Heritage Oaks Bank Returns to Morro Bay

Heritage Oaks Bank, the wholly-owned bank subsidiary of Heritage Oaks Bancorp (Nasdaq: HEOP), announced the opening of the Bank’s newest branch in Morro Bay at 898 Morro Bay Boulevard on Monday, December 31, 2012.  This marks a return to the Morro Bay community for Heritage Oaks Bank since the closure of its former branch there in early 2012.

According to Simone Lagomarsino, President and CEO of Heritage Oaks Bank and Heritage Oaks Bancorp, “We’re so pleased to be back in Morro Bay with a full-service branch. Early in 2012 we underwent a branch consolidation and our Morro Bay customers remained loyal and kept more than 80% of their deposits with us. When we had the opportunity to purchase Coast National Bank’s Morro Bay branch and the related deposits, we took immediate action to get back into this community. This office’s central location and amenities are far superior to our previous location and that allows us to better serve our local customers. In addition, since we own the property rather than lease it, we are further demonstrating our commitment to Morro Bay.”

Heritage Oaks Bank reluctantly closed its former Morro Bay branch because the lease was about to expire and the physical location and size of the branch were not optimal. The Bank did not abandon the Morro Bay customers and continued to serve them by consolidating their deposit accounts into the nearest branch in San Luis Obispo. With the purchase of the former Coast National branch, Heritage Oaks Bank added $27 million in deposits to the existing Morro Bay customer deposits the Bank had retained. This now places the Bank in fourth position in terms of market share in Morro Bay.

The new branch will offer a complete range of financial services including deposit services, consumer and commercial lending, agribusiness services, residential and commercial real estate loans, SBA financing, and cash management services. The branch offers drive-up service, a night depository and a full-service ATM.  The Bank will also continue to maintain an additional full-service ATM in Morro Bay at 407 Morro Bay Boulevard.

“This year marks the Bank’s 30th anniversary of service to the Central Coast and we are glad that we are bringing our exceptional brand of customer service back to Morro Bay,” said Lagomarsino. “We are very pleased that both Theresa Richmond and Melissa Kelly decided to stay at the branch and join our Heritage Oaks Bank family. Jennifer Bromby was previously our branch manager in Morro Bay and she is returning to manage the new office. She brings a wealth of local expertise and familiarity with the customers there. We know the customers will enjoy seeing these familiar faces.”

For further information, visit www.heritageoaksbank.com or call the Morro Bay branch at (805) 771-1950.

About the Company

Heritage Oaks Bancorp is the holding company for Heritage Oaks Bank which operates as Heritage Oaks Bank and Business First Bank, a division of Heritage Oaks Bank. Heritage Oaks Bank has its headquarters and two branch offices in Paso Robles, two branch offices in San Luis Obispo, single branch offices in Morro Bay, Cambria, Arroyo Grande, Atascadero, Templeton, and two branch offices in Santa Maria, as well as a loan production office in Oxnard. Heritage Oaks Bank conducts commercial banking business in the counties of San Luis Obispo, Santa Barbara, and Ventura. The Business First division has one branch office in Santa Barbara. Visit Heritage Oaks Bancorp on the Web at www.heritageoaksbancorp.com. By including the foregoing website address, Heritage Oaks Bancorp does not intend to and shall not be deemed to incorporate by reference any material contained therein.

Forward Looking Statements

Certain statements contained in this press release which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements concerning future performance, developments or events, management’s expectations for growth, income forecasts, sales activity for collateral, and any other guidance on future periods, constitute forward-looking statements within the meaning of the Act and are subject to a number of risks and uncertainties. Actual results may differ materially from expectations expressed in any forward-looking statements as a result of such risks and uncertainties. Specific risks and uncertainties include, but are not limited to, the success of Heritage Oaks Bancorp (the “Company”) and Heritage Oaks Bank (the “Bank”) in fulfilling the requirements of the memoranda of understanding entered into by the Company and the Bank, respectively, with the Federal Reserve Bank of San Francisco, and the FDIC and California Department of Financial Institutions, respectively, the ongoing recession in the United States and the markets in which the Company operates, and the response of the federal and state government and banking regulators thereto, continued growth, the Bank’s beliefs as to the adequacy of its existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Bank’s operations, interest rates and financial policies of the United States government, continued weakness in the real estate markets within which we operate and general economic conditions. Additional information on these and other risks and uncertainties that could affect our business, operations and financial results are included in the Company’s Securities and Exchange Commission filings. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the Company’s results could differ materially and adversely from those expressed in, implied or projected by such forward-looking statements. Heritage Oaks Bancorp assumes no obligation, and specifically disclaims any obligation to revise or update such forward-looking statements for any reason.