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COLONY FINANCIAL, INC. TO TAKE MINORITY INTEREST
IN ACQUISITION OF FIRST REPUBLIC BANK

Los Angeles, CA, October 21, 2009/Business Wire/ - Colony Financial, Inc. (NYSE: CLNY) (the "Company") today announced that it has committed to invest $25 million, together with additional amounts from other investment funds managed by Colony Capital, LLC, and alongside General Atlantic LLC and a number of other investors, to purchase First Republic Bank from Bank of America Corporation.

The transaction will be led by First Republic's existing management and is expected to close in the second quarter of 2010, subject to regulatory approvals.  Terms were not disclosed.

Jim Herbert, Chairman and founding Chief Executive Officer, and Katherine August-deWilde, President and Chief Operating Officer, will continue in their current positions along with the rest of the management team.

First Republic was acquired on Jan. 1, 2009 as part of the Merrill Lynch & Co., Inc. acquisition. As of Sept. 30, 2009, First Republic had $19 billion in total assets (primarily residential, multifamily and commercial real estate loans), $16 billion in deposits, and $15 billion in wealth management assets under management.

Founded in 1985, First Republic provides private wealth management services including private banking, private business banking, and private wealth management including brokerage and trust services, delivered through a team of financial professionals who are committed to extraordinary, personalized service.  First Republic serves ten metropolitan areas: San Francisco, Los Angeles, Santa Barbara, Las Vegas, Newport Beach, San Diego, Portland, Seattle, Boston, and New York City.

About Colony Financial, Inc.
The Company is a newly formed real estate finance company that will focus primarily on acquiring, originating and managing commercial mortgage loans, which may be performing, sub-performing or non-performing loans (including loan-to-own strategies), other commercial real estate-related debt investments, CMBS, REO properties and other real estate-related assets. The Company intends to elect and qualify to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes.  For more information, visit www.colonyfinancial.com.

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, that may cause actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking: the ability to successfully close the transactions described herein in a timely manner or at all; the use of proceeds of the Company's initial public offering; and the Company's ability to maintain its qualification as a REIT for U.S. federal income tax purposes.

All forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance.  Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.  For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company's final prospectus relating to the Company's initial public offering filed with the Securities and Exchange Commission on September 24, 2009, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

Investor Contact:
Colony Financial, Inc.
Darren Tangen
Chief Financial Officer
(310) 552-7230

Addo Communications, Inc.
Andrew Blazier
(310) 829-5400
andrewb@addocommunications.com

Media Contact:
Kristin Celauro
Owen Blicksilver P.R., Inc.
(732) 433-5200
kristin@blicksilverpr.com