California Oaks State Bank Receives $3.3 Million in TARP Funding

THOUSAND OAKS, CA--(Marketwire - January 26, 2009) - California Oaks State Bank (OTCBB: COSB) announced today it has received $3.3 million of new capital from the U.S. Treasury Department as part of the government's Capital Purchase Program (TARP).

The investment represents 3% of California Oaks State Bank's risk-weighted assets as of September 30, 2008. Based on the Bank's capital ratios as of September 30, 2008, the capital infusion would have increased the Bank's Leverage ratio from 12.5% to 15.1%, the Bank's Tier 1 capital to risk-weighted assets ratio from 13.6% to 16.5% and the Bank's total capital to risk-weighted assets ratio from 14.7% to 17.8%.

Under the terms of the TARP program, the Treasury purchased 3,300 shares of Series A Noncumulative Perpetual Preferred Stock of California Oaks State Bank totaling $3.3 million and 10 year warrants to purchase an additional 165 shares of the Bank's Preferred Series B Noncumulative Perpetual Warrant Preferred Stock with a $1,000 liquidation preference. The Bank will pay the U.S. Treasury a 5% dividend on the Series A shares quarterly for each of the first five years of the treasury investment and a 9% dividend thereafter or until the shares are redeemed.

Mr. John Nerland, the Bank's President and CEO, noted, "The increase in capital has enhanced the Bank's current well-capitalized position based on regulatory standards and our ability to service the needs of our customer base."

The U.S. Treasury announced the voluntary Capital Purchase Program on October 14 to encourage U.S. financial institutions to build capital to increase the flow of financing to U.S. businesses and consumers and to support the U.S. economy. Information about the Capital Purchase Program, including the Treasury's term sheet, is available at the Treasury's Web site at www.ustreas.gov.

For additional information, visit www.caloaks.com.

About California Oaks State Bank

California Oaks State Bank (OTCBB: COSB) with $128 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, Calif. 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 loan, as well as cash management products and deposit services. Its unique capability in diversified lending, in addition to its customary community bank credit products help its customers meet their cash management goals. For additional information, visit www.caloaks.com.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by the act. These forward-looking statements refer to the Company's current expectations regarding future operating results, and growth in loans, deposits, and assets. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance, or achievements to differ materially from those expressed, suggested, or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to (1) the impact of changes in interest rates, a decline in economic conditions, and increased competition by financial service providers on the Company's results of operation, (2) the Company's ability to continue its internal growth rate, (3) the Company's ability to build net interest spread, (4) the quality of the Company's earning assets, and (5) governmental regulations.

Contact Information: Media Contact: John Nerland President & CEO (805) 413-0111