1063997--3/31/2006--HARRINGTON_WEST_FINANCIAL_GROUP

related topics

{acquisition, growth, future}

{personnel, key, retain}

{condition, economic, financial}

{loss, insurance, financial}

{loan, real, estate}

{competitive, industry, competition}

{product, market, service}

{stock, price, share}

{provision, law, control}

{cost, regulation, environmental}

{regulation, change, law}

{tax, income, asset}

Our allowance for loan losses may prove to be insufficient to absorb probable losses inherent in our loan portfolio. Our business is subject to economic and other general risks which may adversely impact our results of operations and financial condition. Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. Our investment portfolio includes securities and total rate of return swaps which are sensitive to interest rates and spread changes and which we may be required to sell at a loss to meet our liquidity needs. We invest in interest rate contracts which can cause losses to us in excess of the value at which we carry these investments. We are subject to extensive regulation which could adversely affect our business. Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed. Our plan to expand the franchise with additional banking offices in California, Kansas and Arizona may not be successful, which would negatively affect our growth strategy and prospects, and profitability. We are dependent on key individuals and our ability to attract and retain banking professionals with significant experience in our local markets. We rely on the investment advice and research of an independent advisor, and the loss of services from that advisor could disrupt our business. We face strong competition from other financial institutions, financial service companies and other companies that offer banking services which can hurt our business. We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements. Our ability to service our Trust Preferred Securities, pay dividends, and otherwise pay our obligations as they come due is substantially dependent on capital distributions from Los Padres Bank, and these distributions are subject to regulatory limits and other restrictions. Provisions in our certificate of incorporation and bylaws limit the authority of our stockholders, and therefore minority stockholders may not be able to significantly influence our governance or affairs.

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1063997--3/31/2006--HARRINGTON_WEST_FINANCIAL_GROUP_INC/CA