California Oaks State Bank Receives Preliminary Approval From U.S. Treasury's Capital Purchase Program

THOUSAND OAKS, CA--(Marketwire - December 19, 2008) - California Oaks State Bank (OTCBB: COSB) announced today it has received preliminary approval from the U.S. Treasury Department as part of the government's Capital Purchase Program for approximately a $3.3 million investment.

The investment represents 3% of California Oaks State Bank's risk-weighted assets as of September 30, 2008. Based on the capital ratios as of September 30, 2008, the capital infusion would increase 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%.

In addition, the Bank announced today its continued participation in the Federal Deposit Insurance Corporation (FDIC) Transaction Account Guarantee Program (TAGP), which provides unlimited insurance coverage of all funds in non-interest bearing transaction accounts.

The transaction account guarantee program feature of the FDIC Temporary Liquidity Guarantee Program provides unlimited FDIC insurance of 100 percent of funds deposited in non-interest bearing transaction accounts, such as personal and business non-interest checking and NOW accounts bearing interest rates of less than 0.50 basis points, through December 31, 2009. Certain types of attorney trust accounts are also included in this program. The coverage under the TAGP is separate from coverage available under the FDIC's general deposit insurance rules, which currently insure accounts up to $250,000.

John Nerland, the Bank's President and CEO noted that the increase in capital would enhance the Bank's current well-capitalized position based on regulatory standards and the Bank would benefit from its transaction account customers having the added security of unlimited FDIC insurance on all their standard checking deposits.

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.

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 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 help its customers meets 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