Two California lenders, First Regional Bancorp (FRGB.O) and Bank On It Inc (BKOT.OB), have entered agreements with the Federal Reserve Bank of San Francisco designed to ensure they remain financially sound, the regulator said on Thursday.

First Regional, the Los Angeles-based parent of First Regional Bank, agreed to submit within 60 days a written plan detailing how it will maintain sufficient capital, including the sources and timing of additional funds.

Bank On It, the Stockton-based parent of Community Bank of San Joaquin, agreed to submit within 60 days a statement detailing its planned sources and uses of cash to pay interest on debt, operating costs and other expenses for 2009.

Both lenders also agreed not to pay dividends without prior Fed approval, among other restrictions.

The Fed said the agreements are designed to maintain the financial soundness of the companies and ensure they are strong enough to support their banking units.

First Regional lost $23.6 million in 2008 and ended the year with $2.47 billion of assets, a regulatory filing shows. Bank on It lost $917,000 in the nine months ended last September and had $146.8 million of assets, according to its banking unit's website.

Both banks have reported increases in real estate-related losses. California has been among the U.S. states hit hardest by the housing slump.

First Regional shares were down 12 cents to $1.67 in morning Nasdaq trade. Bank On It shares traded this week at $6.50 on the Bulletin Board. (Reporting by Jonathan Stempel; editing by John Wallace)

California