First Regional Bank. Quarterly Report June 30, Century Park East. Century City, California Telephone (310)

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1 1801 Century Park East Century City, California Telephone (310) Quarterly Report June 30, 2004 MEMBER FDIC

2 To Our Clients and Friends: registered a new high in earnings for the first six months of the current year, with net income advancing by 99% from the 2003 level. For the first half of 2004, First Regional Bank s net income rose to $4,846,000 from $2,425,000 for the first six months of As of June 30, 2004 total assets recorded 70% growth on a year-over-year basis, while total deposits showed a 60% increase. The availability of attractive lending opportunities enabled our bankers to expand net loans by 75% over the past year while maintaining our high standards for credit quality. As our results indicate, our operations continue to reflect robust activity and growing market penetration. We benefited from the contributions of our eight regional offices, our Trust and Investment Division, and our Merchant Services and Trust Administration Services business units. We also wish to emphasize the key role our talented managers and employees have played in the company s ongoing progress and success. First Regional again turned in an exceptional performance, as our bank strives to further increase its presence in carefully targeted markets throughout southern California. Looking ahead, we remain optimistic but recognize the ever-present uncertainties related to economic conditions, the actions of the Federal Reserve Board, and potentially adverse developments in a volatile international scene. We will remain watchful and ready to adapt swiftly to changing conditions as warranted. It is our conviction that our proven emphasis on high asset quality, strong capital and prudent reserves will continue to be the bedrock of our success. We are advancing on a path of solid profitability guided by prudent and conservative operating strategies. 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 forwardlooking 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. Jack A. Sweeney Chairman

3 FIRST REGIONAL BANK FIRST REGIONAL BANK CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED) (000 s omitted) As of June 30, ASSETS: Cash and due from banks $ 25,704 $ 30,573 Investment securities 6,238 8,839 Funds sold 29,660 10,425 Loans, net 896, ,849 Premises and equipment 2,295 1,620 Other assets 18,551 13,925 Total assets $978,846 $576,231 LIABILITIES AND CAPITAL Demand deposits $310,391 $196,606 Savings deposits 33,565 27,200 Money market deposits 351, ,820 Time deposits 145,723 93,872 Total deposits 841, ,498 Federal Home Loan Bank advances 40,000 0 Funds purchased 0 0 Other liabilities 9,118 6,292 Total liabilities 890, ,790 Stated capital 67,597 30,197 Retained earnings 20,681 14,243 Unrealized gains (losses) on available for sale securities 0 1 CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) (000's omitted) The six months ended June 30, Interest and fees on loans $ 22,688 $13,948 Interest on funds sold Interest on securities Revenue from earning assets 22,780 14,104 Interest on deposits 2,164 1,162 Interest on FHLB advances Interest on funds purchased 2 5 Cost of funds 2,421 1,204 20,359 12,900 Provision for loan losses 1, Net revenue from earning assets 18,557 12,150 Other revenue 2,552 2,134 Salaries and related benefits 9,079 6,607 Occupancy expense Other operating expenses 3,788 3,181 Total operating expenses 13,720 10,478 Income before taxes 7,389 3,806 Provision for taxes 2,543 1,381 Net income $ 4,846 $ 2,425 Total capital 88,278 44,441 Total liabilities and capital $978,846 $576,231

4 BOARD OF DIRECTORS FIRST REGIONAL BANK SENIOR OFFICERS FIRST REGIONAL BANK Jack A. Sweeney Board Chairman Lawrence Sherman Board Vice Chairman Fred Edwards Fisher Edwards Investment Counsel H. Anthony Gartshore Gary Horgan Partner Horgan, Rosen, Beckham & Coren Thomas McCullough Executive Chief Operating Officer Corporate Secretary Richard Schreiber Partner Tatum CFO Partners, LLP Marilyn Sweeney Investor Jack A. Sweeney Board Chairman H. Anthony Gartshore Thomas McCullough Executive Chief Operating Officer Corporate Secretary Jeffrey Hahn Executive Trust and Investment Division Dexter Kodama Executive Cashier Carolyn Nicholson Executive Real Estate Loans Klaus Schilling Executive Steven Sweeney Executive General Counsel Ronald Fields Regional South Bay Regional Office Ted Vournas Regional Glendale Regional Office Jane Weblemoe Regional Ventura County Regional Office Duane Allison Charles Arrindell First Regional Merchant Services Michelle Brooks Chief Risk Officer Max Bruno Gerald Bruver Allen Court Irvine Regional Office Ralph Downing Richard Hensley Steven Sweeney Executive General Counsel Edward Meyer Regional Hollywood Regional Office Harry Miller Regional Encino Regional Office Gloria Lee Ron Makela

5 SENIOR OFFICERS FIRST REGIONAL BANK (continued) SENIOR OFFICERS TRUST ADMINISTRATION SERVICES CORP. Jackie Nixon Colleen O Rourke David Peskin Jory Potts Leslie Lyons Kim Meyer Jeffrey Munson Ted Pappas James Wagner Paul Maxwell Executive Chief Operating Officer Karen Neal Eric Sohovich Ryan Perez Elizabeth Thompson Chief Financial Officer William Upchurch Paul Verdon Santa Monica Regional Office Martha Ponce Christopher Smith C. J. VerHalen Jerold Beckman Maureen Boggs Debra Bordeaux Barry Bouley Jeannette Kesterson Duane King

6 F I R S T R E G I O N A L B A N K O F F I C E S Century City Regional Office 1801 Century Park East Telephone: (310) Century City, California Facsimile: (310) Encino Regional Office Ventura Boulevard, Suite 201 Telephone: (818) Encino, California Facsimile: (818) Glendale Regional Office 655 North Central Avenue, Suite 1500 Telephone: (818) Glendale, California Facsimile: (818) Hollywood Regional Office 7083 Hollywood Boulevard, Suite 650 Telephone: (323) Hollywood, California Facsimile: (323) Irvine Regional Office Von Karman, Suite 1050 Telephone: (949) Irvine, California Facsimile: (949) Santa Monica Regional Office 501 Santa Monica Blvd., Suite 403 Telephone: (310) Santa Monica, California Facsimile: (310) South Bay Regional Office 990 West 190th Street, Suite 350 Telephone: (310) Torrance, California Facsimile: (310) Ventura County Regional Office 2535 Townsgate Road, Suite 300 Telephone: (805) Westlake Village, California Facsimile: (805) Trust and Investment Division 1801 Century Park East Telephone: (310) Century City, California Facsimile: (310) First Regional Merchant Services Roadside Drive, Suite 155 Telephone: (818) Agoura Hills, California Facsimile: (818) Trust Administration Services Corp La Place Court, Suite 160 Telephone: (800) Carlsbad, California Facsimile: (760)