Anticipates Quick Return to Profitability; Remains Well Capitalized

First Regional Bancorp (Nasdaq:FRGB), posted strong core earnings in the second quarter ended June 30, 2008, but significant additions to its loan loss reserve in the challenging real estate environment resulted in a loss for the period and for the year to date.

Reflecting the impact of the economic climate, in the second quarter of 2008 First Regional made a $44.7 million provision to its loan loss reserve and charged off a total of $34.2 million in loans secured by real estate in the recently concluded quarter. These transactions brought the loan loss reserve to $44.2 million, or 1.90% of gross loans, at June 30, 2008. Nonperforming assets as of the same date, consisting of eleven loans, totaled $32.9 million, or 1.41% of gross loans, compared to $17.8 million at March 31, 2008, and just $13,000 on June 30, 2007.

For the three months ended June 30, 2008 the net loss was $18.5 million, equal to $1.46 per diluted share, compared with last year's second quarter profit of $8.6 million, or 66 cents per diluted share. For the first six months of 2008, the Company’s net loss was $13.8 million, or $1.08 per diluted share, versus a profit of $17.6 million, or $1.35 per diluted share, for the first half of 2007. At June 30, 2008, total assets were $2.472 billion, up 20.1% from $2.058 billion one year earlier. Total deposits grew 21.0% to $1.982 billion from $1.640 billion a year earlier, and net loans posted growth of 21.0% to $2.282 billion from $1.885 billion at June 30, 2007. First Regional continues to exceed all financial ratio requirements under applicable regulations for “Well Capitalized” status, the highest level established by banking regulators.

H. Anthony Gartshore, President and Chief Executive Officer, commented: "Clearly these are challenging times for financial institutions like First Regional, and obviously our results are being adversely affected by these difficult conditions. Despite continuing pressures on the segments of real estate in which we participate, we benefit from having avoided involvement in sub-prime mortgages and other exotic financial instruments which have been particularly hard hit. Our second quarter loan loss provision followed an exhaustive review of our loan portfolio, and reflects our realistic assessment of the economic environment and its impact on collateral values and borrower performance. It should be emphasized that the loan loss provisions we have made relate to only a small number of land and real estate development loans; the vast majority of our loan portfolio continues to be well-secured and to perform as agreed. First Regional’s approach has always been to confront challenges fully, directly, and realistically, and we believe we have accomplished this in the second quarter. Consistent with the conservative and prudent basis on which First Regional has always operated, and especially in light of current economic conditions, we remain highly selective on loan transactions. While we believe we have dealt effectively with our loan problems, the economic future remains unclear, and additional loan loss provisions will be made if called for by 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 served us well in this period. It 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 remain strong. Our assets, deposits, and net loans continue to increase. While operating margins have declined in 2008 due to the Federal Reserve's actions to reduce interest rates and stimulate the economy, and much uncertainly remains regarding the economic environment in which we operate, we expect First Regional to return quickly to the profitability which has long been its hallmark.

"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 efficient, cost-effective operation."

Mr. Gartshore concluded: "While we foresee many challenges, we remain confident regarding the future. The current environment has required difficult measures, but they are a necessary step on First Regional’s road forward, and to providing our shareholders with the value they deserve.”

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.

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.

The following is a schedule of new loans booked (not including renewals of existing loans) by First Regional’s subsidiary, First Regional Bank, during each month of the second quarter of 2008:

The following is a schedule of the primary components of First Regional Bank’s loan portfolio as of June 30, 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.

First Regional Bancorp
H. Anthony Gartshore
President and Chief Executive Officer
310-552-1776