Liberty Bank - Newsletter

Bruce Farrell
A Message From Our President

To the valued clients of Liberty Bank:

I am excited to share the news that on February 28, 2022, Liberty Bancorp signed a definitive merger agreement to be acquired by DMG Bancshares Inc. the parent company for California First National Bank (together, “CalFirst”) in an all cash transaction valued at over $30 million. This announcement is the culmination of several months of consideration, due diligence and deliberation by the Liberty Bancorp Board and executive team and we are now able to share this news publicly.

CalFirst is a great fit for us. We have a shared focus on commercial banking. CalFirst has plans to continue expanding and this merger is an important part of that growth. The scale from this acquisition, will be an important foundation for future growth and DMG will be looking to the Liberty Bank team to help facilitate the growth. Together we will be nearly $500 million in assets and have considerable capital commitments from investors to support future organic and acquisitive growth. Our greater scale will allow us to more capably serve larger customers and, in time, provide an expanded array of products and services. At current, CalFirst actually expects to adopt the Liberty Bank, N.A. name going forward and we do not anticipate any branch closures.

The DMG team is a group of top-notch bankers who know how to achieve commercial banking growth and we have great enthusiasm for their leadership team and strategic plan.

It is important that you know that this merger will require the approval of our shareholders and the banking regulators along with other customary conditions to closing. The approval process will take several months, and we will keep you updated as we make progress on completing the merger. Until the merger is closed, we will continue to operate independently – it remains business as usual at Liberty Bank.

It is possible that you have questions about this combination. To that end, below are the FAQ’s that should help address many of those questions.

Lastly and most importantly, on behalf of the entire Liberty Bank team, I want to thank you for the opportunity to serve your banking needs. We wouldn’t be here without you and we look forward to continuing to deliver you great service and innovative banking solutions as part of the larger combined company.

Q: Why is Liberty merging with DMG?
Over almost 40 years, we have built an attractive commercial bank in a great market area. Our Board of Directors and Management are regularly considering what is in the best interests of our shareholders, employees, and customers; and in recent times it was determined that a merger may best serve these key constituents. After thorough consideration, we determined that DMG is the best partner for Liberty Bank. This combination should not only reward our shareholders but also create opportunities for our employees and expand our customer offerings. DMG is headquartered in Irvine, CA, and is led by a group of commercial bankers with a strong growth initiative from their investors. This merger will be a critical next step in DMG’s growth plan. DMG plans on continuing to operate our branches and will use the Liberty Bank, N.A. name going forward.

Q: Does this mean there is going to be a change in ownership of the bank?
Yes. Following closing, DMG will own Liberty Bank and Liberty shareholders will receive cash as merger consideration. We do expect to operate as Liberty Bank, N.A. and DMG intends to operate our existing locations. You should continue to receive great service from your Liberty Bank team.

Q: Who is DMG Bancshares?
DMG Bancshares Inc. is the holding company for California First National Bank. DMG is led by Don Griffith with a group of talented commercial bankers including Debbie Marsten and Dave Dayton. The group has had success growing commercial banking organizations in the past and they acquired CalFirst to launch their latest project. At current, CalFirst operates out of a single location in Irvine, CA and has about $170 million in assets.

Q: When will the merger take place?
The merger requires the approval of Liberty Bancorp shareholders and the banking regulators along with other customary conditions to closing. Management anticipates the merger to be finalized in the summer of 2022. Additional shareholder and customer communication will be ongoing as we move towards closing.

Q: Will any offices be closed?
No. We do not foresee any reduction in branches.

Q: Will Liberty Bank’s name change?
No. It is currently expected that CalFirst will begin operating using the Liberty Bank, N.A. name.

Q: How will my accounts change?
For now there will be no changes. Following closing, we will undertake a conversion and integration process. Rest assured, we will be communicating with you regularly regarding any changes impacting your accounts and our staff will make sure any transition is seamless.

Q: What is changing now, before the merger is complete?
For now and until closing it is business as usual for Liberty Bank. You can count on the same professional staff serving your financial needs.

Q: Will you continue to focus on Community Banking?
Yes. Like Liberty Bank, personalized, professional customer service and relationship banking are core values of CalFirst and will continue to be following this merger. CalFirst provides a professional environment where customers can take care of their banking and financial needs with responsive, knowledgeable, and reliable bankers who know them by name and go the extra mile to provide the value-added solutions with exemplary service.

Q: Will FDIC coverage of my accounts change?
There will be no changes to FDIC insurance now or after the merger is complete. Your accounts continue to be covered by the standard maximum deposit insurance amount of at least $250,000 per depositor.

Q: What is going to change?
From a service standpoint, you will see the same friendly faces when visiting a branch. We are hopeful that following the completion of the merger you will notice an increase in products and an increase in our ability to service your needs particularly in the areas of lending and treasury management. Together we will be nearly $500 million in assets and believe our greater scale will put us in position to provide you with expanded products and services, over time.

Bruce K. Farrell
President & Chief Executive Officer