908311--3/16/2006--PMC_COMMERCIAL_TRUST

related topics

{tax, income, asset}

{investment, property, distribution}

{condition, economic, financial}

{loan, real, estate}

{capital, credit, financial}

{stock, price, operating}

{loss, insurance, financial}

{financial, litigation, operation}

{competitive, industry, competition}

{personnel, key, retain}

Investment Risks Lending Activities Competition might prevent us from originating loans at favorable yields, which would harm our results of operations and our ability to continue paying dividends at current levels. There are significant risks in lending to small businesses. There is volatility in the valuation of our loans receivable which can require the establishment of loan loss reserves. Changes in interest rates could negatively affect lending operations, which could result in reduced earnings. We depend on the accuracy and completeness of information about potential borrowers and guarantors. There is no market for our Retained Interests and the value is volatile. There is volatility in the valuation of our loans receivable which can require the establishment of loan loss reserves. Changes in interest rates could negatively affect lending operations, which could result in reduced earnings. We depend on the accuracy and completeness of information about potential borrowers and guarantors. There is no market for our Retained Interests and the value is volatile. We have a concentration of investments in the hospitality industry and in certain states, which may negatively impact our financial condition and results of operations. We are subject to prepayment risk on our Retained Interests and loans receivable which could result in losses or reduced earnings and negatively affect our cash available for distribution to shareholders. We have a concentration of investments in the hospitality industry and in certain states, which may negatively impact our financial condition and results of operations. We are subject to prepayment risk on our Retained Interests and loans receivable which could result in losses or reduced earnings and negatively affect our cash available for distribution to shareholders. Our Board of Trust Managers may change operating policies and strategies without shareholder approval or prior notice and such change could harm our business and results of operations and the value of our stock. Liquidity and Capital Resources Risks Our operating results could be negatively impacted by our inability to access certain financial markets. The market for structured loan transactions may decline, which would decrease the availability of, and increase the cost of, working capital and negatively affect the potential for growth. Our Board of Trust Managers may change operating policies and strategies without shareholder approval or prior notice and such change could harm our business and results of operations and the value of our stock. Liquidity and Capital Resources Risks Our operating results could be negatively impacted by our inability to access certain financial markets. The market for structured loan transactions may decline, which would decrease the availability of, and increase the cost of, working capital and negatively affect the potential for growth. We use leverage to fund our capital needs which magnifies the effect of changing interest rates on our earnings. Economic slowdowns, negative political events and changes in the competitive environment could adversely affect operating results. We use leverage to fund our capital needs which magnifies the effect of changing interest rates on our earnings. Economic slowdowns, negative political events and changes in the competitive environment could adversely affect operating results. There may be significant fluctuations in our quarterly results which may adversely affect our stock price. We depend on our key personnel, and the loss of any of our key personnel could adversely affect our operations. We operate in a highly regulated environment, changes in which could adversely affect our financial condition or results of operations. There may be significant fluctuations in our quarterly results which may adversely affect our stock price. We depend on our key personnel, and the loss of any of our key personnel could adversely affect our operations. We operate in a highly regulated environment, changes in which could adversely affect our financial condition or results of operations. Failure to qualify as a REIT would subject us to U.S. Federal income tax. Ownership limitation associated with our REIT status may restrict change of control or business combination opportunities. Failure to make required distributions to our shareholders would subject us to tax. Failure to qualify as a REIT would subject us to U.S. Federal income tax. Ownership limitation associated with our REIT status may restrict change of control or business combination opportunities. Failure to make required distributions to our shareholders would subject us to tax. Our ownership of and relationship with our taxable REIT subsidiaries will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax. Our ownership of and relationship with our taxable REIT subsidiaries will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax. We are dependent on third party management for the operation and management of our Hotel Properties and we are subject to operating risks of Hotel Properties. Our ability to sell the Hotel Properties at favorable prices could be adversely affected by market conditions or other factors. We could encounter risks that adversely affect real estate ownership. Uninsured and underinsured losses could result in a loss of value of our Hotel Properties. We may be required to make significant capital improvements to maintain our Hotel Properties and their flags. We are dependent on third party management for the operation and management of our Hotel Properties and we are subject to operating risks of Hotel Properties. Our ability to sell the Hotel Properties at favorable prices could be adversely affected by market conditions or other factors. We could encounter risks that adversely affect real estate ownership. Uninsured and underinsured losses could result in a loss of value of our Hotel Properties. We may be required to make significant capital improvements to maintain our Hotel Properties and their flags.

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908311--3/16/2006--PMC_COMMERCIAL_TRUST_/TX