Discovery Bank Shareholders Approve New Bank Holding Company.

SAN MARCOS, Calif. -- Shareholders of Discovery Bank have approved formation of a bank holding company known as Discovery Bancorp (OTCBB: DVBC) that may own, acquire and operate other federally insured banks and certain authorized non-bank companies operated as independent subsidiaries.

Under terms of the transaction, which took effect June 22, 2005, each share of Discovery Bank common stock currently outstanding is treated as an issued and outstanding share of common stock in Discovery Bancorp, and each outstanding Discovery Bank warrant is treated as an outstanding warrant of Discovery Bancorp. Holders of common stock certificates and warrant certificates do not need to take any action to exchange certificates.

The bank now operates as a wholly owned subsidiary of Discovery Bancorp, whose shares are traded under a new symbol, DVBC.

Shareholders approved the proposition at a special meeting on June 15, 2005. Discovery Bancorp, a California corporation, is regulated by the Federal Reserve.

"This structure gives us the flexibility to develop additional sources of business and revenues that should -- over time -- help strengthen our competitive position," said James P. Kelley, president and chief executive officer of Discovery Bank and Discovery Bancorp.

The next addition to Discovery Bancorp is expected to be Celtic Capital, a privately held commercial finance company in Santa Monica, Calif. Discovery Bancorp and Celtic Capital signed a definitive agreement in January 2005 for a subsidiary of the holding company to purchase Celtic Capital's $23 million loan portfolio and continue operations under the Celtic name. When the transaction closes, subject to regulatory approval and other conditions, the new Celtic will operate as a wholly owned subsidiary of Discovery Bancorp.

The purchase will be funded by a proposed offering, expected to begin early in August 2005, of approximately $12 million in Discovery Bancorp stock. Approximately $6.5 million of the offering's proceeds will be allocated to the Celtic Capital purchase.

"Celtic Capital's reputation and experience in commercial finance," Kelley said, "is a natural extension of Discovery Bank's core product line, and offers new funding options for the bank's business customers."

Utilizing the Discovery Bancorp umbrella, the company also can consider new business ventures such as acquiring another bank or offering traditionally non-bank services like insurance and brokerage accounts, loan collections and servicing, financial planning, certain types of investment services, and equipment leasing.

"Our decisions as we move forward will be driven by what best serves the needs of our business customers," said Kelley.

As an added advantage for having a bank holding company, Kelley noted that Discovery Bancorp can use capital instruments like subordinated debt and trust-preferred securities that provide important tax advantages to the issuer without diluting the investments of shareholders.

Discovery Bank, with offices in San Marcos and Poway, Calif., is a full-service business bank serving the banking needs of small to medium-sized businesses, professionals and individuals in the San Diego County area. It was founded in September 2001 and has more than $100 million in assets.

Forward-Looking Statements -- Statements in this release that are not historical facts are forward-looking statements based on management's current expectations and beliefs on future developments and their potential effects on the company. There is no assurance that future developments affecting the company will be those anticipated by management. Forward-looking statements involve risks and uncertainties, and actual results may differ from those projected in the forward-looking statements due to credit, market, operational, liquidity, interest rate and other risks. For further information about the company or to obtain the company's quarterly financial supplement, please e-mail your request to [e-mail] or call LouEllen Ficke, Chief Financial Officer, at 760-736-8900. Please include your phone, facsimile number and mailing address.