908311--3/16/2010--PMC_COMMERCIAL_TRUST

related topics

{loan, real, estate}

{condition, economic, financial}

{tax, income, asset}

{capital, credit, financial}

{investment, property, distribution}

{personnel, key, retain}

{regulation, government, change}

{cost, operation, labor}

{financial, litigation, operation}

{debt, indebtedness, cash}

{stock, price, operating}

{stock, price, share}

{acquisition, growth, future}

{competitive, industry, competition}

Payment defaults and other credit risks in our investment portfolio have increased, and may to continue to increase, which has caused, and may continue to cause, adverse effects on our cash flows, net income and ability to make distributions. The commercial real estate loans we originate are subject to the risks of default and foreclosure which could result in losses to us. There are significant risks in lending to small businesses. We depend on the accuracy and completeness of information provided by potential borrowers and guarantors. Longer term loans and our real estate owned may be illiquid and their value may decrease. Changes in interest rates could negatively affect lending operations, which could result in reduced earnings and dividends. 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 or anticipated levels. Our operating results will depend, in part, on the effectiveness of our marketing programs. Liquidity and Capital Resources Risks If an event of default occurs under our Revolver, the lender is permitted to accelerate repayment of the outstanding obligation. Our operating results could be negatively impacted by our inability to access certain financial markets. Our operating results could be negatively impacted by our inability to extend the maturity of, or replace, our Revolver on acceptable terms, if at all. Turmoil in financial markets could increase our cost of borrowing and impede access to or increase the cost of financing our operations or investments. The market demand for structured loan transactions may not return to previous levels which would negatively affect our earnings and the potential for growth. The market demand for secondary market sales may decline or be temporarily suspended. Continuation of the unprecedented market volatility may have an impact on our access to capital markets. We use leverage to fund our capital needs which magnifies the effect of changing interest rates on our earnings. We have concentrations of investments which may negatively impact our financial condition and results of operations. We are subject to prepayment risk on our loans receivable which could result in losses or reduced earnings and negatively affect our cash available for distribution to shareholders. Changes in our business strategy or restructuring of our business may increase our costs or otherwise affect the profitability of our business. 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 common shares. We may not be able to successfully integrate new investments, which could decrease our profitability. The occurrence of further adverse developments in the mortgage finance and credit markets may affect our business. Economic slowdowns, negative political events and changes in the competitive environment have affected and could adversely affect future operating results. There may be significant fluctuations in our quarterly results which may adversely affect our share price. If we lower our dividend, the market value of our common shares may decline. We have risk and substantial expenses associated with holding and/or operating our real estate owned. 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 and subsequent changes could adversely affect our financial condition or results of operations. The discontinuation of government sponsored programs implemented to provide stability to financial markets may have a material adverse impact on us. Failure to qualify as a REIT would subject PMC Commercial to U.S. Federal income tax. Ownership limitations 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.

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908311--3/16/2010--PMC_COMMERCIAL_TRUST_/TX