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The following is a letter from Gideon King, President of Loeb Capital Management to the Board of Directors of First California Financial Group, Inc.
Board of Directors
First California Financial Group, Inc.
3027 Townsgate Road, Suite 300
Westlake Village, California 91361
To the Board of Directors:
Loeb Arbitrage Management LP and Loeb Offshore Management LP, together doing business as Loeb Capital Management, and affiliated entities (collectively, “Loeb”) over which it has management discretion own approximately 2,100,000 shares of the common stock of First California Financial Group, Inc. (“FCAL” or the “Company”). We have grown increasingly frustrated with the actions of the board and management of FCAL. In our opinion, a credible cash offer has been made and shareholders have been treated to “double-talk” on many levels with respect to this springboard (a credible offer) from which to run an auction process to sell the Company to the highest bidder. At no point has FCAL simply stated that it is engaged in a process to explore strategic alternatives to maximize shareholder value. Rather, we believe shareholders have been subjected to vague press releases that give shareholders no assurance that the board takes its fiduciary duties seriously. One example of the poor quality of the Company’s communication with shareholders is the following from a press release dated May 9, 2012: “The First California Board did not believe that it was in the best interest of stockholders to grant exclusivity to PacWest [Bancorp] in the absence of satisfactory clarification of the terms and value of its proposal and taking into account the other strategic alternatives that First California may pursue, including discussion with third parties.” We view this as muddy language that avoids declaratively stating that the appropriate actions will be taken. In our view, the time for this management team to “have its cake and eat it too” is over.