Harrington West Financial Group, Inc. (fka HWFGQ)

[HDOGTX]

Harrington West’s Subsidiary, Los Padres Bank, Deemed Adequately Capitalized by the Office of Thrift Supervision and Relieved from Prompt Corrective Action

SOLVANG, Calif.--(BUSINESS WIRE)--January 25, 2010--Harrington West Financial Group, Inc. (OTCBB: HWFG), the holding company for Los Padres Bank, FSB (LPB), today announced that LPB has been deemed by the Office of Thrift Supervision (OTS) to be adequately capitalized, upgraded from an undercapitalized status, and therefore released from the Prompt Corrective Action Process of Section 38 of the Federal Deposit Insurance Act. This development should reduce LPB’s FDIC insurance assessments in the future.

In the December 2009 quarter, LPB sold $96.2 million of the assets and loans and all $94.9 million of the deposits of its Harrington Bank division in Kansas to Arvest Bank for net book value plus a $4.1 million premium and expects a multi-million dollar tax benefit from the Worker, Homeownership, and Business Assistance Act of 2009, which allows the carry-back of net operating losses for five years rather than two years. Based on the improvement in capital ratios principally from these factors and reduced loan loss reserves relative to prior quarters, the OTS made its determination.

HWFG and LPB remain subject to the OTS’s Cease and Desist Order (CDO) of October 14, 2009 that, among other things, requires LPB to reach an 8% core tangible ratio and a 12% risk-based capital ratio by December 31, 2009. With the exception of reaching the required capital ratios, LPB and HWFG have complied with all the terms and covenants of the CDO and continue to work on a capital plan to reach the ultimate capital requirements.

Harrington West Financial Group, Inc. is a $1.1 billion, diversified, financial institution holding company for Los Padres Bank, FSB. HWFG operates 14 full service banking offices on the central coast of California and the Phoenix metro, Arizona. The Company also owns Harrington Wealth Management Company, a trust and investment management company with $152.6 million in assets under management or custody.