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:  July 30, 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:

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

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

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

oPre-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 July 30, 2009 announcing its financial results for the quarter and six months ended June 30, 2009.  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.

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.”  As First Regional has no material intangible assets, all of First Regional’s equity capital, and its equity capital ratios, are tangible.  The computation of the June 30, 2009 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			129,582,022		222,304,953
	Less: Unrealized Gains			-604,000		0
	Plus: Trust Preferred Securities
	Qualifying as Tier I Capital			42,992,674		0
Line 1	Tier I Capital			171,970,696		222,304,953
	Plus: Trust Preferred Securities
	Qualifying as Tier II Capital			54,507,326		0
	Plus: Portion of Loan Loss
	Reserve Qualifying as Tier II
	Capital			29,320,151		29,593,351
Line 2	Total Capital			255,798,173		251,898,304
Line 3	Average Total Assets			2,401,772,786		2,401,772,786
Line 4	Total Risk-weighted Assets			2,324,637,000		2,322,466,000
	Tier I Leverage Ratio
	(Line 1 / Line 3)	5.00	%	7.16	%	9.26	%
	Tier I Capital Ratio
	(Line 1 / Line 4)	6.00	%	7.40	%	9.57	%
	Total Capital Ratio
	(Line 2 / Line 4)	10.00	%	11.00	%	10.85	%

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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 June 30, 2009 First Regional’s non-performing assets were as follows:

NON-PERFORMING ASSETS

Amount	Status	Asset Type	Collateral
786,900		OREO	105 acres of residential land in Homeland (Riverside County), California
1,162,050		OREO	18 acres of residential land in Menifee (Riverside County), California
3,118,920		OREO	Residential land (for 34 units) in Glendale (Los Angeles County), California
6,299,697		OREO	Condominium project in Spring Valley (San Diego County) California
3,930,467		OREO	Luxury residence in Tarzana (Los Angeles County) California
1,098,000		OREO	23 acres of residential land in Silverdale (Kitsap County), Washington
1,990,000	Non-accrual	Loan to Individual	Unsecured
3,085,214	Non-accrual	Construction Loan	Condominium project in Bakersfield (Kern County), California
16,516,297	Non-accrual	Land Loan	9 acres of residential land in Palos Verdes (Los Angeles County), California
1,316,000		OREO	11.62 acres of residential land in San Bernardino (San Bernardino County), California
814,703	Non-accrual	Land Loan	1.95 acres of residential land in Corona (Riverside County), California
1,100,000	Non-accrual	CRE Loan	13.74 Acres of industrial land in Bellingham (Whatcom County), Washington
1,968,037	Non-accrual	Loan to Individual	Unsecured
1,609,617	Non-accrual	Loan to Company	Unsecured
1,284,636	Non-accrual	CRE Loan	110,000 sq. ft. warehouse in Bellingham (Whatcom County), Washington
23,479,400	Non-accrual	Construction Loan	Apartment building in Carpenteria (Santa Barbara County), California
2,211,572	Non-accrual	Construction Loan	3 single family residences in Carpenteria (Santa Barbara County), California
9,180,000	Non-accrual	CRE Loan	29 Acre Commercial Property in Murray (Salt Lake County), Utah
14,282,842	Non-accrual	Construction Loan	Condominium Project in Sparks (Washoe County), Nevada
12,442,772	Non-accrual	Construction Loan	Condominium project in Oceanside (San Diego County), California
2,369,550	Non-accrual	Construction Loan	Luxury residence in Palm Springs (Riverside County), California
1,642,000	Non-accrual	Land Loan	16,000 sq. ft. of residential land in Santa Monica (Los Angeles County), California

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9,375,000	Non-accrual	Land Loan	100,000 sq. ft. of residential land in Valley Village (Los Angeles County), California
7,068,259	Non-accrual	Land Loan	62,000 sq. ft. of residential land in Valley Village (Los Angeles County), California
800,000	Non-accrual	Land Loan	4.76 acres of residential land in Sunland (Los Angeles County), California
2,898,600	Non-accrual	Land Loan	5.5 acres of residential land in Henderson (Clark County), California
4,852,852	Non-accrual	Land Development	24 acres of commercial and residential land in Ontario (San Bernardino County), California
2,593,713	Non-accrual	Construction Loan	22 unit condominium project in Los Angeles (Los Angeles County), California
735,000	Non-accrual	Land Loan	30,000 sq. ft. residential land in Thousand Oaks, (Ventura County), California
9,193,419	Non-accrual	CRE Loan	180 Unit Apartment in North Hollywood (Los Angeles County), California
530,225	Non-accrual	CRE Loan	98 Unit Apartment in Las Vegas (Clark County), Nevada
1,217,250	Non-accrual	Land Loan	6 Unit Apartment in Valley Village (Los Angeles County), California
1,217,250	Non-accrual	Land Loan	6 Unit Apartment in Valley Village (Los Angeles County), California
1,217,250	Non-accrual	Land Loan	6 Unit Apartment in Valley Village (Los Angeles County), California
1,565,000	Non-accrual	Land Loan	14,000 sq. ft. of residential land in Los Angeles (Los Angeles County), California
5,311,000		OREO	128 Unit Apartment in Daphne (Baldwin County), Alabama
3,508,093	Non-accrual	CRE Loan	Restaurant in Summerland (Santa Barbara County), California
8,512,500	Non-accrual	Land Loan	82,000 sq. ft. of residential land in Valley Village (Los Angeles County), California
3,562,024	Non-accrual	Land Loan	29,000 sq. ft. of residential land in Valley Village (Los Angeles County), California
14,935,906	Non-accrual	Construction Loan	29 Unit condominium project in Beverly Hills (Los Angeles County), California
199,829	Non-accrual	Loan to Individual	Unsecured
3,469,308	Non-accrual	Construction Loan	7 Unit condominium project in Los Angeles (Los Angeles County), California
7,090,000	Non-accrual	Construction Loan	Condominium project in Los Angeles County, California
8,149,789	Non-accrual	Construction Loan	22 unit condominium project in Thousand Oaks (Ventura County), California
5,874,484	Non-accrual	Construction Loan	18 unit condominium project in South Pasadena (Los Angeles County), California
1,265,841	Non-accrual	Land Loan	15,000 sq. ft. lot in Santa Monica (Los Angeles County) California
1,257,564	Non-accrual	Land Loan	16,000 sq. ft. lot in Santa Monica (Los Angeles County) California
5,068,000	Non-accrual	Land Loan	5.2 acres of commercial land in Las Vegas (Clark County) Nevada
5,399,685	Non-accrual	Construction Loan	Luxury residence in Irvine (Orange County) California
1,520,000	Non-accrual	CRE Loan	4 unit apartment in Los Angeles (Los Angeles County), California
4,251,115	90+ days past due	CRE Loan	Medical office building in Newport Beach (Orange County) California
3,975,000	Non-accrual	CRE Loan	56 room hotel in Santa Barbara (Santa Barbara County) California
408,326	Non-accrual	Loan to Individual	Unsecured
500,000	Non-accrual	Loan to Individual	Unsecured

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75,000	Non-accrual	Loan to Individual	Unsecured
13,772,079	Non-accrual	CRE Loan	272 Unit apartment in Fern Park (Seminole County), Florida
3,186,170	Non-accrual	CRE Loan	96 unit mobile home park in San Diego, California
6,160,000	Non-accrual	CRE Loan	15,000 sq.ft. bldg. In Los Angeles (Los Angeles County), California
13,904,421	Non-accrual	Construction Loan	27 Unit condo project in Los Angeles (Los Angeles County), California
17,898,574	Non-accrual	Construction Loan	42 unit Condo project in Los Angeles (Los Angeles County), California
1,439,797	Non-accrual	Construction Loan	15,000 sq. ft. lot in West Hollywood (Los Angeles County) California
5,634,677	Non-accrual	Land Loan	56 acres of land in Cedar Park, Texas
249,962	Non-accrual	Loan to Company	Unsecured
46,489	Non-accrual	Loan to Company	Unsecured
23,500	Non-accrual	Loan to Individual	Unsecured
3,400,000	90+ days past due	Land Loan	31,000 sq. ft. residential lot in Brentwood (Los Angeles County) California
80,666	90+ days past due	Loan to Company	Unsecured
362,933	90+ days past due	Loan to Company	Unsecured
4,205,850	90+ days past due	CRE Loan	97 unit apartment in Federal Heights, Colorado
4,779,492	90+ days past due	Land Loan	320 Acres of land in Bullhead City, Arizona
70,597	90+ days past due	Loan to Company	Federally guaranteed
77,083	90+ days past due	Loan to Company	Federally guaranteed
499,000	90+ days past due	Loan to Individual	Unsecured
315,077,246	Gross Non-performing Assets
0	Less: prior writedowns
550,748	Less: writedowns this period
314,526,498	Reported Non-performing Assets
46,531,351	Less: specific reserves
267,995,147	Net Book Value of Non-performing Assets

As indicated above, most of First Regional’s nonperforming assets at June 30, 2009 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

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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 June 30, 2009 were as follows:

OTHER DELINQUENT LOANS

Amount	Status	Asset Type	Collateral
4,833,581	Past Due 30-89 days	Construction Loan	32 unit condominium project in Santa Monica (Los Angeles County), California
1,889,995	Past Due 30-89 days	Loan to Company	Unsecured
136,326	Past Due 30-89 days	Loan to Individual	Unsecured
1,799,660	Past Due 30-89 days	Loan to Company	Unsecured
299,880	Past Due 30-89 days	Loan to Individual	Unsecured
75,000	Past Due 30-89 days	Loan to Company	Unsecured
1,884,940	Past Due 30-89 days	CRE Loan	26 room hotel in Morro Bay, California
2,545,381	Past Due 30-89 days	Loan to Individual	3 story parking structure in Los Angeles (Los Angeles County), California
11,049,989	Past Due 30-89 days	CRE Loan	98 Unit Apartment in Las Vegas (Clark County), Nevada
11,861,212		CRE Loan	98 Unit Apartment in Las Vegas (Clark County), Nevada
2,496,982		Land Loan	4.9 Acre lot in Redlands, California
2,418,072		Land Loan	7.24 Acres lot in Temecula, California
9,481,516		CRE Loan	19 unit condo project in Los Angeles (Los Angeles County) California
50,772,534	Gross Other Delinquent Loans
0	Less: prior writedowns
50,772,534	Reported Other Delinquent Loans

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What is the status of First Regional’s regulatory agreements?

First Regional’s wholly-owned subsidiary, First Regional Bank, consented to an agreement with the FDIC and the California Department of Financial Institutions in the form of an order to cease and desist which become effective on February 23, 2009.

The Bank has already achieved substantial compliance with the agreement.  The principle components of the agreement, and the status of the Bank’s compliance efforts, are as follows:

·Retain qualified management, and continue the active involvement of the board of directors in managing the Bank’s activities.

The Bank’s existing management remains in place; no changes in management were suggested or required, and none have been made.  The board of directors is maintaining its active involvement in the management of the Bank.

·Increase capital by $12 million, increase capital ratios based on a pre-determined schedule, and develop a comprehensive capital plan to assure compliance with that schedule.  No dividends may be declared without prior regulatory approval.

The $12 million capital increase called for in the agreement, as well as a subsequent $5 million contribution, was made by First Regional Bancorp in the first quarter of 2009 using its existing cash reserves.  The schedule referred to in the agreement calls for the Bank to increase its Tier 1 leverage ratio to 9.5% immediately, and to further increase it to 10% by September 30.  For the second quarter of 2009 the Bank’s Tier 1 leverage ratio (based on average assets) was 9.3%, but was 9.5% based on total assets at the end of the quarter.  A comprehensive capital plan was developed and adopted, which includes plans to meet the September 30 goal, and at this time that objective is expected to be met without the need to raise additional outside capital.  No dividends have been declared by the Bank.

·Eliminate from the books any assets classified loss and a portion of any assets classified doubtful that have not already been charged-off or collected, and develop a comprehensive plan to reduce classified assets based on a pre-determined schedule.

This provision relates solely to the Bank’s classified assets as of June 30, 2008.  The assets classified loss and the portion of the assets classified doubtful were eliminated from the Bank’s books by the end of 2008.  The Bank developed a written plan to reduce the remaining classified assets, and has implemented it.  The schedule referred to in the agreement calls for the Bank to reduce the classified assets from their original level of $218 million to $130 million by June 30, and to $110 million by September 30.  As of June 30 the balance of the classified assets had been reduced to $101.5 million, meaning that the Bank has met both the June 30 and the September 30 goals.  Naturally, the Bank is continuing its efforts to collect all of the classified assets even though the goals contained in the agreement have already been met.

·Create and implement a plan to increase the diversification of the Bank’s lending activities.

The Bank has adopted and implemented the diversification plan called for in the agreement.  Under the plan, over time the Bank will reduce the amount of real estate lending it does, and increase its other types of lending.  The Bank has also adopted revised policies reducing the permissible amount of credit that may be extended to individual borrowers and their related interests.

·Create and implement a comprehensive profit plan to improve the Bank’s earnings performance.

The profit plan called for in the agreement has been adopted and implemented.  While profits are expected to remain under pressure for a time as the Bank deals with its problem assets, improvement is anticipated in the future.

·Update or revise the Bank’s written policies in the areas of credit administration and liquidity management.

Updated policies have been adopted by the board of directors for both of these functional areas.

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·Correct all violations of laws or regulations, and take action to prevent future violations.

Such violations included certain technical violations, such as regulations requiring a bank to prepare an updated evaluation of real property value, even for a loan extension made with no new money lent.  It is believed that all previous violations of laws or regulations have been corrected, and that procedures are in place to prevent future violations.

As evidenced above, the Bank has made considerable progress thus far in complying with its agreement, and expects to remain in full compliance.

In addition, First Regional Bancorp has entered into a written agreement with the Federal Reserve Bank of San Francisco which became effective on April 21, 2009.  The Company is currently in full compliance with the agreement, and expects to remain so.  The principle components of this agreement, and the status of the Company’s compliance efforts, are as follows:

·The Company shall not declare or pay dividends without prior regulatory approval

The Company has never declared or paid dividends in its history, and no dividends are anticipated at this time.

·The Company shall not take dividends or other forms of payment from First Regional Bank without prior regulatory approval.

No such payments are being sought at this time, and dividend payments by the Bank are already restricted under the terms of the Bank’s regulatory agreement.

·The Company and its non-bank subsidiaries shall not make any distributions of principal, interest or other sums on subordinated debentures or trust preferred securities without prior regulatory approval.

In accordance with their terms, the Company has deferred payments on its outstanding trust preferred securities and the associated subordinated debentures.

·The Company and its non-bank subsidiaries shall not incur, increase, or guarantee any debt without prior regulatory approval.

No such debt transactions have occurred since the effective date of the agreement, and none are contemplated at this time.

·The Company shall not purchase or redeem stock without prior regulatory approval.

No shares have been purchased or redeemed since the effective date of the agreement, and no further purchases or redemptions are contemplated at this time.

·The Company shall develop and submit a revised written capital plan to maintain sufficient capital on a consolidated and a bank-only basis.

The revised plan has been adopted and implemented.

As just described, the Company expects to achieve and maintain full compliance with its written agreement.

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Item 9.01Financial Statements and Exhibits

(d)Exhibits

99Press Release of First Regional Bancorp, dated July 30, 2009, announcing financial results for the year ended June 30, 2009.

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:  August 4, 2009

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

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Exhibit Index

99Press Release of First Regional Bancorp, dated July 30, 2009, announcing financial results for the quarter ended June 30, 2009.

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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 REPORTS

OPERATING RESULTS FOR SECOND QUARTER

AND FIRST HALF OF 2009

·Accelerates progress in resolving problem credits

·Further strengthens loan loss reserves

·Substantial loan loss provisions lead to operating loss for period

·Exceeds all financial ratio requirements for “Well Capitalized” status

·Achieves planned shrinkage in total assets and net loans; deposits rise from year ago levels

CENTURY CITY, CALIFORNIA (July 30, 2009)—First Regional Bancorp (Nasdaq-GSM: FRGB) reported operating losses for the second quarter and first half of 2009.  The losses principally reflect additional loan loss provisions and other costs incurred in the course of resolving problem loans resulting from the current severe economic recession.

For the three months ended June 30, 2009, the net loss was $17.8 million, equal to $1.50 per diluted share, versus a net loss of $18.5 million, or $1.57 per diluted share, in last year’s second quarter. For the first six months of 2009, the net loss was $21.0 million, or $1.78 per diluted share, compared to a net loss of $13.8 million, or $1.17 per diluted share, for the comparable period in 2008.

Operating results continue to be adversely impacted by historic lows in interest rates resulting from the Federal Reserve’s aggressive actions directed at reviving the economy during the past twelve months.  These actions have significantly impacted the yield on First Regional’s loan portfolio, which consists almost entirely of variable-rate notes that adjust immediately upon any change in interest rates.  In contrast, deposit accounts generally require a longer period to mature, and interest costs adjust accordingly.  As a result, net interest income in the first half of 2009 amounted to $31.6 million, down sharply from $50.5 million in the corresponding period of 2008.

H. Anthony Gartshore, President and Chief Executive Officer, commented:  “While times remain difficult for First Regional and financial institutions in general, we continue to make steady progress confronting our challenges.  Our highest priority remains to resolve problem assets spawned by the current economic recession.  As well, First Regional has made a deliberate effort to reduce total assets and net loans in concert with our ongoing program of shrinking the asset base, thereby further strengthening our capital position.”

At June 30, 2009, total assets were $2.380 billion, compared to $2.472 billion one year earlier. Net loans declined more sharply to $2.157 billion at June 30, 2009, compared to $2.282 billion on the same date in 2008. Total deposits at the end of the quarter were $2.011 billion, up from $1.982 billion in the prior year.  Reflecting the impact of operating losses over the past year in the difficult economic environment, shareholders’ equity at the end of the second quarter of 2009 amounted to $129.7 million, or $10.96 per share outstanding, compared with $159.3 million, or $13.50 per outstanding share a year ago.  First Regional continues to exceed all financial

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ratio requirements for Well Capitalized status under applicable regulations.  As First Regional holds no material intangible assets, all of First Regional’s equity capital is tangible.

Mr. Gartshore continued: “In the second quarter of 2009 we completed the resolution of over $46 million in nonperforming assets, and we expect that resolution process to continue.  Despite our success in resolving problem assets, our long-standing policy of dealing firmly and pragmatically with delinquent borrowers resulted in our nonperforming asset totals increasing in the second quarter.  We are confident that those totals will decline as we complete the asset resolution transactions which we have in process.”

In the second quarter of 2009 First Regional made provisions of $31.1 million to its reserve for loan losses, compared to provisions of $44.7 million in the second quarter of 2008.  Year to date, 2009 loan loss provisions were $38.6 million, versus provisions of $55.5 million for the same period in 2008.  First Regional’s loan loss reserve totaled $74.5 million, or 3.34% of gross loans at June 30, 2009, compared to a reserve of $44.2 million, or 1.90% of gross loans at the close of the second quarter of 2008.

Mr. Gartshore stated: “As reported earlier, most of our nonperforming assets are secured by real estate, meaning that our risk of loss is limited by the value of the underlying collateral even in the present soft market. As required by applicable accounting standards, we have made loan loss provisions to reflect our latest estimates of such potential losses, so the anticipated impact of such losses is already reflected in our financial results.  As always, we will continue to make loan loss provisions as necessary based on our ongoing analysis of First Regional’s loan portfolio performance and economic conditions in general.

“As previously disclosed, our vigorous loan collection efforts combined with normal loan repayments are expected to result in a significant reduction in both net loans and total assets as we move through the balance of 2009,” continued Mr. Gartshore.  “The aforementioned asset shrinkage, along with the historically low interest rate environment currently prevailing, is placing continued pressure on our 2009 operating results. The shrinkage will, however, further strengthen First Regional’s capital ratios, which already exceed the ‘well capitalized’ standards established by banking regulators.”

Mr. Gartshore concluded:  “Despite the many challenges that remain, we look to the future with continued confidence and resolve.  Our strong capital base provides the solid foundation which enables us to offer customers and prospects creative solutions to their loan and deposit needs, and an unmatched level of personal service which has long been our hallmark.  While our actions in the present environment are limiting current growth and profitability, they contribute to our fundamental goal of enhancing value for our shareholders over time.”

First Regional Bancorp is a bank holding company headquartered in Century City.  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 June 30	2009				2008
ASSETS:
Cash and due from banks	$	24,065			$	35,084
Federal funds sold			18,710						17,145
Cash and cash equivalents	42,775				52,229
Investment securities, available for sale	27,002				24,598
Interest-bearing deposits in financial institutions	14,006				2,003
Federal Home Loan Bank stock - at cost	7,359				18,532
Loans, net of allowance	2,156,575				2,281,604
Premises and equipment, net of depreciation	4,524				5,320
Other real estate owned	22,473				0
Accrued interest receivable and other assets	105,279				88,102
Total assets	$	2,379,993			$	2,472,388
LIABILITIES AND CAPITAL:
Demand deposits	$	399,433			$	398,251
Savings deposits	52,960				76,968
Money market deposits	514,028				873,181
Time deposits	1,044,178				633,352
Total deposits		2,010,599					1,981,752
Funds purchased	0				0
Federal Home Loan Bank advances	110,000				210,000
Subordinated debentures	100,517				100,517
Accrued interest payable and other liabilities	29,139				20,821
Total liabilities	2,250,255				2,313,090
Stated capital	45,318				44,615
Retained earnings	83,816				114,699
Net unrealized gains (losses) on available-for-sale securities, net of taxes	604				(16)
Total shareholders' equity	129,738				159,298
Total liabilities and shareholders' equity	$		2,379,993		$			2,472,388
Book value per share outstanding	$			10.96	$					13.50
Total shares outstanding	11,836,016				11,802,839

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	(000’s omitted)						(000’s omitted)
	Three Months Ended						Six Months Ended
	June 30						June 30
	2009			2008			2009			2008
Interest on loans	$	25,728		$	35,957		$	53,575		$	76,253
Interest on federal funds sold	17			105			60			173
Interest on deposits in financial institutions	14			51			26			123
Interest on investment securities	330			317			641			676
Total interest income	26,089			36,430			54,302			77,225
Interest on deposits	9,538			9,437			20,813			20,504
Interest on subordinated debentures	813			1,224			1,777			2,840
Interest on FHLB advances	60			1,628			82			3,336
Interest on other borrowings	0			24			0			32
Total interest expense	10,411			12,313			22,672			26,712
Net interest income	15,678			24,117			31,630			50,513
Provision for loan losses	31,116			44,743			38,616			55,533
Net interest income after provision for loan losses	(15,438)			(20,626)			(6,986)			(5,020)
Other operating income	2,178			2,481			4,279			7,652
.	.
Salaries and related benefits	8,236			8,487			17,052			17,973
Occupancy expenses	1,031			954			2,022			1,923
Other operating expenses	8,615			5,416			15,298			7,503
Total other operating expenses	17,882			14,857			34,372			27,399
Income (loss) before provision (benefit) for income taxes	(31,142)			(33,002)			(37,079)			(24,767)
Provision for income taxes (benefit)	(13,359)			(14,489)			(16,059)			(10,989)
Net loss	$		(17,783)	$		(18,513)	$		(21,020)	$		(13,778)

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	(000’s omitted)								(000’s omitted)
	Three Months Ended								Six Months Ended
	June 30								June 30
	2009				2008				2009			2008
Net income per share
Basic	$	(1.50)			$	(1.57)			$	(1.78)		$	(1.17)
Diluted	$	(1.50)			$	(1.57)			$	(1.78)		$	(1.17)
Average shares outstanding	11,836,016				11,796,903				11,835,673			11,806,280
Diluted average shares	11,836,016				11,796,903				11,835,673			11,806,280
Average equity	$	138,548			$	173,216			$	144,321		$	174,352
Average assets	$	2,401,773			$	2,407,558			$	2,445,747		$	2,324,457
Return on average equity (%)	(51.48)				(42.99)				(29.37)			(15.89)
Return on average assets (%)	(2.97)				(3.09)				(1.73)			(1.19)
Efficiency ratio (%)	100.15				55.86				95.72			47.11
Number of employees	286				294
Assets per employee (000s)	$	8,322			$	8,409
CREDIT QUALITY
Beginning reserve for loan losses (000s)	$	68,264			$	33,580			$	61,336		$	22,771
Loan loss provisions	31,116				44,743				38,616			55,533
Loan recoveries	76				18				80			18
Loan chargeoffs	25,130				34,244				25,802			34,244
Net change in allowance for unfunded loan commitments and lines of credit	125				55				221			74
Ending reserve for loan losses (000s)	$			74,451	$			44,152	$		74,451	$		44,152
Loans Past Due 30-89 days	$	50,773			$	22,865
Loans Past Due 90 Days or More	$	17,727			$	0
Nonaccrual Loans	274,327				32,861
Other Real Estate Owned			22,473				0
Nonperforming Assets	$		314,527		$		32,861
Nonperforming Assets /
Nonperforming Assets / Gross Loans + OREO (%)	13.96				1.41
Reserve for Loan Losses /
Nonperforming Assets (%)	23.67				134.36
Reserve for Loan Losses /
Reserve for Loan Losses / Gross Loans (%)	3.34				1.90

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	(000s omitted)
	For the Three Months Ended June 30,
	2009					2008
		Average			Average		Average			Average
		Balance		Interest	Yield/Cost (%)		Balance		Interest	Yield/Cost (%)
Gross loans	$	2,277,383	$	25,728	4.53	$	2,293,118	$	35,957	6.31
Funds sold	34,413		17		0.20	21,240		105		1.99
Interest bearing deposits in financial institutions	10,312		14		0.54	5,203		51		3.94
Investment securities	26,036		330		5.08	24,699		317		5.16
Total earning assets	$	2,348,144	$	26,089	4.46	$	2,344,260	$	36,430	6.25
Deposits	$	2,084,668	$	9,538	1.84	$	1,841,705	$	9,437	2.06
Federal Home Loan Bank advances	71,420		813		4.57	289,385		1,628		2.26
Subordinated debentures	100,517		60		0.24	100,517		1,224		4.90
Funds purchased	0		0		0.00	3,520		24		2.74
Total bearing liabilities	$	2,256,605	$	10,411	1.85	$	2,235,127	$	12,313	2.22
Net interest spread (1)					2.61					4.03
Net interest margin (2)					2.68					4.13

(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 Six Months Ended June 30,
	2009					2008
		Average			Average		Average			Average
		Balance		Interest	Yield/Cost (%)		Balance		Interest	Yield/Cost (%)
Gross Loans	$	2,302,286	$	53,575	4.69	$	2,211,408	$	76,253	6.93
Funds Sold	53,084		60		0.23	15,033		173		2.31
Interest bearing deposits in financial institutions	6,180		26		0.85	6,120		123		4.04
Investment Securities	25,324		641		5.10	24,756		676		5.49
Total Earning Assets	$	2,386,874	$	54,302	4.59	$	2,257,317	$	77,225	6.88
Deposits	$	2,154,479	$	20,813	1.95	$	1,790,708	$	20,504	2.30
Federal Home Loan Bank Advances	47,943		1,777		7.47	255,582		3,336		2.62
Subordinated Debentures	100,517		82		0.16	100,517		2,840		5.68
Other Borrowings	0		0		0.00	2,126		32		3.03
Total Bearing Liabilities	$	2,302,939	$	22,672	1.99	$	2,148,933	$	26,712	2.50
Net Interest Spread(1)					2.60					4.38
Net Interest Margin (2)					2.67					4.50

(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 describing the primary components of First Regional Bank’s loan portfolio as of  June 30, 2009:

	Disbursed Balance	Percentage of
	as of June 30, 2009	Total
Commercial Real Estate Loans
Construction
Condominium	$272,249,000	12.18%
Apartment	55,427,000	2.48%
Single Family Residence	58,191,000	2.60%
Office	15,767,000	0.71%
Retail	78,265,000	3.50%
Commercial/Industrial	0	0.00%
Mixed Use	53,169,000	2.38%
Other (Hotel/Motel)	29,250,000	1.31%
Total	562,318,000	25.16%
Mini Perm/Bridge
Condominium	39,399,000	1.76%
Apartment	565,536,000	25.31%
SFR	39,206,000	1.75%
Office	80,515,000	3.60%
Retail	147,023,000	6.58%
Commercial/Industrial	32,401,000	1.45%
Mixed Use	118,112,000	5.29%
Other (Hotel/Motel)	173,328,000	7.76%
Total	1,195,520,000	53.50%
Land Loans by County
California Counties
Los Angeles	148,605,000	6.65%
Orange	28,767,000	1.29%
Riverside	8,682,000	0.39%
San Bernardino	10,136,000	0.45%
San Diego	6,406,000	0.29%

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Other	8,646,000	0.39%
California Total	211,242,000	9.46%
Other States	23,103,000	1.03%
Total Land Loans	234,345,000	10.49%
Government Guaranteed Loans	837,000	0.04%
Total Real Estate Loans	1,993,020,000	89.19%
Commercial Non-Real Estate Secured Loans	241,510,000	10.81%
Total Loans	2,234,530,000	100.00%
Less - Allowance for loan losses	74,451,000
- Deferred loan fees	3,504,000
Net loans	$2,156,575,000

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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