United Western Bancorp, Inc. Reports 2009 Third Quarter Results

http://www.businesswire.com/news/home/20091104006134/en

* Company completed public offering of 20,000,000 shares of common stock at a
price of $4.00 per share for net proceeds of $74.4 million, which were received
on September 22, 2009. On October 14, 2009, Company issued an additional
1,961,325 shares and received net proceeds of $7.4 million, total of $81.8
million raised.
* Company`s leverage ratio increased to 7.43% at September 30, 2009, from 4.51%
at December 31, 2008.
* Company contributed $62.1 million of offering proceeds to United Western Bank,
which increased capital ratios: core capital to 8.77%, total risk based capital
to 11.07%.
* Net loss for the third quarter of 2009 of $8.7 million, compared to net income
of $4.0 million for the second quarter of 2009.
* Community bank deposits increased 100%, or $193 million, and total deposits
including custodial escrow balances are up over $289 million since year end
2008.
* Liquidity held in cash and due from banks was $569 million at September 30,
2009.
* Net interest margin contracted to 2.84% for the third quarter of 2009 due to
higher levels of liquidity maintained on the balance sheet. Excess liquidity
reduced the net interest margin an estimated 47 basis points in the third
quarter of 2009.
* Community bank held for investment nonperforming loans remained unchanged at
$24.6 million, or 2.31% of the community bank held for investment loans
portfolio.
* Community bank held for investment allowance for credit losses increased $1.8
million to $26.4 million; $10.1 million provision for credit losses expense, net
of charge-offs during the quarter, increased allowance as a percentage of the
entire held for investment portfolio to 2.21%.
* Total nonperforming asset ratio grew slightly to 1.59% at September 30, 2009,
compared to 1.34% at June 30, 2009.

DENVER--(Business Wire)--
United Western Bancorp, Inc. (NASDAQ: UWBK) (the "Company"), a Denver-based
holding company whose principal subsidiary, United Western Bank (the "Bank"), is
a community bank focused on expansion across Colorado`s Front Range market and
selected mountain communities, announced results for its 2009 third quarter.

For the third quarter of 2009, the Company incurred a loss from continuing
operations of $8.7 million. On September 22, 2009, the Company issued 20 million
shares of its common stock in a public offering. Had these shares been
outstanding for the entire third quarter, the loss per share for the quarter
would have been $(.30). Based on the weighted average number of shares that were
outstanding during the period the loss was $(.95) per share. The loss was
attributable to three principal factors: (i) $10.1 million of provision for
credit losses, or $6.3 million net of tax, (ii) a net other-than-temporary
impairment charge on non-agency mortgage backed securities of $2.8 million, or
$1.7 million net of tax, and (iii) during the third quarter, the Company held
approximately $370 million of short term liquidity on its balance sheet, which
resulted in an approximate 47 basis point reduction in net interest margin for
the period. The Company reported a loss from continuing operations for the
second quarter of 2009 of $33.7 million, or ($4.71) per share, and income from
continuing operations for the third quarter of 2008 of $1.5 million, or $.21 per
diluted share. See Appendix I to this earnings release for a reconciliation of
our adjusted core earnings and weighted average shares outstanding.

Scot T. Wetzel, President and Chief Executive Officer said: "During the third
quarter, we successfully raised $74.4 million, net of expenses, in a common
stock offering, and together with an over-allotment option exercised in October,
we raised a total of $81.8 million net of expenses. Our community bank deposits
increased $193 million, or 100%, during the first nine months of the year, as
consumers and businesses seek a solid community banking franchise for their
funds. We were cautious in the utilization of this liquidity, which resulted in
high cash balances on our balance sheet that negatively impacted our net
interest margin. We continue to focus on working diligently and strategically
for our customers and shareholders."

William D. Snider, Chief Financial Officer, said: "We continued with our efforts
to strengthen the balance sheet and plan for the future. The balance sheet
strengthening actions in the third quarter included increasing capital,
increasing liquidity, and risk reduction through increased reserves, a decline
in exposure to construction and development loans and increasing core community
bank deposits. We increased the Company`s leverage ratio by almost 300 basis
points to 7.43% with our equity raise, reduced exposure to land loans, and added
to the allowance which grew to 2.21% in total and 2.47% for community bank
loans. At September 30, 2009, nonperforming community bank loans held for
investment were $24.6 million. Net charge-offs for the third quarter of 2009
were $8.4 million. Net interest margin declined 48 basis points to 2.84% for the
third quarter of 2009 compared to 3.32% for the second quarter of 2009. This was
principally due to a decline in the yield on interest earning assets caused by
higher levels of liquidity that we maintained on our balance sheet."

Net Interest Income,Yield on Assets, Cost of Liabilities

Quarter Ended
September 30, 2009 June 30, 2009 September 30, 2008
(Dollars in thousands)
Interest and dividend income $ 25,236 $ 25,975 $ 29,151
Interest expense 8,202 7,595 8,109
Net interest income before $ 17,034 $ 18,380 $ 21,042
provision for credit losses

Yield on assets 4.20 % 4.69 % 5.51 %
Cost of liabilities 1.48 % 1.50 % 1.73 %
Net interest spread 2.72 % 3.19 % 3.78 %
Net interest margin 2.84 % 3.32 % 3.99 %

* Average community bank loans increased $35.2 million in the third quarter of
2009 to $1.167 billion as compared to $1.132 billion for the second quarter of
2009. The yield on community bank loans declined eight basis points to 5.34% for
the third quarter as compared to 5.42% for the second quarter as a result of an
increase in the average balance of nonperforming construction and development
loans, which reduced interest income approximately $259,000. The yield on
community bank loans in the year ago quarter was 6.19%, when the average prime
rate of interest was 175 basis points higher than for the quarter ended
September 30, 2008.
* Average wholesale assets declined $76.8 million in the third quarter of 2009
to $838.5 million as compared to $915.2 million in the second quarter of 2009.
The yield on wholesale assets declined eighteen basis points to 4.42% in the
third quarter of 2009 as compared to 4.60% in the second quarter of 2009. The
principal cause of the decline in the yield was due to adjustable rate
residential loans that have repriced to current rates. In the year ago period,
average wholesale assets were $1.1 billion and yielded 4.99%.
* Average other interest earning assets increased $209.4 million based on our
decision to maintain additional liquidity on our balance sheet in the current
environment together with strong deposit growth. The average balance of other
interest earning assets was $382 million for the third quarter, compared to
$172.7 million for the second quarter. The yield was 26 basis points for the
third quarter compared to 36 basis points in the second quarter.
* The Company`s cost of interest-bearing liabilities declined two basis points
to 1.48% for the third quarter, compared with 1.50% for the second quarter. This
decrease can be primarily attributed to the decline in rates paid on
certificates of deposit. The average balance of interest bearing liabilities
increased $172.7 million, which caused interest expense to increase over the
second quarter level. In the year ago period the cost of interest-bearing
liabilities was 1.73%.
* We expect net interest margin to improve prospectively from the following
actions: (i) future reductions in our institutional deposit base in order to
reduce excess liquidity, (ii) continued disciplined loan pricing and (iii)
fourth quarter 2009 maturities of certain higher-cost wholesale funding.

Provision for Credit Losses

Quarter Ended
September 30, 2009 June 30, 2009 September 30, 2008
(Dollars in thousands)
Net interest income before provision $ 17,034 $ 18,380 $ 21,042
for credit losses
Provision for credit losses 10,106 6,278 2,203
Net interest income after provision $ 6,928 $ 12,102 $ 18,839
for credit losses

* In the third quarter of 2009, provision for credit losses was $10.1 million,
compared with $6.3 million for the second quarter of 2009 and $2.2 million for
the third quarter of 2008.
* Net charge-offs of community bank loans held for investment for the quarter
ended September 30, 2009, were $8.3 million, compared to $842,000 for the second
quarter of 2009, and $13,000 for the third quarter of 2008. There were four
relationships in our C&D portfolio that accounted for $6.9 million of the net
charge-offs in the third quarter of 2009, including the complete charge-off of
one out-of-market loan, and another loan that the Bank successfully moved to
real estate owned as part of its classified asset management strategy.
* Overall at September 30, 2009, our allowance for credit losses as a percent of
loans held for investment increased to 2.21%, as compared to 2.02% at June 30,
2009, and 1.16% at September 30, 2008.
* The allowance for loan losses attributed to community bank loans as a percent
of community bank loans for the periods shown above was 2.47%, 2.26%, and 1.33%,
respectively.
* Based on constant review of our loan portfolio, the current level of
delinquencies and our outlook for the economic environment in the short run, we
considered it prudent to continue to build our reserves in the quarter.

Noninterest Income

Quarter Ended
September 30, 2009 June 30, 2009 September 30, 2008
(Dollars in thousands)
Custodial, administative and escrow $ 101 $ 171 $ 174
services
Loan administration 1,070 1,038 1,175
Gain on sale of loans held for sale 1,244 331 418
Loss on sale of available for sale - (46,980 ) -
securities
Total other-than-temporary (3,244 ) (892 ) (4,110 )
impairment ("OTTI") losses
Portion of OTTI losses recognized in 443 289 -
other comprehensive income before
taxes
Net OTTI losses recognized in (2,801 ) (603 ) (4,110 )
earnings
Other 427 642 1,115
Total noninterest income (loss) $ 41 $ (45,401 ) $ (1,228 )

* The Company incurred OTTI charges on three of its non-agency mortgage-backed
securities in the third quarter of 2009. Two securities subject to OTTI were the
same securities for which OTTI was incurred in the second quarter of 2009 and
third quarter of 2008. The other security subject to an OTTI charge in the third
quarter of 2009 was a security that demonstrated weaknesses in performance
similar to the other OTTI securities; the charge was $2 million for this other
security.
* Gain on sale of SBA originated loans improved in the third quarter and there
is evidence of a recovery of this market activity. We believe it is possible
that this business sector will allow for increased levels of sales in future
quarters.

Noninterest Expense

Quarter Ended
September 30, 2009 June 30, 2009 September 30, 2008
(Dollars in thousands)
Compensation and employee benefits $ 6,995 $ 6,554 $ 6,764
Subaccounting fees 6,377 3,983 4,365
Lower of cost or fair value adjustment on 300 252 610
loans held for sale
Occupancy and equipment 895 823 716
Other 6,459 8,187 4,473
Total noninterest expense $ 21,026 $ 19,799 $ 16,928

* Compensation and employee benefits increased $441,000 to $7.0 million in the
third quarter compared with $6.6 million in the second quarter. The increase in
the third quarter of 2009 compared to the second quarter of 2009 was the result
of an increase in incentive compensation related to loan originations, deposit
growth and loan sales for the period and modestly higher medical insurance
costs.
* After the completion of the sale of certain assets of UW Trust at the end of
June 2009, the Company incurred subaccounting fees on the custodial deposits
transferred to the buyer. During the third quarter of 2009, the increase of $2.4
million in subaccounting fees was the result of this sale. Between the third
quarter of 2009 and the third quarter of 2008, the fee increased as a result of
the sale of certain assets of UW Trust, adjusted for decline in the underlying
index upon which the subaccounting fees are tied.
* The fair value adjustment on loans held for sale increased $48,000 between the
third quarter of 2009 and the second quarter of 2009. During the third quarter,
an increase in the level of delinquencies required an addition to the valuation
account.
* Other expense decreased $1.7 million between the third quarter of 2009 and the
second quarter of 2009. During the second quarter of 2009, the Company incurred
a $1.8 million loss on the disposition of legacy assets owned by a non-core
subsidiary, and a $672,000 loss at the UWBK Colorado Fund LLC, incurred on a
loan that paid off in full at United Western Bank. In addition, between the
second quarter of 2009 and the third quarter of 2009, there was an $888,000
decline in FDIC assessments, principally the result of the $1.2 million special
assessment incurred during the second quarter. Partially offsetting these
declines was an increase in real estate owned expense and loan collection
expenses of approximately $1.3 million.

Income Taxes. For the quarter ended September 30, 2009, the Company`s effective
tax rate was (38.2%). The Company`s tax rate was 25.5% for the second quarter of
2009 and (118.2%) for the third quarter of 2008.

Balance Sheet. The Company`s assets were $2.63 billion at September 30, 2009,
compared with $2.26 billion at December 31, 2008, and $2.24 billion at September
30, 2008. Assets grew $368 million in the first nine months of 2009 due to $289
million of deposit growth, including escrow balances, our equity capital raise,
and our decision to maintain increased liquidity on our balance sheet.

Loan Portfolio

The table below includes loans held for investment:

September 30, 2009 June 30, 2009 December 31, 2008 September 30, 2008
(Dollars in thousands)
Community bank loans:
Commercial real estate $ 476,319 $ 453,283 $ 434,399 $ 417,780
Construction 277,143 306,732 277,614 243,401
Land 98,527 101,676 123,395 122,332
Commercial 155,787 161,308 134,435 131,128
Multifamily 18,663 25,223 20,381 20,128
Consumer and mortgage 44,140 43,150 49,440 44,481
Premium, net 186 192 216 223
Unearned fees (4,896) (5,333) (3,565) (3,407)
Total community bank loans 1,065,869 1,086,231 1,036,315 976,066

Wholesale loans:
Residential 94,400 101,824 125,630 132,632
SBA purchased loans - guaranteed 68,193 71,149 80,110 84,677
Premium on SBA purchased, 6,162 6,348 7,084 7,548
guaranteed portions
Premium, net 154 324 345 106
Total wholesale loans 168,909 179,645 213,169 224,963
Total loans $ 1,234,778 $ 1,265,876 $ 1,249,484 $ 1,201,029

* At September 30, 2009, community bank loans held for investment increased $30
million from December 31, 2008, inclusive of the $43.1 million note received in
connection with the UW Trust asset sale. Absent the UW Trust asset sale note,
community bank loans decreased a modest $14 million in the first nine months of
2009, which is consistent with our balance sheet management plan implemented in
2008.
* We are reducing our exposure to construction and development ("C&D") loans. As
a percentage of the total held for investment loan portfolio, C&D loans
decreased to 30.4% at September 30, 2009, compared to 32.1% at December 31,
2008. In addition, our land loan exposure declined $24.9 million in that same
period. We have established a goal to reduce C&D loans to 25% of our total held
for investment loan portfolio. Commitments to fund C&D loans declined to $42.8
million at September 30, 2009 compared to $151.2 million at December 31, 2008.
* In the first nine months of 2009, wholesale loans declined $44.3 million as a
result of repayments.

Asset Quality

The following table sets forth our nonperforming assets from our held for
investment portfolio as of the dates indicated:

September 30, 2009 June 30, 2009 December 31, 2008 September 30, 2008
(Dollars in thousands)
Residential $ 3,729 $ 3,867 $ 3,238 $ 2,425
SBA purchased loans - guaranteed - - 791 728
Total wholesale 3,729 3,867 4,029 3,153

Commercial real estate 7,583 9,164 1,311 885
Construction and development 16,239 14,258 2,900 4,713
Commercial and industrial 756 1,036 283 146
SBA originated, guaranteed portions 50 101 124 88
Total community bank 24,628 24,559 4,618 5,832
Total nonperforming loans held for investment 28,357 28,426 8,647 8,985
REO 13,325 3,920 4,417 2,693
Total nonperforming assets $ 41,682 $ 32,346 $ 13,064 $ 11,678

Nonperforming residential to residential loans 3.95 % 3.80 % 2.58 % 1.83 %
Nonperforming community bank to community bank 2.31 % 2.26 % 0.45 % 0.60 %
loans
Total nonperforming HFI loans to total HFI loans 2.30 % 2.25 % 0.69 % 0.75 %
Total nonperforming assets to total assets 1.59 % 1.34 % 0.58 % 0.52 %

* Total nonperforming assets have increased as shown in the table above. During
the third quarter, there was a modest decline in nonperforming wholesale loans
partially offset by a modest increase in community bank nonperforming, and in
total nonperforming loans declined slightly in the third quarter of 2009 as
compared to the second quarter of 2009. We continue to manage these problem
loans with anticipatory actions including conducting regular reviews of loans,
obtaining current independent appraisals, and taking other appropriate actions
to work with our customers to a satisfactory resolution.
* During the third quarter of 2009, we moved the largest nonperforming asset as
of June 30, 2009, into real estate owned, which resulted in a $6.9 million
increase in REO. In addition, we moved two other former community bank loans
totaling $2.2 million at September 30, 2009, into real estate owned. The balance
of the increase was due to wholesale residential foreclosures during the
period.

The table below shows the nonperforming loans that are held for sale which are
subject to the fair value adjustment for loans held for sale:

September 30, 2009 June 30, 2009 December 31, 2008 September 30, 2008
(Dollars in thousands)
Residential $ 9,663 $ 8,849 $ 6,493 $ 5,786
Total wholesale 9,663 8,849 6,493 5,786

Multifamily 1,511 1,511 6,759 337
Total community bank 1,511 1,511 6,759 337
Total nonperforming loans $ 11,174 $ 10,360 $ 13,252 $ 6,123
held for sale

* Nonperforming residential loans increased $814,000 in the third quarter. This
increase is generally consistent with delinquency trends in the national
marketplace. There were no residential charge-offs from the held for sale
portfolio during the period.
* Multifamily nonperforming loans held for sale did not change for the third
quarter and represents one loan in the process of foreclosure.

Investment Securities

* At September 30, 2009, the Company`s held to maturity mortgage-backed
investment security portfolio had an amortized cost of $363 million. The
Company`s available for sale mortgage-backed investment security portfolio had a
fair value of $35 million, or approximately $3 million below cost.
* As shown above in noninterest income, the Company incurred $2.8 million net
other-than-temporary impairment charges ("OTTI") on three private label
mortgage-backed securities during the third quarter of 2009. To date these
securities have been written down to 39% of the remaining unpaid principal
balance, which represents our best estimate of anticipated recovery.
* Our exposure to non-agency mortgage-backed securities decreased $33 million
from repayments in the third quarter and decreased $134 million since December
31, 2008, as a result of the previously disclosed sale of $47 million of
mortgage-backed securities secured by option-adjustable-rate mortgage loans
during the second quarter and year-to date repayments. At September 30, 2009,
risk based capital regulations required the Bank to allocate $86.9 million of
capital to support the $333.2 million book value of non-agency mortgage-backed
securities portfolio, of which $77.1 million of capital was allocated to $138.0
million of nonagency mortgage-backed securities subject to the direct credit
substitute methodology.
* The level of repayments has positively impacted the values of non-agency
mortgage-backed securities in the third quarter of 2009 as well as resulting in
a corresponding reduction in risk of loss related to those repayments. However,
a continued increase in the levels of delinquencies, foreclosures and incurred
losses by the underlying loans that collateralize mortgage-backed securities
owned by the Company may result in additional OTTI charges prospectively.

Deposits. At September 30, 2009, deposits, including custodial escrow balances,
increased $289 million to $2.04 billion, as compared with $1.75 billion at
December 31, 2008. Community bank deposits increased $92 million, or 32%, in the
third quarter of 2009 to $385 million at September 30, 2009, versus $293 million
at June 30, 2009. During the third quarter of 2009, community bank deposits
increased as a result of successful marketing efforts which resulted in higher
money market account balances and certificates of deposit.

Capital. At September 30, 2009, after completion of the Company`s common equity
raise, the Company`s equity leverage ratio was 7.43% compared with 5.35% at June
30, 2009. At September 30, 2009, the Bank`s Tier-1 core capital, total
risk-based and Tier-1 risk-based capital ratios were 8.77%, 11.07% and 9.82%,
respectively, all of which are in excess of regulatory requirements of 5%, 10%
and 6%, respectively.

The Office of Thrift Supervision ("OTS") conducted a regularly scheduled
examination of the Company`s and Bank`s condition as of March 30, 2009. Upon
completion of the examination the OTS found certain matters that required the
attention of management and the Company`s and the Bank`s Board of Directors. The
Bank has received a proposed memorandum of understanding from the OTS and
although the memorandum of understanding has not yet been finalized, once
finalized and executed the memorandum of understanding could require the Company
and the Bank to take certain actions concerning capital, dividends, debt and
stock redemptions, and asset and liability concentrations. The Company expects
that the terms of the memorandum of understanding will be finalized in the near
future.

Conference Call

Any investor or interested individual can listen to the teleconference, which is
scheduled to begin at 9:00 a.m. MST (11:00 a.m. EST) on Thursday, November 5,
2009. To participate in the teleconference, please call toll-free 1-877-941-2333
(or 1-480-629-9692 for international callers) approximately 10 minutes prior to
the start time. You may also listen to the teleconference live on the Company`s
website, www.uwbancorp.com, and accessing the Investor Relations tab, or by
accessing http://www.talkpoint.com/viewer/starthere.asp?Pres=128492. The
teleconference may include forward-looking statements.

For those unable to attend, an archive of the conference call will be hosted on
our website.

About United Western Bancorp, Inc.

Denver-based United Western Bancorp, Inc. is focused on developing its
community-based banking network through its subsidiary, United Western Bank, by
strategically positioning branches across Colorado`s Front Range market and
certain mountain communities. This area spans the eastern slope of the Rocky
Mountains - from Pueblo to Fort Collins, and from metropolitan Denver to the
Roaring Fork Valley. United Western Bank plans to grow its network to an
estimated ten to twelve community bank locations over the next three to five
years. In addition to community-based banking, United Western Bancorp, Inc. and
its subsidiaries offer deposit services to institutional customers and
custodial, administrative, and escrow services through its wholly owned
subsidiary, UW Trust Company. For more information, please visit our website at
www.uwbancorp.com.

Forward-Looking Statements

This press release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 that are subject to significant risks and
uncertainties.Forward-looking statements include information concerning our
liquidity, exposure to C&D loans, management of nonperforming loans, and
community bank implementation and business strategy. These statements often
include terminology such as "may," "will," "expect," "anticipate," "predict,"
"believe," "plan," "estimate," "continue," "could," "should," "would," "intend,"
"projects," or the negative thereof or other variations thereon or comparable
terminology and similar expressions.As you consider forward-looking statements,
you should understand that these statements are not guarantees of performance or
results.They involve risks, uncertainties and assumptions that could cause
actual results to differ materially from those in the forward-looking
statements.These factors include, but are not limited to: the successful
implementation of our community banking strategies; the ability to secure,
timing of, and any conditions imposed thereon of any, regulatory approvals or
consents for new branches or other contemplated actions; the availability of
suitable and desirable locations for additional branches; the continuing
strength of our existing business, which may be affected by various factors,
including but not limited to interest rate fluctuations, level of delinquencies,
defaults and prepayments, increased competitive challenges, and expanding
product and pricing pressures among financial institutions; changes in financial
market conditions, either internationally, nationally or locally in areas in
which we conduct our operations, including without limitation, reduced rates of
business formation and growth, commercial and residential real estate
development, real estate prices and other recent problems in the commercial and
residential real estate markets; demand for loan products and financial
services; unprecedented fluctuations in markets for equity, fixed-income,
commercial paper and other securities, including availability, market liquidity
levels, and pricing; increases in the levels of losses, customer bankruptcies,
claims and assessments; the extreme levels of volatility and limited credit
currently being experienced in the financial markets; changes in political and
economic conditions, including the economic effects of terrorist attacks against
the United States and related events; legal and regulatory developments, such as
changes in fiscal, monetary, regulatory, trade and tax policies and laws,
including policies of the U.S. Department of Treasury and the Federal Reserve
Board; our participation, or lack thereof, in governmental programs implemented
under the Emergency Economic Stabilization Act (the "EESA"), including without
limitation the Troubled Asset Relief Program ("TARP"), and the Capital Purchase
Program (the "CPP"), and the impact of such programs and related regulations on
our business and on international, national, and local economic and financial
markets and conditions.

Additional information concerning these and other factors that may cause actual
results to differ materially from those anticipated in forward-looking
statements is contained in the "Risk Factors" section included in the Prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424 (b) (4)
on September 17, 2009, and in the Company`s other periodic reports and filings
with the Commission. The Company cautions investors not to place undue reliance
on the forward-looking statements contained in this press release.

Any forward-looking statements made by the Company speak only as of the date on
which the statements are made and are based on information known to us at that
time. We do not intend to update or revise the forward-looking statements made
in this press release after the date on which they are made to reflect
subsequent events or circumstances, except as required by law.

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)

September 30, December 31,
2009 2008
Assets
Cash and due from banks $ 568,581 $ 22,332
Interest-earning deposits 351 548
Total cash and cash equivalents 568,932 22,880
Investment securities - available for sale, at estimated fair value 34,920 59,573
Investment securities - held to maturity, at amortized cost 410,530 498,464
Loans held for sale - at lower of cost or fair value 272,142 291,620
Loans held for investment 1,234,778 1,249,484
Allowance for credit losses (27,254 ) (16,183 )
Loans held for investment, net 1,207,524 1,233,301
FHLBank stock, at cost 12,311 29,046
Mortgage servicing rights, net 7,791 9,496
Accrued interest receivable 7,318 8,973
Other receivables 20,384 15,123
Premises and equipment, net 24,406 23,364
Bank-owned life insurance 25,942 25,233
Other assets, net 7,453 13,839
Deferred income taxes 14,599 24,100
Foreclosed real estate 13,325 4,417
Total assets $ 2,627,577 $ 2,259,429

Liabilities and shareholders' equity
Liabilities:
Deposits $ 2,005,442 $ 1,724,672
Custodial escrow balances 37,603 29,697
FHLBank borrowings 216,636 226,721
Borrowed money 118,513 119,265
Junior subordinated debentures owed to unconsolidated subsidiary trusts 30,442 30,442
Income tax payable - 1,140
Other liabilities 23,763 25,543
Total liabilities 2,432,399 2,157,480

Shareholders' equity:
Common stock 3 1
Additional paid-in capital 99,376 23,856
Retained earnings 98,372 100,348
Accumulated other comprehensive loss (2,573 ) (22,256 )
Total shareholders' equity 195,178 101,949
Total liabilities and shareholders' equity $ 2,627,577 $ 2,259,429

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except share information)

Quarter Ended Nine Months Ended
September 30, September 30, June 30, September 30, September 30,
2009 2008 2009 2009 2008
Interest and dividend income:
Community bank loans $ 15,717 $ 15,439 $ 15,301 $ 45,983 $ 42,451
Wholesale residential loans 3,185 5,004 3,793 11,054 15,619
Other loans 360 576 389 818 2,241
Investment securities 5,721 7,779 6,339 18,961 24,487
Deposits and dividends 253 353 153 519 1,327
Total interest and dividend income 25,236 29,151 25,975 77,335 86,125

Interest expense:
Deposits 3,919 2,921 3,470 10,671 9,086
FHLBank borrowing 2,391 3,645 2,366 7,138 11,101
Other borrowed money 1,892 1,543 1,759 5,437 4,800
Total interest expense 8,202 8,109 7,595 23,246 24,987

Net interest income before provision for credit losses 17,034 21,042 18,380 54,089 61,138
Provision for credit losses 10,106 2,203 6,278 20,565 6,226
Net interest income after provision for credit losses 6,928 18,839 12,102 33,524 54,912

Noninterest income:
Custodial, administrative and escrow services 101 174 171 388 697
Loan administration 1,070 1,175 1,038 3,265 3,833
Gain on sale of loans held for sale 1,244 418 331 1,622 742
Loss on sale of available for sale investment securities - - (46,980 ) (46,980 ) -
Total other-than-temporary impairment losses (3,244 ) (4,110 ) (892 ) (4,136 ) (4,110 )
Portion of loss recognized in OCI (before taxes) 443 - 289 732 -
Net OTTI losses recognized in earnings (2,801 ) (4,110 ) (603 ) (3,404 ) (4,110 )

Gain on sale of investment in Matrix Financial Solutions, Inc. - - - 3,567 -
Other 427 1,115 642 1,880 2,369
Total noninterest income 41 (1,228 ) (45,401 ) (39,662 ) 3,531

Noninterest expense:
Compensation and employee benefits 6,995 6,764 6,554 19,804 19,153
Subaccounting fees 6,377 4,365 3,983 13,800 14,066
Amortization of mortgage servicing rights 570 491 587 1,951 1,872
Lower of cost or fair value adjustment on loans held for sale 300 610 252 (25 ) 1,175
Occupancy and equipment 895 716 823 2,510 1,923
Postage and communication 222 237 247 692 676
Professional fees 1,017 880 944 3,056 2,032
Mortgage servicing rights subservicing fees 330 389 344 1,042 1,288
Other general and administrative 4,320 2,476 6,065 13,146 6,631
Total noninterest expense 21,026 16,928 19,799 55,976 48,816

(Loss) income from continuing operations before income taxes (14,057 ) 683 (53,098 ) (62,114 ) 9,627
Income tax (benefit) provision (5,363 ) (807 ) (19,360 ) (23,169 ) 1,869
(Loss) income from continuing operations (8,694 ) 1,490 (33,738 ) (38,945 ) 7,758

Discontinued operations:
Income from operations, net of income tax provision of $0, $2, $20,727, - 2 37,736 37,525 162
$20,620, and $91, respectively
Net (Loss) Income $ (8,694 ) $ 1,492 $ 3,998 $ (1,420 ) $ 7,920

(Loss) Income from continuing operations per share - basic and diluted $ (0.95 ) $ 0.21 $ (4.71 ) $ (4.97 ) $ 1.07
Income from discontinued operations per share - basic and diluted - - 5.26 4.79 0.02
Net (Loss) Income per share - basic and diluted $ (0.95 ) $ 0.21 $ 0.55 $ (0.18 ) $ 1.09

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(Unaudited)

Nine Months Ended September 30,
2009 2008
Average Average Average Average
Balance Interest Rate Balance Interest Rate
(Dollars in thousands)
Assets
Interest-earning assets
Community bank loans:
Commercial real estate $ 393,037 $ 17,231 5.86 % $ 288,637 $ 14,289 6.61 %
Construction and development 378,932 13,629 4.81 305,303 14,049 6.15
Originated SBA loans 148,572 6,289 5.66 107,118 6,081 7.58
Multifamily 47,257 1,786 5.04 50,148 2,403 6.39
Commercial 120,217 5,005 5.57 108,077 5,250 6.49
Consumer and other loans 54,436 2,043 5.02 10,231 379 4.95
Total community bank loans 1,142,451 45,983 5.38 % 869,514 42,451 6.52 %

Wholesale assets:
Residential mortgage loans 313,684 11,054 4.70 392,684 15,619 5.30
Purchased SBA loans and securities 129,717 1,633 1.68 162,596 3,977 3.27
Mortgage-backed securities 463,079 18,146 5.22 575,180 22,751 5.27
Total wholesale assets 906,480 30,833 4.54 % 1,130,460 42,347 4.99 %

Interest-earning deposits 186,574 254 0.18 16,551 307 2.44
FHLBank stock 22,977 265 1.54 36,099 1,020 3.77
Total interest-earning assets 2,258,482 $ 77,335 4.57 % 2,052,624 $ 86,125 5.60 %

Non-interest earning assets
Cash 54,700 18,896
Allowance for credit losses (24,761 ) (12,276 )
Premises and equipment 26,088 20,588
Other assets 90,238 84,682
Total non-interest bearing assets 146,265 111,890
Total assets $ 2,404,747 $ 2,164,514

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Passbook accounts $ 342 $ 1 0.25 % $ 253 $ 2 0.81 %
Money market and NOW accounts 1,441,578 5,653 0.52 1,191,489 8,076 0.91
Certificates of deposit 236,028 5,017 2.84 33,934 1,008 3.97
FHLBank borrowings 219,273 7,138 4.29 419,934 11,101 3.47
Repurchase agreements 79,489 2,743 4.55 78,361 2,124 3.56
Borrowed money and junior subordinated debentures 69,775 2,694 5.09 51,906 2,676 6.77
Total interest-bearing liabilities 2,046,485 23,246 1.50 % 1,775,877 24,987 1.86 %

Noninterest-bearing liabilities:
Demand deposits (including custodial escrow balances) 218,701 254,867
Other liabilities 19,098 21,759
Total non-interest bearing liabilities 237,799 276,626
Shareholders' equity 120,463 112,011
Total liabilities and shareholders' equity $ 2,404,747 $ 2,164,514

Net interest income before provision for credit losses $ 54,089 $ 61,138
Interest rate spread 3.07 % 3.74 %
Net interest margin 3.21 % 3.99 %
Ratio of average interest-earning assets to average interest- 110.36 % 115.58 %
bearing liabilities

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(Unaudited)

Three Months Ended September 30,
2009 2008
Average Average Average Average
Balance Interest Rate Balance Interest Rate
(Dollars in thousands)
Assets
Interest-earning assets
Community bank loans:
Commercial real estate $ 415,695 $ 6,092 5.81 % $ 349,329 $ 5,561 6.33 %
Construction and development 363,819 4,239 4.62 335,165 4,912 5.83
Originated SBA loans 157,490 2,316 5.83 119,417 2,082 6.94
Multifamily 43,412 583 5.37 49,457 802 6.49
Commercial 142,473 1,957 5.45 120,811 1,864 6.14
Consumer and other loans 43,893 530 4.79 18,106 218 4.79
Total community bank loans 1,166,782 15,717 5.34 992,285 15,439 6.19

Wholesale assets:
Residential mortgage loans 294,737 3,185 4.32 376,561 5,004 5.32
Purchased SBA loans and securities 124,383 635 2.03 151,608 1,081 2.84
Mortgage-backed securities 419,332 5,446 5.19 543,678 7,274 5.35
Total wholesale assets 838,452 9,266 4.42 % 1,071,847 13,359 4.99 %

Interest-earning deposits 369,798 176 0.19 15,410 76 1.93
FHLBank stock 12,235 77 2.50 28,659 277 3.85
Total interest-earning assets 2,387,267 $ 25,236 4.20 % 2,108,201 $ 29,151 5.51 %

Non-interest earning assets
Cash 90,087 20,046
Allowance for credit losses (30,647 ) (14,052 )
Premises and equipment 24,692 22,741
Other assets 80,075 90,072
Total non-interest bearing assets 164,207 118,807
Total assets $ 2,551,474 $ 2,227,008

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Passbook accounts $ 342 $ - 0.25 % $ 250 $ 1 0.85 %
Money market and NOW accounts 1,472,807 1,842 0.50 1,249,288 2,504 0.80
Certificates of deposit 353,714 2,077 2.33 42,959 416 3.85
FHLBank borrowings 216,837 2,391 4.31 427,431 3,645 3.34
Repurchase agreements 78,741 923 4.59 80,045 647 3.16
Borrowed money and junior subordinated debentures 70,442 969 5.38 52,806 896 6.64
Total interest-bearing liabilities 2,192,883 8,202 1.48 % 1,852,779 8,109 1.73 %

Noninterest-bearing liabilities:
Demand deposits (including custodial escrow balances) 202,592 245,763
Other liabilities 12,101 22,283
Total non-interest bearing liabilities 214,693 268,046
Shareholders' equity 143,898 106,183
Total liabilities and shareholders' equity $ 2,551,474 $ 2,227,008

Net interest income before provision for credit losses $ 17,034 $ 21,042
Interest rate spread 2.72 % 3.78 %
Net interest margin 2.84 % 3.99 %
Ratio of average interest-earning assets to average interest- 108.86 % 113.79 %
bearing liabilities

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
OPERATING RATIOS AND OTHER SELECTED DATA
(Unaudited)
(Dollars in thousands, except share information)

Quarter Ended Nine Months Ended
September 30, September 30, June 30, September 30, September 30,
2009 2008 2009 2009 2008

Income from continuing operations per share - basic $ (0.95 ) $ 0.21 $ (4.71 ) $ (4.97 ) $ 1.07
Income from continuing operations per share - assuming dilution $ (0.95 ) $ 0.21 $ (4.71 ) $ (4.97 ) $ 1.07

Income from discontinued operations per share - basic $ - $ - $ 5.26 $ 4.79 $ 0.02
Income from discontinued operations per share - assuming dilution $ - $ - $ 5.26 $ 4.79 $ 0.02

Net income per share - basic $ (0.95 ) $ 0.21 $ 0.55 $ (0.18 ) $ 1.09
Net income - assuming dilution $ (0.95 ) $ 0.21 $ 0.55 $ (0.18 ) $ 1.09

Weighted average shares - basic 9,186,806 7,198,398 7,182,516 7,834,636 7,178,169
Weighted average shares - assuming dilution 9,186,806 7,198,398 7,182,516 7,834,636 7,181,124
Number of shares outstanding at end of period 27,345,564 7,224,111 7,341,827 27,345,564 7,224,111

Operating Ratios & Other Selected Data (1)
Return on average equity NM 5.61 % NM NM 9.23 %
Operating efficiency ratios (3) NM 82.96 % NM NM 72.59 %
Book value per share (end of period) $ 7.14 $ 13.90 $ 17.66 $ 7.14 $ 13.90
Yield on assets 4.20 % 5.51 % 4.69 % 4.57 % 5.60 %
Cost of liabilities 1.48 % 1.73 % 1.50 % 1.50 % 1.86 %
Net interest margin (2) 2.84 % 3.99 % 3.32 % 3.21 % 3.99 %

Asset Quality Information (1)
Community bank allowance for credit losses $ 26,350 $ 13,021 $ 24,564 $ 26,350 $ 13,021
Allowance to community bank loans(4) 2.47 % 1.33 % 2.26 % 2.47 % 1.33 %
Residential allowance for credit losses $ 867 $ 886 $ 917 $ 867 $ 886
Allowance to residential loans(4) 0.92 % 0.67 % 0.90 % 0.92 % 0.67 %
Allowance for credit losses $ 27,254 $ 13,952 $ 25,520 $ 27,254 $ 13,952
Allowance for credit losses to total loans(4) 2.21 % 1.16 % 2.02 % 2.21 % 1.16 %
Community bank net charge offs (4) $ 8,333 $ 13 $ 842 $ 9,455 $ 80
Residential net charge offs (4) 39 - - 39 194
Commercial nonperforming loans (4) 24,628 5,832 24,559 24,628 5,832
Residential nonperforming loans (4) 3,729 2,425 3,867 3,729 2,425
Commercial guaranteed nonperforming loans (4) 50 88 101 50 88
Nonperforming loans held for investment 28,357 8,985 28,426 28,357 8,985
Nonperforming loans held for sale 11,174 6,123 10,360 11,174 6,123
Real estate owned 13,325 2,693 3,920 13,325 2,693
Total nonperforming assets and REO 52,856 17,801 42,706 52,856 17,801
Total residential loans allowance to nonperforming residential loans (4) 23.25 % 36.54 % 23.71 % 23.25 % 36.54 %
Ratio of allowance for credit losses to total nonperforming loans 96.11 % 155.28 % 89.78 % 96.11 % 155.28 %
Total nonperforming residential loans to total residential loans (4) 3.95 % 1.83 % 3.80 % 3.95 % 1.83 %
Total nonperforming community bank loans to total community bank loans (4) 2.31 % 0.60 % 2.26 % 2.31 % 0.60 %
Total nonperforming assets and REO to total assets (5) 1.59 % 0.52 % 1.34 % 1.59 % 0.52 %

NM - Not Meaningful

(1) Calculations are based on average daily balances where available and monthly
averages otherwise, as applicable.

(2) Net interest margin has been calculated by dividing net interest income
before credit losses by average interest earning assets.

(3) The operating efficiency ratios have been calculated by dividing noninterest
expense, excluding amortization of mortgage servicing rights, by operating
income. Operating income is equal to net interest income before provision for
credit losses plus noninterest income. Such ratios are not meaningful for the
quarter and nine months ended September 30, 2009 due to the loss on sale of
available for sale investment securities.

(4) Excludes loans held for sale.

(5) Excludes nonperforming loans held for sale.

UNITED WESTERN BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP EARNINGS DISCLOSURE
(Unaudited)
(Dollars in thousands)

Appendix I

Three Months Ended Nine Months Ended
September 30, September 30, June 30, September 30, September 30,
2009 2008 2009 2009 2008
(Loss) income from continuing operations $ (8,694 ) $ 1,490 $ (33,738 ) $ (38,945 ) $ 7,758
Income tax (benefit) expense (5,363 ) (807 ) (19,360 ) (23,169 ) 1,869
(Loss) income from continuing operations (14,057 ) 683 (53,098 ) (62,114 ) 9,627
before taxes
Provision for credit losses 10,106 2,203 6,278 20,565 6,226
Loss on securities - - 46,980 46,980 -
Loss on disposition of legacy assets owned by - - 1,785 1,785 -
non-core subsidiary
Loss at UWBK Colorado Fund - - 672 672 -
FDIC Special Assessment - - 1,080 1,080 -
OTTI Losses 2,801 4,110 603 3,404 4,110
Gain on sale of investment (1) - - - (3,567 ) -

Adjusted core earnings $ (1,150 ) $ 6,996 $ 4,300 $ 8,805 $ 19,963

(1) Represents nonrecurring gain on sale of investment in first quarter of 2009.

Adjusted core earnings (earnings before income taxes, provision for credit
losses, loss on securities, loss on disposition of legacy assets owned by
non-core subsidiary, loss at UWBK Colorado Fund, FDIC special assessment, OTTI
losses and gain on sale of investment) is not a measure of financial performance
under generally accepted accounting principles, or GAAP, but is used by some
investors to determine a company's ability to generate core earnings from
operations. The Company presents adjusted core earnings as it believes that it
provides useful information to both management and investors by excluding
specific revenues, costs and expenses that the Company believes are not
indicative of core operating results. The presentation of adjusted core earnings
should not be considered in isolation or as a substitute for results prepared in
accordance with GAAP. The reconciliation set forth above is provided in
accordance with Regulation G and reconciles (loss) income from continuing
operations with adjusted core earnings. This may not be comparable to similarly
entitled measures of other companies and may not be an appropriate measure for
performance relative to other companies. Adjusted core earnings is not intended
to represent and should not be considered more meaningful than, or as an
alternative to, measures of operating performance as determined in accordance
with GAAP.

Weighted Loss from Loss per
Average Continuing Share
Shares Operations
Outstanding
(Dollars in thousands, except per share data)
Weighted Average Shares Outstanding During 9,186,806 $ (8,694 ) $ (0.95 )
the Period:
Less Weighted Average Shares Outstanding (659,341 ) - -
Related to the September 22, 2009 Public
Offering:
Weighted Average Shares Outstanding During 20,000,000 - -
the Period Related to the Public Offering
Assuming it Occurred on July 1, 2009:
Total Weighted Average Shares Outstanding 28,527,465 $ (8,694 ) $ (0.30 )
During the Period:

United Western Bancorp, Inc.
William D. Snider, 720-956-6598
Chief Financial Officer
bsnider@uwbank.com

Copyright Business Wire 2009