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Colony Financial Announces Completion of Acquisition of First Republic Bank in Conjunction with Funds Managed by Colony Capital

Announces commitments to invest $18 million in three additional transactions

Los Angeles, CA, July 1, 2010/Business Wire/ – Colony Financial, Inc. (NYSE: CLNY) (the "Company"), a real estate finance and investment company, today announced the completion of its $24 million participation in the previously announced acquisition of First Republic Bank.  Colony Capital, LLC, alongside General Atlantic LLC, co-led a group of investors in supporting First Republic Bank’s founding management team in the transaction, which was first announced on October 21, 2009.  The management-led transaction re-establishes San Francisco-based First Republic Bank as an independent financial institution with approximately $20 billion of total banking assets, $18 billion of deposits and $16 billion of wealth management assets. The bank has tangible equity capital of over 8%, loan delinquencies of less than 20 basis points, and is profitable.

"We are very excited about participating in this transaction," said Richard Saltzman, Chief Executive Officer of the Company. "This is yet another example of the extraordinary reach and depth of the Colony Capital organization and one of the many benefits enjoyed by the Company as an affiliate.  First Republic Bank is a top-tier, nationally recognized financial institution with a superior portfolio of residential and commercial mortgage assets."

In addition to the First Republic Bank acquisition, the Company committed to participate in three new transactions in June totaling approximately $18 million of additional equity investment. These three transactions bring total invested and committed capital to $256 million, or 93% of the net proceeds from our IPO and concurrent private placement.

About First Republic Bank
Founded in 1985, First Republic Bank and its affiliated companies provide private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service through preferred banking and/or wealth management offices in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Seattle, Boston, Greenwich and New York City. More information is available on the Bank’s website at http://www.firstrepublic.com.

About Colony Financial, Inc.
Colony Financial is a real estate finance and investment company that is focused primarily on acquiring and originating commercial real estate loans and real estate-related debt at attractive risk-adjusted returns. Secondary debt purchases may include performing, sub-performing or non-performing loans (including loan-to-own strategies). Colony Financial intends to elect and qualify to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. Colony Financial is a component of the Russell 2000Æ and the Russell 3000Æ indices. For more information, visit www.colonyfinancial.com.

Forward-Looking Statements of Colony Financial, Inc.
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 pay dividends in the amounts described herein in a timely manner or at all.

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