Related Party Transactions and Outside Related Director Information

First Regional Bancorp (FRGB)

5/1/2006 Proxy Information

Some of the directors, officers and principal shareholders of the Company and companies with which they are associated are customers of, and have had banking transactions with, the Bank in the ordinary course of the BankŐs business and the Bank expects to have banking transactions with such persons in the future. These transactions include lines of credit of $100,000 each which the Bank has extended to certain of the directors of the Company and the Bank, including Jack A. Sweeney, Lawrence J. Sherman, Fred M. Edwards, H. Anthony Gartshore, Thomas E. McCullough, Marilyn J. Sweeney and Steven J. Sweeney. In the CompanyŐs opinion, all loans and commitments to lend included in such transactions were made in compliance with applicable banking regulations and other laws and on substantially the same terms, including interest rates, collateral and repayment schedule, as those prevailing for comparable transactions with other persons of similar creditworthiness and did not involve more than a normal risk of collectibility nor contained terms unfavorable to the Bank. In addition, as of December 31, 2005 and 2004, deposits from directors, named executive officers and their affiliates amounted to $2,977,000 and $924,000, respectively.

Gary M. Horgan, a director of the Company and the Bank, is a partner in the law firm of Horgan, Rosen, Beckham & Coren, LLP. That firm, among other law firms, provides legal services to the Company and the Bank and was paid $89,892 by the Company and the Bank during 2005.

Marilyn J. Sweeney, who served as a director of the Company and the Bank, is the wife of Jack A. Sweeney, Chairman of the Board and Chief Executive Officer of the Company and the Bank. For her service as a director of the Company and the Bank, Marilyn J. Sweeney received aggregate fees of $38,900 during 2005.

Steven J. Sweeney, who serves as General Counsel of the Company and Executive Vice President and General Counsel of the Bank, and also as a director of the Bank, is the son of Jack A. Sweeney. During 2005, Steven J. Sweeney received aggregate compensation of $216,409.

During 2000, the Bank purchased two life insurance policies on behalf of Jack A. Sweeney. The policies were fully funded at purchase by payment of one-time premiums on the policies, aggregating $6,000,000, and no further premiums are owed on the policies. The Bank owns the cash surrender value of the policies, which is 100% of the equity value of the policies, with no cash surrender charge. The Bank and the insuredŐs estate are co-beneficiaries, with each receiving a certain amount upon the death of the insured. At such time, the insuredŐs estate will receive a death benefit of approximately $5,000,000. The insured reimburses the Bank for the cost of this benefit each year. Also at the time of the insuredŐs death, the Bank will receive its original investment of $6,000,000 plus an additional amount of return on its investment, currently equal to approximately $1,293,000.