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| FRGB > SEC Filings for FRGB > Form 8-K on 11-Feb-2009 | All Recent SEC Filings |
11-Feb-2009
Results of Operations and Financial Condition, Regulation FD Disclosure, F
(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.
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 %
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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.
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
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 Condominium project in Spring Valley (San
Loan Diego County) California
3,930,467 Nonaccrual Construction Luxury residence in Tarzana (Los Angeles
Loan 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 Unsecured
Individual
3,118,500 Nonaccrual Construction Condominium project in Bakersfield (Kern
Loan 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 Unsecured
Company
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 Luxury residence in Newport Beach (Orange
Loan County) California
1,968,037 Nonaccrual Loan to Unsecured
Individual
1,609,617 Nonaccrual Loan to Unsecured
Company
1,284,636 Nonaccrual CRE Loan 110,000 S.F. warehouse in Whatcom County,
Washington
23,679,400 Nonaccrual Construction Apartment building in Santa Barbara
Loan County, California
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2,244,655 Nonaccrual Construction 3 single family residences in Santa
Loan 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 Unsecured
Individual
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
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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 Land Loan 9 acres of residential land in Los
30-89 days Angeles County, California
9,375,000 Past Due Construction Loan Condominium project in San Diego County,
30-89 days California
3,469,308 Past Due Construction Loan Condominium project in Los Angeles
30-89 days County, California
3,476,557 Past Due Construction Loan Condominium project in Los Angeles
30-89 days County, California
4,281,967 Past Due Construction Loan Condominium project in Los Angeles
30-89 days 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 Unsecured
Company
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 Condominium project in Los Angeles
Loan County, California
6,953,069 Past Due 30-89 days Construction Condominium project in Los Angeles
Loan 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 Unsecured
Company
224,829 Past Due 30-89 days Loan to Unsecured
Individual
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
. . .
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(d) Exhibits
99 Press 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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