944725--3/15/2010--UNITED_WESTERN_BANCORP

related topics

{loan, real, estate}

{acquisition, growth, future}

{tax, income, asset}

{stock, price, share}

{regulation, government, change}

{loss, insurance, financial}

{debt, indebtedness, cash}

{system, service, information}

{condition, economic, financial}

{personnel, key, retain}

{stock, price, operating}

{capital, credit, financial}

{interest, director, officer}

{financial, litigation, operation}

{regulation, change, law}

{cost, regulation, environmental}

We may elect or be compelled to seek additional capital, but that capital may not be available or it may be dilutive. As a regulated entity, the Bank must maintain certain required levels of regulatory capital that may limit our operations and potential growth. Liquidity risk could impact our operations and our results of operations. If the Bank or Company were unable to borrow funds through access to the marketplace, we may not be able to meet the cash flow requirements of our depositors, creditors, and borrowers, or the operating cash needed to fund corporate expansion and other corporate activities. United Western Bank relies on wholesale funding sources for secondary and contingent liquidity sources. We are significantly dependent upon brokered deposits as a source of liquidity, and are currently under significant restrictions in our ability to use them in the future. Our ability to service our debt and pay dividends is subject to our ability to receive dividends from our subsidiaries. Risks Associated with Non-Agency Mortgage Backed Securities Continued deterioration in the underlying performance of our investment securities backed by mortgage loans could create losses in our investment portfolio. Declines in the credit and residential housing markets could result in further losses on our mortgage-backed securities. If any additional of the Bank s subordinate-tranche, non-agency, mortgage-backed securities were to be downgraded below investment grade by one or more of the nationally recognized securities rating organizations, or NRSROs, which rate the securities, we could be required to maintain additional capital. Our allowance for credit losses may be insufficient. A significant portion of our loan portfolio is secured by real estate, and a continued downturn in the economy within the markets we serve could significantly hurt our business and prospects for growth. We are subject to risk related to our concentration of construction and land development and commercial real estate loans. The mortgage loans that the Bank holds are subject to risks of delinquency, foreclosure and loss, which could result in losses to us. The Bank has invested in loan portfolios, pooled securities and mortgage-backed obligations, which may lead to volatility in cash flow and market risk. We must effectively manage our credit risk. Other Risks Related to our Business Our FDIC deposit insurance premiums have increased and could increase further, which could have a material adverse impact on earnings in the future. Our business is subject to interest rate risk. Continued declines in interest rates would likely hurt our earnings. As a savings bank, pursuant to the Home Owners Loan Act, or HOLA, the Bank is required to maintain a certain percentage of its total assets in HOLA-qualifying loans and investments, which limits our asset mix and could significantly restrict our ability to sell certain assets to obtain liquidity. Our quarterly results may fluctuate. If we sell mortgage loans or mortgage servicing rights and the underlying loan defaults, we may be liable to the purchaser for unpaid principal and interest on the loan. Curtailment of government guaranteed loan programs could affect our SBA business. We are exposed to risk of environmental liabilities. Failure in our automated systems and controls could subject us to increased operating or other liabilities. Breaches of our computer and network security systems may result in customer information being compromised and/or identity theft. We may be adversely affected by changes in laws and regulations and the regulatory environment. We are subject to examinations and challenges by tax authorities. Restriction on use of tax attributes from tax law ownership change. UW Trust Company is subject to regulation as a trust company and could be the subject of third party actions. Significant legal actions could subject our Company to substantial liabilities. Risks Related to our Business Strategy We may be unable to fully implement our community banking business strategy. We may not be able to effectively manage our proposed growth. We may not be able to attract and retain key personnel. Adverse economic conditions in the Colorado Front Range and our mountain community markets could impair the execution of our business strategy. Risks Relating to Ownership of Our Common Stock The trading volume of our stock is low. We may issue additional shares of common or preferred stock, which may cause dilution and other risks.

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944725--3/15/2010--UNITED_WESTERN_BANCORP_INC