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Grandpoint Capital, Inc., And NCAL Bancorp Sign Definitive Agreement To Merge

Stocks in this article: NCAL

Grandpoint Capital, Inc., the parent company of Grandpoint Bank, and NCAL Bancorp (OTCBB: NCAL), the parent company of National Bank of California, jointly announced today that they have entered into a definitive agreement to merge. Under the terms of the agreement, Grandpoint Capital will acquire NCAL Bancorp and National Bank of California will become a wholly owned subsidiary of Grandpoint Capital.

The merger consideration to be received by common shareholders will be paid in part at closing and in part two years after the closing. The total consideration to be received at closing will depend upon NCAL Bancorp’s tangible common equity prior to closing, pre-closing loan recoveries on charged-off loans, the level of NCAL Bancorp’s transaction expenses and the amount of a reserve to be established for future credit losses. Had the transaction closed on May 31, 2012, closing consideration of approximately $1.45 per share would have been payable to common shareholders. The NCAL Bancorp shareholders will also be entitled to participate in certain loan recoveries and data processing expense reductions in the two years following the transaction and to receive at the end of two years any unused portion of the credit reserve established at closing. While the amount of the actual credit reserve cannot presently be determined, at May 31, 2012, the credit reserve would have been approximately $1.70 per share.

All outstanding preferred shares of NCAL Bancorp issued to the U.S. Department of the Treasury shall also be redeemed for their stated value of $10.5 million, plus current accrued but unpaid dividends of approximately $605,000 and all additional dividends accruing through closing.

National Bank of California was founded in 1982. It operates five branches in Los Angeles and Orange counties. As of March 31, 2012, National Bank of California had total assets of $340.9 million.

Completion of the transaction is subject to customary closing conditions and regulatory and shareholder approvals. It is anticipated the transaction will be completed in the fourth quarter 2012.

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