line 2 / Line 4)	10.00	%	10.91	%	10.19	%

2

Did First Regional participate in the Treasury Department’s Capital Purchase Program?

The Company thoroughly examined the Capital Purchase Program of the Treasury’s Troubled Assets Relief Program (the “TARP Capital Program”), under which the Federal government injects capital into financial institutions through the purchase of preferred stock and warrants.  Since both the Company and First Regional Bank already exceed all financial ratio requirements for “Well Capitalized” status, neither the significant dilution that would result from the issuance of the warrants nor the costs related to the preferred stock appeared to be justified.  Accordingly, First Regional did not seek capital under the TARP Capital Program.

3

Does First Regional anticipate involvement in other government programs relating to the Emergency Economic Stabilization Act?

First Regional is monitoring the many programs which continue to emerge as part of the Federal government’s efforts to stabilize and strengthen the nation’s economy.   All programs are evaluated based on their applicability to First Regional, and whether they will provide benefit to the Company and its shareholders.  The Company’s subsidiary, First Regional Bank, is participating in the program to provide full deposit insurance coverage of non-interest bearing deposit transaction accounts under the FDIC’s Temporary Liquidity Guarantee Program.  As neither the Company nor First Regional Bank anticipate issuing qualifying debt, they will not participate in the debt guarantee portion of the Temporary Liquidity Guarantee Program

4

First Regional has reported its total “non-performing assets” and loans past due 30 to 89 days.  Can you provide an update on the composition and status of these items?

Per banking industry convention, non-performing assets consist of loans past due 90 or more days and still accruing interest, loans on non-accrual status, and other real estate owned (“OREO”).  As of December 31, 2008 First Regional’s non-performing assets were as follows:

Amount	Status	Asset Type	Collateral
3,734,400		OREO	105 acres of residential land in Riverside County, California
5,290,400		OREO	18 acres of residential land in Riverside County, California
3,345,000	Nonaccrual	Land Loan	Residential land (for 34 units) in Los Angeles County, California
20,744,204	Nonaccrual	Construction Loan	Condominium project in Spring Valley (San Diego County) California
3,930,467	Nonaccrual	Construction Loan	Luxury residence in Tarzana (Los Angeles County) California
8,081,850		OREO	Condominium conversion in San Diego County, California
3,050,000		OREO	23 acres of residential land in Silverdale, Washington
3,647,800		OREO	Apartment building in San Diego County, California
1,990,000	Nonaccrual	Loan to Individual	Unsecured
3,118,500	Nonaccrual	Construction Loan	Condominium project in Bakersfield (Kern County), California
832,780	Nonaccrual	CRE Loan	Retail center in Maricopa County, Arizona
1,006,877	Nonaccrual	CRE Loan	Retail center in Maricopa County, Arizona
1,036,765	Nonaccrual	CRE Loan	Retail center in Maricopa County, Arizona
1,016,190	Nonaccrual	CRE Loan	Retail center in Maricopa County, Arizona
16,575,000	Nonaccrual	Land Loan	9 acres of residential land in Los Angeles County, California
1,500,000	Nonaccrual	Loan to Company	Unsecured
1,741,265	Nonaccrual	Land Loan	11.62 acres of residential land in San Bernardino County, California
845,000	Nonaccrual	Land Loan	1.95 acres of residential land in Riverside County, California
1,100,000	Nonaccrual	CRE Loan	13.74 Acres of industrial land in Whatcom County, Washington
7,096,050	Nonaccrual	Residential Loan	Luxury residence in Newport Beach (Orange County) California
1,968,037	Nonaccrual	Loan to Individual	Unsecured
1,609,617	Nonaccrual	Loan to Company	Unsecured
1,284,636	Nonaccrual	CRE Loan	110,000 S.F. warehouse in Whatcom County, Washington
23,679,400	Nonaccrual	Construction Loan	Apartment building in Santa Barbara County, California

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2,244,655	Nonaccrual	Construction Loan	3 single family residences in Santa Barbara County, California
898,363	Nonaccrual	CRE Loan	Retail center in Maricopa County, Arizona
9,180,000	Nonaccrual	CRE Loan	29 Acre Commercial Property in Murray, Utah
193,480	Nonaccrual	Loan to Individual	Unsecured
4,340,000	90+ days past due	CRE Loan	Apartment building in Los Angeles County, California
8,512,500	90+ days past due	Land Loan	82,000 S.F. of residential land in Los Angeles County, California
3,562,024	90+ days past due	Land Loan	29,000 S.F. of residential land in Los Angeles County, California
2,125,000	90+ days past due	Land Loan	18,000 S.F. of residential land in Los Angeles County, California
149,280,260	Gross Non-performing Assets
26,790,838	Less: prior writedowns
1,533,544	Less: writedowns this period
120,955,878	Reported Non-performing Assets

As indicated above, most of First Regional’s nonperforming assets at December 31, 2008 were secured by or consisted of real property.  The value of that real property serves to mitigate potential losses that may otherwise result from a nonperforming asset.  In addition, applicable accounting standards require the Company to evaluate property values periodically relative to their carrying value on the Company’s books or the loans which that property secures.  Accordingly, based on current estimates of property values discounted for anticipated costs of sale and other qualitative factors, the loss potential associated with the Company’s nonperforming assets has already been recognized and is reserved for in the Company’s financial statements.

First Regional’s loans which were 30 to 89 days past due as of December 31, 2008 were as follows:

Amount	Status	Asset Type	Collateral
647,106	Past Due 30-89 days	Land Loan	9 acres of residential land in Los Angeles County, California
9,375,000	Past Due 30-89 days	Construction Loan	Condominium project in San Diego County, California
3,469,308	Past Due 30-89 days	Construction Loan	Condominium project in Los Angeles County, California
3,476,557	Past Due 30-89 days	Construction Loan	Condominium project in Los Angeles County, California
4,281,967	Past Due 30-89 days	Construction Loan	Condominium project in Los Angeles County, California

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2,475,000	Past Due 30-89 days	Land Loan	29,000 SF of residential land in Los Angeles County, California
24,220,912	Past Due 30-89 days	Loan to Company	Unsecured
2,217,885	Past Due 30-89 days	CRE Loan	Apartment building in Orange County, California
3,450,000	Past Due 30-89 days	Land Loan	29,000 SF of residential land in Los Angeles County, California
735,000	Past Due 30-89 days	Land Loan	30,000 SF residential land in Ventura County, California
800,000	Past Due 30-89 days	Land Loan	4.76 acres of residential land in Los Angeles County, California
14,476,201	Past Due 30-89 days	Construction Loan	Condominium project in Los Angeles County, California
6,953,069	Past Due 30-89 days	Construction Loan	Condominium project in Los Angeles County, California
7,632,787	Past Due 30-89 days	CRE Loan	Apartment building in Santa Clara County, California
4,760,548	Past Due 30-89 days	Loan to Company	Unsecured
224,829	Past Due 30-89 days	Loan to Individual	Unsecured
3,014,100	Past Due 30-89 days	CRE Loan	Apartment building in Los Angeles County, California
6,107,500	Past Due 30-89 days	CRE Loan	Apartment building in Los Angeles County, California
2,050,000	Past Due 30-89 days	CRE Loan	Apartment building in Los Angeles County, California
3,709,932	Past Due 30-89 days	CRE Loan	Apartment building in Los Angeles County, California
7,068,259	Past Due 30-89 days	CRE Loan	Apartment building in Los Angeles County, California
1,642,000	Past Due 30-89 days	Land Loan	16,000 SF of residential land in Los Angeles County, California
112,787,960	Gross Other Delinquent Loans
0	Less: prior writedowns
112,787,960	Reported Other Delinquent Loans

7

First Regional’s time deposits experienced significant growth over the past twelve months.  What is the reason for this increase?

The growth in First Regional’s time deposits reflects the Company’s decision to increase deposits obtained from under-represented sources such as time deposits.  Historically, the Company has not competed aggressively for such deposits, since the cost of time deposits is typically higher than the costs of the Company’s other funding sources.  In the second quarter of 2008, however, the Company made the decision to seek more time deposits in order to reduce the utilization of supplemental funding sources (such as advances from the Federal Home Loan Bank) in order to hold such supplemental sources in reserve to deal with possible future funding needs.  This program continued in the third quarter of 2008.  The increase in time deposits was accomplished by quoting more competitive interest rates than had previously been the Company’s practice, and while the cost of the deposits is higher than the supplemental funding sources which they replaced, the rates paid remained at the low end of the market for such deposits.

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Item 9.01Financial Statements and Exhibits

(d)Exhibits

99Press Release of First Regional Bancorp, dated February 4, 2009, announcing financial results for the year and quarter ended December 31, 2008.

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:  February 10, 2009

FIRST REGIONAL BANCORP
By:	/s/ Thomas E. McCullough
	Thomas E. McCullough
	Corporate Secretary

10

EX-99

Exhibit 99

News Release

First Regional	1801 Century Park East
Bancorp	Century City, California 90067
	Telephone (310) 552-1776
	Facsimile (310) 552-1772

IMMEDIATE RELEASE

FIRST REGIONAL BANCORP POSTS OPERATING LOSSES FOR FOURTH
QUARTER AND FULL YEAR 2008 ON HIGHER LOAN LOSS PROVISIONS;
COMPANY MAINTAINS “WELL CAPITALIZED” RATIOS

CENTURY CITY, CALIFORNIA (February 4, 2009)—First Regional Bancorp (Nasdaq-GSM:  FRGB) today announced financial results for both the fourth quarter and year ended December 31, 2008.  Reflecting higher loan loss provisions due to the continuing economic recession, the Company reported operating losses for both the quarter and the full year.  Core earnings (before loan loss provisions and taxes) declined from earlier periods but remained substantial.

The net loss for the quarter ended December 31, 2008 was $10.2 million, equal to 86 cents per diluted share, compared to net income for the fourth quarter of 2007 of $7.9 million, equal to 62 cents per diluted share.  For the full year 2008, the Company recorded a net loss of $22.8 million, or $1.93 per diluted share, versus 2007 net income of $33.6 million, equal to $2.59 per diluted share.

At December 31, 2008, total assets were $2.467 billion, compared to $2.174 billion one year earlier. Total deposits grew to $2.130 billion from $1.721 billion a year earlier, and net loans rose to $2.259 billion from $2.020 billion at December 31, 2007. The increase in loans was the result of a decline in loan payoffs due to slower sales of completed condominium units and the ongoing funding of previously-approved construction loan commitments.  At the end of 2008, equity totaled $151.0 million.  As First Regional has no “intangible” assets on its books, all of the Company’s equity is tangible.  First Regional continues to exceed all financial ratio requirements under applicable regulations for “Well Capitalized” status, the highest level established by banking regulators.

Reflecting the impact of the economic downturn, in the fourth quarter of 2008 First Regional made a $26.3 million provision to its loan loss reserve and charged off a total of $14.2 million in loans. These transactions brought the loan loss reserve to $66.2 million, or 2.85% of gross loans, at December 31, 2008. Nonperforming assets as of the same date totaled $121.0 million, or 5.33% of gross loans plus other real estate owned, compared to $10.5 million at December 31, 2007.

H. Anthony Gartshore, President and Chief Executive Officer, commented: “Clearly these are challenging times for the nation and for financial institutions, and obviously our results have been adversely affected by these difficult conditions. The impact of the economic climate on real estate values has been of particular concern.  Our 2008 loan loss provisions reflect our ongoing review of our loan portfolio, and our current assessment of collateral values and borrower performance. It should be emphasized that the vast majority of our loan portfolio continues to be well-secured and to perform as agreed. Nonetheless, our nonperforming assets increased in the fourth quarter of 2008.  First Regional is continuing its long-standing practice of confronting challenges fully, directly, and realistically.  We do not hesitate to place loans on

1

nonaccrual status (rendering them “nonperforming” by definition) as part of our enhanced collection program.  Most of our nonperforming assets are secured by real estate, and thus our risk of loss is mitigated by the value of the underlying collateral even in a declining market.  Reflecting the economic environment in which we now operate, we remain highly selective on loan transactions. While we believe we are dealing effectively with our problem loans, the economic future remains unclear, and additional loan loss provisions will be made if warranted based on our ongoing analysis of First Regional’s loan portfolio performance and economic conditions in general.”

Mr. Gartshore continued: “First Regional’s long-standing emphasis on capital strength has enabled us to deal realistically with the economic environment while maintaining “well capitalized” capital ratios, the highest standard established by banking regulators. Moreover, our core earnings (before loan loss provisions and taxes), though reduced, remain substantial despite the decline in operating margins in 2008 due to the Federal Reserve’s actions to reduce interest rates in an attempt to stimulate the economy.

“As we move forward, we will continue to benefit from our skilled and experienced management and our capable and professional staff. These members of the First Regional team have shown the talent and experience to confront the challenges and to capitalize on the opportunities that will doubtless arise as the economy and the credit markets return to health. We will continue to provide our clients with our unmatched level of service and the efficient, cost-effective operation they have come to expect.”

Mr. Gartshore concluded: “While we foresee many challenges, we remain confident regarding the future. The current environment continues to require difficult measures, but we are committed to taking those actions as necessary steps in enhancing value over time for First Regional’s 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.

# # #

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.

2

CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)

	(000’s omitted)
As of December 31	2008		2007
ASSETS:
Cash and due from banks	$	19,192	$	46,676
Federal funds sold	42,340		0
Cash and cash equivalents	61,532		46,676
Investment securities, available for sale	26,735		32,156
Federal Home Loan Bank stock - at cost	6,557		8,487
Loans, net of allowance	2,259,341		2,020,217
Premises and equipment, net of depreciation	4,812		5,438
Other real estate owned	9,899		0
Accrued interest receivable and other assets	97,808		61,341
Total assets	$	2,466,684	$	2,174,315
LIABILITIES AND CAPITAL:
Demand deposits	$	368,517	$	418,220
Savings deposits	50,011		58,173
Money market deposits	610,125		951,488
Time deposits	1,101,319		293,196
Total deposits	2,129,972		1,721,077
Funds purchased	0		20,955
Federal Home Loan Bank advances	60,000		135,000
Subordinated debentures	100,517		100,517
Accrued interest payable and other liabilities	25,212		22,147
Total liabilities	2,315,701		1,999,696
Stated capital	45,008		45,989
Retained earnings	105,672		128,480
Net unrealized gains on available-for-sale securities, net of taxes	303		150
Total shareholders’ equity	150,983		174,619
Total liabilities and shareholders’ equity	$	2,466,684	$	2,174,315
Book value per share outstanding	$	12.76	$	14.69
Total shares outstanding	11,833,616		11,890,487

3

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	(000’s omitted)					(000’s omitted)
	Three Months Ended					Twelve Months Ended
	December 31					December 31
	2008			2007		2008			2007
Interest on loans	$	33,766		$	42,873	$	147,155		$	169,303
Interest on federal funds sold	47			244		325			576
Interest on deposits in financial institutions	11			80		147			293
Interest on investment securities	325			338		1,330			1,289
Total interest income	34,149			43,535		148,957			171,461
Interest on deposits	12,539			13,219		44,927			50,125
Interest on subordinated debentures	1,203			1,969		5,253			7,095
Interest on FHLB advances	264			1,543		4,350			6,414
Interest on other borrowings	0			5		33			16
Total interest expense	14,006			16,736		54,563			63,650
Net interest income	20,143			26,799		94,394			107,811
Provision for loan losses	26,261			1,422		92,212			2,622
Net interest income (loss) after provision for loan losses	(6,118		)	25,377		2,182			105,189
Other operating income	2,120			4,671		12,165			11,421
Salaries and related benefits	8,214			9,073		34,002			36,373
Occupancy expenses	992			956		3,908			3,640
Other operating expenses	5,392			6,638		18,029			18,567
Total other operating expenses	14,598			16,667		55,939			58,580
Income (loss) before provision (benefit) for income taxes	(18,596		)	13,381		(41,592		)	58,030
Provision for income taxes (benefit)	(8,387		)	5,479		(18,787		)	24,420
Net income (loss)	$	(10,209	)	$	7,902	$	(22,805	)	$	33,610

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	(000’s omitted)					(000’s omitted)
	Three Months Ended					Twelve Months Ended
	December 31					December 31
	2008			2007		2008			2007
Net income per share
Basic	$	(0.86	)	$	0.66	$	(1.93	)	$	2.77
Diluted	$	(0.86	)	$	0.62	$	(1.93	)	$	2.59
Average shares outstanding	11,832,626			11,935,640		11,817,678			12,120,892
Diluted average shares	11,832,626			12,793,075		11,817,678			12,981,088
Average equity	$	157,530		$	172,263	$	167,929		$	163,370
Average assets	$	2,437,989		$	2,150,076	$	2,380,776		$	2,056,426
Return on average equity (%)	(25.78		)	18.20		(13.58		)	20.57
Return on average assets (%)	(1.67		)	1.46		(0.96		)	1.63
Efficiency ratio (%)	65.57			52.96		52.50			49.13
Number of employees	302			301
Assets per employee (000s)	$	8,168		$	7,224
CREDIT QUALITY
Beginning reserve for loan losses	$	54,674		$	21,993	$	22,771		$	20,624
Loan loss provisions	26,261			1,422		92,212			2,622
Loan recoveries	1			0		20			94
Loan chargeoffs	14,162			691		48,407			741
Net change in allowance for unfunded loan commitments and lines of credit	(551		)	47		(373		)	172
Ending reserve for loan losses	$	66,223		$	22,771	$	66,223		$	22,771
Loans Past Due 30-89 days	$	112,788		$	21,440
Loans Past Due 90 days or More	$	18,539		$	8,525
Nonaccrual Loans	92,517			2,000
Other Real Estate Owned	9,899			0
Nonperforming Assets	$	120,955		$	10,525
Nonperforming assets / gross loans + OREO (%)	5.33			0.52
Reserve for loan losses / nonperforming assets (%)	54.75			216.35
Reserve for loan losses / gross loans (%)	2.85			1.11

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	(000s omitted)
	For the Three Months Ended December 31,
	2008					2007
	Average				Average	Average				Average
	Balance		Interest		Yield/Cost (%)	Balance		Interest		Yield/Cost (%)
Gross loans	$	2,331,203	$	33,766	5.76	$	2,028,014	$	42,873	8.39
Federal funds sold	26,830		47		0.70	21,653		244		4.47
Investment securities	26,297		336		5.08	31,954		418		5.19
Total earning assets	$	2,384,330	$	34,149	5.70	$	2,081,621	$	43,535	8.30
Deposits	$	2,087,927	$	12,539	2.39	$	1,746,931	$	13,219	3.00
Federal Home Loan Bank advances	108,155		264		0.97	132,446		1,543		4.62
Subordinated debentures	100,517		1,203		4.76	100,517		1,969		7.77
Funds purchased	68		0		0.00	475		5		4.18
Total bearing liabilities	$	2,296,667	$	14,006	2.43	$	1,980,369	$	16,736	3.35
Net interest spread (1)					3.27					4.95
Net interest margin (2)					3.35					5.11

(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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	(000s omitted)
	For the Twelve Months Ended December 31,
	2008					2007
	Average				Average	Average				Average
	Balance		Interest		Yield/Cost (%)	Balance		Interest		Yield/Cost (%)
Gross Loans	$	2,270,810	$	147,155	6.48	$	1,916,249	$	169,303	8.84
Federal funds sold	19,607		325		1.66	11,772		576		4.89
Investment Securities	28,646		1,477		5.16	30,886		1,582		5.12
Total Earning Assets	$	2,319,063	$	148,957	6.42	$	1,958,907	$	171,461	8.75
Deposits	$	1,934,708	$	44,927	2.32	$	1,664,273	$	50,125	3.01
Federal Home Loan Bank Advances	187,053		4,350		2.33	125,439		6,414		5.11
Subordinated Debentures	100,517		5,253		5.23	94,840		7,095		7.48
Funds Purchased	1,132		33		2.92	210		16		7.62
Total Bearing Liabilities	$	2,223,410	$	54,563	2.45	$	1,884,762	$	63,650	3.38
Net Interest Spread (1)					3.97					5.37
Net Interest Margin (2)					4.07					5.50

(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 the primary components of First Regional Bank’s loan portfolio as of December 31, 2008.

	Disbursed Balance as of December 31, 2008		Percentage of Total
Commercial Real Estate Loans
Construction
Condominium	$	321,830,000	13.81	%
Apartment	46,688,000		2.00	%
SFR	58,280,000		2.50	%
Office	18,266,000		0.78	%
Retail	67,299,000		2.89	%
Commercial/Industrial	0		0.00	%
Mixed Use	57,000,000		2.45	%
Other (Hotel/Motel)	36,645,000		1.57	%
Total	606,008,000		26.00	%
Mini Perm/Bridge
Condo	52,495,000		2.25	%
Apartment	541,722,000		23.25	%
SFR	53,432,000		2.29	%
Office	80,654,000		3.46	%
Retail	155,998,000		6.69	%
Commercial/Industrial	34,772,000		1.49	%
Mixed Use	110,114,000		4.73	%
Other (Hotel/Motel)	160,494,000		6.89	%
Total	1,189,681,000		51.05	%
Land Loans by County
California Counties
Los Angeles	161,283,000		6.92	%
Orange	27,577,000		1.18	%
Riverside	8,882,000		0.38	%
San Bernardino	13,980,000		0.60	%
San Diego	6,413,000		0.28	%
Other	8,629,000		0.37	%
California Total	226,764,000		9.73	%

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	Disbursed Balance as of December 31, 2008		Percentage of Total
Other States	24,771,000		1.06	%
Total Land Loans	251,535,000		10.79	%
Government Guaranteed Loans	1,337,000		0.06	%
Total Real Estate Loans	2,048,561,000		87.90	%
Commercial Non-Real Estate Secured Loans	281,635,000		12.10	%
Total Loans	2,330,196,000		100.00	%
Less - Allowance for loan losses	66,223,000
- Deferred loan fees	4,632,000
Net loans	$	2,259,341,000

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