THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Placer Sierra Bancshares (PLSB)

4/25/2006 Proxy Information

The Fund

California Community Financial Institutions Fund Limited Partnership, or the Fund is a private equity investment fund established in 1997 for the purpose of investing in California-based financial services companies and is managed by its general partner, Belvedere Capital Partners, LLC. As of December 31, 2005, the Fund owned 48.0% of our outstanding common stock. On January 25, 2006, the Fund sold 5,000,000 shares and on February 7, 2006, the Fund sold an additional 250,000 shares. As a result of those sales, the Fund owned 13.1% of our outstanding shares as of February 7, 2006.

History. Placer Sierra Bank was previously a wholly-owned subsidiary of Placer Capital Co., or PCC, which was incorporated in 1999 by the Fund, for the purpose of acquiring Placer Sierra Bank. In December 1999, PCC became a wholly-owned subsidiary of California Community Bancshares, Inc., or CCB. CCB was restructured in December 2001, which resulted in, among other organizational changes, the formation of our company, Placer Sierra Bancshares, as well as Southland Capital Co., as wholly-owned subsidiaries of CCB. Pursuant to the restructuring, PCC merged into CCB, as a result of which CCB directly acquired all of the shares of Placer Sierra Bank. CCB then contributed all of the shares of Placer Sierra Bank to us, making Placer Sierra Bank our wholly-owned subsidiary. After completing a cash-out merger whereby all the CCB shareholders other than the Fund received cash in exchange for their shares of CCB stock, CCB adopted a plan of liquidation and distributed its assets, primarily our common stock and Southland Capital Co. common stock, to its sole shareholder, the Fund. Consequently, we and Southland Capital Co. became subsidiaries of the Fund at that time.

Southland Merger. In May 2004, we acquired Bank of Orange County and its holding company, Southland Capital Co. Pursuant to the acquisition, Southland merged into Placer Sierra Bancshares and Bank of Orange County became a Placer Sierra Bancshares subsidiary. In July 2004, Bank of Orange County was merged into our wholly-owned subsidiary, Placer Sierra Bank and operates as a division of Placer Sierra Bank, under the name Bank of Orange County.

In connection with the execution of the merger agreement, the Fund entered into a shareholder agreement with us pursuant to which the Fund agreed:

• upon our request, to execute a written consent approving the principal terms of the merger,

• to not negotiate with third parties or enter into an agreement for the sale of us, Placer Sierra Bank, Southland, Bank of Orange County or our or their assets or to take specified actions that would have the effect of thwarting the Southland merger,

• to commit to include in our initial public offering such number of shares stock held by it as would cause it to be the beneficial owner of no more than 49.9% of our issued and outstanding common stock upon completion of the initial public offering unless the managing underwriter for the offering advised Belvedere Capital Partners, LLC that, due to market factors, the proposed initial public offering should not be consummated or the number of shares of our stock to be underwritten should be limited (in which case, the Fund agreed to sell the maximum amount advisable by the managing underwriter), and

• to indemnify us for losses that fall within a specified dollar range arising out of litigation, which we believe to be immaterial, pending against Bank of Orange County relating to dissenters’ rights in connection with its acquisition of Cerritos Valley Bank and to fund an escrow arrangement with $2.6 million upon completion of the offering to secure that indemnification obligation. On June 23, 2005, Bank of Orange County received a notice of entry of judgment and satisfaction of judgment with respect to this litigation. However, a notice of appeal from the judgment and satisfaction of judgment was filed on August 12, 2005 by dissenting shareholders that hold a majority of the Cerritos Valley Bank common stock shares involved in the litigation, and the opening appeal brief was filed in February 2006. Shareholders holding the remaining Cerritos Valley Bank common stock shares involved in the litigation are not participating in the appeal. Accordingly, certain funds in the escrow arrangement continue in place.

Registration Rights Agreement. We are party to a registration rights agreement with the Fund in which we agreed to register shares of common stock held by the Fund. Pursuant to the agreement, upon written request by the Fund to register at least 50,000 shares of common stock, we will file, within 90 days after the receipt of the request, a registration statement registering the requested shares held by the Fund. Additionally, in the event we propose to register any of our shares of common stock under the Securities Act, we have agreed to notify the Fund of our intent, and upon its written request, register the shares of our common stock that the Fund has requested to be registered. In connection with the initial public offering of our shares of common stock, we notified the Fund of our intent to register and, pursuant to its written request and in accordance with the terms of the registration rights agreement, we registered shares of common stock held by the Fund and the Fund sold 5,943,306 registered shares in our initial public offering.

In December 2005, we filed a shelf registration statement on Form S-3 pursuant to the registration rights agreement relating to the offer of 7,222,379 shares held by the Fund, which is the selling shareholder in the offering. The registration statement was declared effective on December 23, 2005. On January 25, 2006, the Fund sold 5,000,000 shares and on February 7, 2006, the Fund sold an additional 250,000 shares under the shelf registration statement. As a result of those sales, the Fund owned 13.1% of our shares as of February 7, 2006. In addition, on December 19, 2005, we entered into Amendment No. 2 to the Amended and Restated Registration Rights Agreement (the “Amendment”). Pursuant to the Amendment, we agreed to pay, in the aggregate, up to $125,300 of registration expenses incurred in connection with certain registrations of our common stock. The Fund will reimburse us for any expenses of registration incurred by us in excess of $125,300. In the Amendment, we and the Fund acknowledged and agreed that we have no obligation under the Amended and Restated Registration Rights Agreement to provide for underwritten registrations of the 7,222,379 shares owned by the Fund. The terms of the Amendment were established in arm’s length negotiations with the Fund. We have agreed to keep the registration statement filed pursuant to the registration rights agreement effective for a period of up to one year and to use our best efforts to qualify and remain qualified to register securities on Form S-3 under the Securities Act.

Belvedere Capital Partners LLC

Prior to joining us, Mr. Bachli was the President and a member of Belvedere Capital Partners, LLC, the general partner of the Fund. Mr. Bachli retains an economic interest in Belvedere attributable to Belvedere’s investment in the Fund and carried interest in the Fund. Based on Belvedere’s investment in the Fund, Mr. Bachli received approximately $620,000 from the proceeds received by the Fund upon its sale of shares in our initial public offering and received approximately $724,682 from the proceeds received by the Fund upon its sale of shares on January 25, 2006 and on February 7, 2006 under the shelf registration statement. In respect of his serving as President of Belvedere prior to January 1, 2003, Mr. Bachli received payments derived from the management fee paid by the Fund to Belvedere relating to the Fund’s capital commitments. Mr. Bachli is not entitled to receive any further compensation payments from Belvedere.

Loans and Credit Arrangements by Placer Sierra Bank

Some of our directors and executive officers and their affiliates or associates are also customers of the bank. During the three years ending December 31, 2005, we made loans and extended credit in the ordinary course of business to some of our directors and executive officers and their affiliates or associates and we expect to make such loans or extensions of credit in the future. We may also have banking transactions with corporations or entities of which our directors or officers may own a controlling interest, or also serve as directors or officers. These transactions have taken place and will take place on substantially the same terms, including interest and collateral, as those prevailing for comparable transactions with others unaffiliated with us, and comply with the provisions of the Sarbanes-Oxley Act of 2002. In our view, the loans, leases and other credit arrangements did not involve more than the normal risk of noncollectibility or present other unfavorable features. The Federal Reserve Act and FRB Regulation O, which are applicable to state member banks, place limitations and conditions on loans or extensions of credit to a bank’s or bank holding company’s executive officers, directors and principal shareholders (that is, in most cases, those persons who own, control or have power to vote more than 10% of any class of voting securities), any company controlled by any such executive officer, director or shareholder, or any political or campaign committee controlled by such executive officer, director or principal shareholder. We expect to have such transactions or transactions on a similar basis with our directors and executive officers and their affiliates in the future.