First California Financial Group Announces Second Quarter 2008 Results; Favorable Asset Quality Trends; Strong Capital

LOS ANGELES, CA, Jul 23 (MARKET WIRE) --
First California Financial Group, Inc. (NASDAQ: FCAL) today reported net
income of $1.3 million for the second quarter ended June 30, 2008.

"In light of the current economic environment we are encouraged by several
consecutive quarter comparisons which indicate positive trends,
particularly asset quality and a stable net interest margin," said C. G.
Kum, president and CEO. "Our asset quality trends are favorable and our
capital position is strong. 2008 is proving to be a challenging year for
the banking industry due in part to market dynamics, real estate concerns,
the effect of falling interest rates on loans and their impact on margins
and ultimately the overall result of these forces on profitability. The
company's operating performance for the second quarter, though adequate,
allows for opportunities for improvement."

Second Quarter 2008 Highlights:

-- Total past due and non-accrual loans declined to $9.2 million from
$11.8 million last quarter;

-- Net loan charge-offs were $15,000 compared with $570,000 last quarter
- none were real estate related;

-- Residential construction and land loans decreased $14.8 million to
$109.7 million from $124.5 million last quarter;

-- The allowance for loan losses as a percentage of loans was unchanged
from last quarter at 1.02%;

-- Loans grew $19.1 million to $773.5 million from $754.4 million last
quarter;

-- Net interest margin increased to 4.17% from 4.14% last quarter;

-- The bank continues to be strongly capitalized -- exceeding all "well-
capitalized" capital measures;

-- New Glendale full-service branch office opened

Asset Quality

Total past due and non-accrual loans decreased to $9.2 million as of June
30, 2008 compared with $13.3 million as of December 31, 2007 and continue
to represent a small percentage of total loans outstanding. Non-accrual
loans were $6.6 million as of June 30, 2008 compared with $5.7 million as
of December 31, 2007. Three new non-accrual loans with balances totaling
$0.9 million were added during the quarter -- 1 commercial loan, 1
residential mortgage and 1 commercial real estate loan. The largest
non-accrual loan, in the amount of $5.7 million, is a real estate-secured
land loan in bankruptcy court litigation. The company recorded a loan loss
provision of $200,000 and net loan charge-offs of $15,000 during the
second quarter and a loan loss provision of $650,000 and net loan
charge-offs of $585,000 for the six months ended June 30, 2008. None of
the charge-offs in the six months ended June 30, 2008 were real estate
related. The company recorded no loan loss provision in the second
quarter 2007 or the six months ended June 30, 2007. The allowance for
loan losses as a percentage of total loans was unchanged from last
quarter at 1.02%.

Commenting on the bank's loan portfolio, Kum said: "Throughout the recent
economic turmoil, we have continued to experience a low level of past due
and non-accrual loans and we believe the relatively consistent trend
reflects our success at effectively monitoring and managing our loan
portfolio. We attribute this to our underwriting standards and our
proactive credit administration efforts which act to identify problem
loans early while seeking timely resolution. We continue to lend in our
markets and invest in talented lending personnel to take advantage of
select opportunities."

Kum said the bank continues to be aggressive in managing risk in its
entire loan portfolio, and particularly in the construction sector.
Updated appraisals have been received in 2008 for almost all construction
projects and the bank continues to work aggressively with builder clients
to reduce their exposures by paying down lines, funding interest from
sales proceeds and borrower resources, and lowering sale prices where
necessary to remain in-line with the slower market. He pointed out that
most of the residential construction projects are in the coastal
communities of Southern California served by First California where
management believes real estate values have not experienced declines as
severe as other portions of California, particularly inland areas of
Central and Southern California.

Results of Operations

For the quarter ended June 30, 2008, the company reported net income of
$1.3 million, or 11 cents per diluted share, compared to 2008 first
quarter net income of $2.2 million or 19 cents per diluted share. The
first quarter 2008 results include a $1.2 million pre-tax gain on
derivatives and the second quarter 2008 results include a $0.4 million
pre-tax loss on derivatives. Excluding these amounts from both periods'
results in adjusted first quarter earnings of $1.5 million, or 13 cents
per diluted share, compared to adjusted second quarter earnings of $1.5
million or 13 cents per diluted share. The interest rate swap contracts
were terminated in the second quarter 2008; the remaining interest rate
floor contract expires in December 2008 and is not expected to have a
significant effect on earnings for the second half of the year.

For the six months ended June 30, 2008, the company reported net income of
$3.5 million, or 30 cents per diluted share, compared with net income of
$2.0 million, or 20 cents per diluted share for the six months ended June
30, 2007. Year-ago results that affect comparability include a $2.4
million gain on the sale of two bank charters, a $1.6 million charge
related to the refinancing of trust preferred securities and approximately
$4.9 million of integration and conversion charges related to the merger
of two holding companies that created First California in March 2007, as
well as the fact that the first quarter 2007 included only approximately
19 days of results for FCB Bancorp.

Total assets increased $16 million, or 1.5%, to $1.13 billion at June 30,
2008 compared to $1.11 billion at December 31, 2007. Total loans compared
with year-end 2007 rose 4% to $773.5 million at June 30, 2008. Total
deposits decreased 1% to $754.1 million as of June 30, 2008 compared to
$761.1 million at year end 2007. The company's net interest margin was
4.17% for the quarter ended June 30, 2008 compared to 4.14% in the
previous quarter and 5.14% in the year ago quarter. The company's net
interest margin was 4.16% for the six months ended June 30, 2008 compared
to 4.93% in the same period in 2007.

The efficiency ratio for the second quarter of 2008 was 77% compared with
65% in the first quarter of 2008. The previous quarter's ratio is
primarily lower due to $1.2 million of derivative gains in the quarter
versus $0.4 million of derivative losses in the current quarter. "We
recognize the necessity of controlling costs and we are being very
selective in which areas we place our growth emphasis. We have made
several important moves to consolidate operations and control expenses
while judiciously expanding some segments of operations according to our
strategic plan. For example, we continue to hire personnel slightly ahead
of our planned expansion so that our business can grow smoothly and
appropriately," Kum explained.

First California continued to fine-tune its branch network to generate
operating efficiencies and establish a more visible presence in new areas
of the three major counties it serves in Southern California -- Los
Angeles, Orange and Ventura. The company completed its announced plans to
close a small branch in El Segundo in May. Consistent with previously
announced plans, in July the company opened a new full-service office in
Glendale which is north of Los Angeles. This location establishes a
presence in an area management perceives to be underserved and puts First
California within convenient reach of new markets, including media and
entertainment, technology, education, culture, shopping and dining in
nearby Universal City, Studio City, Burbank and Pasadena. The company is
also on schedule to consolidate its administrative and back-office
departments in its new headquarters in Westlake Village in the third
quarter.

Liquidity and Capital Resources

The company's primary source of funds continues to be core deposits. The
company increased retail time deposits approximately $16 million in the
second quarter through specific marketing campaigns. The company also has
access to alternate funding sources and continued to utilize brokered
deposits, FHLB borrowings and State of California time deposits during the
quarter. Brokered deposits increased to $30.9 million at June 30, 2008
compared to $10.0 million at March 31, 2008. The change in the mix of
funding liabilities and change in market rates during the quarter resulted
in a cost of interest-bearing deposits of 2.23% and a cost of borrowed
funds of 3.92% for the second quarter 2008. These compare favorably to a
cost of interest-bearing deposits of 3.05% and a cost of borrowed funds of
4.28% for the first quarter 2008.

During the quarter, we increased our unsecured federal funds facilities
with other financial institutions to $30 million from $14 million
previously. In addition, the bank has a $12 million secured borrowing
facility with the Federal Reserve Bank of San Francisco. These facilities,
along with the unused and available borrowing capacity on the bank's
secured FHLB borrowing facility in excess of $60 million provide ample
liquidity to support our operations and strategic plan.

At June 30, 2008, total shareholders' equity of the company totaled $136.2
million, a decrease of $0.6 million, or 0.5% as compared with December 31,
2007. The company's net book value per common share decreased from $11.81
at December 31, 2007 to $11.78 per share at June 30, 2008. The company's
tangible book value per common share increased from $6.61 at December 31,
2007 to $6.62 per share at June 30, 2008.

First California Bank continues to be "well-capitalized" pursuant to the
guidelines established by regulatory agencies. To be considered
"well-capitalized" a bank must have a total risk-based capital ratio of
10% or greater, and a leverage ratio of 5% or greater. First California
Bank's total risk-based and leverage capital ratios were 12.6% and 9.3%
at June 30, 2008, respectively.

Outlook

The company believes the business outlook for the Southern California
economy remains uncertain. However, management anticipates steady, modest
business growth in its served communities. Kum explained: "We expect the
economic and business climate to remain challenging for the remainder of
the year and possibly longer. Our two primary focuses will be dedicating
appropriate resources to maintain our asset quality and cautious,
strategic growth in select areas of the company. With our high asset
quality, strong capital position, experienced personnel and focus on core
deposit relationship growth, we believe we are well-positioned to take
advantage of opportunities in our marketplace and continue to be ready
for the inevitable economic recovery. We will continue our marketing
campaigns to increase awareness of the First California Bank brand in our
markets and seek to strengthen and expand our core client relationships."

About First California

First California Financial Group, Inc. (NASDAQ: FCAL) is an emerging force
in Southern California banking. With assets exceeding $1 billion, the
company operates throughout Southern California, primarily under the First
California Bank brand. The bank's focus is the commercial market,
particularly small- and middle-sized businesses and commercial real
estate, development and construction concerns. With a commitment to
provide the best client service available in its markets, the bank offers
a full line of quality commercial banking products through twelve
full-service branch offices and one loan production office. The holding
company's website can be accessed at www.fcalgroup.com. For additional
information on First California Bank's products and services, visit
www.fcbank.com.

First California was a wholly owned subsidiary of National Mercantile
Bancorp formed to facilitate the reincorporation merger with National
Mercantile and the merger with FCB Bancorp, which occurred on March 12,
2007. Accordingly, First California's historical balance sheet and results
of operations before the merger are the same as the historical information
of National Mercantile. The company's results of operations include
approximately 19 days of FCB's results for the 2007 first quarter.

Forward Looking Information

This press release contains certain forward-looking information about
First California that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities Litigation
Reform Act of 1995. All statements other than statements of historical
fact are forward-looking statements, and include statements related to the
maintenance of First California's asset quality and capital position, the
monitoring of and management of risks in First California's loan
portfolio, the continuation of lending activity and investment in
talented lending personnel, the less severe decline in real estate values
in the coastal communities of Southern California that First California
serves relative to other portions of California, the impact of First
California's remaining interest rate floor contract on earnings for the
second half of 2008, the adequacy of sources of liquidity to support
First California's operations and strategic plans, the monitoring of and
response to changing market conditions, First California's focus on
controlling its operating costs while focusing on selective growth
opportunities, the status of the economy in the Southern California
communities served by First California and its effect on First
California's clients, the dedication of appropriate resources to maintain
asset quality and cautious, strategic growth in select areas of the
company, the continuation of First California's marketing campaigns to
increase awareness of the First California Bank brand and efforts to
strengthen and expand First California's many core client relationships.
Such statements involve inherent risks and uncertainties, many of which
are difficult to predict and are generally beyond the control of First
California. First California cautions readers that a number of important
factors could cause actual results to differ materially from those
expressed in, or implied or projected by, such forward-looking
statements. Risks and uncertainties include, but are not limited to,
revenues are lower than expected, credit quality deterioration which
could cause an increase in the provision for credit losses, changes in
consumer spending, borrowing and savings habits, technological changes,
the cost of additional capital is more than expected, a change in the
interest rate environment reduces interest margins, asset/liability
repricing risks and liquidity risks, general economic conditions,
particularly those affecting real estate values, either nationally or in
the market areas in which First California does or anticipates doing
business, including the possibility of a U.S. recession, a slowdown in
construction activity, recent volatility in the credit or equity markets
and its effect on the general economy, loan delinquency rates, the ability
of First California and First California Bank to retain customers,
demographic changes, demand for the products or services of First
California and First California Bank, as well as their ability to attract
and retain qualified people, competition with other banks and financial
institutions, and other factors. If any of these risks or uncertainties
materializes or if any of the assumptions underlying such forward-looking
statements proves to be incorrect, First California's results could differ
materially from those expressed in, or implied or projected by such
forward-looking statements. First California assumes no obligation to
update such forward-looking statements. For a more complete discussion of
risks and uncertainties, investors and security holders are urged to read
the section titled "Risk Factors" in First California's Annual Report on
Form 10-K and any other reports filed by it with the Securities and
Exchange Commission ("SEC"). The documents filed by First California with
the SEC may be obtained at the SEC's website at www.sec.gov. These
documents may also be obtained free of charge from First California by
directing a request to: First California Financial Group, Inc., 1880
Century Park East, Suite 800, Los Angeles, CA 90067. Attention: Investor
Relations. Telephone (310) 282-6703.

First California Financial Group
Unaudited Financial Results

As of or for the quarter ended 30-Jun-08 31-Mar-08 31-Dec-07
Income statement summary
Net interest income $ 10,335 $ 10,263 $ 10,658
Service charges, fees & other income 996 879 886
Loan commissions & sales 185 54 586
Operating expenses 8,553 8,077 7,845
Provision for loan losses 200 450 -
Amortization of intangible assets 297 298 372
Unrealized gain (loss) on
derivatives (367) 1,225 224
Gain on sale of charters - - -
Integration/conversion expense - - -
----------- ----------- -----------
Income before tax 2,099 3,596 4,137
Tax expense 815 1,407 1,475
----------- ----------- -----------
Net income $ 1,284 $ 2,189 $ 2,662
=========== =========== ===========

Balance sheet data
Total assets $ 1,125,096 $ 1,134,507 $ 1,108,842
Shareholders' equity 136,229 138,256 136,867
Common shareholders' equity 135,229 137,256 135,867
Earning assets 991,740 1,005,653 988,982
Loans 773,544 754,419 746,179
Loans - held for sale - 23,927 11,454
Securities 217,896 227,032 231,095
Federal funds sold & other 300 275 255
Interest-bearing finds 790,202 794,225 759,367
Interest-bearing deposits 566,664 540,919 563,818
Borrowings 196,863 226,644 168,901
Junior subordinated debt 26,675 26,662 26,648
Goodwill and other intangibles 59,146 59,444 59,859
Deposits 754,115 729,819 761,080

Asset quality data and ratios
Loans past due 30 to 89 days and
accruing $ 1,502 $ 4,646 $ 4,746
Loans past due 90 days and accruing 1,081 1,480 2,848
Nonaccruing loans 6,627 5,720 5,720
----------- ----------- -----------
Total past due and nonaccrual loans $ 9,210 $ 11,846 $ 13,314
=========== =========== ===========

Repossessed personal property $ 154 $ 161 $ 197
Other real estate owned - - -
----------- ----------- -----------
Total foreclosed property $ 154 $ 161 $ 197
=========== =========== ===========

Net loan charge-offs $ 15 $ 570 $ 262
Allowance for loan losses $ 7,894 $ 7,708 $ 7,828
Allowance for loan losses to loans 1.02% 1.02% 1.05%

Common shareholder data
Basic earnings per share $ 0.11 $ 0.19 $ 0.23
Diluted earnings per share $ 0.11 $ 0.19 $ 0.22
Book value per share $ 11.78 $ 11.95 $ 11.81
Tangible book value per share $ 6.62 $ 6.77 $ 6.61
Shares outstanding 11,477,086 11,485,220 11,500,520
Basic weighted average shares 11,480,271 11,484,749 11,621,958
Diluted weighted average shares 11,756,817 11,757,532 11,887,269

Selected ratios
Return on average assets 0.46% 0.80% 0.99%
Return on average equity 3.72% 6.47% 8.01%
Equity to assets 12.11% 12.19% 12.34%
Tangible equity to tangible assets 7.23% 7.33% 7.34%
Efficiency ratio 76.72% 65.03% 63.50%
Net interest margin (tax equivalent) 4.17% 4.14% 4.34%
Total risk-based capital ratio:
First California Bank 12.59% 12.15% 11.98%

As of or for the quarter ended 30-Sep-07 30-Jun-07
Income statement summary
Net interest income $ 10,954 $ 11,710
Service charges, fees & other income 858 824
Loan commissions & sales 540 816
Operating expenses 7,819 8,094
Provision for loan losses - -
Amortization of intangible assets 242 353
Unrealized gain (loss) on
derivatives - -
Gain on sale of charters - 2,375
Integration/conversion expense 540 1,427
----------- -----------
Income before tax 3,751 5,851
Tax expense 1,340 2,741
----------- -----------
Net income $ 2,411 $ 3,110
=========== ===========

Balance sheet data
Total assets $ 1,091,696 $ 1,033,782
Shareholders' equity 135,233 131,209
Common shareholders' equity 134,233 130,209
Earning assets 964,387 914,786
Loans 756,264 731,098
Loans - held for sale 3,567 7,256
Securities 204,281 173,654
Federal funds sold & other 275 2,777
Interest-bearing finds 741,246 670,377
Interest-bearing deposits 566,799 557,034
Borrowings 147,811 86,721
Junior subordinated debt 26,635 26,622
Goodwill and other intangibles 60,231 60,472
Deposits 767,237 776,587

Asset quality data and ratios
Loans past due 30 to 89 days and
accruing $ 3,668 $ 4,027
Loans past due 90 days and accruing 890 953
Nonaccruing loans 5,720 5,992
----------- -----------
Total past due and nonaccrual loans $ 10,278 $ 10,972
=========== ===========

Repossessed personal property $ 244 $ 161
Other real estate owned - -
----------- -----------
Total foreclosed property $ 244 $ 161
=========== ===========

Net loan charge-offs $ 211 $ -
Allowance for loan losses $ 8,085 $ 8,296
Allowance for loan losses to loans 1.07% 1.13%

Common shareholder data
Basic earnings per share $ 0.21 $ 0.27
Diluted earnings per share $ 0.20 $ 0.25
Book value per share $ 11.46 $ 11.11
Tangible book value per share $ 6.32 $ 5.95
Shares outstanding 11,715,310 11,715,185
Basic weighted average shares 11,715,245 11,565,075
Diluted weighted average shares 12,246,499 12,241,087

Selected ratios
Return on average assets 0.93% 1.19%
Return on average equity 7.19% 9.63%
Equity to assets 12.39% 12.69%
Tangible equity to tangible assets 7.27% 7.27%
Efficiency ratio 63.30% 60.63%
Net interest margin (tax equivalent) 4.77% 5.25%
Total risk-based capital ratio:
First California Bank 11.34% 12.03%

First California Financial Group
Unaudited Financial Results (cont'd)

YTD YTD
----------- -----------
(in thousands except for share data and ratios) 30-Jun-08 30-Jun-07

Income statement summary
Net interest income $ 20,598 $ 18,632
Service charges, fees & other income 1,875 1,504
Loan commissions & sales 239 1,073
Operating expenses 16,630 13,343
Provision for loan losses 650 -
Amortization of intangible assets 595 415
Unrealized gain on derivatives 858 -
Gain on sale of charters - 2,375
Integration/conversion expense - 4,903
Expense of early termination of debt - 1,564
----------- -----------
Income before tax 5,695 3,359
Tax expense 2,222 1,344
----------- -----------
Net income $ 3,473 $ 2,015
=========== ===========

Balance sheet data
Total assets $ 1,125,096 $ 1,033,782
Shareholders' equity 136,229 131,209
Common shareholders' equity 135,229 130,209
Earning assets 991,740 914,786
Loans 773,544 731,098
Loans - held for sale - 7,256
Securities 217,896 173,654
Federal funds sold & other 300 2,777
Interest-bearing finds 790,202 670,377
Interest-bearing deposits 566,664 557,034
Borrowings 196,863 86,721
Junior subordinated debt 26,675 26,622
Goodwill and other intangibles 59,146 60,472
Deposits 754,115 776,587

Asset quality data and ratios
Loans past due 30 to 89 days and accruing $ 1,502 $ 4,027
Loans past due 90 days and accruing 1,081 953
Nonaccruing loans 6,627 5,992
----------- -----------
Total past due and nonaccrual loans $ 9,210 $ 10,972
=========== ===========

Repossessed personal property $ 154 $ 161
Other real estate owned - -
----------- -----------
Total foreclosed property $ 154 $ 161
=========== ===========

Net loan charge-offs (recoveries) $ 15 $ (7)
Allowance for loan losses $ 7,894 $ 8,296
Allowance for loan losses to loans 1.02% 1.13%

Common shareholder data
Basic earnings per share $ 0.30 $ 0.22
Diluted earnings per share $ 0.30 $ 0.20
Book value per share $ 11.78 $ 11.11
Tangible book value per share $ 6.62 $ 5.95
Shares outstanding 11,477,086 11,715,185
Basic weighted average shares 11,483,635 11,565,075
Diluted weighted average shares 11,758,300 12,241,087

Selected ratios
Return on average assets 0.62% 0.83%
Return on average equity 5.00% 9.98%
Equity to assets 12.42% 12.69%
Tangible equity to tangible assets 7.56% 7.27%
Efficiency ratio 70.56% 84.00%
Net interest margin (tax equivalent) 4.16% 4.93%
Total risk-based capital ratio:
First California Bank 12.59% 12.03%

For further Information:

At the Company:
Ron Santarosa
805-322-9333

At The Investor Relations Company:
Diane Hettwer
312-245-2700

Corporate Headquarters Address:
1880 Century Park East, Suite 800
Los Angeles, CA 90067

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