1169770--3/6/2009--FIRST_PACTRUST_BANCORP

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{stock, price, share}

{condition, economic, financial}

{loan, real, estate}

{provision, law, control}

{tax, income, asset}

{system, service, information}

{loss, insurance, financial}

{product, market, service}

{competitive, industry, competition}

{acquisition, growth, future}

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Risks Relating to First PacTrust Difficult market conditions and economic trends have adversely affected our industry and our business. Recent legislative and regulatory initiatives to address difficult market and economic conditions may not stabilize the U.S. banking system. Current levels of market volatility are unprecedented. Changes in economic conditions, particularly a further economic slowdown in California, could hurt our business. Recent negative developments in the financial industry and credit markets may continue to adversely impact our financial condition and results of operations. Liquidity risk could impair our ability to fund operations and jeopardize our financial condition. We may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed. If our allowance for loan losses is not sufficient to cover actual loan losses or if we are required to increase our provision for loan losses, our results of operations and financial condition could be materially adversely affected. The maturity and repricing characteristics of our assets and liabilities are mismatched and subject us to interest rate risk which could adversely affect our results of operations and financial condition. Our loan portfolio possesses increased risk due to the number of multi-family, construction, commercial real estate and consumer loans. The loan portfolio possesses increased risk due to expansion, unseasoned nature and amount of nonconforming loans. Strong competition within our market area may limit our growth and profitability. We encounter continuous technological change in our industry. We are subject to extensive government regulation and supervision. Our information systems may experience an interruption or breach in security. We rely on dividends from the Bank for substantially all of our revenue. Risks Relating to Both the Series A Preferred Stock and Our Common Stock The Series A Preferred Stock is equity and is subordinate to all of our existing and future indebtedness; regulatory and contractual restrictions may limit or prevent us from paying dividends on the Series A Preferred Stock and our common stock; and the Series A Preferred Stock places no limitations on the amount of indebtedness we and our subsidiaries may incur in the future. The prices of the Series A Preferred Stock and our common stock may fluctuate significantly, and this may make it difficult for you to resell the Series A Preferred Stock and/or common stock when you want or at prices you find attractive. There may be future sales of additional common stock or preferred stock or other dilution of our equity, which may adversely affect the market price of our common stock or the Series A Preferred Stock. Anti-takeover provisions could negatively impact our stockholders. Risks Specific to the Series A Preferred Stock An active trading market for the Series A Preferred Stock may not develop. The Series A Preferred Stock may be junior in rights and preferences to our future preferred stock. Holders of the Series A Preferred Stock have limited voting rights. If we are unable to redeem the Series A Preferred Stock after five years, the cost of this capital to us will increase substantially. Risks Specific to the Common Stock The securities purchase agreement between us and the Treasury limits our ability to pay dividends on and repurchase our common stock. The Series A Preferred Stock impacts net income available to our common stockholders and earnings per common share, and the warrants we issued to Treasury may be dilutive to holders of our common stock. The voting limitation provision in our charter could limit your voting rights as a holder of our common stock.

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1169770--3/6/2009--FIRST_PACTRUST_BANCORP_INC