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California United Bank and California Oaks State Bank Announce Execution of a Definitive Agreement

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  Published in Business and Finance on Wednesday, August 25th 2010 at 6:10 GMT by Market Wire
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ENCINO, Calif.--([ BUSINESS WIRE ])--The Boards of Directors of San Fernando Valley headquartered California United Bank (OTCBB:CUNB) and Conejo Valley based California Oaks State Bank (OTCBB:COSB) announced today that the companies entered into a merger agreement providing for California United Bank to acquire California Oaks State Bank.

"We believe this is a significant opportunity for our customers and employees and offers an excellent value for our shareholders by providing them the ability to participate in long-term growth opportunities, while also providing them immediate value"

The acquisition is valued at approximately $17.3 million, with approximately half that amount being paid in cash and the balance in the form of shares of California United Bank common stock. At June 30, 2010, California United Bank had total assets of $532.0 million, total deposits of $420.2 million and seven offices; and California Oaks State Bank had assets of $136.7 million, total deposits of $114.0 million and three offices. Upon completion of the transaction, California United Bank will have over $650.0 million in assets and $530.0 million in deposits. The transaction is expected to be immediately accretive to California United Banka™s earnings per share in 2011 and 2012.

California United Bank intends to continue to operate both of California Oaks State Banka™s branches as full-service branches. At close, California United Bank will feature six full-service branches; located in Encino, Santa Clarita Valley, Los Angeles, South Bay, Conejo Valley and Simi Valley and three commercial lending offices located in Glendale/San Gabriel Valley, Orange County and Walnut Creek.

The merger has been unanimously approved by the Boards of Directors of both banks. The acquisition is subject to approval by bank regulatory authorities and the shareholders of each of California United Bank and California Oaks State Bank as well as other customary conditions. The transaction is expected to close in the fourth quarter of 2010.

aWe are pleased to have California Oaks State Bank joining forces with California United Bank,a said David Rainer, President and Chief Executive Officer of California United Bank. aCalifornia Oaks State Bank has a strong franchise as well as talented branch staff and the strategic opportunities of this transaction are extremely attractive. The combination is expected to create one of the largest banks headquartered in the San Fernando Valley and presents significant prospects for our communities and shareholders. Our current office in the Conejo Valley has been very successful in bringing our personalized banking services to this growing area. The acquisition of California Oaks State Bank, which includes full-service offices in the Conejo and Simi Valleys, is a logical step in our strategy to achieve critical mass by expanding in local and adjacent markets with attractive demographics and to continue to build franchise value for our shareholders.a

aCalifornia Oaks State Bank has an established track record of excellent customer service which will combine well with California United Banka™s passion for delivering legendary relationship banking. California Oaks State Bank customers can count on seeing the same familiar faces at their branches as our objective is to maintain the excellent rapport our new colleagues have with their customers,a concluded Rainer.

aWe believe this is a significant opportunity for our customers and employees and offers an excellent value for our shareholders by providing them the ability to participate in long-term growth opportunities, while also providing them immediate value,a commented John Nerland, President and Chief Executive Officer of California Oaks State Bank. aOur two banks have very similar operating philosophies and the critical mass of a larger institution will enable better penetration and services to our markets. California United Bank is building a strong franchise and we look forward to being a part of its future.a

California Oaks State Bank shareholders will receive approximately $11.35 per share if the transaction closes by December 31, 2010 or $11.30 per share if the transaction closes after December 31, 2010, in the form of stock, cash or a combination of cash and stock, subject to the election and proration procedures set forth in the merger agreement. The receipt of California United Bank stock by shareholders of California Oaks State Bank is expected to be structured as a tax-free exchange. The number of shares of California United Bank stock received by California Oaks State Bank shareholders will depend on the average closing price of the California United Bank stock for the 20 business day period ending ten days prior to the closing date of the transaction.

Both banks have been active in their communities and philanthropic activities. Among the charities they support are: The Boys and Girls Club of the West Valley, The Boys and Girls Clubs of Conejo & Las Virgenes, Casa Pacifica, Heart of Los Angeles (aHOLAa), Kidsave International, various local Rotary Club Foundation events, and the YMCA of Southeast Conejo Valley. California United Bank recently received the coveted aOutstandinga rating from the Federal Deposit Insurance Corporation (FDIC) for its performance under the Community Reinvestment Act (CRA).

Hovde Financial, Inc. acted as financial advisor to California United Bank and rendered a fairness opinion to the California United Bank Board of Directors. Howe, Barnes, Hoefer & Arnett acted as financial advisor to California Oaks State Bank and rendered a fairness opinion to the Board of Directors of California Oaks State Bank in conjunction with this transaction. Horgan, Rosen, Beckham & Coren acted as outside legal counsel to California United Bank and Loren P. Hansen, PC acted as counsel for California Oaks State Bank.

About California United Bank

California United Bank, which recently celebrated the fifth anniversary of its opening, provides a full range of financial services, including credit and deposit products, cash management, and internet banking for business, entrepreneurs, professionals and high net worth individuals throughout Southern California from offices in the San Fernando Valley, the Santa Clarita Valley, the Conejo Valley, Los Angeles, South Bay, Glendale/San Gabriel Valley and Orange County. To view California United Banka™s most recent financial information, please visit the [ Investor Relations ] section of the Banka™s Web site. Information on products and services may be obtained by calling (818) 257-7700 or visiting the Banka™s Web site at [ www.californiaunitedbank.com ].

About California Oaks State Bank

California Oaks State Bank (OTCBB: COSB) with $136.7 million in assets is located in Ventura County with offices in Thousand Oaks and Simi Valley and a Loan Production Office located in Walnut Creek, California. California Oaks State Bank was founded in 1998 as a locally owned community business bank. The bank provides a full range of products and services including commercial and real estate loans as well as cash management products and deposit services. Its unique capability in diversified lending, in addition to its customary community bank credit products, helps its customers meet their cash management goals. Further information may be obtained at [ www.caloaks.com ].

Additional Information About the Transaction for Stockholders

In connection with the proposed merger with California Oaks State Bank, California United Bank will file with the FDIC (the aFDICa) and the California Department of Financial Institutions a Registration Statement that will include a joint proxy statement of California United Bank and California Oaks State Bank that also constitutes a prospectus of California United Bank. California United Bank and California Oaks State Bank will each mail the proxy statement/prospectus to their respective stockholders. Investors and security holders are urged to read the proxy statement/prospectus regarding the proposed merger when it becomes available, as well as any amendments or supplements to those documents, because it will contain important information. You may obtain a free copy of the proxy statement/prospectus (when available) and other related documents filed by California United Bank by writing to California United Bank, 15821 Ventura Boulevard, Suite 100, Encino, CA 91436, Attention: Corporate Secretary. The proxy statement/prospectus (when it is available) and the other documents may also be obtained for free by accessing California United Banka™s website at [ www.californiaunitedbank.com ] under the tab aInvestor Relationsa and then under the heading aFDIC Filingsa.

California United Bank, California Oaks State Bank and their directors, and executive officers may be deemed to be participants in the solicitation of proxies from their shareholders in connection with the proposed merger. Information about the directors and executive officers of both California United Bank and California Oaks State Bank will be set forth in the proxy statement /prospectus relating to the merger when it becomes available. Information about California United Banka™s directors and executive officers is available in its Annual Report on Form 10-K and Form 10-KA for the year ended December 31, 2009, which were filed with the Federal Deposit insurance Corporation on March 12, 2010 and April 29, 2010, respectively and its notice of annual meeting and proxy circular for its most recent annual meeting, which was filed with the FDIC on June 8, 2010. These documents will be available at [ www.californiaunitedbank.com ] as described in the previous paragraph.

This communication does not constitute an offer of any securities for sale.

Forward Looking Statements

Certain statements contained in this release that are not statements of historical fact constitute forward-looking statements for which the Bank claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the aActa), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the FDIC, in press releases and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of our plans, objectives and expectations or those of our management or Boards of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.Words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the possible or assumed future financial condition, results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond our ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) difficult and adverse conditions in the global and domestic capital and credit markets and the state of California, (2) continued volatility and further deterioration of the capital and credit markets, (3) significant costs or changes in business practices required by new banking laws or regulations, (4) a more adverse than expected decline, a adouble dipa recession, or continued weakness in general business and economic conditions, which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense, (5) changes in market rates and prices which may adversely impact the value of financial products, (6) changes in the interest rate environment and market liquidity which may reduce interest margins and impact funding sources, (7) increased competition, (8) changes in the financial performance and/or condition of the Bank's borrowers, (9) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes, (10) earthquake, fire, pandemic or other natural disasters, (11) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (12) our success at managing the risks involved in the foregoing.

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to reflect the occurrence of unanticipated events.

For a more complete discussion of these risks and uncertainties, see the California United Banka™s Annual Report on [ Form 10-K ] for the year ended December 31, 2009, and particularly Part I, Item 1A, titled "Risk Factors.a

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