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First National Bank of Southern California and First Mountain Bank Announce Definitive Agreement

May 5, 2014

SAN DIEGO & BIG BEAR LAKE, Calif.--(BUSINESS WIRE)-- First National Bank of Southern California and First Mountain Bank announced today that they have entered into a definitive agreement pursuant to which First National Bank of Southern California will acquire First Mountain Bank for approximately $14.1 million in cash. The purchase price is equivalent to $9.00 per share but is subject to downward adjustment in the event that First Mountain Bank’s total shareholder equity falls below $12.175 million at the time of the closing of the transaction. The total assets of the combined banks on a pro forma basis at March 31, 2014 are approximately $300 million. As part of the transaction Jack Briner, Chairman and CEO of First Mountain Bank, will become a director of First National Bank of Southern California and will continue in a consulting role to oversee the Big Bear Lake operations and continue to work with customers and the community. The transaction was unanimously approved by the boards of directors of both banks. Completion of the transaction is subject to regulatory and shareholder approvals. Following the successful completion of these steps, it is anticipated the transaction will close in the third quarter of 2014.

First Mountain Bank will be merged with and into First National Bank of Southern California. Also as part of the transaction First Mountain Bank’s Chief Credit Officer and Chief Operating Officer will assume similar roles with First National Bank of Southern California. The shareholders of First Mountain Bank will receive their consideration in cash. The agreement also contains customary representations, warranties, termination fees and other covenants customary for a transaction of this nature.

Michael Persall, Chairman of First National Bank of Southern California, stated: “We look forward to capitalizing on the strengths of both banks. Combined, we will continue to build on our strong capital base expanding our menu of services. When consummated, this union will be a key step in our strategy to augment our growth through organic and external means. The addition of First Mountain Bank will allow us the opportunity to extend client reach in serving the counties of Southern California. We will continue to provide a mix of commercial and real estate loans, as well as a full array of deposit and business banking services.”

Jack Briner, Chairman and CEO of First Mountain Bank, stated: “We believe that the combined resources of First Mountain Bank and First National Bank of Southern California will provide for a greater array of products and services for our clients; and the capital strength will allow for larger credits within our market place. First National Bank of Southern California understands our local market and we believe that the consideration to be paid to our shareholders is fair and provides a meaningful return on investment for many of our shareholders who have been with us since our inception over 30 years ago.”

First Mountain Bank operates three banking offices in Big Bear Lake, Running Springs, and Lucerne Valley, California, and, at March 31, 2014, had total assets of $137 million. First Mountain Bank opened in October 1981 and is headquartered in Big Bear Lake. First Mountain Bank currently trades on the Over the Counter Bulletin Board under the symbol “FMBP.” More information on First Mountain Bank is available at www.firstmountainbank.com.

First National Bank of Southern California began business in November 2007 and is privately held by three investors: Chooch Alsenz, Paul Becker and Michael Persall. At March 31, 2014, First National Bank of Southern California had total assets of approximately $177 million with five banking offices in Southern California. More information about First National Bank of Southern California may be obtained by visiting www.fnbsocal.com or contacting First National Bank of Southern California’s President and CEO Jeffrey Watson at (951) 788-2265.

First National Bank of Southern California was represented by McKenna, Long & Aldridge, LLP for legal services. First Mountain Bank was represented by Gary Steven Findley and Associates and The Findley Group for legal and investment banking. Vining Sparks issued a fairness opinion to the First Mountain Bank Board of Directors.

Forward-Looking Statements

Certain statements in this press release contain forward-looking statements that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors.

All forward-looking statements speak only as of the date of this press release. All subsequent written and oral forward-looking statements attributable to either First National Bank of Southern California or First Mountain Bank or any person acting on their behalf are qualified by the cautionary statements in this press release. First National Bank of Southern California and First Mountain Bank do not undertake any obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

This press release may be deemed to be solicitation material in respect of the proposed merger of First Mountain Bank with and into First National Bank of Southern California. First Mountain Bank intends to send its shareholders a proxy statement regarding the proposed merger. Before making any voting or investment decision, investors and security holders of First Mountain Bank are urged to carefully read the entire proxy statement, when its becomes available, because it will contain important information about the proposed transaction.



First National Bank of Southern California

Jeffrey Watson, President and CEO

951-788-2265

or

First Mountain Bank

Dennis Saunders, President

909-866-5861

Source: First Mountain Bank


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