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Business Services Industry

Palisair Capital Announces Its Plan to Make a Tender Offer to Increase Its Position in 1st Century Bancshares, Inc. up to 9.9%, the Maximum Percentage Amount Allowed under the Bank Holding Company Act; Intends to Bid $8.00 Per Share

Business Wire, Feb 29, 2008

LOS ANGELES -- Palisair Capital Partners, LP, a fund managed by Palisair Capital, LLC, announced today that it intends to commence a friendly tender offer to acquire up to six hundred eighty-eight thousand shares (688,000) of the common stock of 1st Century Bancshares, Inc. (OTC:FCTY) at a price, net to the seller, of $8.00 per share, on Friday, March 14, 2008, and will be open for at least 20 business days.

At the close of trading on February 25th, Palisair Capital Partners L.P. controlled 291,220 shares. This represents approximately 2.9% of the shares outstanding. According to a simple holders search on Bloomberg, there are only three institutional holders of 1st Century Bancshares, Inc. Based on this information, Palisair Capital Partners, L.P. is the largest institutional shareholder of 1st Century Bancshares, Inc.

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Palisair Capital's offer price will represent a premium of approximately 35% to the average price at which 1st Century Bancshares, Inc. was trading on the over-the-counter bulletin board market in the last (30) thirty days of trading preceding this announcement and a premium of approximately 20% to the average trading price for the (1) one year period preceding this announcement.

The following text constitutes remarks by Zachary James Cohen, Managing Member of Palisair Capital, LLC.

"The management team, led by Chairman Alan Rothenberg, is a group of highly-skilled, experienced, and honest individuals. We believe the Company has a tremendous amount of potential that is not being recognized by the market and represents an attractive investment at current price levels. We are making this offer because it is very hard to buy the stock on the open market as the Company is closely controlled by friends and family of the management team.

"The tangible book value of 1st Century Bancshares was approximately $5.50 per share as of September 30, 2007. Based on the quality of management's underwriting and the short history of the bank, we are confident that the assets will not need to be written down by a material amount once the 10-K is filed. We are also confident the capital position is sound on an absolute basis and relative to competitors. Regulators will be comfortable with additional borrowing from the Federal Loan Home Bank and other wholesale forms of financing. So, we believe that with continued risk management, deposit and loan growth, and last but not least timely expansion based on the needs of employees, shareholders, and citizens, that the stock of 1st Century Bancshares should trade for $11 to $15 within a few years. This would represent a multiple of 2.0x to 3.0x tangible book value. This valuation is justified because community banking is a good business with high returns on capital. Of course, you need to have a talented and honest management team. Mr. Rothenberg is the epitome of a great leader who many people respect.

"More than relying on any traditional financial metrics, it is important to recognize that it is truly a waste of talent to have a 'Dream Team' like the one Mr. Rothenberg has assembled operate on such a small scale with only one branch in an office building tucked away in Century City.

"Mr. Rothenberg needs to expand the focus of the bank to serve not just business professionals, closely-held and family-owned businesses, and high net worth individuals, but also ordinary citizens. This is a critical time in the financial services industry and Los Angeles economy. As the Chairman of a publicly traded bank, Mr. Rothenberg has more responsibility than most business leaders do.

"For those of you who are not experts in analyzing banks, it is important to know that goodwill is an intangible asset which provides a competitive advantage, such as a strong brand, reputation, or high employee morale. In addition to tangible book value which is the hard Assets minus Liabilities of a bank or 'liquidation value,' community banks are also valued based on their goodwill. There is no one who represents and understands the value of goodwill more than Mr. Rothenberg.

"Because for those of you who do not know him, Mr. Rothenberg was one of the main visionaries behind and leader of the 1994 World Cup of soccer--which was one of the most highly attended and universally appreciated events in sports history. This was after a storied career as a partner at Latham and Watkins, L.P., one of the nation's premier law firms.

"We do not know how much goodwill per share of stock all of Mr. Rothenberg's accomplishments and relationships are worth, but we are willing to make the bet that it is significantly more than zero, which is what the official Balance Sheet says on the Company's most recent 10-Q.

"Timing is everything in business and Mr. Rothenberg cannot afford to wait because there are too many disgruntled deposit holders of many undercapitalized community banks who would greatly benefit from the unparalleled legal experience and overall passion for life that Mr. Rothenberg possesses. It is likely that customers will be willing to accept lower deposit rates if they knew that Mr. Rothenberg was responsible for their money being safe. Since money is a commodity, a financial services organization can only be an efficient, low-cost gatherer of deposits if they have community trust. That's it.

Business Services Industry

Palisair Capital Announces Its Plan to Make a Tender Offer to Increase Its Position in 1st Century Bancshares, Inc. up to 9.9%, the Maximum Percentage Amount Allowed under the Bank Holding Company Act; Intends to Bid $8.00 Per Share

Business Wire, Feb 29, 2008

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