TabC

Exhibit 53
1533
Office of Thrjft Supervision
Department of the Treasury
Regional Director. Western
225 East John Carpenter Freeway, Suite 500, Irving, TX 75062-2326 Telephone: (972) 277-9500
P.O. Box 619027, DallaslFort Worth, TX 75261-9027' Fax: (972) 277-9501
December 21,2010
OTS Docket No. 06679
Board of Directors
Attn: Mr. James R. Peoples
Chairman of the Board, CEO and President
United Western Bank
700 17th Street, Suite 100
Denver, CO 80202
Re: Directive on Liquidity Contingency Plan
Dear Board Members:
f7A SECURE E-MAIL
Pursuant to Paragraph 22 of the Cease and Desist Order (C&D) of June 25, 2010, United
Western Bank (Association) submitted its Liquidity Contingency Plan to the Office of Thrift
Supervision (OTS) on July 2,2010. The Liquidity Contingency Plan is part ofthe Association's
Liquidity Policy and is titled the "Contingent Funding Plan."
Subsequent developments have called into question whether the Liquidity Contingency Plan is
adequate to address the Association's liquidity position. As stated in OTS CEO Memorandum
No. 342 (March 17,2010) (Interagency Policy Statement on Funding and Liquidity Risk
Management): "OTS expects all thrifts and thrift holding companies to manage liquidity risk
using processes and systems commensurate with the institution's complexity, risk profile, and
scope of operations. Liquidity risk management processes and plans should be well documented
and available for supervisory review. Failure to maintain an adequate liquidity risk management
process will be considered an unsafe and unsound practice." We have reviewed the Liquidity
Contingency Plan in light of the declining financial condition of the Association. We have
concluded that it is inadequate to address the current acute liquidity risks at the Association,
which is an unsafe and unsound practice.
We, therefore, direct the Association to provide us with a revised Liquidity Contingency Plan
(LCP) by 5:00 p.m. Central Time on Tuesday, December 28, 2010. The LCP must meet the
requirements set forth in Paragraph 22 ofthe C&D and must explicitly outline the methods by
which the Association will assure adequate operational liquidity commensurate with the
Institution's complexity, risk profile, and scope of operations. The LCP must specifically
address the full range of the potential impact of the contractual arrangements with the
Institutional Depositors on the Association's liquidity position. including "worst case" scenarios.
1534
Board of Directors
United Western Bank:
Page 2
December 21, 2010
OTS understanding of the Association's liquidity position
Attachment A sets forth our understanding of certain elements of the Association's liquidity
position, including certain of its contracts with Institutional Depositors.
1
Please notify us immediately if our understanding of the information detailed in Attachment A is
incorrect. If the Association takes the position that our understanding with regard to any
Institutional Depositor is incorrect because of any unwritten understandings or agreements
between the Association and such Institutional Depositor, please provide a detailed written
description of that understanding or arrangement. If there are practical reasons why an
Institutional Depositor cannot remove its deposits from the Association, notwithstanding
- contractua11anguage that permits such removal, please provide a detailed written description of
those reasons. You must support youidescriptions with-sufficient evidence to-erial:5le the OTS to
determine the present level of risk to the Association. This evidence may include copies of
correspondence between the Association and its Institutional Depositors or other documentation.
We appreciate management's oral notification regarding the withdrawal of funds by MSCS on
December 21, 2010. This recent development is not reflected in Attachment A.
Required contents of the Lep
The LCP must satisfy all of the requirements set forth in (a) Paragraph 22 of the C&D; (b) 12
C.F.R. 563.161 (Management and Financial Policies); (c) OTS Examination Handbook Section
530 (Liquidity Risk Management); and (d) OTS CEO Memorandum No. 342 (March 17,2010)
(Interagency Policy Statement on Funding and Liquidity Risk Management).
The LCP shall, at a minimum, provide:
a short-term liquidity forecast substantially in the form set forth in OTS Examination
Handbook Section 530, Appendix A (see Attachment B to this letter); and
a long-term liquidity forecast substantially in the form set forth in OTS Examination
Handbook Section 530, Appendix B ( ~ e e Attachment B to this letter), including
consideration of various scenarios as provided therein.
The LCP must contain specific strategies for addressing short-term and long-term liquidity in the
event the $200 million investment contemplated in the executed Investment Agreement
(Investment Agreement) dated October 28,2010, by and between United Western Bancorp, Inc.
(UWBK) and certain investors is not completed or the Investment Agreement is terminated.
I As described in Attachment A, six institutional entities (Institutional Depositors) currently account for
approximately $1.3 billion in deposits at the Association. That amount represents approximately 76 percent of the
Association's total deposits. The Institutional Depositors are: (1) Equity Trust Company and its related Companies
(Equity Administrative Services, Inc. and Sterling Administrative Services, LLC) (collectively, ETC); (2) Matrix
Settlement and Clearance Services, LLC and Matrix Financial Solutions, Inc. (collectively, MSCS); (3) Lincoln
Trust Company (LTC); (4) Legent Clearing, LLC (Legent); (5) UW Trust Company (UW Trust), an affiliate of the
Association; and (6) Trust Management, Inc. (TMI).
1535
Board of Directors
United Western Bank
Page 3
December 21, 2010
The OTS is concerned that the Association's interpretation of its contractual agreements with
Institutional Depositors (Depositor Agreements) underestimates the risk that certain Institutional
Depositors will seek to terminate or withdraw deposits pursuant to their respective Depositor
Agreement. (See Attachment C to this letter, which provides a partial list of provisions
contained in certain Depositor Agreements that may affect the termination or withdrawal rights
of the Institutional Depositors.) In each such case, the LCP must address steps that the
Association will take should the Institutional Depositors described in Attachment C seek to
terminate their Depositor Agreements pursuant to these specified contractual provisions. Thus,
at a minimum, the LCP must address steps the Association will take in the event: (a) LTC
terminates its Depositor Agreement immediately; (b) LTC terminates its Depositor Agreement
with 30 days' notice; (c) ETC terminates its Depositor Agreement with 10 days' notice; (d) ETC
terminates its Depositor Agreement with 30 days' notice; (e) ETC terminates its Depositor
Agreement with the Association based upon the Association'S capital position; (f) Legent (or
Deutsche Bank Trust Company of America (DBTCA immediately terminates Legent's
Depositor Agreement, withdraws all deposits placed at the Association, or causes such deposits
to be withdrawn; and (g) any or all of the Institutional Depositors immediately withdraws all
deposits from the Association in excess of the contractual minimum amounts described in
Attachment A.
Based on the Association's oral notification on December 21, 2010, we understand that MSCS
has withdrawn approximately $50 million in deposits and will withdraw all of its deposits from
the Association in the near future. The LCP must indicate the effect of these withdrawals on the
Association's liquidity position. Please also describe how these withdrawals are consistent with
the Association's Depositor Agreement with MSCS and with previous OTS directives regarding
the Association's institutional deposits.
The LCP must also address the potential effects, both likely and "worst case," on the
Association's liquidity position of: (a) the statutory prohibition on accepting employee benefit
plan deposits set forth at 12 U.S.C. 1821(a)(1)(D)(iii)(II); and (b) the FDIC's brokered deposits
determination letter dated November 5,2010 (November 5 Determination) indicating that all of
the deposits placed by the Institutional Depositors are brokered deposits. The LCP must address
the steps the Association will take in the event the Association's administrative appeal to the
FDIC regarding the November 5 Determination is unsuccessful. The LCP must also address the
steps the Association will take in the event the FDIC determines that all of the deposits placed by
the Institutional Depositors are brokered deposits, notwithstanding recent modifications to the
Depositor Agreements. The LCP must address these possibilities even if the Association
disagrees that such deposits are brokered deposits.
In addition, the LCP must address the steps the Association will take in the event the FDIC
issues an additional determination that the Association is paying fees to the Institutional
Depositors that in substance constitute interest payments on the deposits placed at the
Association in violation of the interest rate limits provided by 12 C.F.R. 337.6. In this
scenario, the Association's payments to the Institutional Depositors will be limited to a fraction
of the amount currently paid by the Association.
1536
Board of Directors
United Western Bank
Page 4
December 21, 1010
As required by Paragraph 22 of the C&D, theLCP must specifically identify alternative funding
sources (both source and dollar amounts) to meet extraordinary demands. Based on a discussion
with management on December 21, 2010, the Association has a borrowing capacity of
approximately $270 million with the Federal,Home Loan Bank of Topeka (FHLB-T). The LCP
must set forth the Association's borrowing capacity with Federal Home Loan Bank of Dallas
(FHLB-D), FHLB-T, and any Federal Reserve Bank(s) (FRB) and address any possible
reduction in, or changes to the terms of, the Association's borrowing capacity that may result
from the current review of the Association's collateral and fmancial condition by these entities.
Specifically, the LCP must analyze its borrowing relationship with FHLB-D, FHLB-T, and the
FRB(s) with respect to the possibility of each entity (a) rejecting collateral, (b) increasing
"haircuts" on collateral, (c) further restricting the maturity of advances, (d) calling advances
before the maturity date, or (e) declining to lend further in the eVent of specific financial or
regulatory events. The LCP must also describe all discussions with the FHLB-T on these matters
and provide a realistic assessment of how quickly the FHLB-T could curtail its lending to the
Association in the future.
Further, the LCP muSt assess the availability of additional QwikRate Internet CDs in the event of
a liquidity event and estimate the amount of time needed to attract funds and their likely interest
cost. The LCP must detail the amount of proceeds that the Association may reasonably expect to
receive from the sale of unpledged assets and the time necessary to complete the sales.
Current and complete copies of Depositor Agreements
Finally, on December 7, 2010, the first provided the OTS with a copy of a new
Amended and Restated Omnibus Subaccounting Agreement withUW Trust dated April 26,
2010. To ensure the OTS is in possession otup-to-date materials, please resubmit complete
executed copies of all the Depositor Agreements (including all amendments to date). Provide a
detailed written description of any unwritten agreement or understanding with any Institutional
Depositor regarding deposits placed at the Association.. .
If you have questions regarding this letter, please contact Assistant Director Nicholas Dyer at
(650) 746-7025 or Senior Attorney Clay Coon at (650) 746-7042. .
c..

Regional Director
cc: Ms. Kristie K; Elmquist, Acting Regional Director, FDIC-Dallas
Mr. Joseph A. Meade, Assistant Regional Director, FDIC-Dallas
Mr. Lawrence Kaplan, Paul, Hastings, Japofsky & Walker LLP
1537
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Exhibit 53 A
1538
Board of Directors
United Western Bank.
December 21, 2010
ATTACHMENT A
ASSOCIATION LIQUIDITY POSITION
Our understanding of the Association's liquidity position is as follows:
1. Six institutional entities (Institutional Depositors) currently account for approximately
$1.3 billion in deposits at United Western Bank (Association). That amount
represents approximately 76 percent of the Association's total deposits. The
, Institutional Depositors are: (1) Equity Trust Company and its related Companies
(Equity Administrative Services, Inc. and Sterling Administrative Services, LLC)
(collectively, ETC); (2) Matrix Settlement and Clearance Services, LLC and Matrix
Financial Solutions, Inc. (collectively, MSCS); (3) Lincoln Trust Company (LTC);
(4) Legent Clearing, LLC (5) UW Trust Company (UW Trust), an affiliate
of the Association; and (6) Trust Management, Inc. (TMI).
2. The relationships between the Association and the Institutional Depositors are
governed by written contractual agreements (as amended to date, Depositor
Agreements).
3. Pursuant to the applicable Depositor Agreements, two of the Institutional Depositors
(UW Trust and TMI) may remove any or all of the deposits placed at the Association
at any time. Both of these Institutional Depositors may remove their deposits from
the Association immediately and without notice.
4. The other four Depositor Agreements contain covenants whereby the applicable
Institutional Depositor has promised the Association to deposit and maintain with the
Association a certain minimum dollat amount of deposits, as follows:
a. ETC's Deposit Agreement provides that ETC may immediately withdraw $150
million in deposits from the Association at any time, but until June 27, 2012 is
otherwise contractually obligated to deposit and maintain at the Association the
lesser of (x) $700 million and (y) the aggregate total of all cash balances held by
its individual customers in "Custodial Accounts." The Custodial Accounts
. include all individual participant accounts in employee benefit plans, individual
retirement plans and other qualified plan accounts maintained by ETC. The cash
balance in the Custodial Accounts has consistently been in excess of $1 billion.
Thus the total amount that ETC is required to deposit with the Association .
pursuant to its Depositor Agreement is currently $550 million.
Attachment A Page 1
1539
Board of Directors
United Western Bank
December 21, 2010
b. MSCS's Depositor Agreement requires MSCS to maintain a "minimum average
monthly balance" of$100 million at the Association during the term of the
contract.
c. LTC's Depositor Agreement states that the aggregate balance to be maintained by
LTC during the term of the contract "shall in no event be less [than] $110
million."
d. Legent's Depositor Agreement requires Legent to use its "reasonable commercial
efforts" to maintain a minimum of $170 million with the Bank.
Thus the total amount that all Institutional Depositors are contractually required to
deposit with the Association is approximately $930 million.
5. Each of the Association's Depositor Agreements contains termination provisions that
allow the applicable Institutional Depositor to terminate the contract upon the
occurrence of various events or contingencies. Should an Institutional Depositor
terminate its Depositor Agreement with the Association, that Institutional Depositor
has the contractual right to remove all deposits placed with the Association following
the expiration of the applicable contractual notice period.
6. Each of ETC and MSCS has entered into a letter agreement with the Association
limiting its rights to terminate its respective Depositor Agreement based upon the
Association's capital condition. Each of these letter agreements expressly preserves
the right to terminate based upon the Association's "undercapitalized" condition after
December 31, 2010.
7. If ETC were to terminate its Depositor Agreement based upon the Association's
capital position, ETC's Depositor Agreement requires ETC to provide the
Association with 30 days' prior written notice.
8. If MSCS were to terminate its Depositor Agreement based upon the Association's
capital position, MSCS's Depositor Agreement requires MSCS to provide the
Association with 60 days'.prior written notice.
Attachment A Page 2
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Exhibit 53 B
1542
Board of Directors
United Western Bank
December 21,2010
ATfACHMENT B
OTS EXAMINATION HANDBOOK SECTION 530, APPENDIX A AND B
/
1543
Appendix A: Liquidity Risk Management
Section 530
SAMPf-E SHQRT -TERM LIQUIDITY FORECAST
Day 1 Day 2 Day 3 Day 4 DayS Days 610
Cash inflows
100 120 130 100 120 620
Cash outflows
90 130 100 150 150 510
Net surplus (deficit)
10 (10) 30 (50) (30) 110
Cumulative net surplus (defi-
10 0 30 (20) (50) 60
cit)
Beginning liquid cash surplus
1
25 35 25 55 5 0
Plus: Net surplus (deficit)
10 (10) 30 (50) (30) 110
Ending liquid cash surplus
35 25 55 5
(25)2
110
Net cash shortfall
0 0 0 0 25 0
1 The liquid cash sutplus is the level of cash and cash equivalents in excess of transactions balances
required for day-to:-day operations and any minimum reserve of cash for contingencies.
~ The institution would have to close the projected cash shortfall by increasing cash inflows (for in-
stance by borroWing) or by reducing cash outflows on or before day 5 to avoid dipping into the reserve
for contingencies. The beginning liquid cash sutplus on day 6 of zero ($0) assumes that management
will address the net cash shortfall on day 5 by taking some action. Of c o u r s e ~ management may address
that shortfall before day 5.
.......-y2010
1544
Appendix B= Liquidity Risk Managemeht Section 530
SAMPLE LONG .. TERMLIQUIDITY FORECAST
Ci($lllnfiowS:
Scenario No.1: Most Likely Forecast
Date:
Deposits .. .. .... ..... ....... . ..
Matlltingloans
sale$ .
. Other
January 2010
1545
-'--------
Appendix B:Liquidity Risk Management Section 530
. f.'
Sce.narlo No.2: 20% Reduction in Deposit Inflows
Date: ..,..,...._.,_.....,.....----
1546
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Exhibit 53 C
1547
Board of Directors
United Western Bank
,December 21, 2010
ATTACHMENT C
PROVISIONS OF DEPOSITOR AGREEMENTS
1. LTC's Depositor Agreement states: "LTC may terminate this Agreement upon thirty (30)
days' written notice to Bank in the event that Bank no longer meets the definition of 'well-
capitalized' pursuant to 12 CFR 565.4(b)(1)(ii). Bank agrees to promptly notify LTC in the
event the Bank ceases to meet the definition of well-capitalized as defined herein." ( 4.3)
The Association has asserted to the OTS examiners that this provision permits LTC to terminate
only where the Association does not have "a Tier 1 risk-based capital ratio of 6.0 percent or
greater," as required by the precise language of subsection (ii) of 565.4(b)(1). Contrary to the
Association's reading, this provision may permit LTC to terminate where the Association does
not meet the definition of "well-capitalized" as set forth in 565.4(b)(1) read as a whole.
Furthennore, there are indications that LTC may disagree with the Association's interpretation as
presented to the OTS examiners. LTC informs its customers that deposits will be placed only
with "well-capitalized" institutions. See, e.g., the "Important Disclosures About Uninvested
Cash in Lincoln Trust Company IRAs and ESAs" provided to LTC's customers on LTC's
website (see attached document, available online at
https:llwww.lincolntrustco.com!Fonns/Lincoln%20Trust%20Company%20FormslIRA-
SlO8.pdf>, visited December 17,2010); see also "Investment Options" ("Because Lincoln Trust
Company is a non-deposit taking trust company, it will deposit your uninvested cash with one or
more FDIC-insured commercial financial institutions that are categorized by the FDIC as 'well
capitalized. "') (<https:llwww.lincolntrustco.comlself-directed _ InvestingiPageslF AQs.aspx >,
visited December 17, 2010).
This provision indicates LTC may tenninate its Depositor Agreement with 30 days' notice to the
Association. If LTC determines the Bank has breached its agreement to promptly notify LTC
regarding its capital category, LTC may terminate its Depositor Agreement immediately.
2. Provisions in ETC's Depositor Agreement and MSCS's Depositor Agreement provide that
those contracts may be terminated in the event it appears the contract will violate law or
regulation.
2
ETC, MSCS, or both of them, could reasonably determine that this provision has
2 ETC's Depositor Agreement provides that the Depositor Agreement shall terminate 10 days following "receipt by
any Party of any written instruction, enforcement or other action by any regulatory agency with enforcement
authority over either [the Association], the Companies, or ETC, indicating that this Agreement, in whole or in part.
violates any applicable regulation to which either Company, ETC, or Bank is subject, now or at any time during the
term ofthis Agreement."
MSCS may tenninate its Depositor Agreement with 60 days' notice if the Association'S "continued performance of
services under this Agreement will result in or is likely to result in a violation of any .federal. state, local, or
regulatory rules or regulations applicable to the Bank or United Western Bancorp. Inc and/or the Bank's inability to
provide such services, including, but not limited to, the Bank's inability to handle increases in trading volume, in all
respects in accordance with the current existing service standards."
Attachment C Page 1
1548
Board of Directors
United Western Bank
December 21,2010
been triggered by, among other things: (a) the Association's receipt of the FDIC's November 5,
2010, determination that the deposits placed by ETC or MSCS constitute brokered deposits, or
by (b) the Association's receipt of the PCA Notice dated December 13,2010, indicating that as a
result of the Association's PCA "undercapitalized" status, the Association is unable to accept
employee benefit plan deposits pursuant to 12 U.S.C. 1821(a)(l)(D)(ii).
These provisions indicate that ETC may terminate its Depositor Agreement with 30 days' notice
. to the Association, and that MSCS may terminate its Depositor Agreement with 60 days' notice
to the Association.
3. Legent's MMDA Agreement with DBTCA
3
provides that DBTCA must not "unreasonably
withhold its consent" to the Association's participation in DBTCA's MMDA placement program
but also indicates that the Association must meet certain criteria to be determined jointly by
Legent and DBTCA. ( 18(1).) Association management has represented that it is not aware of
any criteria established between DBTCA and Legent in connection with this provision.
However, it appears that the Association's decline in capital status may cause DBTCA to refuse
to continue to place deposits with the Association. The MMDA Agreement provides that
Program Banks are not eligible for participation in DBTCA's MMDAProgram "in the event that
the Program Bank has insufficient capital or is otherwise ineligible under the regulations of the
Federal Deposit Insurance Corporation from receiving brokered deposits." ( 11(g).) Legent's
Depositor Agreement does not appear to contemplate placement of deposits outside ofDBTCA's
MMDA Program. The Association has not provided the OTS with a contingency plan with
Legent to place deposits in the event DBTCA refuses to do so.
4. Section 6 of Legent's Depositor Agreement dated August 18, 2010, states: "Legent shall use
its reasonable commercial efforts to provide deposits into Accounts at Bank under the Program
with aggregate balances of not less than $170 million; subject to adjustment from time-to-time as
agreed to in writing between Legent and Bank; provided, however, that Bank acknowledges and
agrees there are no assurances that Bank will receive deposits in the amount of the Target
Balance, or of any balance."
The proviso in this section indicates that the Association may have no legal recourse should
Legent fail to maintain a minimum of $170 million in deposits at the Bank and that Legent may
withdraw all of its deposits from the Association without notice.
3 Legent's Depositor Agreement with the Association relates to Legent's participation in an MMDA placement
program operated by Deutsche Bank Trust Company of America (DBTCA). Legent and DBTCA have entered into
that certain Broker-Dealer Money Market Deposit Account Agreement (MMDA Agreement) dated as of November
18,2008, by and between Legent and DBTCA, a copy of which has been provided to the OTS. The relationship
between Legent and DBTCA is governed by the MMDA Agreement. The Association has represented to the OTS
and the FDIC that no agreement between the Association and DBTCA exists.
Attachment C Page 2
1549
Board of Directors
United Western Bank
December 21,2010
5. MSCS's Depositor Agreement states that the Agreement may be terminated "[b]yMSCS,
immediately, in the event the Bank is subject to a cease and desist order issued by the Bank's
regulator that includes an allegation of unsafe and unsound practices other than those pertaining
to any matter included in the Memorandwn of Understanding entered into by and between the
Bank and the [OTS] on December 10,2009." The June 25 C&D arguably contains such
allegations.
This provision indicates MSCS may terminate its Depositor Agreement at any time without
notice. ..
Attachment C Page 3
1550
Toll Free: 1-800-962-4238
For express deliver!e:z:
Send mail to:
LINCOLND www.LincolnTrusICo.com
Lincoln Trust Company
717 17th Street
lincoln Trust Company
P.O. Box 173859
Denver, CO 80217-3859
-------Trust Suite 2200
Denver, CO 80202-3308
IMPORTANT DISCLOSURES ABOUT UNINVESTED CASH
IN LINCOLN TRUST COMPANY IRAs AND ESAs
Lincoln Trust Company (Lincoln Trust) will depositall uninvested
cash for which it has not received investment instructions (including
but not limited to cash awaiting investment, contributions, transfers,
dividends from investments within the account, and pending dis-
tributions) into a deposit account(s) with one or more third-party
Federal Deposit Insurance Corporation (FDIC)-Insured financial
institutions selected by Lincoln Trust that are categorized as "well
capitalized" institutions by the FDIC and that enter into s ~ b
accounting agreements with Uncoln Trust. You further authonze
Lincoln Trust to withdraw, In the tuture, the full balance of such
uninvested cash and deposit it with other FDIC-insured depository
institutions selected by Uncoln Trust. All such cash deposits will
be insured up to the legal limit, as established by the FDIC. For
additional information regarding FDIC insurance, please visit
www.fdic.gov or call 1-877-ASK-FDIC. You are deemed to have
approved the use of such third-party financial institution(s) tor
your uninvested cash deposits. Lincoln Trust will receive a fee,
based on the average aggregate Uncoln Trust balances held by
the third-party financial institution, for the provision of administrative
and sub-accounting services to such third-party financial institutions
by Uncoln Trust.
A variable rate of interest will be applied to your uninvested cash.
At our discretion, the interest rate and Annual Percentage Yield
(APY) applied to your uninvested cash may change at any time.
The interest on your uninvested cash is compounded and credited
on a monthly basis. In order to receive interest, your account must
be open as of the interest crediting date. The Interest is calculated
using the average daily balance methOd. This method applies a
periodic rate to the average daily balance in the account for the
period. The average daily balance is calculated by adding the
principal in the uninvested cash for each day in the period and
dividing that figure by the number of days in the period. Interest
begins to accrue no later than the second business day follOwing
the day of deposit of non-cash items.
As of October 1, 2010, the current interest rate applied to your
uninvested cash deposit is 0.1200% with an APY of 0.1201 %. The
most current interest rate information may also be obtained by
calling 1-800-962-4238.
There may be minimum balance requirements ("liquidity require-
ments") that apply to your uninvested cash based upon the invest-
ments you hold in your account. Information about these liquidity
requirements is disclosed in the Fee Schedule contained in your
account establishment booklet and on our Web site (for IRAs).
These requirements are also described on the applicable invest-
ment direction forms.
The fees that may be charged and debited from your account are
referenced on the applicable Fee Schedule provided with your
account agreement. You may obtain a Fee Schedule in the "Docu-
ments and Forms" seclion of our Web site, www.LincolnTrustCo.com.
or you may call 1-800-962-4238.
I
INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE. MAY LOSE VALUE
I
2010 UNCOLN TRUST COMPANY PAGE 1 of 1
IRA-5108 (10/10)
1551
TabC
Exhibit 54
1552
'
....
. J ..... J .. 1.. .' u .......... N ......... I ..... T. .........E .... D .... '. .'
WESTERN
.. ' BANK'
, James R.J?eoples
Chaittnan,Ptesident & Chief Executive Officer
Uhlted. Wf;lteriiBank

jpec)pies@,uwbal1k.c:om.
(]ONFi1YBNT1AL TREATMENT11EOUESTJjJd

SEIYTVIA. EMAlL:!lN1JOVERNIGHTHML

Regional Director
Office of Thrift Supervisioh
We&tePl RegioIl,alO;ff1ce
225 E, $uite500
TX
Re: united Ditectiveoll Liquidity Contingency Plan
DeatMt.
On December theO!Sissue<ito United ",estern Bank; Denver, Colorado (the, "Bank")
a Directiveoh Liquidity Contin.gcncy Plan. rc;:quiJ:ingth Banktotevjse its Liquidity
Contingency PlAn (the "Lew') by 5 p.m.centtaltin1e 011 TlJes(lay, December 28; 2010 (the
'''LiquidJty Encloseq, please finq therequestedLCP which is provided intwoparts
_ the first, a revised Liquidity Policy and Contingency Fundiiig plan provided as Exhibit A (the
"Plan") and this which discusses the implemen.tation of the Plan and responds tQ various
issues raised ro. the Liquidity Duective.
forth in the Liqllidity the OTS the iBank is
underestitnatingthe riskpresented'bypotential withdrawals of deposits at the Bank
("Institutional.DepositS")placedhy:(l }Equity Trust Company and its a.ffiliates (collectively
"ETC"); (2) Matrix Settlement and Clearance LLC audits affiliates (collectively;
(4) ("Legep-t"); ($)
Western TNst Company ("UWT"); MaJige:1l.1ent, Inc. C'TNU" and collectively
with each depositor the "Institutional Depositors"} ... As dis
cus
sedbelow;aswel1as
inthe Plan, the Bank has carefully. and prudently reviewed the possibility of withdrawals by the
tTh.islttercotltain& \VestemBank and its holding company united
Western BancQ-rp, Inc. that llot in the publiC domi.\in. This lettetisbeing prov'idedtothe fe<;leralbauktegJ,ilatgTs of
Westem.B'ank in theirsuperv{sorYCf0.pacit0vet the. Bank and therefore should be' grailted<;onfiderttial
coinm,erc:ialiiifOi:nlaliOlland b.ankcxam.inatiQIlaruill\Jl>etvision
the Fredomof InfoIJIlatioll AYt. .. requt}st. pwsutplt to 5P$t?' SS2(b)(4 ) and (b)(8),
tre!l.fuient oftbjs le@t. Pleli$.nQtifyu$ ifanYQne subtnits Ii Fr(jedQlll ofln:forIllation Act reque$t for a copy of this
letter.
1553

..... ".' . " ','."" .' ': . , .. ,.9Umg: pubUel-y,
klnl.WUttCeqotJ;, 29i'201()(the of1b..e
Recapitalization Transaction by January 3 I, 2011 is the most and effective liquidity plan
for the Bank as it addresses all of the cfuillengell crtUtently faced by the Bank, which has been
preViouSly. exphfutedwtheOTS QQcasions. .
Tta1l$;iCtf()naIso th,e UfUlk's
'The vdt}lout.
torebuttals,ofcontrotbyiwo oillie proposed anchor' investors. as: wen as;UTS'and,FDIC
approval ofvanous sttuCtunu cliatigeS.W(i tesJiectfuiIytequest,agenctacnoll on pending
.. '&:1;1_,' . ...,'" cC,ac'" !U,.....;+e .a. .. ;o;,..-.;-iM ..... 'n+.:O" of,,+t.. e:n:-cap'i"''''U.:"", '''', .. ""',ex: '''po .>0Il.if, ..... '';;'101 ..
.1,l.Il,.D\P. '" "' __
..,
appropriately
andteIatedliqUidiiji.demands sifP:rliicailtwdtnaterialchallenges-inc1u.dmga
metnm'and-.uu ora troubled col'l.ditb;in letwrdaWd
adii.rl1'Il.t' {" . .. U ... _;l. an FDIC .. 'telnntn'At'Vdetenninati . ,Aft' 'd M '24 ,",'010' .
.', :p, ...... ...,......" ..... ".QA- U4te. :41 . ,.4 . ..
a Bm.*'C$ an4
Bank and an FDIC final determination on brokered;deposildetenninationdaied


otttcba:r,g.$ rtWem:t8 ',.. . ...... ' , . . .,p "ti'Ag .' a,1)iijty of
tt>bOld.emploYee . . ,
, Depositors .andtheBank's managementofits liquidity throughoutthiScha11eqgingpettod iJithe
Bank;s a liquidity
. 19nificandy aU of the lt1$titutiomil Depo.sits: will tetnain on deposit pendingthe Recb: . ital" ". t' '. '.
s: c .!+1>< ",' :;,J?
.,' .. If .. , .. p. "". .... ,."".,
hQwever; challenges. ..
2,,A$\te Pl-fcii14ed. ili8li;
Qid.riY ill I)J:der .
cauSms aayliq;ldaity
3.Qr.t. tJWBI pte$$ ."teaseand fUed\',tiththeSeeurffies andBxchanseCiommissibll It


1554
M.,.." ... UepO$l.
Asailiidtial matter. we. note that ihevatlous:institUtlonalDepo$ilotS.ate tequitedto mainudn
$930. miUi.set forth in,Attachm.ent Atb 't:he incltl$tve of
the $1()Qttdlliot.1,mftdmu,ttt 1hatM$CS (),f the
d,q)()$its:andtb,e .
. limitations set:forth.m Seetionll(a)(l)(D)(ii) BeriefitPlan

L
.:ir-lih"' ""'-. '"fPbtntialWitbdrawalOfDeposi .... ,v Reiludlihio'IDstitutinalDen""f' , .
. .. D\,f;1 ... 0 , e.,.. .... .. . . . ...... ., '/,. '. ... . ... ..... P . . "f'o"IPl'$
1555
Philip A.. Getbick
Ofioeot 'I'hdft SUpervisiqu
Dectribet 28; 20m
PageS
which is separt1.teanq.apartftomfueDeutscll,aank-LegetJt Ptograttt(the
Witll; r.especttQ the DBL Program, wenotetbatDeutsche Barile
receives instructions from Legentand weare notawareofany indication from Legent
that Deutsche Bank will limit its deposits at the Bank.
CO:tlfumt haven{) against Legntfot:a
breach of its subaccountingagreementwith the the right to
,seek injunctive remedies against .Legent for an attempted violation ofitsdeposit
agreement. that as a, party to the pending Recapitalization:
Transaction,itis in Legenfsbstintere$t$ for the lteciipitalization TransactiQnto be
pro111ptly c()nsummated, Accordingly,we believe :thatLegeufwoul4take n.oactj:ons to
jeQpardize tll;e pending that we believe.
thafLegeutposes no rlskwould be
completely mitigated upontheapptQval oftheloIig-pendUtga,pplicationfortheBank to
acquire Legent.NotWithstandingtheJotegoing, intheevent Legentwere 'to cause a
at the Ban1c, Bapl{cOllJd wit\1stands1,lch by
Legentby fiul.ds from the FHLBand from
Trust Management,Jllc. TM1 liasbe.ena c1ientofthe BaIlkfol'over .eleven
maintains arelativly small and stable deposit balance of approxi:inately $ H) million.

belief that none ofTMI;saccounts are employee benefit plan deposits.
United WestenrTrustCompany. The Bank does not believe thatUWTWill Withdra.w
funds frotntheBankas l1WTiscontrQlled. by the Batik's parerttUWBI. Accordingly,
the 'Bank doesno1;belicvethat tJWT wou14 tal<:eMyacti,on.Plconsistentwith its corporate
parenfs, its fiduciary duties, As adient oftheBank
for overf0urtecn UWT is supportive 'of the Bank' s operations and believes that
coUSunullation oftlieR.ecapita1ization Transaction as. quickly as possible is mUWT' s
bcstmterests,
()TSonDeccm.ber 21,2010, funds are
heirlgwithdrawninanorderly andprudentmanner to comply with applicable law ... Such
withdrawalis not causing an.ad.verse liquidity event atthe Bank; We note
CPl,iscun"ently stnicturit1gan orderly withdrawal of approximate1y $30 million in
deposjtsat the Bank. Pend,ings1,lchwithdrawal,the aanki$ anY neW
deposits from cpt. The required liquidity for the with4rawalofCpr sdeposjts VVillbe
fulfilled through the Bankls on .. balance sheet liquid assets.
Employee Benefit Plan Deposits
SitJ.ce the of tlJ,eEl'fiployee IienefitPlUl Ili,rective.the diligently
or re.vieWi.ng acco\llltregisters of Institutional DI!pQsitors. As a
1557
PhiliPA. Getbick
Of1ce of Tbtift Stipetvisioll
Detetpbe:t; 2010
Page 6.
tes1llt of such COtfithUilicatioilS,a$weadvised tl1eOTS an.<!
on, Decem.ber 21,20 10 well as in a. letter date4D
ec
ember 10). MSCS withdrew...... . .
approximately $29 million in deposits from the Bartk 2010'andanadditional
$50tnillion on December 21, 2010. While MSCS is subJect to an Administrative Services
Agteemeiltteqiliring thrnaintt.latlceof at le.ast$lOOD1Ulj(;l1 why suh
13ankreceived the Em.ployee Ben(!fit Plan Directive.is
becaU$ecompliatlce with theFDIAsupersedesany contractual obligations and MSCSwas within
its rights to terminate the Administrative Services Agreement. Nonetheless, as the MSCS
withdrawal exemplifies,; the Bartkmaintain:s suffieientliquidity to address tb,esJJddenwithdrawal
ofamaterial.amo:untot<i,epositsat tbeBank. !n the that MSCSis to
beacqWte<1. ina to December Jl,201 O. In
light of the impendtng chM-ge in controlofMSCSi notwithstanding that MSCS had not yet
provided the Bank with fottnal notice that it planned to WithdraW deposits from the
prudence dictated that the Banktake appropriateactionsinadvallC ofimy fannal notice.
Accordingly, the Batikwa,$ .fUlly prepa.r<lfottbeMSCSWithdrawal of funPs,
At this webelievetbat M$CS theotlter Institutional
totheBai1k that they.have.few, employee benefit plan
deposits at the Bank. For example, UWThad appro;omately $lOO.()O in .ell1ployee benefitpll;ll1
withdrawn sucham.OU11t, noted, above, advised the
thatonlxasmall portion of thed,eposit$ ithas atthe B$1k are related to .employee benefit
plans Mdthatithasceasedtransmittingnewemployeebenefit plan deposits to the Bank.
Finally, LTC haS advisedtheBatlk thatjthas no employee
Withdrawal of Deposits iftheFJ)IC'Takes an Advcl'$eJ\CQ(llto tbeB3n):'$ DpO$it

As the Or8is aware. the primary basis of the FDICs Novemhet 5,2010 determihatiol1 was that
various Institutional Depositors could bedeposltmoker$ basedupontheiaQt that they di<ltlot
follow FDIC Advisory Opinion 05-02. (February3,20QS), which ptovicles atllmetpretative
eXQlusionfrom the AsUle were eachadV'ised, in .early
December 20 1 the Bankand eaohrelllaining Institutional Depositor:restructured their deposit
agreements to mirror the relationships setforth in FDICAdvisotyOpiniou 05-02 (February 3,
2005), thereby excluding. each reinaming InstitUtional DepbsitQffrom the FDIC;preS\lffie<i smtys
of "deposit broker" bath, in fact, $Swell as \ll1der cited FDIC..,ptecedent TheBMkadvised the
FDICofsucltreStrl;tcttrtmgin. funes and disc'\lssed such restructuring withthe
Aqting Regional Dil'ectotQftheFDICon Decemher15, 2010. While Acting Regional Director
Ehnqulst heing"vetted," to date the FDIC has not objeCted to the Bank's
restructuringahd hilS. not.advised the Bankto'ceaserol1Uig over suchdeposits. Nonetheless;. the
BattkcQlltinuesto purSUe itsadnilillsttative appeals SilidetenninatiQn within the
FlJIC' ptQces$,am.ong Qther . strategies.
that.consumrnationof.the announced. Recapitalization.Transaction is
1558
Philip A. Gemiclt .
. ,. f'.c-,. ... ,j Sit . . ..:ti
Q.w,;;e,oJ
.D"'..., ........ 'k. ..... 2.8. 20 ....10
..
Pilge:7
the @st prudet}t. 01'$ i$.
Transaction will
for core capitaland. 16,3% weUin
excess ot'thewel1:"capita1izedteqUjremeilttOacc.ept
altm.=. . .
that Section 3m.
the an4 desistorderdatedJime B3Iik obtaining;tlie
apprriXinlatelyS200milHonm private--sectotcapital. We belie.ve;tnattbe ors 'Dfficia1s have a.
4
u
ty.to
,of .. CJ.... .. ' .....
. LlqliidityFUudilig$ourees.AV1dIable:
.. 27. 2Q10, mUllan
till available credit:lfue.ftom the FHLB.ofan mlllioh. .
A;,.. 'f'D'"' .. ; bZ7 "'0'1' O ;o.i.. .. B ... ;;;1,;.a!so 1..n..l lim r;nrf' ..... G<bil "0'\,"5 '7' . '"IIi .. ,. ..... 1.
AlsO A . w.e. .... """" "!",tIp :tn.1(m; ill e
theFRB: .. , . WeUQt'. thatit;rnqst million of cash
tlte filltin;les. Prior;iQ of the MSeS dpoSits;by" .. '
policy the Bank held aminim
UDl
of $100 rliil1ion.at the FRB to .addtess day-to-clay flUctuations
.ill depositS, by. the lllstitutioilal. Depositot$ as.weU as Other ijctivity' at the Bank... Since.th '. .
Withdtawa.lofthe MsCS the Ba,nt.b.M
$7SlliU1i()u, 'beUeves issutfi,cient.baseCi. upon. bistQJ:iea.Itluctuat1Qmof the
.
1559
Philip
bfficof 'tlu:i;tSupems1011.
'December
P!1ge 8
Attached asEXhlbit l),pleasennd the ,Bank' $ Dt:rily LiqwdftyAn.alysis ago!
27 ,2Q W. The Bank pro-videsthese Daily Liquidity Att;Uys{s report$ to the business

The Bank also is currently accessing the QwickRate system to solicit intemetcertificates of
deposits and hasreceivedapproxitnately$20A milli0ninsuch deposits asofOecember
2010,&11 ofwbJ.ch were.acquired in accordance with the appllcahle, FDIC national-tateca,ps, The
Batik plans td'contintleto acceSs the Qwi,ckRatesys;tem into 201l'tc> enhartqeitsliqUidity.
***
As we have indicated previously to. the 01'8, the pendingpnvate-sectQr RecapItaliZation
Transaction benefits all concerned CQnstituencies, including the FDIC, the QT$,lUid the pUblic.
The Sank's managen1,e11t and hoard of directors have heenwork:iJ:l,gtirelesslYtotaise Capital,
despite the odds and increased challenges facing the Bank, and the Bank.and its parent have done
everythingpossihle tohringthe $200 million capital-raiSe to the finish line. The
Recapitalization Transactioucleady will address the liquidity challenges raised, bythe ors i.n
tbeLiqQ.idity Directive. M"anagementand representatiyesQrtheBankare avallabletq$sist the
OT8 with any qUestions jts understand the Bank's deposit relationships
and liquidity we all work together towards the successful private,.sector
Recapitalization Transaction.

James R.Peoples
co: Ktistie K. Elmquist. AtingJ{egiQnaLDirector, FDIC-Dallas
Joseph A. Meade, Assistant Regional Director,FpI<:;"Dallas
JohnB.
Thomas A.Bames"Deputy Director, OTS
" NicholasDyet. Assistant Regional Director
Debor$ Jenldns-KirIg; Counsel
Clayton Goon, Senior Attorney, OTS
Lawrence D. Kaplan,. Esq.
AndrewL. Sandler, Esq.
1560
TabC
Exhibit 54 A
1561
,Exhibit A
'I.heP1AA,
1562
UNITED WESTERN BANK
LIOillDITY POLICY and CONTINGENCY FUNDING
PLAN
Approved by Resolution of the Board of Directors dated
UNITED WESTERN BANK
Liquidity Policy
December 28. 2010
December 28, 2010
1563
I. SUMMARY
The purpose of this Liquidity Policy ("Policy") is to establish and document
guidelines for the management of United Western Bank's (the
"Bank") liquidity considerations. The Board of Directors has ultimate
responsibility for the liquidity risk assumed by the Bank. This Policy is developed
and implemented as a meaningful tool and reference for the Board Investment
Committee ("IC") to carry out its oversight responsibilities and for the
AssetiLiability Committee ("ALCO") and Bank management to use in its ongoing
liquidity risk measurement and management efforts, processes,
and managing the between liquidity risk and short-term profits.
A strong liquidity risk management process is a critical element of maintaining
Bank operations in a safe and sound manner.
Effective liquidity risk management requires systems and processes that are
commensurate with the Bank's complexity, risk profile, and scope of operations.
Thus, it will evolve as business conditions and the Bank's risk profile changes.
Liquidity risk management is intertwined with internal and external forces
including credit, market, operation, legal, and reputation risk. These forces can
shape the Bank's liquidity risk profile and need to be considered in the assessment
of liquidity and asset/liability management.
ll. AUTHORITY
Board of Directors
Has ultimate responsibility for the liquidity risk assumed by the Bank.
Appoint qualified members to serve on the Board Investment Committee.
Review and approve revisions and improvements to the Liquidity Policy
and Contingency Funding Plan (CFP) on at least an annual basis.
Monitor Bank performance and overall liquidity risk profile, ensuring that
the level of liquidity risk is maintained at prudent levels and is supported
by adequate capital.
Ensure that the Bank implements sound fundamental policies and
principles that facilitate the identification, measurement, monitoring, and
control of liquidity risk.
Ensure that adequate resources (personnel, budgetary and other) are
devoted to liquidity risk management. Effective risk management requires
both technical and human resources.
Board Investment Committee
Monitors compliance with Board-approved limits and polices.
Reviews and understands significant balance sheet and liquidity
management activity including, but not limited to: loan and deposit
activity, investment activity, wholesale funding, off-balance-sheet
transactions, including concentrations in any of the foregoing, and other
UNITED WESTERN BANK
Liquidity Policy
December 28, 2010
1564
2
activities that impact liquidity risk at the Bank and significant subsidiaries
and affiliates as appropriate.
Reviews applicable deviations from the approved policies, and provides
feedback to ALCO.
Ensures the ALCO process reflects the Board's objectives; provides
appropriate feedback to the Board.
Ensures that adequate resources are devoted to the liquidity management
process.
It is the intent of the Bank Board of Directors to delegate day-to-day operational
authority for the matters set forth in this Policy to senior executive officers of the
Bank. The Board directs the authority granted and requirements of this Policy to
be administered by the ALCO with periodic reports to the Investment Committee.
Bank ALCO Committee (at least monthly)
Oversees the capital markets activities of the Bank.
Reviews deviations in policies and guidelines. Recommends prospective
action plans to Board Investment Committee.
. Approves Asset/Liability Strategies.
Reviews Contingency Funding Plan Triggers at least monthly to assess
Bank's liquidity risk status.
Reviews effectiveness of Contingency Funding Plan and makes
modifications as necessary depending on Bank's risk profile and market
conditions.
Reviews and understands significailt balance sheet and liquidity
management activity including, but not limited to loan and deposit
activity, investment activity, wholesale funding, off-balance-sheet
transactions, and other activities that impact liquidity risk.
Recommends liquidity risk parameters and limits for the risk positions of
the Bank.
Ensures an appropriate mix of existing and potential future funding
sources.
Ensures adequate levels of highly liquid, unencumbered marketable
securities, securities pledged to FHLB with appropriate collateral value, or
cash that can be used to meet liquidity needs in stressful situations.
Monitors compliance with all regulatory limits and benchmarks regarding
capital, brokered. deposits, outstanding loans and loan commitments or
other limitations on growth that may arise from time to time, including
those that may arise from the Bank becoming less than well-capitalized
pursuant to Prompt Corrective Action (PCA) provisions under Federal
Deposit Insurance Corporation Improvement Act (FDICIA). This would
include monitoring compliance with and developing funding
contingencies if restrictions are placed on rates . paid for deposits,
participating in any approvals requested from FDIC to accept brokered
UNITED WESTERN BANK
Uquidlty Policy
December 28, 2010
3
1565
deposits, and partnering with Operations should the Bank be unable to
accept brokered deposits.
Responsibilities and Oversight
Chairman of ALCO as appointed by Board
Recommends to the President and/or Chief Executive Officer (CEO), or
the Bank Executive Committee for interim exceptions to specific policies
and limits. These exceptions must be presented at the next ALCO.
Chairs ALCO
Responsible for overall liquidity risk management and executing the
Contingency Funding Plan
In cases where the Chairman is absent the Chief Operating Officer (COO),
Chief Investment Officer and/or Accounting Officer (CAO) or Chief
Financial Officer (CFO) can obtain approval from the President and/or
CEO, or the Bank Executive Committee.
Partners with COO or appropriate designee on a daily review of balance
sheet an4 liquidity risk issues when the Bank is in a Stage 2 or higher
liquidity risk status.
Balance Sheet Strategy Group (weekly if needed)
Reviews the following as needed:
Balance Sheet Growth and Trends - compare to Plan, and compared to any
documentation received from a regulatory agency that may impact balance
sheet growth. .
Product Pricing/Profitability Plan.
Economic Developments that impact ;Earnings and customer behavior.
Investment Portfolio Activity and Strategy
Emerging Credit Trends
FundinglLiquidity Issues
Reviews Contingency Funding Plan Triggers at least monthly to assess the
Bank's liquidity risk status
Reviews effectiveness of Contingency Funding Plan and makes
modifications as necessary
Coordinates Deposit Gathering and Pricing Strategy with Pricing
Committee
Analyzes Net Interest Income versus Plan; versus Forecast; versus prior
periods
Provides .Feedback and Analysis for ALCO
Monitors Compliance with all Regulatory limits and benchmarks regarding
capital, brokered deposits, outstanding loans and loan commitments or
other limitations on growth that may arise from time to time, including
those that may arise from the Bank becoming less than well-capitalized
pursuant to PCA provisions under FDICIA. This would include monitoring
UNITED WESTERN BANK . 4
Uquidity Policy
December 28, 2010
1566
compliance with and developing funding contingencies if restrictions are
placed on rates paid for deposits, if restrictions are placed on the types of
deposits received (e.g. certain institutional deposits), participating in any
approvals requested from FDIC to accept brokered deposits or accept a
waiver of deposit restrictions on certain deposit types (e.g., institutional
deposits), and partnering with Operations should the Bank be unable to
accept brokered deposits.
Reviews periodically any material changes or proposed material changes to
the Bank's liquidity risk profile.
Develops and recommends strategies to ALCO.
Business Development Officers and others with customer contact
Keep CEO, CFO, CAO, and other ALCO members abreast of news,
rumors, concerns, etc. regarding the Bank in the market place.
Units Engaged in Contingency Funding Plan Activity
There are several groups authorized to execute some form of CFP activity.
Finance and Operations
Manages interest rate risk, liquidity, hedging, wholesale funding,
derivatives, and investing activity.
Adheres to the directives and policies.
Prepares material for Balance Sheet Strategy Group andALCO.
Must adhere to any payments policies.
Pledges collateral and prices deposits in concert with Pricing Committee
andALCO.
Keeps CFO, COO, CAO and ALCO abreast of deposit gathering efforts
and challenges.
Monitors and manages intraday liquidity and capital.
Chief Credit Officer
Adheres to policies
Coordinates lending activity in advance with ALCO when under Stage 2
or Stage 3 liquidity risk. .
Policy Compliance Monitoring
Many compliance rules are detailed in the policies themselves. The following list sets
forth responsibilities for monitoring adherence to the policies.
UNITED WESTERN BANK
Uquidity Policy
December 28. 2010
5
1567
Liquidity Risk
Contingency. Funding Plan Targets
Measurement of Liquidity Risk Metrics
Trade Confirmation/EntrylReconciliation
Credit Risk
Overall Policy Compliance and Adequacy
Determination of Brokered Deposit Designation
ID. OBJECTIVES
ALCO
Controller and A VP-Treasury
Modeling
Controller
Chief Credit Officer (CCO)
ALCO subject to Audit and
Compliance testing of such.
General Counsel and ALCO
The objective of liquidity management is to reduce 'the risk to bank earnings and
capital arising from the inability to meet obligations in a timely manner and cover
both expected and unexpected deviations from normal operations without
incurring unacceptable losses. This entails ensuring sufficient funds are available
at a reasonable cost to meet potential demands from both fund providers and
borrowers. To achieve this objective, it is essential to be able to indentify,
measure, monitor, and control liquidity risk in a timely and comprehensive
manner. Liquidity risk management needs to be fully integrated into the Bank's
risk management process. The objective ofthis Policy is to outline the procedures
to accomplish these tasks.
The Board of Directors should establish the association's tolerance for liquidity
risk, set liquidity limits and thresholds, and approve policies related to liquidity
management. The Board should also ensure senior management takes the
necessary steps to monitor and control liquidity risk. The Board should
understand the nature and level of the association's liquidity risk, and
management should inform the Board regularly of the liquidity position of the
association.
This Policy, along with related policies, will assist the IC, ALCO and
management in administering the Bank's liquidity as well as the overall asset and
liability portfolios. This Policy overlaps in some respects with the Bank's Interest
Rlite Risk Policy; however, this Policy is specific to liquidity. This Policy sets
forth tolerance for liquidity risk, establishes liquidity limits and thresholds,
establishes liquidity management monitoring activities, and requires preparation
of appropriate contingency funding plans.
UNITED WESTERN BANK
Uquidity Policy
December 28. 2010
6
1568
IV. RISK MANAGEMENT
In addressing liquidity management issues, the Board of Directors and executive
management must be aware of the potential risks that arise related to differing
types of liquidity risk exposures faced by the Bank. In establishing a Liquidity
Policy, the Board has evaluated various risks; these risks, and their related
management techniques, which include:
Credit risk. Impacting earnings or capital due to an obligor's failure to meet the
terms of a loan or an investment, or otherwise failing to perform as agreed. Credit
risk occurs any time an institution relies on another party, issuer, or borrower
performance.
Interest rate risk. Addressing the potential adverse impact to the organization's
capital or earnings arising from movement in interest rates. Interest rate risk
evaluation must take into consideration the impact of complex hedging strategies
or products which become illiquid; potential impact on loans or investments due
to earnings reduction of the actual investments per changes in interest rates; or
ability to sell assets in the portfolio due to significant changes in interest rates.
Liquidity risk. This is the risk that the Bank's financial condition or overall safety
and soundness is adversely affected by an inability (or perceived inability) to meet
its obligations. An institution's obligations and the funding sources used to meet
them, depend significantly on its business mix, balance sheet structure, and the
cash flow profiles of its on- and off-balance sheet obligations. In managing the
Bank's cash flows, various situations can give rise to increased liquidity risk.
These include funding mismatches, market constraints on the ability to convert
assets to cash or accessing sources of funds (i.e., market liquidity), and contingent
liquidity events. Changes in economic conditions or exposure to credit, market,
operation, legal and reputation risks can also affect the Bank's liquidity risk
profile and should be considered in the assessment of liquidity and asset/liability
management.
Price risk. Measuring and supervising the risks inherent with market-making,
dealing, and position-taking activities in interest rates, foreign exchange, equity
and commodities markets. Price risk represents a risk to earnings or capital arising
from changes in the value of portfolios of financial instruments.
Compliance risk. Maintaining legal compliance with various appropriate
regulations as well as compliance with the Bank's ALCO Policies.
Reputation risk. Developing and retaining marketplace confidence in handling
customers' financial transactions in an appropriate manner as well as protecting
the safety and soundnessofthe Bank.
V. LIQUIDITY MANAGEMENT PROCESS
The Bank will be capable of meeting financial obligations in a timely manner at a
reasonable cost without incurring unacceptable losses if the Bank has a sufficient
liquidity Management Process. Accordingly, liquidity is measured by the Bank's
ability to have sufficient cash reserves on hand, at a reasonable cost and/or with
UNITED WESTERN BANK
Liquidity Policy
December 28. 2010
7
1569
minimum losses, as well as to meet liquidity requirements under supervisory
agency regulations.
Management shall employ general risk management strategies to ensure that the
Bank's system is commensurate with the liquidity and funding risks undertaken.
Proper funds management policies and procedures shall be adopted and followed.
The Policy shall provide for forward planning, establish appropriate cost
structures, and set realistic limitations and business strategies.
Funds management decision-making responsibilities shall be clearly defmed by
. applicable Bank policies, with the acceptable level of risk tolerance set forth by
the board. Sufficient due diligence procedures will be performed prior to entering
into any business relationship with a wholesale or processing I trust deposit
source. Due diligence shall be employed in assessing the potential risk to earnings
. and capital associated with various deposit relationships or other rate-sensitive
deposits and prudent strategies for their use. Management will avoid excessive
reliance on funds that may be only temporarily available, which may require
premium rates or pose excessive operational risks to retain.
Appropriate management processes will be utilized to monitor funding
concentrations. Specific attention shall be paid to brokered funds, and other rate-
sensitive or credit-sensitive deposits obtained through wholesale or processing
and trust sources.
Management will track at least monthly non.,.relationship and higher-cost funding
programs to measure performance; manage funding gaps, and monitor compliance
with concentration and other risk limits. Reports will include a listing of funds
obtained through each significant program, rates paid on each instrument and an
average per program, information on maturity of the instruments, and
concentration or other limit monitoring and reporting. Management will ensure
that brokered deposits are accurately reported in regulatory reports.
Contingency funding plans shall address the risk that deposits may not "roll over"
at expected rates and terms and provide a reasonable alternative funding, risk
management and communication strategy. The Bank's contingency funding plan
will consider the potential for changes in market acceptance based on a variety of
factors, which are discussed below.
Management shall also consider the potential. for triggering legal limitations that
restrict the Bank's access to brokered deposits under PCA standards, or other
regulatory actions and the effect that this would have on the Bank's liability
structure. .
Liquidity is often available from both asset and liability sources,. however, the
timing and confidence in the availability vary. with the nature of the source and
the condition of the bank. Therefore, the analysis of liquidity is measured by
assigning a tier level to the sources based on management's confidence level in
the timing and probability of availability. For identification and ongoing
measurement purposes, liquidity is segmented as follows:
UNITED WESTERN BANK
Uquidity Policy
December 28, 2010
8
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INDENTIFICATION AND MEASUREMENT OF LIQUIDITY
Liquidity will be indentified as Primary (Tier 1 and Tier 2) sources and Secondary
sources depending upon the assurance of its availability and the timeframe
necessary to obtain. .
Tier 1 Sources - these sources with respect to which management has the highest
level of confidence in the availability of funds. NOTE: In the event of a
"Liquidity Event" as defined within the Bank's Contingency Funding Plan, Bank:
Management should evaluate and utilize these liquidity sources in the order listed
below:
1. Cash - Excess vault cash, excess reserves at the Federal Reserve or other
correspondent banks, excess cash in A TMs or foreign currency reserves.
2. Money Market Assets - consists primarily of fed funds sold, commercial
paper and agency discount notes. Other instruments may occasionally be
used, however, only those alternatives that can be converted to cash in one
business day are included.
3. Any unencumbered Government or Government agency security, . which is
expected to be relatively nominal as generally all eligible collateral is
pledged to the FHLB.
4. Scheduled or anticipated cash flows from loans and investment securities
principal and/or interest payments or sales.
5. Scheduled or anticipated (non-loan sale) fee income.
6. Available FHLB advances - this is tracked from the FHLB website and
reported in the daily liquidity report.. .
7. Other unpledged securities that can be offered in a standard repurchase
agreement. Pledging requirements and pledged securities are tracked daily
and reported on the daily Liquidity Report, which covers all encumbered
securities.
Tier 2 Sources - these are sources with respect to which management has a high
level of confidence in the availability of funds but whose availability either has
not b ~ n tested or could change based on sudden or unexpected changes in the
market conditions or events unique to the Bank such as bad publicity. NOTE: In
the event of a "Liquidity Event" as defined within the Bank's Contingency
Funding Plan, Bank: Management should evaluate and utilize these liquidity
sources in the order listed below once Tier 1 alternatives are considered:
1. CD's originated outside of the Bank branch network - Availability of the
funds may be sourced through internet deposit bulletin boards or other
sources. Estimates of availability are based on dealer input and market
analysis. .
2. Large (non-brokered) Processing anellor Trust Deposits that can be
gathered quickly based on key and longstanding relationships between the
Bank, its management, and various processing and/or trust companies.
UNITED WESTERN BANK
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This is a subjective estimate based on feedback from relationship Officers
and the Bank.
3. Unpledged securities that may be difficult to offer in a standard repurchase
agreement or liquidate in a short time period. Impact to capital and
earnings needs to be evaluated in advance of liquidating or pledging these
assets. .
4. Brokered CDs (including CDARS) - This channel assumes retention of
a well-capitalized status, thereby atlowing the Bank to utilize this source
without specific FDIC approval. Alternatively, it could only be utilized
with prior regulatory non-objection.
5. Deposit promotions designed by ALCO within the constraints of any
regulatory requirements that exist at the time.
Secondary Sources - These are sources that are considered subordinate to Primary
sources of liquidity. However, they consist of sources that management has a
lower level of confidence as to whether such sources will be available. The
difference is whether the source will be willing to provide liquidity when needed
and the timing of availability. Secondary sources could take as long as 90+ days
to implement.
Examples include:
1. Unused FED fund purchase lines
2. Federal Reserve Discount Window
3. Loan securitizations
4. Loan sales or participations
5. Other asset sales (e.g., liquidation of BOLl or sale of branch real estate)
The Bank would also immediately limit new lending activities, outside of already
existing commitments in the following order:
1. Temporarily cease community bank commercial and mortgage lending.
2. Curtail small consumerloans.
3. Discontinue the purchase of GNMA loans from the MFSC servicing
portfolio.
The Bank would also consider liquidating additional assets, including branches and or
lines of business, under certain circumstances. We realize the timing of these asset sales
may take in excess of 90 days.
Monthly reporting and analysis of liquidity is based on current market conditions .. A
Contingent Liquidity . Plan is in place and updated quarterly or more frequently if
determined by the IC or the ALCO. This plan is presented to ALCO and Board
Investment Committee quarterly. Contingency profiles are covered in the Contingent
Liquidity Plan.
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LIQUIDITY RISK METRICS
NOTE: Many of the limits and guidelines listed below were adopted by the Board on
April 8,2010. The Board is adopting these additional limits and guidelines to move the
Bank towards the liquidity management practices outlined in the March 17, 2010
Interagency Policy Statement on Funding and Liquidity Risk Management. The Board
and Management recognize it will take some time to develop the tools to accurately
measure and report some of the limits below. It will likely take additional time for the
Bank to achieve compliance with some of these guidelines and limits.
Management will report these ratios and guidelines at each ALCO meeting. Variances
from these limits and guidelines will be reported at each subsequent regularly scheduled
ALCO and Board Investment Committee.
MINIMUM LIMIT
Maintain $75 million in cash and at least $100 million in off-balance
sheet funding capacity to absorb unanticipated withdrawals from
depositors including processing and trust deposit withdrawals.
Tier 1 Liquidity to 60 day maturity of time deposits plus 5% attrition
of non-maturity retail deposits.
Tier 2 Liquidity to 120 day maturity oftime deposits plus 10%
attrition of non-maturity retail deposits.
Unencumbered securities and investments plus cash to 30 day
maturity liabilities plus 5% attrition of non-maturity retail deposits.
100%
100%
100%
150%
The $75 million in cash was determined based on the Federal Reserve Bank of Kansas
City recently concluding that the Bank should maintain $20 million of cash on deposit at
the Fed at all times and $50 million of other cash to handle the operations of the Bank.
This is a reduction from the previously determined amount of on balance sheet liquidity
due to the elimination ofthe fluctuations associated with a deposit relationship with
significant institutional depositors as a result of the withdrawal of their deposits.
MAXIMUM LIMIT
Pledged securities*/Total investments plus cash.
A vg. Total Investments plus cash to A vg. Total Assets.
A vg. Total Loans to A vg. Total Deposits.
Unsecured wholesale funding with <90 days to maturity to Total
Investments
Total Non-CorelNon-Relationship (wholesale/internet channel)
UNITED WESTERN BANK
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65%
15% - 35%
105%
35%
25%
11
Deposits as a percentage of total deposits.
Brokered Deposits (when permitted) / Total Deposits.
MAXIMUM LIMIT Continued
Total timedeposits as a percentage of total deposits maturing in any
one calendar month over the next twelve months.
Total term debt (including CPs) as a percentage of total term debt
maturing in anyone calendar month over the next twelve months.
Percentage of deposits from anyone source including customers,
deposit aggregators, individual trust and/or processing accounts,
trustees, etc. with less than one year remaining to contractual
maturity.'" ...
Percentage of deposits from anyone source including customers,
depositaggregators, individual trust and/or processing accounts, .
trustees,etc. with one year or longer remaining to contractual
maturity."'''' .
20%
10%
25%
25%
,
35%
NOTE: all deposit concentrations greater than 5% of total deposits will be
reported to ALCO, but deposit concentrations due to CD or other deposits used to
collateralize a loan will not be considered a Policy Exception.
To further diversify the risk of deposit maturity concentrations, the Bank will also .
. wo* to stagger the contractual expirations of its trust and processing deposit
contracts.
Ratios which violate the limits will be highlighted and discussed at ALCO monthly.
The Committee will decide if action is warranted to manage $e ratio higher or lower
and over what time period that reduction will occur. Ratios in violation of limits will
also be reported to Board Investment Committee along with ALCO's
recommendation.
Averages will be evaluated on a monthly basis ..
... Pledged securities include all investment securities pledged or otherwise provided
as committed collateral to specific debt obligations. Securities safe kept at a third
party (including the FHLB and FED) . that are not pledged to a specific debt
obligation would be considered not pledged for this calculation. This liquidity
guideline ratio is defined as total pledged securities divided by total investment
securities .
...... Non maturity deposits placed under an omnibus contract will have the contractual
maturity of the contract expiration date; otherwise non maturity deposits will be
UNITED WESTERN BANK
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considered to have a contractual maturity of less than one year for the purpose of this
calculation. .
LIQUIDITY MONITORING
Liquidity is monitored in the following manner: .
1. Daily Liquidity Report - reviewed daily by CFO, CAO, and COO. Reported to
Balance Sheet Strategy Group weekly, and ALCO and Board Investment
Committee monthly.
2. Balance Sheet Tracker Report. Key officers receivedaily statement of condition
where changes in the balance sheet can be observed. This is monitored by all
ALCO members for irregularities and changes in condition that could negatively
affect liquidity if not corrected.
3. Bank Cash Flow Analysis Report - produced and reviewed weekly by Balance
Sheet Strategy Committee. Report can be produced to reflect various liquidity
contingencies as part of Contingency Funding Plan.
4. Large Depositor Trend Report - produced at least monthly and reviewed by
ALCO.
5. Key officer feedback - this comes from a variety of sources that occur as part of
the normal conduct of business. Forexample:
a. Weekly Executive Staff meeting.
b. Pricing discussions as needed between senior bank officers and ALCO
members.
c. Monthly Pricing Committee meetings
d. Monthly ALCO Meetings:
e. Weekly Balance Sheet Strategy Committee meetings.
6. Contingent Funding Lines Test Report (annual testing at a minimum)
7. Contingency Liquidity Plan - Financial Indicator Report
Third-party evaluations cOncerning the Bank's credit capacity may also be
. indicators of more serious problems. Such evaluations include: .
Adverse news about the Bank in local or trade media
Downgrades of credit rating by rating agencies
Customers are contacting relationship managers, fixed income sales
representatives, and branch employees requesting information
Other secondary market events may also be early warning signs for potential
liquidity.problems. Bearish activity in the Bank's securities may signal declining
value. Management shall consider:
Drops in stock price
Adverse earnings trends
Wider secondary spreads on the Bank's senior and subordinated debt, and
increasing trading ofthe Bank's debt
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Uquidity Policy .

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Brokers/dealers who become reluctant to show the Bank's name in the market
forcing Bank management to arrange "friendly" broker/dealer support
The Bank's funding market may also provide early information as credit support
is contracted or demanded. The funding market may also begin to ask for better
credit terms or shorter duration lending which can lead to more costly liquidity for
the Bank. Management will . be cognizant of signs of funding deterioration to
include:
Increases in o v e ~ l l funding costs
Requests for collateral by counter parties
Elimination or decreases in credit line availability by correspondent Banks
causing the Bank to make larger purchases in the brokered funds market
Unusually large volumes of tum-downs in the brokered markets forcing the
Bank to deal directly with fewer willing counter parties
Abandonment by rating-sensitive providers such as trust mangers, money
managers, and public entities
An unwillingness by counter parties and brokers to deal in unsecured or
longer dated transactions
Decreasing transaction sizes and counter parties that are unwilling to enter
into even short-dated transactions .
ADDITONAL LIQUIDITY PROCEDURES
The Bank will always have a portion of its .loan and investment securities portfolio
maturing and/or paying down or cash flowing .. Yearly cash flow (principal and interest)
from these maturities, likely call and/or pay downs will at a minimum be equal to 6% of
total assets.
Additional liquidity ratios to be monitored on a monthly basis include: .
Unused Loan Commitments to Excess Funding Capacity*
All unsecured funding lines will be reviewed and tested, where practicable, on an
annual basis.
*Excess Funding Capacity is defined to the unused federal funds lines, Fed
Funds Sold, cash and unencumbered investment securities available for sale.
LIQUIDITY CONTROL
The control process for liquidity policy and risk limits is as follows:
1. Liquidity limits will be reviewed and revised at least annually in conjunction with
the annual review of this Policy.
2. ALCO reviews the liquidity position at least monthly and discusses trends within
the balance sheet that affects liquidity.
UNITED WESTERN BANK
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1576
3. Finance and Operations report significant changes in liquidity to Balance Sheet
Strategy and ALCO Committees.
4. Board Investment Committee reviews policy guidelines monthly along with
trends in the balance sheet.
This Policy will be reviewed at least annually with presentations to and approval by the
Board of Directors, reporting of actual versus limits will be done monthly. Any variances
must be approved by ALCO as an exception and action plan initiated to bring the Bank
within limit. Exceptions will be reported to Board Investment Committee.
v n ~ DEPOSITS
Deposits are the largest source of the Bank's funds. Therefore, it is important the
Bank implement policies and procedures to generate and retain a diversified
deposit base as well as to monitor its overall deposit structure, including rates,
maturities, products and concentrations. The Bank's overall deposit process will
include:
A clearly defined marketing strategy within the business plan that identifies the
desired market share in terms of growth or shrinkage, market niche, and present
and potential competition.
Identification of core and volatile deposits and analysis of the cost of core and
volatile deposits, including operating costs to maintain the various deposit
products and deposit branches, and
Targeted spreads between deposit costs and earnings on assets funded by deposits.
Periodic analysis of present and anticipated funding and liquidity needs and
comparative analysis of costs of deposits versus alternative sources of funds to
meet those needs.
Frequent review of deposit pricing, volume, sources, volatility, and trends in
relation to overall funds management goals, interest rate risk exposure, spread, net
interest margin, and profitability.
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15
VllI. PROCESSING AND TRUST DEPOSITS
Processing and trust deposits comprise a majority of the overall deposits at the
Bank. The Bank has continued to capitalize on its longstanding core deposit base
through the development of processing and trust deposit relationships (which
include securities clearing and settlement, custodial, trust and escrow) that
provide a stable, long-lived and inexpensive compliment to the traditional branch
banking concept. We anticipate that management will evaluate additional sources
to this strategy, and prospectively may consider acquiring deposits from
processing businesses that have significant deposit generating capacity that is
incidental to their primary purpose.
Management will monitor processing and trust deposits as follows:
Each relationship with individual or aggregated deposits of 5 percent of total
deposits or greater shall require the following:
Regular reporting at ALCO
An assigned executive officer ofthe Bank
A contract term, or a contract of withdrawal notice, where possible.
A contractual rate of interest.
These relationships and key terms of the relationship are reported to ALCO.
More detailed reports are reviewed by the CCO, CFO, COO and/or CAO daily.
IX. BORROWINGS
Use of borrowings shall be managed prudently in order to achieve the Bank's
funding goals and assist in controlling interest rate and liquidity risks. Ensuring
that dependable borrowing facilities are in place represents an integral part of the
Bank's liquidity and funds management practices. The Bank may utilize
borrowings obtained from financial intermediaries including: the FHLBank of
Topeka (existing borrowings outstanding at FHLBank of Dallas) other
commercial banks, securities firms and other financial entities. Other commercial
banks, securities firms and other financial entities must be approved as an
acceptable counterparty by ALCO prior to use. Because the nature and extent of
wholesale funding activities will depend greatly on the Bank's overall balance
sheet risk position, the administration of these activities falls under ALCO.
Short4erm borrowings, ranging in maturities from overnight to two weeks can be
executed with prior approval from one of the following: Bank CFO, Bank
President or CEO, Chief Accounting Officer, Chief Investment Officer, or
Assistant Treasurer. Term borrowing in excess of two weeks requires prior
approval from ALCO prior to execution. Amounts borrowed are governed by
pre-existing, board approved limits.
As a member of the FHLBank system the Bank will generally look to obtain
borrowings from the FHLBank of Topeka as its first choice. However, approved
staff or ALCO are allowed to obtain quotes on appropriate borrowings from other
entities including commercial banks and securities firms.
UNITED WESTERN BANK
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The Bank may also borrow from the FED under terms and conditions defined by
the FED, with the same required approvals as FHLB advances and other third
party sources.
FHLBank (FHLB) Advances: The Bank is authorized to borrow from the FHLB.
FHLB advances are generally advantageous due to both the dependability of the
FHLB as a provider of funds and the availability of a broad range of maturities
(overnight to 10+ years) with a variety of characteristics that can be tailored to the
needs of the Bank and its interest rate risk position and interest rate risk goals.
The FHLB lends on a collateralized basis and as it exists today it must have
collateral that contains a mortgage or be guaranteed by the us Government or an
agency thereof, (i.e. single family loans, U.S. Government and Agency securities,
and commercial real estate loans). The advances are subject to an advance rate
("haircuts") based on the collateral and current market conditions applied by the
FHLB depending on the nature of the instruments pledged. .
Periodically at the direction of ALCO, a senior member of management shall
discuss or meet with FHLB of Topeka to review the financial status of the Bank,
assess the Bank's relationship with FHLB of Topeka, and ensure the continued
availability of funding on a collateralized basis. Should FHLB of Topeka indicate
that continued availability of funding will not or may not be forthcoming, this
would constitute a Stage 2 or Stage 3 Liquidity Risk, depending on all available
facts and circumstances.
Repurchase Agreements (Repo): When appropriate, the Bank may utilize reverse
repurchase agreements. These agreements serve as another form of wholesale
borrowings collateralized by securities as an alternative source of funds. In the
capacity as community Bank repos, repo lines will be used to collateralize certain
community Bank deposits from known customers. In the capacity as wholesale
repos, repo lines may be established with commercial banks, securities finns and
other financial institutions that are ALCO approved counterparties. Repos range
from short- to long-term in nature (overnight to several years.) These agreements
may be structured with various instruments, including derivatives, to assist the
Bank in managing its interest rate risk. The various instruments may include lock
outs from calling the debt by either party, and embedded derivative securities (Le.
floors, caps or collars) that protect the Bank, up to the notional amount of the
derivative, against certain changes in interest rates.
Management understands the potential for increased sensitivity to market and
liquidity risks associated with more complex funding instruments that may
include embedded options. As such, the following management techniques shall
be considered as the Bank secures wholesale borrowings:
Review the Bank's borrowing contracts for embedded options or other
features that may affect the Bank's liquidity and sensitivity to market risks.
Management will also review collateral agreements for fees, collateral
maintenance requirements, triggers for increases in collateral, and other
features that may affect the Bank's liquidity and earnings.
UNITED WESTERN BANK
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Assess the Bank's management processes for identification and monitoring of
risks associated with the various terms of each borrowing contract, including
penalties and option features over the expected life of the contract.
Stress testing borrowing contracts prior to entering into the agreement and
periodically thereafter. Stress testing shall not be reliant on the results and/or
assumptions provided by the funds provider. Tests will cover a reasonable
range of contractual triggers and external events, including interest rate
changes that could result in the exercise of embedded options, if any, or the
Bank's termination of the agreement. Prepayment penalties may result.
Evaluate management processes for controlling risks, including interest rate
risks arising from the borrowings and liquidity risks. Contingent funding plans
shall encompass the potential for agreement terminations. Contingent funding
plans will also consider any hedges or other plans for minimizing the adverse
affects of penalties or interest rate changes and other triggers for embedded
options.
Determining whether ALCO or the Board has been fully informed of the risks
and ramifications of complex wholesale borrowing agreements prior to
engaging in the transactions as well as on an ongoing basis.
Determining whether funding strategies regarding wholesale borrowings,
particularly those with optionality, are consistent with both the portfolio
objectives of the Bank and the level of sophistication of the Bank's risk
management.
Other funding sources, including overnight and term Fed Funds are also
authorized with prior ALCO counterp8rty approval.
X. COMPLEX WHOLESALE BORROWINGS
Use of complex wholesale borrowings (with "Complex" having a definition
consistent with the FHLB's definition) shall only be utilized subsequent to
management conducting a thorough review of the borrowing and the Bank's risk
levels. Management will maintain and develop a sound risk management process
to monitor such borrowings.
In assessing the Bank's wholesale borrowing practices, the following steps shall
be performed:
Review of the Bank's borrowing contracts for. embedded options or other
features that may affect the Bank's liquidity and sensitivity to market risks.
Review collateral agreements for fees, collateral maintenance requirements
including triggers for increases in collateral, and other features that may affect
. the Bank's liquidity and earnings. .
Assess the Bank's management processes for identifying and monitoring the
risks of the various terms of each borrowing contract, including penalties and
option features over the expected life of the contract.
Completion of stress testing prior to and periodically thereafter, entering into
borrowing agreements.
UNITED WESTERN BANK
Uquidlty Policy
December 28. 2010
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When relying on third party testing, review underlying assumptions and test
results.
Evaluate management processes for controlling risks, including interest rate
risks arising from the borrowings, as well as liquiditY risks.
Ensure the ALCO or board is fully informed of the risks and ramifications of
complex wholesale borrowing agreements prior to engaging in. the
transactions as well as on an ongoing basis.
Determine whether funding strategies regarding wholesale borrowings,
especially those with optionality, are consistent with both the portfolio
objectives of the Bank and the level of sophistication of the Bank's risk
management.
XI. BROKEREDDEPOSITS
A. Regulatory Definitions and Internal Guidelines
Brokered . deposits are defined as all deposits directly or indirectly obtained
through deposit brokers for deposit in one or more accounts under 12 CFR
337.6. Deposit brokers include any individual, partnership. or corporation that
is engaged in the business of broke ring or placing deposits from third parties.
The Bank may only enter into new or renew existing brokered deposits provided
the brokering entity has been . approved as a counterparty that the Bank is
designated as well-capitalized under PCA provisions under FDICIA and is not
subject to any other regulatory objections.
The definition of deposit broker excludes insured depository institutions acting as
intermediaries or agents for government agencies and departments placing money
in Banks owned by women or minorities.
ALCO is responsible for thoroughly analyzing the terms, maturities, and sources
before contracting with any individual third party deposit source and to
collaborate with the General Counsel to determine whether or not a deposit would
be determined as "brokered" under 12 CFR 337.6. All such requests for
contracts, placement, or access to such funds will be reviewed and approved prior
to execution by ALCO.
Dealers are restricted to recognized names inthe brokerage business, and fees will
not be paid in advance of full disclosures of all terms concerning the availability
of such funds. .
B. FDICIA Limits on Brokered Deposit Use
It is the policy of the Bank to comply with the FDICIA limits on the use of
brokered deposits, as follows:
o Well-capitalized insured depository institutions may accept, renew, or roll
over brokered deposits without first obtaining a waiver from the FDIC. A
well-capitalized institution is one that has a total risk-based capital ratio of
10 percent or greater, a tier 1 risk-based capital ratio of 6 percent or
greater, and a leverage ratio of 5 percent or greater. Also, it is not subject
UNITED WESTERN BANK
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to any fonnal written agreement, order, capital directive, or prompt
corrective action directive to meet and maintain a specific capital level for
any capital measure.
o Adequately capitalized insured depository institutions are prohibited from
accepting, renewing, or rolling over brokered deposits unless they first
obtain a waiver from the FDIC. An adequately capitalized institution is
one that has a total risk-based capital ratio of 8 percent or greater, a tier 1
risk-based capital ratio of 4 percent or greater, and a leverage ratio of 4
percent or greater (or a leverage ratio of 3 percent or greater if the
institution is rated composite 1 under the CAMEL or MACRO rating
system in its most recent report of examination, subject to appropriate
federal Banking agency guidelines), and does not meet the definition of a
well-capitalized institution.
o Undercapitalized insured depository institutions are prohibited from
accepting, renewing, or rolling over brokered deposits. An
undercapitalized institution is one that has a total risk-based capital ratio
of less than 8 percent, a tier 1 risk-based capital ratio of less than 4
percent, and a leverage ratio of less than 4 percent (or a leverage ratio of
less than 3 percent if the institution is rated composite 1 under the
CAMEL or MACRO rating system in its most recent report of
examination, subject to appropriate federal Banking agency guidelines).
o Adequately capitalized and undercapitalized institutions are prohibited
from soliciting deposits by offering rates of interest that ate 75 basis points
above the "national rate" deposit market rates as reported weekly on the
FDIC web site.
o Notwithstanding any of the foregoing, if the Bank receives any
correspondence from its regulatory agencies that affect the foregoing, that
guidance will be provided to ALCO for its immediate evaluation.
Management is responsible for monitoring the Bank's capital level and for
ensuring that the Bank is in compliance with any regulatory restrictions and
limitations.
C. Adequately Capitalized Institutions
In a situation where the Bank may fall below the well-capitalized institution
capital profiles (total risk-based capital ratio of 10 percent; Tier 1 risk-based
capital ratio of 6 percent; and a leverage ratio of 5. percent), or otherwise be
designated as less than well-capitalized, management must obtain a waiver to
accept brokered deposits. The FDIC may waive the brokered deposits prohibitions
placed on an 'adequately capitalized' depository institution; this waiver is
determined on a case-by-case basis.
If the Bank is designated as less than well-capitalized by the regulatory agencies,
the Bank may attempt to obtain a waiver. ALCO will coordinate any attempt to
obtain a waiver with the General Counsel. In addition, restrictions limiting the
amount of interest that the Bank can pay on brokered or other deposits will also
apply.
UNITED WESTERN BANK
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Specifically, the FDIC may grant such a waiver if the acceptance of brokered
deposits do not constitute an unsafe or unsound banking practice, and the
institution's brokered deposit operations do not pose an undue risk to the
organization. To obtain a waiver to accept brokered deposits, the Bank must file a
written application with its FDIC regional director for supervision. The format of
the application may be a written letter; however, it is important that the letter
includes the following:
Time period for which the waiver may be needed
Policy statement for the Bank establishing corporate governance regarding
the usage of brokered deposits in the organization's overall funds
management and liquidity initiatives
Details on the volume, rates, and maturities for the brokered deposits
currently held and anticipated during the requested waiver period,
including any internal limits placed on terms, solicitation, and use of
brokered deposits
Description of how the brokered deposits are cost-analyzed and compared
to other funding alternatives
Description of the Bank's lending and investment activities will use the
brokered deposits, with specific reference to future asset growth
Description of procedures and controls used to solicit brokered deposits,
including identification of the principal sources of the deposits
Description of the management information systems utilized to supervise
the solicitation, acceptance, and use of broke red deposits
Recent consolidated statement with balance sheet and income statements
Reasons that the board of directors and management have considered the
acceptance, renewal, or roll over of brokered deposits pose no undue risk
to the Bank
In addition, the waiver request should include the net interest spread being earned
on these deposits, the need for such deposits, and the maturity of matched assets.
D. Undercapitalized Institutions
In a situation where the Bank may fall below the adequately,.capitalized
institution capital profiles (total risk-based capital ratio of 8 percent; Tier 1 risk-
based capital ratio of 4 percent; and a leverage ratio of 4 percent), the Bank will
be unable to accept brokered deposits as the FDIC is prohibited from granting a
waiver in such cases.
If the Bank is undercapitalized it will also likely be in "troubled condition."
Accordingly, the Bank will be prohibited from accepting, renewing, or rolling
over brokered deposits and there will be restrictions limiting the amount of
interest that the Bank can pay on brokered and other deposits.
If the Bank is undercapitalized it will have to rely upon its Tier 1, Tier 2 and
secondary sources of liquidity without considering brokered deposits.
UNITED WESTERN BANK
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E. Deposit Broker Records and Reports
The FDIC may require, by regulation, that each deposit broker maintain separate
records relating to the total amounts and maturities of the deposits placed by the
broker for each insured depository institution. The FDIC may also require each
deposit broker to file with the FDIC separate quarterly reports relating to the total
amounts and maturities of the deposits that the broker placed for each depository
institution during the applicable quarter.
The Chief Financial Officer, Chief Accounting Officer andlor Controller are
responsible for ensuring that the Bank's regulatory reports filed with the FDIC are
consistent with any reports filed by a deposit broker.
ALCO shall manage Bank use of brokered deposits to ensure those deposits are
beneficial to the Bank, within acceptable risk parameters, including pricing, and
maturity and source concentrations. Management shall develop prudent reviews
of brokered deposits to ensure risk identification and management of these
deposits.
The following elements shall be addressed by ALCO in the risk management
process as they relate to the Bank's usage of broke red deposits:
Proper funds management policies
Adequate due diligence when assessing deposit brokers
Due diligence in assessing the potential risk to earnings and capital associated
with brokered or other rate-sensitive deposits and prudent strategies for their
use
Reasonable control structures to limit funding concentrations. Limit structures
shall consider typical behavioral patterns for depositors or investors and be
designated to control excessive reliance on any significant sources or type of
funding.
Management information systems (MIS) that clearly identity non-relationship
or higher-cost funding programs and allow management to track performance,
manage funding gaps, and monitor compliance with concentration and other
risk limits
Contingency funding plans that address the risk that these deposits may not
"roll over" and provide a reasonable alternative funding strategy
xu. CONTINGENCY FUNDING PLAN
Management has a Contingency Funding Plan (CFP) as part of the Bank's
liquidity risk management process. The CFP will include cash flow projections
and comprehensive funding plans that forecast funding needs and funding sources
under various market scenarios including aggressive asset growth or rapid liability
erosion. The Bank's CFP will be used for the following purposes:
Routine liquidity management
Monitoring/planning during periods of extraordinary asset growth
Contingency planning during emergency and distress environments
UNITED WESTERN BANK 22
Liquidity Policy
December 28. 2010
1584
The CFP will anticipate all of the Bank's funding and liquidity needs during both
temporary and long-term liquidity changes by:
Analyzing and making quantitative projections of all significant on- and off-
balance sheet funds flows and their related effects
Matching potential cash flow sources and uses of funds
Establishing indicators that alert management to a predetermined level of
potential risks
The CFP shall identify, quantify, and rank all sources of funding by preference
including:
Reducing assets (e.g. regular sales of guaranteed portions of originated SBA
loans, irregular sales of other interest earning assets)
Modifying the liability structure or increasing liabilities
Using off-balance sheet sources, such as securitizations
Using other alternatives for controlling balance sheet changes
Management shall also consider asset management strategies for responding to a
liquidity crisis including: .
Whether to liquidate surplus money market assets
When held-to-maturity assets should be transferred to available-for-sale,
liquidated, if needed
Whether to sell liquid securities in the repo markets
When to seHlonger term assets, fixed assets, or certain lines of business
The following liability funding strategies shall be addressed by management:
Establishing an overall pricing policy for funding
Identifying dealers who will assist in maintaining orderly markets in the
Bank's negotiable instruments
Identifying particular funding markets to avoid, such as high-volatility
accounts
Developing strategies on how to interact with nontraditional funding sources
Setting forth a policy for early redemption requests by retail customers
Estimating the Bank's potential Federal Reserve Bank discount window
borrowings, if any, stipulating timing, duration, and source of repayment
Management will also be required to address the following administrative policies
and procedures during a liquidity crisis:
The responsibilities of senior management during a funding crisis
Names, a,ddresses, and telephone numbers of members ofthe crisis team
UNITED WESTERN BANK
Liquidity Policy
December 28,2010
1585
23
Who will be assigned responsibility to initiate external contacts with
regulators, analysts, investors, external auditors, press, significant customers,
and others
How internal communications will flow between management, ALCO the
Board, employees, and others
How to ensure that the ALCO receives management reports that are pertinent
and timely enough to allow members to understand the severity of the Bank's
circumstances and to implement appropriate responses
The Bank's CFP will be reported and approved by the Board on at least an annual
basis to ensure it remains a practical and useful management tool. Appendix A is
the Bank's CFP.
UNITED WESTERN BANK
Liquidity Policy
December 28,2010
24
1586
Appendix A
CONTINGENCY FUNDING PLAN
The Contingency Funding Plan (CFP) is designed to provide management with a
framework for assessing and communicating the need for additional liquidity in a
dynamic market environment.
The CFP will have six key elements:
1) Defme the level or stages of a potential funding crisis;
2) Define appropriate triggers for each stage;
3) Generate estimates for potential funding heeds and available funding sources,
under different scenarios with different degrees of severity;
4) Define appropriate responses and establish reporting requirements for each crisis
stage;
5) . Plan communications and assign internal contact responsibilities between Bank
functional divisions, Bank management, ALCO and the Board. Plan and assign
external contact responsibilities for major funds providers, regulators, press, and
shareholders;
6) Testing the CFP.
Given the high level of potential risk in these activities a carefully designed
framework is in place to govern this activity. The framework is built on senior
management accountability and oversight, policies and procedures, segregation of
duties, limits, and risk-management culture consistent with the goals of the Board of
Directors.
1) Define the level or stages of a potential funding crisis;
ALCO has responsibility for assessing the Bank's level of liquidity risk. It will use the
Bank's adherence to Liquidity Policy limits, its Contingency Funding Plan Triggers, and
market intelligence and other qualitative factors to assess the Bank's level of liquidity
risk.
Baseline Case - Ordinary Course of Business
Stage 1 Liquidity Risk - Minor Impairment, the Bank retains pricing flexibility with
loans and deposits, situation's full extent may not be in public domain.
UNITED WE.STERN BANK
Uquidity Policy
December 28, 2010
25
1587
Stage 2 Liquidity Risk - Reduction in Confidence - the Bank has to significantly alter
pricing to attract or retain customers, more than usual negative news on the Bank in
market place
Stage 3 Liquidity Risk - Severe Liquidity Risk - Organization's viability is at risk
within a 30-day horizon.
2) Define appropriate triggers for each stage;
ALCO will use both quantitative and qualitative measures to assess the Bank's level of
liquidity risk.
Quantitative triggers help identify potential problems while they are manageable and are
objective. The absence of quantitative trigger breaches does not necessarily mean that
liquidity risk exposures are normal.
Qualitative triggers permit management to exercise judgment. Violating one or two
quantitative triggers does not necessarily mean risks are elevated, but warrants further
analysis and discussion.
Baseline Case - Ordinary Course of Business
Stage 1 Liquidity Risk - Will generally be declared if at least 2 or more Liquidity Risk
Metrics are out of policy during the same month or the same policy limit is out of
compliance for 2 or more consecutive months, or if ALCO determines that any
Contingency Funding Triggers demonstrate a deteriorating trend. If these conditions
exist and ALCO does not declare a Stage 1 event, a written summary of the decision will
be provided to the Board Investment Committee. The Bank has no regulatory restrictions
to access all approved deposit and funding sources.
Stage 2 Liquidity Risk - Will generally be declared if at least 3 or more Liquidity Risk
Metrics are out of policy during the same month or if at least 2 Metrics are out of
compliance for 2 or more consecutive months, or if the ALCO determines that multiple
Contingency Funding Triggers demonstrate a deteriorating trend. If these conditions exist
and ALCO does not declare a Stage 2 event, a written summary of the decision will be
provided to the Board Investment Committee. The Bank has specific regulatory
limitations on either deposit rates it can pay, e.g. FDIC rate-caps; or specific deposit or
funding products it can enter into, e.g. brokered deposits or Fed Discount Window.
Stage 3 Liquidity Risk - Will generally be declared if at least 5 or more Liquidity Risk
Metrics are out of policy during the same month or if at least 3 Metrics are out of
compliance for 2 or more consecutive months, or if the ALCO determines that mUltiple
Contingency Funding Triggers demonstrate a deteriorating trend. Ifthese conditions exist
and ALCO does not declare a Stage 3 event, a written summary of the decision will be
provided to the Board Investment Committee.
UNITED WESTERN BANK
Liquidity Policy
December 28,2010
26
1588
CONTINGENCY UQUIDITY PLAN TRIGGERS
Increasing level of delinquent and non
current loans-
% ofloans 90 days Past Due!Total Loans
% of Non-accrual Loans!Total Loans
Net Short-Tenn 30 days) Fed Funds
Bought/Sold
% Non-corelNon-relationship deposits
(wholesale/internet channel) / Total Deposits
United Western Bancorp Stock Price
. Bank EamingTrends
Core Deposit Growth Trends
Retail Transaction Deposits
CD's < $ lOOK
CD's> $100K
CDARS Deposits
Processing and Trust Deposits
Turndown of borrowing request?
If so, what?
UNITED WESTERN BANK
Uquidity Policy
December 28. 2010
1589
Last
Current . Month
3
Months
Ago.
6
Months
Ago
27
12
month
Ago
Case-Shiller 20 City Housing Index
Leading Economic Indicators
National Unemployment Rate
National GDP (quarterly)
United Western Bank news in the market?
3) Generate estimates for potential funding needs and available funding
sources under different scenarios with different degrees of severity;
Operations and Finance will collaborate to generate at least 3 separate estimates of
funding needs over a ISO-day horizon and present them to ALCO at least monthly (more
frequently if required by liquidity risk level). Additional scenarios can be added
depending on specific situations and regulatory guidance.
If the Bank is in a Stage 2 or Stage 3 Liquidity Risk situation, Operations and Finance
will generate 2 additional scenarios, detailed below as scenarios four and five.
The first scenario will analyze the Bank's coverage of Tier 1 liquidity to maturing term
debt obligations, a 10% reduction in retail non-maturity deposits and all anticipated loan
fundings. The report will indicate whether or not the Bank has sufficient Tier 1 liquidity
to its risk limits and be called the Tier 1 Liquidity Report.
The second scenario will analyze the Bank's coverage of Tier 2 liquidity to maturing
term debt obligations, and anticipated loan fundings. The report will indicate whether or
not the Bank has sufficient Tier 2 liquidity to its risk limits and be called the Tier 2
Liquidity Report.
The third scenario will include all the cash flows analyzed in the first two scenarios but
exclude any uncommitted Bank lines from available liquidity. It will also presume no
CDs of any kind can be renewed and includes a 5% reduction in retail non-maturity
deposits each month. This is a "worst case" scenario. An example of this report is
attached as an exhibit. It is called the Bank Cash Flow Analysis Report.
UNITED WESTERN BANK
liqUidity Policy
December 28, 2010
28
1590
The fourth scenario will presume the Bank is less than well capitalized pursuant to PCA
provisions under FDICIA. It presumes that no CDs of any kind will be renewed,
brokered or otherwise. It presumes a 5% reduction in retail non-maturity deposits each
month, and that certain other trust and processing deposits may be deemed brokered by
FDIC. It presumes that these trust and processing deposit maturities are governed by
their omnibus contractual maturity status. Under this scenario and presumption Equity
Trust deposits would exist until June 27,2014. Lincoln Trust deposits would remain until
February I, 2011 and Legent Clearing deposits would remain at the Bank until August
18,2012
In 2010, the FDIC deemed several of the processing and trust deposits to be brokered.
The Bank provided substantial documentation to the FDIC and ultimately re-negotiated
the agreements such that they currently mirror the arrangements set forth in FDIC
Advisory Opinion 05-02 (February 3, 2005).
Under scenario 4, the Bank would have already implemented many of the steps
enumerated above including increased activity in the marketplace for bulletin board
internet based certificates, ceased the majority of lending and look for the timely and
orderly disposition of certain assets.
Scenario 4 is a better scenario for the Bank than scenario 5 discussed below. Scenario 4
would be beneficial to the Bank, its processing and trust depositors, and the Bank's
regulators as it avoids possible legal action on the part of the processing and trust
depositors associated with the Bank breaking its legally enforceable contracts that were
made with these entities in the good faith understanding that" such deposits were not
brokered and represent a core source of funding ofthe Bank's balance sheet.
The fifth scenario will presume the Bank is less than well capitalized pursuant to PCA
provisions under FDICIA. It presumes that no CDs of any kind will be renewed,
brokered or otherwise. It presumes a 5% reduction in retail non-maturity deposits each
month, and that certain other trust and processing deposits may be deemed brokered by
FDIC. It presumes that these trust and processing deposit maturities are governed by
their sub-account contractual maturity status.
First, scenario 5 represents a scenario that based on our understanding and discussions
with our processing and trust depositors is impossible to achieve given the nature of the
systems and the requirements imposed by such a scenario. Under scenario 5, each
individual account that comprises the total of the processing or trust deposit relationship
could be prohibited from adding to their cash balance that is placed at the Bank. The
operations of the trust and processing businesses are not established in a fashion
conducive to this nor are their IT systems. All of an account holder's cash is generally
swept in accordance with the instructions provided, or swept if no instructions are
provided, which end up in the Bank. It is physically impossible for the trust and
processing client to say that effective on any particular date that their customer's account
is frozen at a dollar amount based on that date and that any amounts of deposits in that
same account must be placed in a different bank.
UNITED WESTERN BANK
Uquidity Policy
December 28. 2010
29
1591
Further, scenario 5 would likely raise legal issues for the Bank ifthe Bank were caused to
break existingcontractllal obligations with these entities.
Nevertheless, in an effort to provide a smooth transition for our customer and considering
the adminstrative, judicial and waiver approach discussed above that would be
considered, the Bank would also consider and implement the following:
1. Purchase of Legent Clearing, subject to the filing of an application and receipt of
non-objection from the OTS and other appropriate regulatory authorities to do so.
The ownership of this entity provides the Bank with control over a significant
balance of deposits. The Bank has a history of successful processing and trust
deposit relationships that have been core to our operations, including Sterling
Trust. This is a significant part of our business plan for prudently reducing
certain deposit concentrations that exist on the balance sheet currently. In
addition, the Bank would call on up to $400 million of additional processing and
trust deposits from Legent prior to closing of the purchase if such deposits were
necessary relative to a risk of the withdrawal of Equity Trust deposits or a
regulatory requirement to move such deposits. .
2. Request an extension of time to achieve compliance with the request of six to
twelve months depending on the nature of the specific request and determination.
3. Acquire additional internet based bulletin board deposits that are deemed non-
brokered by the FDIC. The Bank has acquired approximately $150 million of
QwickRate deposits and believes it could raise more.
4. We would sell assets, in this order items a. through d. in an efficient period of
time to maximize recoverability of principal and maintain appropriate liquidity:
a. SBA purchased loans and pooled securities approximately $95 million.
Sales price would be approximately 103 to 105 (the Bank owns these at
approximately 108.) The loss would not significantly impact core capital.
This would reduce availability at FHLB; however would be cash
advantageous as the haircut is approximately 15%.
b. Sale of the single tenant portfolio approximately $28 million. Estimated
sales price would he approximately par, (the Bank owns these at
approximately 101.) The loss would not significantly impact core capital.
This would reduce availability at FHLB; however, this would be cash
advantageous as the haircut is approximately 45%.
c. Sale of residential loans, specifically the DCAL loans approximately $50
million. Estimated sales price would be approximately par, (the Bank
oWns these at approximately 101.5.) The loss would not significantly
impact core capital. This would reduce availability at FHLB; however
would be cash advantageous as the haircut is 15%.
UNITED WESTERN BANK
liquidity Policy
December 28, 2010
30
1592
d. Sale of GNMA buyouts approximately $30 Estimated sales price
at or above par. The Bank owns these at par. No impact to core capital.
The haircut is 7% at FHLB.
e. Other community bank loans, or loan participations determined based on
maximizing cash flow minimizing negative impact to core capital,
potentially $900 million of loans graded pass or above. Longer term sale
cycle and likely bigger negative impact to core capital.
f .. Redeem BOLL We own approximately $27 million. Results in taxable
income and tax penalty; however, results in over $21 million of cash.
g. Sale of other assets, branch land, business line, could be done, but lower
return and longer sale cycle.
4) Define appropriate responses and establish reporting requirements
for each crisis stage;
Baseline Case - Ordinary Course of Business. Normal monthly ALCO reporting and
oversight.
Stage 1 Liquidity Risk - Minor Impairment, the. Bank retains pricing flexibility with
loans and deposits, situation's full extent may not be in public domain. ALCO will
prepare an action plan within 7 days of recognition of impairment. The plan will be
reviewed at the next ALCO meeting and will be presented to the executive committee.
Plan will include an estimate of costs and/or diminished revenues to accomplish the task.
The Investment Committee will be notified of a Stage 1 designation. The Daily Liquidity
. Report will be reviewed at Balance Sheet Strategy (BSS) meetings as scheduled.
Plan may include a review of opportunities to increase the size of the liquidity reserve,
intensify collateral management to free additional collateral, and review
opportunities to increase net cash flow cushions at ovemight,7-day, 30-day and 90 day
horizons. ..
Stage 2 Liquidity Risk - Reduction in Confidence- the Bank has to significantly alter
pricing to attract or retain customers, more than usual negative news on the Bank. in
market place. ALCO will develop a plan within 5 days of ALCO meeting on steps
necessary to bring liquidity risk measures into compliance and present the plan to the
Balance Sheet Strategy Committee. Plan will include an estimate of costs and/or
diminished revenues to accomplish the task. Upon BSS review, the Plan will be shared
with the President - CEO and/or the Executive Committee.
BSS will meet at least weekly. COO and CAO/CFO will have daily communication to
review Bank balance sheet and liquidity positions. Plan may include asset sales and/or
participations, and slowing new asset generation. Proforma capital ratios will also be
analyzed each week. The Investment Committee will be notified of Stage 2 designation.
The Daily Liquidity Report will be reviewed by COO and CAO/CFO Daily. Balance
UNITED WESTERN BANK
Uquidity Policy
December 28. 2010
31
1593
Sheet Strategy will include explicit analysis of key balance sheet trends, key depositor
concentrations, feedback from loan officers, BOOs and others on the Bank's perception
in the market place, and report on progress of liquidity risk remediation plans. It will also
include a specific discussion of emerging credit risk or other risks to earnings.
CFO/CAO will initiate more frequent contact with key liquidity providers such as FIILB,
bank line providers, FRB and report weekly to Balance Sheet Strategy Group. CEO,
President and/or Vice Chairman may initiate contact with large shareholders.
Stage 3 Liquidity Risk - Severe Liquidity Risk - Organization's viability is at risk
within a 30-day horizon. COO and CFO/CAO will develop a plan within 3 days of
ALCO meeting on steps necessary to bring liquidity risk measures into compliance and
present the plan to the Balance Sheet Strategy Group. Plan will include an estimate of
costs and/or diminished revenues to accomplish the task.
Plan may include asset sales and/or participations, and restricting new asset generation
without risking further reduction in customer confidence. Proforma capital ratios will
also be analyzed each week. The Investment Committee will receive notification of Stage
3 designation. The Daily Liquidity Report will be reviewed daily by CFO/CAO and,
COO, Balance Sheet Strategy Group will include explicit analysis of key balance sheet
trends, key depositor concentrations, feedback from BOOs and others on the Bank's
perception in the market place, and report on progress of liquidity risk remediation plans.
It will also include a specific discussion of emerging credit risk or other risks to earnings.
COO and CFO/CAO will initiate more frequent contact with key liquidity providers such
as FIILB, bank line providers, FRB and institutional depositors and report weekly to BSS .
Group. Plan may consider increasing cash held in branches and ATMs to avoid any
shortages, moving additional collateral to FIILB or FRB, reaffirming funding plans with
key institutional depositors, intensifying efforts, employee and/or customer incentives for
deposit retention, and evaluating opportunities to sell illiquid assets or business units as
conditions dictate. .
If ALCO determines that under any conditions, the Bank needs to add or augment its
liquidity under a "Liquidity Evenf' it will follow the list ofprefetred liquidity sources
spelled out in the Liquidity Policy and the summary below.
5) Plan communications and assign internal contact responsibilities
between the Bank functional divisions, layers of Bank management, and
the Board. Plan and assign external contact responsibilities for major
funds providers, regulators, press, and shareholders;
ALCO will have overall responsibility for executing the CFP communications plan. The
ALCO Chairman and/or the COO will be the primary contact point and manager of a
CFP communications plan, in concert with the Executive Committee. The Balance Sheet
Strategy Group will be the primary forum for evaluating and refining the CFP
communication plaQ's ongoing effectiveness. The COO will facilitate communications
between home office and branches and LPOs. The Chief Information Technology
Officer is responsible for maintaining the Bank website in consultation with the CFO and
UNITED WESTERN BANK
Liquidity Policy
December 28, 2010
32
1594
COO on liquidity issues. Balance Sheet Strategy Group members are responsible for
communicating with their respective teams, ensuring that the Balance Sheet Strategy
Group hears concerns or issues raised among staff. The President - CEO and Vice
Chairman will manage commuriications with major funds providers and the Bank. The
CFO/CAO, COO, and/or President - CEO will manage communications with regulatory
bodies. The President/CEO or Vice Chairman will coordinate communications with ,
shareholders, press, and other media. The CFO/CAO, COO, and/or President - CEO will
manage communications with the Board Investment Committee. The President - CEO
will manage communication with the Board. BnOs and Regional Presidents are
responsible for managing communications with their individual customers, and ensuring
the Balance Sheet Strategy Group is apprised of all developments.
Outside consultants may . be required to assist management craft an appropriate
communication plan to external stakeholders.
6) Testing the CFP
Testing the CFP, done properly, can greatly increase the likelihood of effective liquidity
risk management.
The Chief Investment Officer and Assistant Treasurer will maintain a log of various third
party funding sources and report to ALCO quarterly on the timing, rate, and relative
success of sourcing funds from these providers.
The Bank may periodically test its loan liquidity by selling or participating existing loans
from time to time. Such tests will be discussed with ALCO in advance and results
reported to ALCO.
Testing may involve running simulations late in the business day to highlight specific
issues such as difficulty sourcing funds late in the day. It may also identify staffing
bottlenecks or lack of staff willingness to work overtime.
The ALCO will review the CFP testing program on an annual basis and report results to
the Board Investment Committee.
The following plan outlines the steps that will be followed in the Bank's
Contingency Funding Plan in the event ALCO deems this necessary. Each step is
laid out in order of execution with the objective of providing . liquidity at the least
possible cost. It should be noted that steps below may be reordered in priority and
utilization based on current market pricing and other factors considered by ALCO.
Step 1 Initial requests for funds will be met out of the Bank's short-term cash and
equivalent position (e.g. fed funds sold). This would provide the least
expensive source offunds. .
Step 2 The Bank's membership in FID..B gives it ready access to the FIll..B's
advances program utilizing qualifying collateral.
UNITED WESTERN BANK
Liquidity Policy
DeCember 28. 2010
33
1595
Step 3 Acquire additional trust and processing deposits.
Step 4 Acquire additional brokered deposits, if eligible.
Step 5 Borrowings against the fed funds purchased line.
Step 6 Deposit specials and deposit programs.
Step 7 Draw on the holding company's line of credit at another institution, if
available.
In addition to the foregoing, asset sales as discussed above, may be used to
generate cash/increase liquidity. In the current market environment liquidity is of
significant importance and there is a general lack of liquidity for many of the
primary instruments owned by the Bank (single family loans and most mortgage
backed securities), which has impacted their value. As such it is possible that the
sale of such assets would generally be . a last resort as it appears that it would
result in giving up more yield than the borrowing costs outlined above or
incurring losses which may fuel concerns and exacerbate the liquidity problem.
If ALCO determines that 1) the cause(s) of the implementation of the Liquidity
Risk Management Plan is systemic and unlikely to be corrected in the normal
course of business, and 2) the execution of the above steps is deemed inadequate
for prudently weathering the liquidity crisis, then ALCO shall at a minimum, take
the following steps (not necessarily in this order):
Review all deposit gathering programs and accelerate those that it can without
unduly impacting A. the net income of the Bank, B. the interest rate risk profile of
the Bank.
Access available brokered CD facilities to pay down pledged borrowings in
order to un-encumber marketable securities (or temporarily park funds in
money market instruments). In this regard, the Bank would target terms in
excess of 6 months.
Extend the maturities of short-term borrowings, especially those highly
dependent upon the Bank's credit risk, and thus more susceptible to non-
replacement.
Access available institutional depositing gathering facilities for possible
increases to free up unused capacity at FHLB.
Consider, review and prepare to implement plans to securitize and/or sell
portions ofthe loan portfolio. .
Reduce new asset growth and restrict lending to existing customers only.
UNITED WESTERN BANK
Liquidity Policy
December 28. 2010
1596
34
If the above steps do not sufficiently mitigate the liquidity risk management
concerns, ALCO shall (not necessarily in this order):
Sell loans as outlined above.
Intensify deposit-gathering programs.
Transfer unencumbered securities and loans to the Federal Reserve and
borrow at the discount window.
Cease all lending, except for loans approved by ALCO.
The Plan Summary on the following page will be updated on a periodic basis in
order for the Bank to monitor its available liquidity under crisis conditions.
XIll. POLICY EXCEPTIONS
This Policy represents the official Policy Statement of the Board of Directors.
Any specific transactions or situations not covered by this Policy in the
foreseeable future, the IC, ALCO and CFO/CAO, COO must use sound judgment
in the decision-making process. If these guidelines do not address a material
situation occurring in the foreseeable future, an exception to this Policy may need
to be made. In those instances, the CFO/CAO, COO will communicate this to the
ALCO, IC or full Board of Directors before any action is taken if that is possible,
or report to those bodies in a timely fashion thereafter if prior communication is
not possible. All exceptions to this Policy will be documented in the minutes.
The above not withstanding, any regulatory directives received by the Bank will
supersede any policy limits, guidelines or processes enumerated above for as long
as they are in force.
UNITED WESTERN BANK
Liquidity.Policy
December 28,2010
35
1597
CONTINGENCY PLAN SUMMARY
Step
TIER 1
1
2
3
4
5
6
7
Tier 2
PLAN SUMMARY AS OF: _____ _
United Westem Bank
Hypothetical Contingency Plan Scenario 5
Timing 90 days to execute
Description'
Available cash
Money Market Assets
Unencumbered Govfs
Anticipated cash flows from assets
anticipated fee income
FHLB Capacity
Other unpledged securities
Total Tier 1
1 CDs - intemet bulletin board
Dollars Est Cost . Description
(in thousands)
F:L.---,..,
2 Large processing and or trust deposits
3 Unpledged securities (separate from 7 above) 1-__ --1
4 Brokered CDs & CDARS
5 Deposit promotion
Total Tier 2
Secondary
1 Unused FED fund lines capacity
2 Federal Reserve Discount Window
3 Loan securitizations
4 Loan sales or participations
5 Other asset sales
UNITED WESTERN BANK
Uquidity Policy . .
December 28, 2010
1598
Appendix A-1
36
AppendixB
ALCO Committee Composition* (as of December 27, 2010) :
Chairman - Holding Company
President! CEO Bank
Chief Investment Officer
Chief Accounting Officer (ALCO Chair)
Chief Credit Officer
Chief Operations Officer
Chief Financial Officer
Regional President - Appointed by President - CEO Bank
* Membership subject to Board approval.
Balance Sheet Strategy Committee Composition:
Chair - Chief Accounting Officer
Chief Investment Officer
Chief Credit Officer or designee
Chief Operations Officer or designee
Controller
Assistant Treasurer
Others as may be appointed by CFO/CAO or COO depending on
circumstances
UNITED WESTERN BANK
Liquidity Policy
37
December 28. 2010
1599
,,;
Attachment A to
Liquidity Contingency Plan
Assum.es
FDIC
Deems Deposits
asSrol(ered .
because of Fees
and AilLegal
Appeals are
Exhausted
AccessFHLB and Access FHLB and Access FHLB and .. Access FHLB and Access FHLB Access FHLBandAccess FHLB and
Quick Rate .QUick Rate Quick Rate Quick Rate and Quick Rate QuickRate QLiick Rate
I-:! .. ,... :. .... ..... . .....
ETCterrninates . AccessFHLB .
wif!j fP (:Jays' .. and
. , ....,. ...... . Legent .

withf3I,.days'
fnoticei
" '. ,-,,< ,-= ,::: ,',
fETcii/irminates
based;Olrcapltal
pasfflqlr

Terminates'
Immediately
AccessFHLB and
Quick Rate
..
1602
TabC
Exhibit 54 B
1603
ExhibitS'
1604
f-I
(j)
o
111
Tom Kientz
From:
Sent:
To:
Subject:
FYI
Mike Dea [m.dea@trustetc.com]
Thursday, December 23,20107:45 AM
Tom Kientz
FW: QP Defined Benefit Plans
-----Original Message-----
From: Jeff Kelley .
Sent: December 21310 AM
To: Mike Dea
Subject:RE: QP Defined Benefit Plans
Yes it is What I don't have is the development done to identify these on an automated basis in our report.
Kristen is out until the first of the year. These balances do not fluctuate generally but being able to pull them out daily
will be manual right now.
Jeffrey A. Kelley
Chief Operating Officer
Sterling Trust
7901 Fish Pond WacoJ TX 76710
800.955.3434 ext.5270 , Direct: 254.399.52713 I Fax: 254.751.7734 www.sterlingTrustCompany.com I
J.Kelley@SterlingTrustCornpany.com
-----Original Message-----
From: Mike Dea
Sent: December 2010 6:135 AM
To: Jeff Kelley
Subject: QP Defined Benefit Plans
Did you ever get me the amount of deposits for these QPs?
CONFIDENTIAL COMMUNICATION This e-mail and any files transmitted with it are confidential and are intended solely for the
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You must destroy the original transmission and its contents. You will be reimbursed for reasonable costs incurred in
notifying us.
1
TabC
Exhibit 54 C
1606
ExhibifC
SubaCCoU11ting Agteeineht
fromRemainil1g Institutional Depositors
1607
TabC
Exhibit 54 C (a)
1608
AMENDED AND RESTATED
SUBACCOUNTING AGREEMENT
This AMENDED AND RESTATED SUBACCOUNTING AGREEMENT (the "Agreement") is
made and entered into by and among UNITED WESTERN BANK (f/kla Matrix Capital Bank), a
federal savings bank ("Bank"), EQUITY TRUST COMPANY, a South Dakota trust company ("ETC"),
EQUITY ADMINISTRATIVB SERVICES, INC., an Ohio corporation ("BAS"), and STERLING
ADMINISTRATIVE SERVICES, W. a Tex.p limited liability company ("SAS" and, colleotively with
EAS, the "Companies"), as of thisi.:[ day of J II 11 {"I (the "Effective Date") (the Companies, ETC and
Bank referred to herein each as a "Party" and collectively the "Parties").
WHEREAS, BAS and Bank previously entered into an Amended and Restated Subaccounting
Agreement effective as of March I, 2009 (the "Current Subaccounting Agreement") wherein. among
other things, EAS provides oertain subaccounting services to Bank and Bank pays fees to EAS for such
services pursuant to the tenns of the Current Subaccounting Agreement; and
WHEREAS, ETC, SAS, Sterling Trust Company, an aftlliate of Bank ("Sterling"), and United
Western Bancorp, Inc., the parent corporation of Bank ("UWBK"), are parties to an Asset Purchase
Agreement, dated April 7, 2009 (the "Purchase Agreemenf'), pursuant to which ETC and SAS have
agreed to aequire from Sterling its individual retirement and qualified plan business;
WHEREAS, the Companies provide (or will provide) certain administrative management services
... ---.----.-------.. ----...-----... -------------"--'" ...... ... -
WHEREAS. ETC. as custodian,. provides custodial and business services to individual
participants' accounts in employee benefit plans, individual retirement plans and other qualified plan
accounts (hereinafter referred to as "Custodia) Accounts") (and such individual participants of these
Custodial are hereinafter referred to as "Custodial Holders"); and
WHEREAS. the Companies and ETC have opened and wilt open various accounts with Bank (the
"Bank Accounts") for the bcneirt of Custodial Account Holders; and
WHEREAS, the regulations of the FDIC provide that deposit account records of an insured bank
must disclose the existence of a relationship that provides the basis for additional insurance, and the
details of that relationship must be ascertainable from the records of the insured bank or the records of the
account customer; and
WHEREAS. the Companies and ETC desire that the funds maintained in the Bank Accounts be
insured to the fullest extent provided by law for each Custodial Account and Custodial Account Holder.
and consequently records and statements must be prepared for each Custodial Account Holder regarding
the status of each Custodial Account which is within and a part of each Bank Account; and
WHEREAS. Bank could provide account holder record-keeping for the Custodial Accounts and
Custodial Account Holders or obtain such services from a third-party provider; and
WHEREAS. the Companies are willing to act as agent for Bank to provide Custodial Account
Holder recordbeping and certain other services with respect to the account activity by Custodial
Accounts and balances maintained in the Bank Accounts by the individual Custodial Accounts: and
Page 1 ofS
1609
, .
...
WHEREAS, Bank and the Companies believe it appropriate to enter into an agreement that
provides for the Companies to act as agent for Bank to provide account holder record-keeping and certain
other services for the Custodial Accounts and the Custodial Account HoIders, for which Bank will pay a
fee to the Companies based upon the number of Custodial Accounts at Bank and the aggregate monthly
balance of such Custodial Accounts, in light of the amount of record keeping services and other
associated services to be provided by the Companies with respect to the Custodial Accounts .
. NOW, THEREFORE, in consideration of the mutual promises herein contained, and for other
good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, it is
mutually agreed as follows:
1. From the Effective Date until termination hereof. the Companies and/or ETC sball maintain
: ...;. various Bank Accounts on behalf of the Custodial Account Holders' in accordance with the terms and
conditions hereof. Notwithstanding the obligations regarding deposit requirements that are set forth in
Section 10. the Companies and ETC may withdraw from the Bank Accounts an aggregate amount not
! .. : exceeding $100 million in the event the Companies andlor ETC desire to move such amount to a financial
.. institution in which the following individuals eitber collectively or individually have acquired "control"
r: of such financial institution ("control" shall have the meanings ascn"bed to it pursuant to 12 CPR S74.4)!
:: . Jeffrey A. Oesich, Richard Desich and Richard A. Desich andlor any entities controlled by or for the
... benefit of any of them (such institution, the "Desich Financiallnstitution" and such parties, the "Desich
!;:'. .. . Parties"). Any withdrawals allOWed in this Section 1 must not exceed $25 million in the aggregate during
,. any oalendar quarter. Bank shall indicate in its records that the Bank Aocounts are maintained by the
f;. .. ' Companies in a fiduciary or custodial capacity for the beneflt of the individual Custodial. Account
:;: .. : .::.; Holders, and shall further indicate that the delineation of Custodial Account Holders' Interests in the Bank
.... c ........
. ... Accounts of the Companies, ETC and their affiliates shall not exceed $1 billion without the prior written
,; .... :;. approval of Bank.
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2. Each Company shall maintain separate accounting and record-keeping for each of its
Custodial Accounts which have balances in the Bank Accounts. Each Company shall be responsible for
providing such accounting and record-keeping services as agent for Bank. The Companies and ETC,
jointly and severally, represent and warrant, covenant and agree that each of the Companies, ETC and
each of the Custodial Accounts is, and at all times will continue to be, in compliance with the applicable
provisions of 12 CFR Part 204 (Regulation D relating to interest on deposits) and 12 CFR Part 230
(Regulation DD, Truth in Savings Act). The Companies, on behalf of the Custodial Account Holders,
shall issue instructions to Bank, by wire transfer, check or other appropriate means acceptable to the
Companies and Bank, regarding transactions involving funds in the Bank Accounts. Bank shan be
entitled to rely upon such instructions and Bank shall have no liability for any act or omission hereunder
while acting in good faith. Bank shall have no duty to act in regard to the Bank Accounts in the absence
of such instructions.
3. Bank shall provide customary banking services to tbe Bank Accounts: It is understood and
agreed that Bank shall be responsible under this Agreement for the servicing of the Bank Accounts and
not for servicing the individual Custodial Accounts. Bank shaU furnish to each Company on a monthly
basis a bank statement for each Bank Account as requested by such Company. Such statements shall be
mailed by Bank or be made availabJe to the applicable Company on the third business day following the
close of the period being reported.
4. The Companies, as agents for Bank, shall provide account holder record-keeping and certain
other services for the Custodial Accounts and Custodial Account Holders as follows:
a. Deposits to the Bank Accounts from all Custodial Acoounts;
Page 2 of8
1610
e'-' .,... - ............. _ ................ _ ... - . ' .. - ................. _ ... . .. " ...... ..
b. , Withdrawais fi'om tho for aU Custodial Acccnmts;
le. Accounting to an Custodial Accounts; .
d. data processina scrvicosrequired for sub-account admiriistrationof the Bank
, Accounts; and, '. '
e., Monthly and diJclosures incompliance with i,l1applicable federal
and state lawsimd regulations.
s. The Compariies stiall furnish to Battle: by tbefifteenth (15th) day cif eaclimonth a trial
whklh reflects the account nwnbor, Jl8IllO, type of account and ACC01D1t balanco of oxiStins CIlstodial
" Accounta (the' "ActiveAccouiriS.,in the ,Sank Accounts .. of the last., business day of the
month. Such report $hall be aooompanied by a sununary wbichis siped and' certified as true and accurate
by the chief financial officer (If tho Companies or hislher designate. This teport Shall boused to
fee: totbe ,Companies for the,account the
Companies
6. Within ten (10) days after of the monthly report referred to in SeCtion 5 above. Bank
shaH pay tQthe Companies a !J),c:mthly fee equalto,$40.00 multiplied by the number of Activ,e ,
as dCternUned bytheprovisiolls of Seotion S. anything tOthe contrary, contaln
in no event shalhhe aggreptemonthty fee exceed a percentage yield with respect to ,the Bank Accounts
equal to the ..,pUcable Contract Variable Rate as set forth (the ,"Contract
Rate"). It is understood and that such fee is intended to ttie Companies for
their prior services, in connoctionwith No other fees of any
nature sball, be du,e to the CompanieS for services provided hereunder. ' ,
. "'- ..... '
,': , "',, right to 1114b a physical at any time of'COmpanies books: and records matters'
- .....
, by this Agreeii1ent, to verify theaccuraey of the Cotnpanies' monthly ,re,port of the number of
, Gustoclial Accounts within Bank AtWllnt andQlher'matters'deemcd relevant by BUlk. Bank shall
notmake than four (4) Stich audita in eadt calendar, year. , ',' " '
8. Bank personnel will be relSSonal;lIy' ,requested, to consult 'with $e'"
Companies incootdiaating it$ operations pursuant to this , , ' "
9. Any to this Agreell\erltshall be if inwritinS and signed by all,oftbe
, Pames; The teml oftJlts Agreement shall be for "a periodbesinning as of the BfCClICtiveD."and
continumaun,til the l8terof (a) the Dfth anniversary!)f the Date or (b) the date an amounts
q:wing under the Seller Financing (as defined in,the Purchase Agreement) bave been paid in full (ipe
"Term"). Upon the expiratiQll of tbo Tn or any renewal, thereof (the date ,of suCh explraticm. the
"Termination Date", this Agreement shall automEltical1y renew for succes$ivo one-yeat wiess
sixty' d'ays p'rior to the applicable TetminationDate (or the anniversary' date of any subsequent
Termination Date) the Companies or Bank prpvide :written,notice of their,intent 10 tenninate this "
Agreement. In theevetrt the Companies terminate this Agreement, as provided for in this Section 9, then
fora period of sbe: (6) months following such Termination Date. the Companies and BTCmay withdraw
up to one-sixth of tile aggregate balances in the Bank Accounts existing as oftbeTerminatioD Date
at the end of each calendar moJithfollowingthe Termination Date. Any balances remaining in tho Bank
Acootmts after sbt-1IlOnth period' may be ,withdrawn, at any time thereafter. Notwithstanding any
terminatifin, of thiS Agreement, all tights, obligations, term, and conditioq$ of this Agreement shall remain
"in effect with, resPect to '-.y' cash balances in the Bank, .AceountsWltil such balances have lJeen, fully
withJirawn or 'distributed.
to. During tl\e first three (3) years ofthe Term, the Companies and ETC agree that Bank shall be'
the, sole depository pursuant to this Agreement of cash balances, ,for tile Custodial AccOunts; During the
Page 3
1611
remaining portion of the Term and during any renewal thereof, the Companies and ETC agree that they
shaU deposit with Bank pursuant to this Agreement cash balances of Custodial Accounts in an amount at
least equal to (x.) an amount equal to the Final Deposit Amount (as defined by and finally determined in
accordance with the Purchase Agreement) or (y) the aggregate amount of all the cash balances of the
Custodial Accounts, whichever is lesser. If, however, the Companies andlor ETC acquire Custodial
Accounts with cash balances over $20 million in conneotion with the acquisition of a custodial. trustee or
similar business or other bulk acquisition of Custodial Accounts, and the Companies andior ETC are
required or otherwise obligated to maintain deposits relating to the acquired business or accounts with
another financial or depository institution in connection with such transaction, then the Companies and/or
ETC shall be permitted to maintain such deposits with such other financial or depository institution
notwithstanding anything herein to the contrary.
. Notwithstanding anything to the contTary herein. written consent of the Bank is required prior
to the Companies and ETC participating out Bank Account deposits to any other federally insured bank or
saving and loan institution chartered by an agency of the federal government or any state govemment
(''Third Party Banks''). The Companies will take all reasonable or necessary actions to open such accounts
at Third Party Banks, including, without limitation. the execution and delivery of new account forms and
other customary and reasonably necessary documents required by Bank or any Third Party Bank, to allow
the participation of Bank Aocount deposits as provided for herein. Bank acknowledges that Custodial
Account Holders have the right, at their sole option, to direct the Companies and ETC to deposit their
funds with another depository institution; ETC. and the Companies will use
oommercially reasonable efforts to have cash balances relating to Custocital Accounts retained at Bank (or
a Third Party Bank if Bank has consented to participate out any or all of the Custodial Deposits as
": '. provided In the event that Bank consents to participate out the deposits in the Bank Accounts with
. -... -
then in effect, the Companies, on the one hand, and Bank, on the other win split the benefit of the
difference between such higher rate and the applicable Contract Variable Rate SO/SO_ In the event that the
deposit rate being paid on deposits being participated by a Third Party Bank occurs at a rate that is
less than the applicable COntract Variable Rate, Bank shall be responsible for making the Companies
whole for the difference between such Contract Variable Rate and such lower rate. The tenns of this
paragrapb shall not adversely affect any rights of the Custodial Account Holders.
11. Notwithstanding Sections 9 or 10 above. upon a breach by Companies or ETC of any
covenant, agreement, promise or representation or warranty contained herein, Bank may terminate this
Agreement upon ten (to) days prior written notice to the Companies. Upon the breach by Bank of any
covenant, agreement, promise or representation or warranty contained herein, the Companies or ETC may
terminate this Agreement at any time upon ten (10) days prior written notice to Bank. In addition, UpOll
receipt ,by any Party of any written instruction, enforcement or other acti.on by any regulatory agency with
enforcement authority over either Bank, the Companies or ETC, indicating that this Agreement, in whole
or in part, violates any applicable regulation to which either Company, ETC or Bank is subject, now or at
any time during the term of this Agreement, this Agreement shall terminate upon the expiration of ten
(10) days after reoeipt of such written instruction. order or notice by any Party. The party reoeiving such
notice shaH, within three (3) business days of receipt, provide such notice to the other Parties. This
Agreement may be terminated by the Companies or ETC upon thirty (30) days prior written notice to
Bank after receipt by the Companies or ETC of a rating report published by IDC Financial Publishing.
Inc. indicating a composite rank for Bank of 74 or lower.
12. Bank shall indemnify and hold harmless the Companies and ETC and each of their respective
agents, affiliates and employees from all suits, actions. costs, expenses (including reasonable attorneys'
fees), judgments or claims of any character, type or description brought, incurred or made arising from or
relating to the gross negligence or willful misconduct of Bank in the execution of or perfonnance of this
Page4of8
1612
Agreement; provided that Bank shall have no liability to the Companies or ETC under this Section 12 for
any acts or omissions taken Ot' not taken in good faith by Bank.
13. The Companies and ETC shall jointly indemnitY and hold hannless Bank and its agents,
affiliates and employees from all suits. actions, costs, expenses (including reasonable attorneys' fees),
judgments or claims of any character, type or description brought, incurred or made ("Bank Costs")
arising from or relating to: (A) the gross negligence or willful misconduct of the Companies or ETC, as
agent for Bank, in the execution of or perfonnance of this Agreement; and (B) any claim OT assertion by
any customer oftbe Companies or ETC, including but not limited to a Custodial Account Holder, relating
to any Custodial Account or any service provided by the. Companies or ETC to any customer of the
Companies or ETC, including but not limited to a Custodial Account Holder, provided that the foregoing
indemnific:ationin subparagraph (B) shall not apply to the extent the Bank Costs result directly from the
gross negligence or willful misconduct of Bank.
14. The Companies or ETC and not Bank is the oustodian to the Custodial Accooot Holders who
have interests in the Bank Accounts. Bank shall have no fiduciary or custodial obligation to any Custodial
Account Holders who have interests in a Bank Account. In particular. Bank shall have no responsibility
for any bookkeeping or record-keeping functions of the Companies or ETC on behalf of any Custodial
Account Holder or for receipt or disposition of funds in the Bank Accounts; provided, however, that Bank
shall hOnor the Companies' or ETC' s written instructions regarding disposition of the Bank Accounts.
15. Tbis Agreement .and the account documents entered into between the Parties relating to the
Bank Accounts (the "Account Documents") contain the entire understanding of the Parties with respect to
the subject matter hereof, and supersede all prior agreements and understandings relating to the subject
"._,'. __ "__matter"hereo.Refereneeshereifl:-tothi!rAgreement-sha!:l-inclu.-aU$hedules .. andexhlbits-heFeto-.... ln-tJte.-.. .......
event of any conflict between the provisions hereof and the Account Documents, the provisions of this
Agreement shall control. Upon execution of this Agreement and effective as of the Effective Date. the
Current Subaccounting and any prior subaccounting agreements between the Parties shall be
null and void and of no further force and effect; however, the indemnification provisions in the Current
Subaccounting Agreement with respect to matters occurring before the Effective Date shall survive and
inure to the benefit of the Parties and their successors and assigns. Nothing in this Agreement shall limit
or otherwise impair any indemnification rights of any party under the Purchase Agreement,
notwithstanding anything herein to the contrary.
16. Tbis Agreement may be executed by the Parties in separate counterparts, each of which when
so executed and delivered shall be an original. but all such counterparts shall together constitute but one
and the same instrument Any provision of this Agreement that is invalid, illegal 01' unenforceable shall
not affect in any way the remaining provisions hereof.
11. This Agreement shall be governed by the laws of the United States of America and the
applicable laws of the State of Colorado.
18. Any notices provided for under this Agreement shall be in writing delivered by mail. fax or
overnight delivery to:
Page 50f8
If to: Equity Administrative Services, Inc.
225 Bums Road
Elyria. OR 44035
Phone: (440) 323-5491
Fax: (440) 323-4529
Contact: Jeffrey A. Desich
1613
If to: Equity Trust Company
225 Burns Road
Elyria, OR 44035
Phone: (440) 323-5491
Fax: (440) 3234529
Contact: Jeffiey A. Desich
lfto: United Western Bank
700 17111 Street, Suite 2100
Denver, CO 80202
Phone: (720) 956-6548
Fax: (720) 932-3993
Contact: Thomas J. Kientz
19. The Parties acknowledge that the tenus of this Agreement. including all of its exhibits and
other attachments, contain confidential commercial and financial information of the Parties, the public
disclosure of which would have a material adverse effect on the Parties' respective businesses.
Accordingly, without the prior written consent of the other Parties or except as may be required by law
(including without limitation applicable regulations of the Securities and Exchange Commission (the
"SEC" or legal proceeding. no Party shall, nor shall any Party pennit any of its respective officers,
directors, parent companies or other affiliates to, make any public announcement or qisclosure with
Tespect to this Agreement, including any of its exhibits or other attachments, or any of the terms bereot: or
publicly disclose this Agreement, including any of its exhibits or other attachments, or any of the terms
hereof. to any third party. If any such public announcement or disclosure by a party (the ''Disclosing
: " : ( ; f ~ - ' ' ' - - - ' - - 'Party'i;-or--6'Y--iiny OY1lieUi'sciosiiiiTaitY--rsci'ffiCers;' arrectors;-pareiif"companleiOfOffier-iffiHaies, is , .. " ,,' '
required by law or legal proceeding. then the Disclosing Party shall use its commercially reasonable
efforts to seek an appropriate protective order, confidential treatment order or agreement, or other similar
remedy with respect to the tenns of this Agreement (or such portions hereof as may reasonably be
protected pursuant to applicable regulations) and to maintain andlor renew any such order, agreement or
remedy so that it shall remain in effect through the tenn of this Agreement and for a period of three years
after the expiration or other termination hereoL In connection with seeking, maintaining or renewing any
sucb order. agreement or remedy. unless prohibited by applicable law or regulation. (i) the Parties
shall cooperate with each other in connection with any request, filing OT other submission with.
the applicable governmental entity, including the SEC, (ii) the Disclosing Party shall keep the
other Pames informed in all material respects of any material communication received front, or
given to, such governmental entity, and (iii) the Parties shall consult with each other in advance
of any meeting or conference with such governmental entity. The rights and obligations of this
section'shall survive the expirati.on or other termination of this Agreement.
[Signature page follows.]
Page60fS
1614
The foregoing Agreement bas been executed as of the and year fu:st written above.
EQUTIY ADMINISTRATIVE SERVICES, INC.

b7;i8lf::A1
Tltle:
STER.LlNG ADMINISTRATIVE SERVICES. LLC
EQUITYTRUSTCOM?ANY


Title: tu!fl!>
UNITED WESTERN BANK
____________________ _
Name:
Title:
Page7of8
1615
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The foregoing Agreement has becri executed as oftbC date and year tirst written above.
EQUlTV ADMINISTRATIVE SERVICES, INC.
By:

Title:
STElU.ING ADMINISTRATIVE SERVICES, LLC
__________________ --
Name:
Title:
EQui'rYTRUSTCOMPANY
. . By: . .
", ........ : ........ 'tJ',:.Jtf:: .. . . .:. .:: . .. .. :.. .. ! .. .. ....... .:... ......'I.... 'Ij.. .. :."'"" ...." .. _ ...... r..'.\ .. .2. .... -r .. "" ..... ....... -.. ........................ ..

UNITED WESTERN BANK.
.
Paae7o$
,"'!-
1616
Exhibit A
to the Amended S.Ubacruntin9 Agreement
Effective L.:.:L day of J U.n . 2009
Federal Reserve
Target Rate for
Contract Variable Rate Table
Ovemight Federal Contract Variable Earnings Credit
Funds" Rate Rate Pass-through Rate
.0.00%' ': . 2.710%. :.'.', .':: 2.610% '. ". 0.100%:.'.
'.. :::. 0'.25%::).;':;: . -: .. :.:.:, 2. 7.10%'; ,,: ;';<'. (2.560%:.": ,: ,,::.' t: O:,150O/cr.-::::'.:' '.
'.,': '. :::. :'. :":."i,.: '2.710%::;',.., . ":'. ;,::', ';"'..::.2.5.10.%'::::: <. .:C ... : r. .
;.;' :;' .. ::.' :'.:: :, ;(:.:'\':,'2,.7.10.%,'.:;:;:,'.;.:,. ::;'i::::,.\:, 2.;51Q%.;';':'::;:;' :\'{);::::O.20Qo/c(',";:'i , ..
;',,: :', (; ' .. 1.00%'!<,.:j;.!.;, <;;;;".>: .. !:::iit,..: 2;5;to.%;';i;:.:!i,:/': 0;200%'; :.,
.; .: .... ;';.,1-.25%.':;:! -i., Y ::}: lr 2;1,10.%:,'::://;:': :t !\.L:}.( 0'.2Qo.% ':'A:':-:" ,.
:.: ::'. 1.50%:,,'. '.:,:.;.: ".:.', !:'.2.11.0%: ;::-".;..:' :.:'\:':;":"'2.5.10%:::'::,:,::;;. ;(,;:':f',::::0.2000/0:: ,':\' ::.
1.75% .. . 2.835%.;-:.... !, :', >: ,.:' .. :.0.250%' ;':" ..
. ' .... :. 2.QO% .,::" : ....... 2.96Qo/i('.: ... : '.c" ::'., 2.7.10% ',:: :'.::": <. ::-: 0.2500/.0.-, ... ..
2.25%/';." .':".,\ 3.0850/0':.<.: . :..,::2.5a5%:, .. :. :: .....
2.50% .' -:", . 3.2100/cf:: .'. " . -;'.: ". 2.710%":" ,':. ,:. ,: ... ; 0.500% .. '
2.75% .:. ,:' -: . ." 3.3.35%-;.':' :.;.,,.: 2.835% ! : ':'- " 0.500% :-::.' .
3.00%'" '. : ...... 3.460%.:-: . " .. .:.:: :'.' 2.835% :'. ':"" ;'. >" 0.625%', '.
3:25%' :::. :: .. ', . ...:< 3.585%:. '.::: .',:' .. .. ,,,.:: .:'.' ' .. ', 0:625%':' ':
.'.3.7.5% . ".,:. .,'.' .. 4.085%:.. "".,:0 ,: ., .. ,': .. 3.21Q%': .. ":.,' :" .-:, . .'., O:.a75%:-: :.
'" .' 4.75%'.: .. .: ... :',;'" 5,085%',:; ..: .. ::,' ::-:: .. :1.250%..:,,
5.00%':" ". .:.5.:335% .. .. :: '3.960%. ,. :: .. : ,1.375%'';
5.25%' '. ..' .... : .. 5.585%:;::'; ...... 4.135'!fo'":. 'co .. :., ,1A50%. .
5.50% ....... 5.835%:>':' ,.::. 4.31.0%"" .. : ..1.525%:
5.75%;' ., 6:085%':,:,;: '. 4.485%';'. :':" .'..1.600%,
6.25%' .: .. '. 6.585%:- ;:'::';'" .;',.: ' .. 4.835%:.'.,..;:.:: .... .1.7500/0':, ' ..
6.50%' . ,.6,835%' ,. ' .. .:':. '. '4,960%';'. ,:':': '. 1.875%" '.
6.75% : .' :'" 7.08.5%.':' :":' .:. :: : 5.085%,." '. / .. '. 2:000% '" ..
7.00% ,'. " 7,335%' .. ,'.:5.210%: .":" 2.125%'.:.,
7.25% '. " .. :.: '. 7.,585%:\\'" :.:.' .:': 5.335%::: .. "' .. : '.:2.250%.' : ....
.. :.: <.".',7.50% .:.,:' :' .. :: .:. ':::,.'-':..1.83.5%".-;':,> .:;::... ..: ... ; 5:46Q% .t.: :\.' .,.,;.':'."::' 2.37.5% :-c' ,
".:'. >7.75%";' :"'.;:'" " ... ::,.8;085%:",',':' '.:', :';:;:.:..:.\ 2.5000/0.':.'.;:".'
.:: .'.:.: . 8;OQ%".:':;:':. ,.:",':"':', ,.:: ';::::;;.:.<: 5,,7:100J0: ):::':? :,:,':".;'; .. 2.625%<: : ..:: .:
:.,:. :::;.,: 8.25%'.:i:',.: ":':'. ':'.' i;:': ,:;;':8';5.85.%,:.',:":'<' .:'>::::':(:(:5:835%';',':.'.;{;;: :.
::.,,' 8.50%:,;:."', ':., .: "'::," .. ::. 8.83pOfQ:.> .,'.,:' . ,,;-:'U?:, 5;96Qo/O':;' i:-': ',;., ;:':;:'.::':: '2'.875%':'-:;::. ' .
. . ". 8:750/&:: :'.:::;0 ..... :; :: :.:':::: 1<,.::;,: ;:, 6;085%H:':::!) : >:i.f.:: 3.p@'Yo : ;".'.";'
': :.' 9.00%":" ... ,.:..: :'. :::,.:.; ....-'.:U: 6;2:10o/,V .. ; .. : ... ::,. : ..:.:::; =:': 3. '.2t;%,,::',,:
. 9.25%:'.', ... ".:' '9;S8p.%:;-.':: ""::"':-'6.335%,',,:::,., .;:, .;,:3.2500/jI:.:-.,.
9.50%":' '" . .': 9.835%;:;::: ',." i: 6;460% ... ' " 3.37.50//):' ':., '.
9.75%" '. 10 .. 085%. ..: .... '. 6.585%:: . " "'''.:' '3;500%.' .
10.00%. . . 10.210%.: i .6.6a5% .... '. ':,',.: 3.575%"
10..25%. . 10.335%.. '. 6.685%:. :.' :.'., .. .3.650%
10.50%' . 19.460%.. . 6.735% .. '. .... .... a.7Z5%: .. :
10.75%:.:': .... '" 1'0'.585% .;:.: . ., . 6.785%:'" c. : .. ,: '. :' 3.809%':
. '11.00-11/0::: .. ;;. .. 10.:710% ... . :::-.6.835% .. .: .. ,:.: 3.875% .'
Page 1 of2
1617
Exhibit A
to the Amended Subaccounting Agreement
effective day ofOtA Vi i." , 2009
Federal Reserve
Target Rate for
Contract Variable Rate Table
Overnight Federal Contract Variable Earnings Credit
Funds Rate Rate Pass-through Rate
11.25%"': 10.835%".:' '.:.:.: 6.885%' :. ::" .. <, ': 3.9500;0',
11.50% .. 10.960% .' 6.935%' ': :: 4.025%
11.75%' ..... 11.085.%:" . 6.985% ., . :--4.100%. .
12.00%' 11.210%' 7 .. 035% .'. ,'.: 4.1750/0":
12.25%:' , ,'. .:.,11.3350/0: '.' .. ' :' ',', 7.085%:, ...... .,:':: .... :- 4.250% ,:.:.:
. '.' :. 12.50%" .. '::> 11,460%'. :: .... ::': '7.1$%;' :: .... .. 4.325%.: ':"
,' .. :.112.75%': '. ',':: :"..11.585%, ... .'. ., .. ' ,:. 7,1a5%.c.:: ',.': :.'<.:4.400%.:: ., :
: .. ' ::13;00%\: . .11'.710%",:.: ",':: .:' ... ;' ..... , .. : 4A7p%: ',,::-: .
!.;.,:,:': :),13.25%:::: ,:.-;;:., ,:<, ... :"., / ':, .... :.::..: 7,;285%::, :".: ,.!. :'. :" :<:. :,:. 4.550%": ':::'"
"':"::::.'.:;,;.:.13.50./rl:'i ;.::;:';\! 5.' -.:-:' :,'; ,,;,'::,':::':1.::,1;335%':;,:;:: :::.:(' f';.,o:.
.;!:'::':'/" ': <, .;.:. .. ::'0"::::<17,.385%:, x ... ;:
,:. ::: :', 14.00% ' ..<\. .. : ..., 12.21.Q%.::,,,,;:; .:; .. :::.\7,;;435%;:,:::::;,., ':"':'."':":" .
": . -:: .. 14.25% .::,,:,:".:"\,' ;:;, ;::,.1 :.:-.) ,. '.:":-:':::'.:.:: ;:;;466%: '. i).::' :<:: . ::
: .. f.. 14.50%' .. ', :" 'L.. ::; ,::-.::.: 12.460%',0;: ..:.':' .::.; ;.; ,-:': .. -.:. '.' .4.92.5%, .. :. ;
.",; 14.75%":" 'i",::,';12.585o/CIi::.:.; .:<.:: . .::' 11.&86%:'::",,:-, [.('.\.,:. ,,'fj.O.QO"%.;';: .::
. 15.00%.:.. .:' 12 .7.:10%'. :.: .' .. '/:.,: 5.07S?/o>:
:: 15.25%'. '.' 12.835%'; .":: .; .. :,..7.6.8&0/0-:,'. :: .. :',. .
15.50%. ":. ; ... 12.960%. 'I:' ."'.' ':';:'> '.'.
15.75%, '." . 13.085% . 7.785%' . '" ":" : .. 5.30Q%.
16.00% . , ....... : ....... 13.210%:-/,,":,, .: .: ..... 7.83.5%; .:. :.,:,.::,: .. 5.375% .' '.
16.25% '. 13.335%:; .. -: .. 7.885% ;::-.' 5.450%.
. 16.50%': .... c::..": .7.935%;"-:' ;':":;,5.525%" ' .
. ':': :': 16.75% : .: .... : .. ':.:':,:, 13.585%::":':::;' :c,.":";.:- 5.t}QO%,:;-.'
. ": .": 17.QQ%: ... :'.' ..:':' .:. ::"!:'::::' "" .5.(;175%:," .
. ;.'i:;':;:13.635%-!:.' .. ,::i: .' ,:':'::' .. ::.8.085%'-:',':,;,,; 5.7l5.0%,::::: ....
".':'. :'::;' 17.50% (.::":,:;;,.:., :!.,::'.;,::,:-;-, 13. 960o/cv':; :;::';':: .. ,; ;': ',::::. :':::.i:.:,.:? :::. 5.825.%., ..., ,'" :
': '. ',.,1"1.750/0:.:;':: :',:.' ... 14;085%\::.:;,'::- '!-':."::'';: 8,:185%" ... ;"': l"::'-.i.;'. 5.900%;;,: .. : .
. . : :.:: 18.00%':'.": '::"." ,: 14;210%: .':.' ::= .. :-.: .>.: 8;235%.;: .. ':' '.::: i '. 5..975% .. >..-
.... :.18.25% ' .' .14.335%'. , .' 8:285%":; 6.0(50% .
. 18.50% : . 14.460%' :". '.' '. ':. 8.335%' . :. 6.1250(0"
18.75%' 14.585% 8.385% 6.200%
19.00% 14.710% 8.435% .. 6.275%
19.25% 14.835% 8.485% . '. 6.350%"
19.50%.' .... 14.960%':" 8.535%0..- .-""6-.4250/0 .. , .
19.75% '. .15,085%' . '. . B.l585%: ".'. 6.500% .. ,"
,,: 15.2100/0'" . '. 8.635%'.' .. '. '.':.: .6.575%' '.:
*In the event that the target rate for overnight federal funds as announced by the
Open Market Committee of the Federal Reserve of Govemors is a range of values
and not a specific Federal Target Rate as shown in the attached table .lJnited
Western Bank Is to use the lower Federal Target Rate within the announced range to
establish the Contract Variable Rate, Earnings Credit Rate and Pass Through Rate.
Page 2 of2
1618
TabC
Exhibit 54 C(b)
1619
..
FIRST AMENDMENT TO AMENDED AND RESTATED
SUBACCOUNTING AGREEMENT
THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED
St)BACCOtJNTING AGREEMENT (this "Amendment") is made and entered into as of this
24th day of February 2010 (the. "Effective Date"), by and between, UNITED WESTERN
BANK, a federal savings brulk EQUITY TRUST COMPANY, a South. Dakota trust
company ("ETC"), EQUITY ADMINISTRATIVE. SERVICES, INC., an Ohio corporation
("'EAS"), and STERLING ADMJNISTRATIVE SERVICES, LLC,. a Texas limited liability
company ("SAS'1 ru1d, collectively with EAS, the "C01npanjes"). TheCornpanies, ETC and Ballk
are referred to herein each as a "Party" andcotlectivelyas' the "Parties." Capitalized. terms used
and hot defined in this Amendment shall have the meanings ascribed to them in the
Subaccouuting Agreement (as defitIed belqw).
WITNESSETH
WHEREAS,. Bank, ETC and the Companies are parties to that certain AMENDED AND
RESTATE)) SUBACCOUNTiNG AGREEMENT June 27, 2009 (the "Subacc.ounting
Agreement") whereby, among other things,ETC and the Cotnpl:lllies maintaitI Bank Accounts at
Bank fnr the benefit of Custodial Account Holders,and the C01npanies act as ageI1t f()f Bl:lllk to
Account Holder record keeping and certain .other services with respect to the
Custodial Accounts and balances maintained in the Bank Accounts for the benefit of the
individual Custodial Account Holders.
WHEREAS, the Parties desire to amend lheSubaccounting Agreement as described in
further detail in this Ainendment.
NOW, THEREFORE, f.or other gond and valuable consideratiQn, the receipt and
sufficiency of which a.re hereby ackn.owledged, the Parties hereby agree asfollnws:
L The following sentence shall he added at the end of Secti.on 1 .of the Agreement:
"Forpurp.oses of this Agreement, Bank ACCOunts shall include any Bank Account
deposits participated to Third Party Banks pursuant to the terms ofthls Agreement"
2. The second pqragraph of SectiQl1 10 .of this Agreement is hereby deleted in its entirety
and replaced with the follOWing paragraph: .
"NotWithstanding anything to the contrary herein, written consent of the Bank is required
prior to the Companies and ETC participating out Bank Account deposits to any Third Party
Bank (as defined below), which con.sent shall not be l.:mreasonably withheld.. In addition, Bank
may propose that the C.ompanies ETC partiCipate o-qt Bank Accotll1t dep.osits to a. Third
Party Barik,and the written consento;f the C.ompaniesand ETC slfall be required prior to such
v . participation, which consent be withheld. A "Third Party Bank" isauy
\\ federally insured bank. or savtng. and loan chartered by an age?cyof the. federal
govetnment or any state gOvernment that .lsagreed to bf<tween the Parties and (x) has a
of 7S Of higher as published by IDC Fi1lancial Publishing, fpe. ("IDC"} from
1
1620
time to time: or (y)if such bank or institution is not. rated by IDC) . such bank or institution is
"well capitalized" (a$ that tennis defined in 12 CFR 565.4(b)(1), but. subject to 12 CFR
565.4(c. An,y Parly proposing Pm.1icipation' of BaAk Account deposits toa Third Party Bank as
provided herein (the "Proposing Party") shall first deliver to or the Companies and ETC, as
the case may be. (the "ReceiVing Party') . detailed information regarding the proposeq
participa,tion, in:c1udirtg the amoUiltot Bank Account deposits to beparficipated out,
the name of the Third' Party Bank to accept the deposits, the. proposed terms o,f such Third Party
Bank+s participation and infonnation regarding the financial and reguJ.at;'Ory statUsdf such Third '
Patty Bank (the "Participation Infonnation"). The, ReceiVing Party shall, within seven husinesif
days>afW the date of its receipt of all participation Infornlation period,.
'the "Response Period"), provide ih the: .Proposing Party (a) the ReceivingParfy's
writtenconsentto participation, or (17) a statement that the ReceiVittg Party will not
consent to thepartieipat1.on, together with details itS. decision not to gtant
consent. In the event the Receiving. Party fails to respond to pamclpatiQn requ:est within the
Resp,onse. Period,. Parties shall deem that the. Parly' to the proposed
partiCipation has been granted. The Patties will take all reasonable or necessary actiousi
including opening a9Coufitil at Third party executing and delivenngntwaccount
fonnsand other customary and reasonably dolJUmen(s requh-ed by any party 6.T the
Third party to allow the participation of Bank; Acco'Ulltdeposits PtQvi<Je:Q tot hetein.
J3arik acknowledges that CuStodial Account Holders have the right, at their sale option, to direct
the Companies and ETC to deposit their respective funds with another depository institution;
however, ETC and the Companies will USe rei!$oMbie. efforts to. haVe cash
balances relating to Custodial at Batik (or a T)lird PattY has
proposed or consented to participate out any or all of the Custodial Deposits as provided above).
The CC)mpanies shall have right to reltlove any deposits participated out to a Third Party
this paragraph. at any time (i) receipt by the Companies or ETC of a rating
report. puhUshedby IDC a, oompositerank for s'llch Third Part)' Bank of74 or lower, if
Such Third Party Bank is rated by IDC, or (ii) if such Third rarty Bank j;& :t)()trati by IDe,. the
Companle$ or ETC bccom aware that such Party Bank is not "well capitalized"(as that
tetli1is defined in i2 CPR 565A(b)(1), but subject to 12 CFR in either of which case
. the 'IDO,ve $1,lph deposits to Banleor another Third Patty Bank
pursuanttollie tertrt$ In tIre that l3fJnk has propP'Sed of cpnSented to
participate out deposits in the Bank Accounts to a Third Party B-ank thatpaY$ tt),terest,
subaocoimtlng or other administrative fees"'to the Companies with respect to thedeposit$
participated oilt to such Third party Sank (the "Third Party Ratc")tha.t is, in the
excess of the applicable Variable as then in effect, the Coblpanies, Qiithe otIe
hand, and Bank, on the other hand,. the benefit of the difference between suC))higher
Third Party Rate and the applicable Contract ViUiable Rate 50/50. lntb,e event that the Thlrtl
patty Rat the. less than the applicable COntract Variable Rate, Bank shall be
resp(mSible fOI makins the Companies W:hole fot the difference between sUch Contract V mabIe
Rate and such l(}wer Third Party Rate, terms qf this paragraph shall not adversely affect any
rights of the Custodial Accoullt Holdel'$'"
'3. The last sentence of S.ootion 11 of the Agreement shall be deleted. in its entirety and
replae.d withine following Stmtetice;
2
1621
"This Agreement may be tenninated by the Companies or ETC upon thirty (30) daysl
prior written notice to Bank at any time after Bank files with the OfficeofTItrift Supervision, or
any successor regulator designated as Bank's principal regulator, any thrift financial rep<;>rt, or
replacement Or SUCcessor teport if not a thrift financial report, which report reflects that Bank is
neither "wellcapitaiized" nor "adequately capitalized," a$ those tenns arc defined in 12 CFR
565A(b)(1) and (2) or in any replacement or successor federal regulation published from time to
time and at any time by the federal government of the United States of (a "Triggering
TFR"). Bank shall provide the Companies and ETC notice that Bank has filed a Triggering TFR
within three (3) business days of such filing."
The agree that all other tenns or conditions of the Sliba,ccounthlg Agreement
shall remain in full force and effect and the Parties reaffinn the same. The Subaceounting
Agreement, as amended by this Amendment, contains the entire understanding of the Parties
with respect to the subject matter thereof, and supersedes aU prior agreements and
understanding$ relating to the s\lbject mater thereof,
This Amendment shall be binding upon and inure to the benefit of and be enforceable
by the Parties .and their respective successors, assigns (including any direct or indirect successor
by merger or consolidation) and administrators.
[Signatt{re page fOllows,]
3
1622
IN WITNESS the Parties have enteretiint()this Amendrneilt as of the
dat:eUr1)t writteil aooveA
EQUITY ADMlNISTRATIVESERVICES,I;NG.

Name: ItA ) i:.#/tfEt.. A
Title: CFO . '
STERLING ADMINIsTRATIVE SERVICES.L}:

Name: /I;t N': ..././A'6: L "be Ii
Title: CPo ". ,.
EQUl1'Y TRust COMPANY

.By: . ;;_ ..
NaP1e: /'Vi I
,'':'I=:';;p " .'. .
UNlTlID WESTERN BANK
By:, __ __ __ __
'Name:
Title:
4
1623
TabC
Exhibit 54 C (c)
1624
SECOND AMENDMJr;NT TO AMENDEl) AND RESTATED
SUBACCOUN11NG AGREEMENT
tIns SECOND AMENDMENT TO THE AMENDED AND RESTATED
SUBACCOUNTING AGREEMENT (this "Amendment") is made. and entered into as of this 7th
day of May 2010 (the "Effective. Date"), by and betweell; UNITED WESTERN BANK,a
federal saving!) bank ("Bank"), EQUITY TRUST COMPANY, a South Dakota trust company
("ETC'), EQUITY ADMINISTRA TIVESERVICE8 INC., an Ohio corporation ("EAS"),. and
STERLING ADMINISTRATIVE SERVICES, LLC, a Texas limited liability cOlTIpany ("SAS"
and, collectively with EAS" the (the Companies, ETC and Bank referred to herein
e.ach as a and . collectively the "Parties"). Capitalized termsus.ed and not defined in this
Amendlne;nl shall have the rileatlings ascrihed to thel11 in the Subaccounting Agreement (M
defined below).
WITNESSETH
WHEREAS, Hank, ETC and the Companies ar.e parties tothat certain AME}.jbED AND
RESTATED SUBACCOUNTING AGREEJ\.1ENTdated June 27,2009, as amendedhy that First
Amendment to Amended and Restated Subaccounting Agreement dated. February 24, 2010 (the
"Subaccounting Agreement"), whereby, a.mong other things, 13AS and the Companies maintain
Bank Accounts at Bank for the benefit of Custodial Account Holders and the Companies act as
agent for Bank to provide Custodial Account Holder record keeping and certain other services
with respect to the account activity by Custqciial Accountsa.nd maintained in the Bank
Accounts by the individual Custodial Accounts.
WBEREAS .Bank has proposed that ETC and the Companies deposit $350 million of
funds in Custodial Accounts currently deposited in the BankAccounts (the "Third Party Bank
Deposit Funds") with a Third. Party. Bank in aQcordaJice with .the second patagrapll of.Section 10
of the Suhaccounting Agreement (such paragraph, the "Third Parly Bank Deposit Provision").
WlffiREAS, inconnectio.n with .such deposit ofthe Third Party Bank Deposit Funds with
such Third Party Bank, the Parties desil'e to further amend the Subaccounting Agreement as
descl'ibed herein.
NOW, THEREFORE. in exchange for the payment by Bank to ETC of $1,200,000 and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowleciged, the Parties hereby agree to .amend the Subaccounting Agreement in the fan owing
respects:
1. The second-ta-last sentence of Section 1 of the Sllbaccoun.ting Agreement shaH be
deleted in its entirety and replaced with the following:
"The aggregate balances in the Bank Accounts of the Companies, ETC and their affiliates
shan not e}(ceed$70Q million (the "Cap") without the prior written approval of
the Third Party Bank Deposit Funds as deposited with the Third Party Bank shall not
apply agairtst the Cap, notwithstanding anything in the Subaccounting Agreement to the
1625
contrary. The: rigbtsanc1ohligatiO:ns of the PartieSUhder the third,.tb-last and secolid.;toMlast
sentences of the Third pany Bault Deposit Pi"oviSlon shall not apply' in any way to j;he Tbltd
Party Bank Deposit Funds as deposited with the. Third Party Bank.
2. The following paragraph shall be added as a third paragraph to Section 10, (lfthe
Subacoountmg Agreemerit:
andl'he COmpanIes shall have the unilateral
.. ,,'lglif topatticlpate.<)ut uptQ .$156' milliQn 'pf tUhit$ Qeposited 'Batik ;AccountS
. m'Y$elm With ot'wiij)Qllt
(so long as such depository institution otherwise meets the definition of
Third PartY l3an}{). ptoviddthat the participation Q'i,rt of a,ny s\.lohfijnds thi$
paragraph shan not be subject to the rights and obligations of the Parties under the third-
to,.last and second-to'-last sentences of the. immediately preceding paragraph. Any funds
pttidpated out putSuartt to this paragraph. sha:1I not, flP'ply against .. the . Cap;
notwithstanding anything herein. to the contrary. Notwithstanding anything to the
contrary herem; ETC and the Companies roay not; .exercise their tmilateral right to
participate:f\1nda as di$Ct;Jssed in this paragraph to the extent thllt such participati<ln WQuld
reduce the cash balances of Custodial De.positsbelow an amount equal to the Final
Deposit Amount (as defmdby and. filially in: the Pl1l'chase
Agreement), In,addition to the the Parties shall use good faith to
consider opportunities from. time to time on furtherparticipatitm to one .or more Third
Pa.(t)1 deposited'ln the Bank Accounts;"
The Parties agree that all othertenns or oonditlonsofthe Subacco'Utlting Agreement shall .
remaIn 'in full force and . effect anq the Parties teaffum the a,arne. This. shall be
binding upon and inure to the benefit of and. be enfotceableby the Parties and their respective
succC.Ssors, assigns (including any direct or indirect SUCceSsor by lllerger at cOl1sQUdation) ar:td

2
1626
IN theJ!)miles hereiohaveentere.d into ..tll.i$. Amendment
. 'cf' th , d ". te" . .... ..... abov.e.
a;s'Q .' e , A . ur;s .
EQUITY AOMINlS1'RATlVE SERVICBS,lNC,

....... .
. ' '. . '," . /.'.. 'j.'

Name: A41'41.fA'c".. D q
Titie:cr-o
STBlq . .;INO ADMlNIS. ..' TIVE
. . ' ,
. . All d"'A ' ....
By: I V/i'Vt-: .'
N'cU.ne;M l'&-rlA <.E;.'

.
By: ..
1Jc7f.
TItle:. c- .p 0
WImp WESTERN BANK.
3
1627
TabC
Exhibit 54 C (d)
1628
October 26. 2010
Mr. Jeffiey A. Desich
President
Equity Tn.lSt Company
Equity Administrative Inc.
Sterling Administrative Services, LLC
225 Bums Road
Elyria, OH 44035
James R.Peoples
Chairman, President & CEO
tel: 720-956-6576
fax 720-946-1186

Re: Amended and Restated Subaceounting Agreement dated June 27, 2009, as
between United Western Bank, Equity Trust Company, Equity
AdministrativeServiees,Ine. and Sterling AdaninistratWe Services, LLC (the
"SubaccoDDting.Agreement")
Dear Mr. Desiclt:
United Western Bank (the "Bank'j. Eql1ity Trust Company ("EtC"), Equity Administrative
Services, Inc, ("BAS") and Sterling Adtninistrative Senrices; LLC ("SAsn collectively
with BAS, the "Companies't) are parties to the above referenced SUbaccounting Agreement,
among other things, ETC and the Companies rnaintain Bank Accol111ts at Bank for
the benefit of Custodial Account Holders and the Companies act as agent for Bank to provide
Custodial Account Holder record keeping and certain other services with respect to the account
activity by Custodial Accounts and balances maintained :in the Bank Accounts by the individual
Custodial Accounts.
Bank's parent company, United Western Inc. ("UWBK'j is currently in negotiations to
enter into a binding agreement (the HCapital Investment Agreement',) with various investors
pursuant to which such investors will purchase equity capital of tJWBK, for all aggregate
purchase price in exceSs of $200 million. As a condition to entering into the Capital
Investment Agreement, the investors have requested that ETC andthe Companies enter into
this letter agreement.
FOl" good and valuabJeconsideration" the receipt and sufficiency of which are hereby acknoWledged,
the parties hereby agree as follows;
NotwithstRllding anything to the contnuy in the Subaecounting Agreement, and subject to the
terms and conditions ofiliis letter agreement, during the R.estricted Period (defined below), ETC
8l"ld the Companies agree not to exercise their right to tenninatethe Subaccounting Agreement in
United Western Financial Center
700 Seventeenth Street, Suite2100
Denver, Colorado 80202
W\i6lildlncorp.com
accordance with the last sentence Qf Section 11 of the Subaccounting Agreementht the event
b._"; f.. . to :.fi:J wfthth ':Officeof'Thrift. Supervision any thrift.fihan : ... I.rep' .' ni+. or .... ,....... .... .
OW11\. were . e. . e .. .... '.' Cu:u tepu:u.;cm
or successor . report if nota t1nift 'financial report, which,teports reflects that the Bante is
detinedin 12 C.}?"R. 56S.4(b){3). Fotthe avoidanc;e of doubt, ETC and
1he Companies are not waiving any right, during the RestrlctedPeriOd or otherwise; toterminate
theSUbaccountingAgreement. in .. the event Bank wereto file a ,reporttetlecting that Bank is
usigniti.cantly undercapitalized" or "critically as de:tiJ1ed in 12C.F.R. .
. S65:.4(b)(4) and (5); respectively. means thepedod'beginrii1'lg,as of the date the
CapltalInvestment Agreement is entered into and, ending on.the _lierof(a) the date .the Capital
Investment Agreement is terminated, (b) the date thettansadions contemplatdl by the capital
InveStment Agreement are consuttJIllatetf:(tbe "CapitalTransact;ionClosmg''), an:d(c) December 31,
2010. Bank sbaIlnotifYETCifand whenthe'CapitaUnvestment Agteementis entert.dinto oriS
terminated or the capimi TransactiQIlClosmS.occms, in each case witbiit 48 hours after the event
0CClJrS;
The-covenants .and agreemen1S set fbrth:in<this letter agreement sha1l:.be nullandvoid and. of no :
further effect it.the Capital Agteeinent is not entered into on or before N()Veillber 15;
2010. The parties agree that all other tenns and conditions .oftheSubaccounting Agreement shall
remairi in full. force and.effect and the parties reaffinn the same. This. letter Bgreement shall. be
binding upon. and irtute ..to,the benefit of and be entbrceable by tbeparties and .theirrespeetive
successors, assigns (Including any direct or' indirect successor by merger or
consolidation) and ..
Capitalized terms not otherwise defined herein shaUhave the.meaning ascn'bed to them. in the .
S\lbaccounting Agreement
The duly au1horized parties deSignated below hereby signily theiragr;eemertt with the ti:mIs. and
conditions Contained. herein through exeCution of this letter.".agi'elnent bysignit)gas
below.
Sincerely,
UNI'IED WESTERN BANK

... r.-. _
. ;;:JaIne; R Peoples
Title: Chaittnan of' the Board and ChiefExecuti've
Officer
1630
EQUITY ADl\.11NIS1RATIVE SERVICES, INC.
STERLING ADIvflNISTRATIVE SERVICES, LLC
B y : ~ A A . -
Name: }'VII t:..rIA-CI- ~ A -
Trtle: CFO
EQUlTY TRUST COMPANY
103515295.2
1631
TabC
Exhibit 54 C(e)
1632
THIRD AMENDMENT TO AMENDED AND RESTATED
SUBACCOUNTING AGREEMENT
TIllS THIRD AMENDMENT TO THE AMENDED AND RESTATED
SUBACCOUNTING AGREEMENT (this "Amendment") is made and entered into as of this _
day of December, 2010, by and between, UNITED WESTERN BANK, a federal savings bank
("Bank"), EQUITY TRUST COMPANY, a South Dakota trust company ("ETC"), EQUITY
ADMINISTRATIVE SERVICES, INC., an Ohio corporation ("EAS"), and STERLING
ADMINISTRATIVE SERVICES, LLC, a Texas limited liability company ("SAS" and,
collectively with EAS, the "Companies"), (the Companies, ETC and Bank referred to herein
each as a ''Party'' and collectively the ''Parties''). Capitalized terms used and not defined in this
Amendment shall have the meanings ascribed to them in the Subaccounting Agreement (as
defined below).
WITNESSETH
WHEREAS, Bank, ETC and the Companies are parties to that certain AMENDED AND
RESTATED SUB ACCOUNTING AGREEMENT dated June 27, 2009, as amended by that First
Amendment to Amended and Restated Subaccounting Agreement dated February 24,2010, and
as further amended by that Second Amendment to Amended and Restated Subaccounting
Agreement dated May 7,2010 (the "Subaccounting Agreement"), whereby, among other things,
in connection with the primary purpose of facilitating the purchase and sale of securities and
other investments by their customers and not in a capacity as a deposit placement service, EAS
and the Companies maintain Bank Accounts at Bank for the benefit of Custodial Account
Holders, and the Companies act as agent for Bank to provide Custodial Account Holder record
keeping and certain other services with respect to the account activity by Custodial Accounts and
balances maintained in the Bank Accounts by the individual Custodial Accounts.
WHEREAS, the Parties desire to further amend the Subaccounting Agreement as
described herein.
WHEREAS, the Parties acknowledge that time is of the' essence.
NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree to amend the
Subaccounting Agreement in the following respects:
1. Effective for the two-year period beginning as of December 1, 2010 (the
"Amendment Period"), Section 6 of the Subaccounting Agreement shall be deleted in its entirety ~
and replaced with the following:
"6. Notwithstanding anything herein to the contrary, the Companies shall use
their commercially reasonable efforts to ensure that funds deposited in the Bank
Accounts do not exceed 10% of the total customer account assets held by the
Companies on behalf of their customers (the "Ratio"). In furtherance of the
foregoing, the Companies shall use their commercially reasonable efforts to
prevent the average daily balance in .the Bank Accounts during any calendar
1633
month from exceeding the Ratio, based on the average total customer account
balances held by the Companies during that month (the "Monthly Ratio"), based
on the most recently available data. The monthly report referred to in Section 5
above shall (a) include a certification. confirming both the Ratio and the Monthly
Ratio for the preceding calendar month as well as the average number of Active
Accounts (as determined below) for such month, and (b) acknowledge that such
certification will be used by Bank. for purposes of reporting to the FDIC, and that
it may be relied upon by federal bank regulators during examinations of Bank.. At
no time shall any funds deposited in the Bank: Accounts be held in time deposits.
Bank. shall pay interest on deposits in the Bank Accounts in the amount set
forth on Exhibit "A" attached hereto (the ''Pass-Through Rate"). The Pass-
Through Rate shall be adjusted from timeto time pursuant to Exhibit "A" based
on the then-prevailing Federal Reserve Target Rate for overnight .Federal funds
(the ''Fed Funds Rate"). The full amount of such interest paid on the Bank.
Accounts shall be passed through and paid by the Companies to the Custodial
Accounts for the sole benefit of the Custodial Account Holders.
Within ten (10) days after receipt of the monthly report referred to in
Section 5 above with respect to each calendar month beginning with December,
2010, Bank. shall pay the Companies a fee (the "Service Fee") for the record-
keeping services provided by the Companies hereunder during such month. The
Service.Fee for a month shall be an amount equal to $20.35 multiplied by the
average number of Active Accounts for that month. For purposes of determining
the Service Fee for any given calendar month, the average number of Active
Accounts shall be determined by dividing (A) the sum of the number of Active
Accounts as. of the last day of such month and the last day of the immediately
preceding month, by (B) two. In no event, however, shall Bank pay a Service Fee
for any month on an average number of Active Accounts of more than 75,000.
No other fees, charges or interest of any nature shall be due to the Companies for
services provided hereunder."
2. During the' Amendment Period, Exhibit "A" of the Subaccounting Agreement
shall be amended and restated in its entirety with the Exhibit "A" attached hereto.
3. During the Amendment Period, the term "Contract Variable Rate," in each
. instance it is used in Section 10 of the Subaccounting Agreement, shall be deleted and replaced
with the term "Service Fee."
4. Unless otherwise agreed to in writing by the Parties, for the remainder of .the
Term following expiration of the Amendment Period, Section 6, Exhibit "A" and Section 10 of
the Subaccounting Agreement, each as amended hereby, shall revert back to the provisions of
such sections and Exhibit as in effect immediately prior to being amended by this Amendment.
5. The seventh sentence of the second paragraph of Section 10 of the Subaccounting
Agreement is hereby amended and restated in its entirety as follows:
2
1634
"Bank acknowledges that Custodial Account Holders have the right, at their sole
option, to direct the Companies and ETC to deposit their respective funds with
. another depository institution."
6. The Parties agree that all other terms or conditions of the Subaccounting
Agreement shall remain in full force and effect and the Parties reaffirm the same. This
Amendment shall be binding upon and inure to the benefit of and be enforceable by the Parties
and their respective successors, assigns (including any direct or indirect successor by merger or
consolidation) and administrators.
[Signature page follows.}
3
1635
pA
Deo061006:21p
IN WITNESS WHEREOF, the Parties hereto have entered into this Amendment
as of the date first written above.
EQUITY SERVICES, INC.
/4
(
. "

Name:? /
Title:
STERLING ADMINISTRATIVE SERVICES. LLC
By:(2!6!
Name:/
Title:
EQUITY TRUST COMP.l\..1\fY"
. ', ... :..-.:2 /'
By. ------,--/ "'"'Y
NaDlZ /'"
Title:
UNITED WESTERN BA.. 'fl(
4
1636
EXlDBIT "A"
To the Amended and Restated Subaccounting Agreement, as amended, effective as of December _,
2010, by and among United Western Bank, Equity Trust Company, Equity Administrative Services, Inc.
and Sterling Administrative Services, LLC (the "Agreement")
Definitions (Capitalized terms used and not defined in this Exhibit "A" have the meanings
ascribed to them in the Agreement.)
Pass-Through Rate- The rate of interest actually paid and credited to the Bank Accounts as
adjusted from time to time based on the then-prevailing Fed Funds Rate, which interest shall be
passed through and paid by the Companies to the Custodial Accounts for the benefit of the
Custodial Account Holders.
The Pass-Through Rate shall be adjusted from time to time. in accordance with the schedule
attached hereto based upon the then..,current Fed Funds Rate as published inthe Money Section of
The Wall Street Journal on the last business day of the month preceding the month during which the
Pass-Through Rate and Multiple will be calculated.
1637
TabC
Exhibit 54 C (f)
1638
SUBACCOUNTING AGREEMENT
THIS AGREEMENT. dated as of August 18, 2010, is made between United Western
Bank ("Bank"), a federal savings bank, organized and eXisting under the laws of the United
States of America. and Legent ClearingLLC, aSEG Registered Broker-Dealer ("Legenf').TIlis
Agreement supersedes aU other agreements related to a FDIC Sweep Program between Bank and
Legent Bank will make available, on a regular and continuoU$ basis, to Legent ,whichsha11 have
a separate account at Bank to for the benefit of customers of Legent ("Customers"),
one or more "money market deposit accounts" ("MMDAs"), as defined in Section 204.2(d)(2) of
the regulations of the Federal Reserve Board (12 C.F.R. 204.2(d)(2), or accounts authorir-ed
by 12 U.S.C. 1832(a) ("NOW Accounts") to be maintained at Bank (MMDAs and NOW
Accounts,. co llectively, the "Accounts").
WHEREAS, Legent is acting as clearing or executing broker ("dearing broker") Jor
introducing or investment advisers (such introducing broker-dealers or investment
advisers. collectively, "IBDs"), and "Customers", as defined above, may include Customers of
suchIBDs;
WHEREAS, Legent and Deutsche Bank Trust CompallY of America ("DBTCA") ora
successor have entered into an agreement for DBTCA to provide services in relation to a FDIC
Insured Sweep Program (the "Program") for IBDs Customers (the 'DBTCA Services"). These
services include acting as agent for Legent in preparing and maintaining records of Customers'
beneficial interests, calculating interest for Customers,ca1cuiating fees for servicesperfonned in
relation to the serviceS, acting as a Settlement Bank and acting as a Qualified lntemlediary Bank;
and
WHEREAS, Bank wishes to participate in the Program by accepting deposits from
Legcnt and incur certain obligations pursuant to terms set forth herein in such a way that, under
the regulations of the Federal Deposit Insurance Corporation ("'FDIC") (12 C.F.R. 330), each
Customer's beneficial. interest ("Beneficial Interest") in each Account be eligible to be
insured to the maximum extent permitted by the FDIC.
NOW, THEREFORE, Bankand Legent hereby agree as follows:
Section 1. . Effective Date. Following the. execution of this Agreement, Bank's
participation in the Program with respect to receiving deposits from Legeot will be on the tenns
and conditions set out in this Agreement. The date on. which it is mutually agreed by Bank and
Legent that the Bank is participating in the Program pursuaht to the terms of this Agreement
shall be the "Effe.ctive Date."
Section 2. Customers' Beneficial Interests in the Account;
(a) Legent audor its agent shan have principal responsibillty for (i) recording in book
entry form the Beneficial Interest held by each Customer in each Account at and (ii) for
assigning to such Beneficial Interest an identifYing number.
1639
(b) Bank acknowledges that, under the terms of the Program, the total principal amount
deposited for the benefit ofa particular Customer in Accounts maintained at Bank on any day,
when aggregated with the Customer's Beneficial Interest in the Accounts as of that day; will not
exceed ninety-five percent (95%) of the maximum amount of FDIC insurance available for
deposit accounts maintained by the Customer in the same right and capacity at the Bank (the
"Beneficial Interest Limitation"), except as otherwise agreed toby Legent, and that it is the
responsibility of Legent, (or DBTCA as its agent), to ensure that deposits held at Bank for the
benefit of any Customer do not exceed the Beneficiallnterest Limitation.
( c) S u ~ i e c t to and in accordance with the terms and condition.s of this Agreement,
Bank shall accept for deposit in the Accounts funds delivered by DBTCA as Settlement Bank
upon instructions from Legent.
(d) Bank. shall have no obligation to determine or ensure that the amOtlllt of deposits
maintained by a Customer with Bank does not exceed the maximum amount insured by the
FDIC, whether considered separately or in combination with other funds that the CllStomer may
maintain with Bank. outside the Program.
Section 3. Terms. and Conditions of the Accounts; Unless otherwise requited by law or
regulation, the parties agree that each Account shall be governed by the following tenns and
conditions:
(a) Unless required by Applicable Law (as defined below), Bank will accept no
instructions concerning a Customer's Beneficial Interest in an Account u:rtless such instructions
are directed by Legent or a qualified intermediary bank ("Qualified Intermediary Bank") on
behalf of Legent. which for this purpose shall be DBTCA until Bank is notified to the contrary in
accordance with Section 9. If Bank receives inconsistent instructions from Legent an.d from the
Qualified Interrilediary Bank, and Bank cannot afte.r reasonable iuquiryresolve the inconsistency.
it shall be entitled to rely upon the instructions received from Legent. As used in this Agreement,
"Applicable Law'; .means arty law, statute,rule, regulation Or policy or any governmental
authority (and its instrumentalities and political subdivisions thereof. including l;l.11 states,
provinces and territories) of competent jurisdiction. and relevant jUdicial interpretations thereof;
or any rule or interpretation of any self-regulatory organization of competent Jurisdiction
("SRO't). that is applicable to a party to. this Agreement in connection with the actions required
to be taken by that party pursuant to this Agreement as the same is in efi'ectfrom time to time,
and shall include, without limitation, Regulation D issued by the Federal Reserve Board (12
C.P.R. 204); ,
(b) Withdrawals from the Accounts will be paid by Bank only upon instructiOll of
Legent or a Qualified Intermediary Bank by transmitting funds to one or more pre-designated
deposit accounts {the "Settlement Accounts") maintained at a designated bank (the "Settlement
Bank'') for the purpose of settling funds to be transmitted to the Legs:nt The Settlement Bank
shall be nBTCA unless another bank is designated pursuant to Section 9 of this Agreement or
until Bank becomes the Settlement Bank pursuant to this Agreement. Bank will be released from
all liability to the parties to this Agreement for such withdrawn funds once Bank transmits or
delivers those funds to the Settlement Accounts;
2
1640
(c) Bank is not responsible.for the actions of Legent,any Qualified Intermediary Bank,
DBTCA or the Settlement Bank with respect to the Program or otherwise in connection with this
Agreement;
(d) Bank may, with good cause determined in its good faith discretion, refuse to accept
a deposit from or on behalf of Legent that may cause Bank t() violate a law or regulation, or a
good faith belief that the deposit was sent to Bank by error);
(e) There shall be no minimum initial deposit for any Account;
(t) Bank shaH pay interest to the Customers on all balances in the Accounts in
accordance with Section 4; provided, however. that no interest shall be paid except as allowed by
law and as stated in any deposit account agreement (an "'account agreement") entered into
between Legt::nt and Bank (subject to Section 17(1) below);
(g) There shall be no maturity on any Account;
(h) Notwithstanding anything to the contrary herein, Bank reserves the righttorequite
seven (7) calendar days prior notice of any withdrawal offunds from any MMDA. as. required by
Applicable Law, and payment by Bank without requirlngsuch n()ticewill not constitute a waiver
by Bank of its right to require notice for subsequent withdrawals;
(D Subject to Sections 3(d) and there is no restriction on the amount or number
of any additional deposits to the Accounts;
(j) No transfers from an Account. shall be pennitted;provided, however, that
withdrawals shall be permitted in accordance with this Section 3 and Section 7 hereof;
(k) Each Account and Beneficial Interests therein shall be subject to any and all terms
and conditions as may from time to time be imposed on any Account by Applicable Law;
(1) Bank acknowledges and agrees that all funds deposited into an ACCOUl1t are subject
to Rule under the Secilrities Exchange Act of 1934 (the "'Exchange Act");
Bank acknowledges and agrees (l) that all funds deposited into an Account are for the exclusive
benefit of Customers and that these funds are to be held separately from any other accounts
maintained by Legent at Bank, and (2) that the balanCe in any Account shall at no time be used
directly or indirectly as security for a loan made by Bank to Legent and shall be to no
right, charge, security interest, lienor claim of any kind in favor of Bank or any person claiming
through Bank. Notwithstanding the foregoing, Bank may take action to retllmfunds deposited
to an Account, if the return or adjustment is required by the Uniform Commercial Code or a
funds transfer system rule, including, without limitation, an unauthorized or duplicate wire; and
(m) Bank shall provide Leg(!nt with (i) Account numbers and balances to pennit Legent
to perform the daily reconciliation of the balances in the Account as is required for compliance
with Rule 15c3-3 under the Exchange Act, and (ii) any additional information and data
reasonably requested by Legent to reconcile any inconsistencies between records maintained by
different parties to this Agreement.
3
1641
Section 4 .. Con$idera(icm Paid lryfJank for services Provided
(a) Each Account shall accrue simple interest daily at the forth on
Exhibit A, and such interest shall be credited by Bank: (i) monthly to the balance of the Account
on the day oftbe.month instructed by Legent,.at which time it shall accrue simple interest, and (ii)
on the date that all of a Customer's Beneficial Interests in .aD the Program are
withdrawn; and shall be paid by Bank. lmerest will begin to accrue on funds deposited to the
Account on the day on which such funds are credited to the Account and will accrue up to, but
not including. the day on which funds m-e withdrawn frotn that Account
(b) Bank shall.pay tQtal consideration with respect to the Accounts in the amount set
forth oil Exhibit A attached hereto. Such total consideration (the "Maxilnum; Bank Paym,nt")
shall consist of the Acco\lDts to be paid to Customers (as described in Section 4(a)
above) and an administrative fee (the "Administration Fee") paid to bothDBTCA fOl'providing
the DnTCA Services and Legent for providing thesubaccounting, administrative and
reconciliation services pursuant to this Agreement. The Administrati.on Fee is set forth on
Exhibit A. The total amount of interest with respect to the Accounts shall be the aggregate of the
interest payable with respect to Beneficial Interests in the AccOunts held by all CustOmers during.
the corresponding period pursUant to the Customers' aw-eements with Legent (or IBDs,as
applicable). and shall be at a rate suggested by Legentand accepted by Bank. The
Administration Fee shall equal the difference between (i) the Maximum Bank Payment and (U)
the aggregate of the interest payable with respect to Beneficial Interests held in the Accounts by
all Customers during the corresponding month as calculated pursuant to this Section 4. The
interest rate shall be reset on the ftrSt Business Day of each month (the "Interest Determination
nate,,) andshaU become effective on the third Business Day of'that month (the "Interest Reset
Date"). For of this Agreement, a "Bl,lSirtess Day" shall mean any day on which the
FederalReserve Wire.Transfer System is open for business.
(c) No later than three (3) Business Days after receiving a written request (the "fee
payment request") from Legetitor its agent, which request studl be made no less frequently than
once each calendat month (but not during the month of the Effective Date, and no more
frequeptly than five (5) times per calendar m'Onth), Bank shall pay nBTCA its portion of the
Administration Fee for participation in the Program. The Administration Fee shall be sent by
wire in the manner. described in Section 7(a) of this Agreement to anacco.unt (the "Operating
Account") to be maintained atDBTCA.
(d) On the day of the fee payment request, Legent or its agent shall provide Bank with
a report setting out the calculation in accordance with the preceding paragraph of (i) the
Maximum Bank Payment and (ii) ilie Administration Fee.
Section 5. Me/hildo/Delivery a/Transaction lriformationforthe Account. AQualified
Intermediary Bank may pn any Business Day send to Bank transaction informatiorr about an
Account by delivering to Bank oneach Business Day, viae-mail, file transmission, facsimile, or
in person by messenger, subject to any reasonable security procedures as may reasonably be
required by Bank, transaction information: about the Account comprised of the amount of that
day's money movement,.calculated pursuant to SectiQn 6 below. In the event that Bank
4
1642
incqnsistent transaction inforlllation Qf other instructions from Legent and the Qualified
Intennediary Bank, Bank shall be entitled to rely upon the instructions received from Legent.
Section 6. Target Balance and Maximum Balance.
(a) Legent shall have sole discretion to determine into which bank wtder the Program
the Customer and IBDs funds should be deposited and from which bank such funds should be
withdrav.'11. Legent shall u s ~ its reasonable commercial efforts to provide deposits into Accounts
at Bank under the Program with aggregate balances of not less than $170 million (the "Target
Balance'jsubject to adjustment from time-to-time as agreed to in writing between Legent and
Bank; provided. however, that Bank acknowledges and agrees there are no assurances that Bank
will receive deposits in the amount of the Target Balance, or of any balance. Bank shall use its
reasonable commercial efforts to accept deposits under the Program of up to the amount of $350
million (the "Maximum Balance") subject to adjustment from time-to-time as agreed upon in
'writing between Legent and Bank.
Section 7, Method of Delivery a/Funds to andfi-om the Accounts.
(a) On the same Business Day that Bank receives the transaction information pursuant
to Section 5 above, (i) to the extent there is a net withdrawal amount, Bank shall initiate asanle-
day money transfer of the. amount into the specified Settlement Account as instructed by Legent
or a Qualified Intermediary Bank, and (ii) to the extent there isa net deposit amount, Settlement
Bank shall initiate a same*day money transfer of the amount to Bank out of the specified
Settlement Account pursuant to instructions from Legent or a Qualified Intermediary Bank.
Notwithstanding the foregoing, (y) Legent's designated messenger may withdraw funds from
Bank by a check made payable to the Legent if. on any Business Day, Bank is unable to effect a
transfer through the Federal Reserve Wire Transfer System and Bank is able to confirm to its
satisfaction the identity and authority of themessenger acting on behalfofLegent; provided that,
DBTCA may servcas communications agent for Legent, and (;z) Bank is authorized to rely on.
instructions received from DBTCA when receiving funds from, and transferring funds to, the
Settlement Account.
(b) If a same-day money transfer (together with any instructions) is sent to Bank by
Legentthrough the Settlement Bank prior to 5:30 p.m. New York time on any Business Day, the
funds deposited by such same-day money transfer shall be credited to the Accounts on such
Business Day.
(c) Bank shall not be obligated to effect any transaction in an ACCOl.lnt unless and until
it has received from Legent or a Qualified Intermediary Bank, on or before 4:30 p.m. New York
time on any Business Day for each deposit or withdrawal, the infonnation described in Section 5.
(d) Bank shall not be obligated to accept more than one deposit to or make more than
one withdrawal of funds from, each Account on any Business Day.
(e) If instructed by Legent to withdraw all of a Customer's funds (including the
Customer's Beneficial Interest and all accrued but unpaid interest) from the Program, the
5
1643
Qualified Intermediary Bank shall initiate a transfer of such funds on behalf of Legent, and Bank
shalltransfer such funds to the Settlement Account in accordance with this Agreement.
(1) If Legent (or a Qualified Intermediary Bank) has properly followed the procedures
to deposit funds into or withdraw funds from Bank, but Bank fails to timely credit funds to or
debit funds from the appropriate Account, Bank shall be liable for interest. other expenses and
losses resulting from such failure to the same extent that it would be liable to any of its other
depositors for a similar failure to timely credit or debit funds.
(g) Notwithstanding paragraph (f) of this Section 7, Bank shall not be liableto Legent,
DBTCA. any Qualified Intermediary Bank, or Customers for any loss, delay. lost interest,
or liability to the extent that it arises from: (i) the actions or omissions of Legent, DBTCA. a
Qualified Intermediary Bank, or persons who are not within Bank's reasonable control; eii) any
breach of this Agreement by DBTCA or its agents, or a breach of any representation or warranty
by Legent,; (iii) a breach of the Bank accolll':t agreement by a Legent; (iv) any ambiguity,
inaccuraCY$ delay, or omission in any instruction or information provided to Bank by Legent or
. DIHCA; (v) any error, failure or delay in the transmission or delivery of information or payment
orders due to a breakdo\VIl in any computer or CQIllmunications facility beyond the reasonable
control of Bank; (vi) causes . beyond the reasonable control of Bank, including accidents, strikes,
labor disputes, civil. unrest, fire, flood, water damage (e.g., from fire suppression systems), acts
of and acts of God; (vii) the application of any government or funds-transfer system
rule, guideline, policy or regulation; (viii) the lack of available funds in an Account to complete a
transaction; or (ix) Bank's inability to confitnl to its satisfaction the identity or
continuing authority of any person purporting to act on behalf of Legent, DBTCA, or a Qualified
Intemlediary Bank. Any claim, action or proceeding to enforce a claim under Section 7(f)or to
recover for any Program-related loss must be commenced, within one year from. the date that the
event giving rise to the claim, action or proceeding first occurs. Legent agrees to cooperate
reasonably with Bank in any loss recovery efforts Bank undertakes to reduce any loss or liability
that arises in connection with the Program.
(h) Bank shall use its best efforts to initiate the same-day money transfer to the
specified Settlement Account required for a 'Withdrawal pursuant to paragraph (a) above within
forty-five (45) minutcs after receiving instructions regarding the amount to be Withdrawn; and in
any event by (i) 3:15 p.m.. New York time on the Business Day on which such insUuctions are
received provided that such instructions are received by not later than 2:30 p.m. New York time
on such Business Day, and by(ii) 4:45 p.m. New York.time on such Business Day provided that
such instructions are received by not later tha.n 4:00 p.m. New York time.
Section 8. Establishing Direct lwoney Market Deposit Accounts. If a Customer desires
to transfer aBeneficial Interest in an Account atBank to an MMDA in the. Customer's name on
the books of tbe Bank, Bank agrees to open such an account for the Customer in tbe absence of
facts constituting good cause for declining to open an account for a similarly situated person who
had not participated in the Program. Legent agrees to accomplish this by (i) instructing DBTCA
to withdraw such Customer's funds from the Account pursuant to the provisions ofthis Section 8
and (ii) making suitable arrangements as are agreed upon with the Customer and the Bank for the
Bank to receive all or part of the proceeds of such withdrawal to the MMDA at suchBru:lic.
6
1644
Section 9. RespqnslbilitiesojLegent;
(a) In addition to its other responsibilities under this Agreement, acknowledges
and agrees that:
(i) With respect to ACcounts opened in the name of Legent for the benefit of
its Customers; Legent has primary responsibility for compliance with Applicable Law
regarding the prevention of money laundering aruithe financing of terrorist activities . and
Legeirt shall inunediately advise Bank upon receiving any oral or written or
making an lnternal determination, tbat Legent is not in compliance with any such
Applicable Law.
(ii) Legent has established and will maintain a written anti-money . laundering
compliance program .reasonably designed to acmevecompliance with Applicable Law
regarding the . prevention of :mhney laundering andthe financing oftertorist
(ill) During the term or this Agreement, Legent shall establish, docum.ent and
maintain a written customer identification. program meets the requirements of the
regulations promulgated under Section 326 of the USA Patriot Act of 2001 C"C.l.
Legentaclmowledges that Bank is relying on the performance by Legem
and its mDs of the necessary of its C.l. Program with respect to each Account
opened in the name of Legent for the benefit of its Customers and that Legeot's
compliance with this (iii) 'is requited in order for Bank to so rely. Legem .
agrees that on the date that an Account is first opened at Bank in the ilameof Legent, and
on each anniversary of such date, Legent will. upon request of Bank, furnish to Bank a
certificate in form and subStance acceptable to Bank stating that Legent is in compliailce
with the requirements set forthin.this Section 9(a).
(iv) Legent represents that. it (and any mo forwbich it acts as a clearing
broker) is a as defined by the Bank Secrecy Act and subjeCt to
the laundering compliance program requirementsof31 U.S.C. 5318(h).
(b) Legentisauthorizedto delegate certain of its responsibilities under this Agreement,
other tbari those set forth in paragraph to one or more agents of its choosing provided
however, that Legent shall first provide Bank with written notice of its election to. delegate
certain of it responsibilities and Bank shall provide its prior written consent to $Uchproposed
, delegation.
(c) Legent' shall be responsible for payment of all taxes required to be withheld under
applicable law in connection with the payment or crediting of any. interest on any Beneficial
Interest in an ACcount to the appropriate governmental agency or itsdesisnated agent.
Cd) Bank shall .have no responsibility to: (i) maintain books and records regarding the
name, type social security or tax identification nUlllber of any Customer or other
person hoiding an interest in an Account, other than the named holder(s)of the Account; (ii)
or file any informationretums that may be required under the Internal Revenlle Code
and applicable regulations thereunder with re;pect to any person holding an interest in an
1645
Account, other than the named holder(s) of the Account; or (iii) to notify any person holding an
interest in an Account, of any taxes required to be withheld under applicable law in connection
with the payment or crediting of any interest to such person.
(e) Legentacknowledges and agrees during the term of this Agreement:
(1) Legent will, upon request, provide Bank and its internal and external
auditors and inspectors as Barik may from time to time designate. with all reasonable
assistance and with access to all personnel, prernises, systems, data and other information
and records (including Confidential Information, as defined below) of Legent relating to
Legent's compliance with this Agreement, at alllocations of Legent or its agents where
the foregoing are located. hut only for the purposes of internal and external audit and
subject to Bank's obligations regarding Confidential Information set out in this
Agreement.
(ii) Bank and its internal and external auditors shall have the right to take such
copies, as are necessary. of any Confidential Information and other documents to the
extent they relate to the performance of Legent's obligations under this Agreement with
the exception of software and programming related methods, trade secrets, technology,
software design, copyrights and patents. Such copies shall be taken only for the purposes
of internal and external audit and subject to Bank's obligations regarding Confidential
Information set out in this Agreement.
(iii) If Legcnt or its agent receives a request for information from the Office of
the Comptroller of the Currency, Board of Governors of the Federal Reserve Board or
any Federal Reserve Bank, FDIC, Offic-e of Thrift Supervision, or any. state banking
agency (each a "Bank Regulator''), that supervises Bank, or from Bank where Bank has
received a request for information from a Bank Regulator the response to which requires
Legent's assistance, which relates to any obligation of Legent under this Agreement,
Legent shall provide the requesting Bank Regulator, promptly upon being required to do
so, with full and unhindered inspection and audit rights at all times, including access to
all records (including Confidential Information) held by Legentor its agent, access to
inspect the premises of Legent or its agent, and all other necessary information in
connection with this Agreement and its performance.
(iv) The auditing and inspection rights shall survive the tenn of this
Agreement for a period of no less than six years commencing on the end of the year in
which this Agreement is terminated. All relevant documentation must continue to be
available during this period.
(f) For purposes of this Agreement; "C(mfidential Information" means all Customer
records provided by Legent and its agents, including "nonpublic personal information" as
defined in lZ C.F.R. 216.3(11). other than infonnation.
Section 10. I1ztentionaJ{vomitted.
Section 11. Intentionally omitted.
8
1646
Seetion 12. Representations and W drfaniies 0/ Bank;
Bank makes the representations and warranties to: Legent as follows as of the Effective
Date and at all times at which it accepts or maintains a deposit to ,an Account under this
Agreement:
(a) The execution, delivery andperfonnance of this Agreement by Bank have been
authorized and approved by aU requisite action on the part of Bank, and neither the execution nor
the delivery of this Agreement nor the consummation of the transactions contemplated hereby
nor the compliance with nor fulfillment of the tennsand provisionS of this Agreement, will
contlict with or result in 8 breach of terms, conditions or provisions of; or constitute a default
under, the organizational and governing docl.1lllcnt$ of Bank
(b) Bank is a "depository institution" (as c:tefined in 12 U.S.C. 1813(c)(1), the
deposits of which are insured by the FDIC.
(c) This Agreement has been duly authorized, executed and delivered by Bank. and
constitutes a legal, valid and binding obligation of Bank, enforceable against Bank in accordance
with its terms, except as may be limited by (i) bankruptcy 18\\'8 and other Similar laws affecting
the rights of creditors generally, and (ii) principles of equity. Bank h8s full power and authority
to do and perforIDaU acts contemplated by this Agreement.
. (d) Bank aCknowledges and agrees that Legent and its agents and representatives shall,
without the prior written (X)nsent in each instance of Bank, disclose the participation of Bank in
the Program as such.
(e) Bank agrees that for. purposes of Section 205.6 of the Federal Reserve Board's
Regulation E (12 C;F.R. 205.6, notice of an unauthorized electronic fund transfer given by a
Customer that is a "consumer", as defined in Section 205.2 of that to Legem
constitutes notice to Bank.
(t) Bank. shall immediately notify Legent inwritingupon becoming aWare or when it
should have become aware that any of the representations or warranti.es given by Bank pUrsuant
to this Section12 is no longer true.
Section 13. Representation$, Warranties and. Agreements of Legent.
Legent makes the following representations and. warranties to Bank as of the Effective
Date and at all times that this Agreement is in effect
(a) Legent is, and shall continue tb be during the term of this Agreement, (i) a broker-
dealer registered with the SecuritieS and Exchange Cotnlilission ("SEC'') pursuant to Section
15(a) of the ExchangeAct and with each state or other jurisdiction in which it i$ required to be
registered, and (il)a member in good standing of FlNRA
(b) This Agreement has been duly authorized, executed and delivered by Legent and
constitutes a legal, valid and binding obligation of Legent, enforceable against Legent in
9
1647
accordance with its tenns, except as may be limited by (i) bankruptcy laws and other similar
la\\'Saffecting the rights of creditors generally. and (ii) principles of equity.
(c) Legent and any agent to which Legent delegates responsibilities under this
Agreement, has the systems, management and experience to fully satisfy the standards for safe
and sound operations as set forth in the FFIEC Information Systems Examination Handbook,
(d) Legent shallimmediatelynotify Bank in writing (i) upon becoming aware or when
it should have become aware that any representation given by it in this Section 13 is no longer
true.
Section 14. Indemnification.
(a) Bank agrees to indemnify and hold harmless Legenl and its managers, officers,
directors. agents and employeeS C"Legent Indemnified Parties"), from and against any and all
losses, claims, damages or liabilities,includingall suits, actions; proceedings, demands,
assessments, judgments, costs, reasonable attorneys' fees and expenses incident to any of the
foregoing matters (other than attorneys' fees not reimbursable pursuant to Section 17(h)(ii)(B)
below). including those reasonable costs, charges and expenses (including any expensesresulting
from any investigation or inquiry) with respect to the participation of officers and employees or
Legentlndemnified Parties in defense thereof, to wh1ch.a Legent Indemnified Party may become
subject that result. from (i) any material misrepresentation, breach of warranty, or material
nonperformance of Bank under this Agreement, and (it) any third party claim or action
threatened or brought against a Legent Indemnified Parties (A) arising out of any failure by
Bank to comply with the provisions of this Agreement or any Applicable Law; or (B) arising 011t
of the gross negligence or willful misconduct of the Bank; Bank shall promptly reimburse
Legent Indemnified Parties for all amounts owed under this Section 14(a) tram time to time,
upon receipt of a written request .from any Legent Indemnified Party, as such amounts are
incurred. .
(b) Legent agrees to indemnify and hold harmless Bank and each of its members,
managers, officers, directors, agents and employees ("Bank IndemnifiedPariies") from and
against any and all losses, claims, damages or liabilities,penalties on deficient deposit reserves.
including all suits, actions, proceedings,demands, a s s e s s m e n t s ~ jUdgments, costs, reasonable
attorneys' fees and expenses incident to any of the foregoing matters (other than attorneys' fees
not reimbursable pursuant to Section 17(h)(ii)(BJ below), including those reasonable costs;
charges and expenses (including any expenses resulting from any investigation or inquiry) with
respect to the participation of officers and employees of Bank in defense thereot: to which Bank:
Indemnified Parties may become subject, that arise out of or result from (i) any material
misrepresentation, breach ofwarranty, or negligent performance by or material nonperformance
of Legent or any subcontractor or agent of Legent under this Agreement; (ii) any third party
claim or action threatened or brought against the Bank Indemnified .Parties (A) arising out of or
relating to any claim that the provision or utilization of the Program or any portion thereof
constitutes an infringement, violation, trespass, contravention or breach of any patent, copyright,
trademark, license or other property or proprietary right of any third party. or constitutes the
unauthorized use or misappropriation of any trade secret of any third party; or (8) arising out of
10
1648
any failure by Legent to comply with any Applicabl Law; <)t (e) arising out of the gross
negligence or willful misconduct of Legent; or (iii) the actions, breaches,. errors or issues set
forth ineach of the items i) - (ix) foun4 ill Section 7(g)of this Agreement,.. Legent shall
promptly reimburse Bank IndemhifiedParties for allatttounts owed under this Section 14(b)
from time to time, upon receipt ofa written request from any Bank Indemnified Party, as sUch
. amounts are incurred.
(e) If a claim bya thitd party is made against any indemnified party under this
Agreement and if any indemnified party intends to seek indemnity with respect thereto under this
Section 14, the indemnified p.arty shall promptly noti.fy otie orm()te Of Bank .. or Legent,as the
case may be, of such claim. The indernrrlfying party shall have thirty (30) days after receipt of
the above...mentioned notice to undertake, conduct ancJ control. through counsel of its own
choosing (subject totbeconsent of the indemnified party, such consent not to be unreasonably
withheld) and at its expense, the settlement or defense thereof. and the indetnnified party shall
cooperate with it in connection therewith; provided that: (i) by taIdng such conduct or control,
the indemnifYing party shall not prevent the indemnified party from contesting .any lien.
encumbrance or other adverse charge upon any asset ofa,ny indemnified party; (il) in the evennt
appears likely. in the reasonable judgment of the indeinnified party. that different defenses are
available to the indemnified party or that a conflict of interest ma.y arise between the indemnified
party and the indemnifying party with respect to such claim, the indemnified party shall choose
its own counsel, and the fees and .expenses of such coUnsel shall be bome by the indemnifying
party; (iii) futhe. event it appears that no conflict of interest will arise between the indeinnified
party and the fudem.nifying party and the indemnified party desires to choose its counsel. the
indemnifYing party shall permit the indemnified party to participate in $uch settlement. or defense
through such counsel chosen by the indemnified party, provided that the fees and expenses of
such counsel shall bebome by the .indemnified paI1y; and (iv) the indemnifying party shall agree.
promptly to reimburse the indemnified party for the full amount of any loss resulting from such
claim and all related expenses reasonably incurred by the indemnified. party within the limits of
this Section 14. So long as the indemnifying party is reasonably contesting any such claim in
good faith, the indenmifiedparty shall. not payor settle any such claim. Notwithstanding the
foregoing, the indemnified party shall have the right to payor settle any such claim,provided
that in such event the indemnified party . shall waive any right to indemnity therefore by the
indemnifying party. If the .inclenmifying party does not notify theindeinnified party within thirty
(30) days after receipt of the indemnified party's notice of a claim of indemni1:yhereunder that it
elects to undertake the defenSe thereof, the i.ndemnified party shall have the right to Contest;
settle or compromise the claim in the exercise of its exclusive discretion at the expense of the
indemnifying party. .
(d) In no event shall any party be liable for 108s6f goodwill or for special, indirect,
consequential or incidental damages arising. from such party's breach of this Agreement;
regardless of whether such c l ~ m arises in tort or iil contract. No claim maybe asserted against
an indenmifyitigparty more than one (1) year after such claim has been lawfully asserted against
an indemnified party. The provisions of this paragraph apply even though the loss or damage,
irrespective of cause or origin, results, directly or indirectly, either froth perfomiaDce or non-
perforttlance of obligations imposed by this Agreement. .
11
1649
Section 15. Indemnification. Notwithstanding Section 14(b) above,. Legent. will
indemnify and holdharIi1less Bank from and.against any. and all tax losses, claimS; cJ.am,ages or
to which it may become subject that result from any non-fulfillment 011 the part of
Legent or its relating to the preparation, maintenartce or transmission of information
pursuant to this Agreement, including the preparation and filing of all tax forms required to be
filed with the Internal Revenue Service pursuant to: the Intemal Revenue Code, as amended; and.
including any additional or interest incurred by Sank in connection with such
non-fulfillment, and all s1.1its; actions, proceedings, demands, assessments, judgments, costs,
reasonable attorneys' fees and .expenses incident toauy of the foregoing matters, including:
reasonable costs. charges and expenses with respect to the participation of officers and
employees of Bank in defense thereof Legent shall promptly reimburse Bank for all amounts
owed under this Section IS from time to time, at Bank' as such amounts are incurred.
Section Termination. anti Non-eXclusivity,
(a) Except as otherwise provided in this SeCtion 16, and subject to Section 17(a) below"
the tenn of this Agreement shall be two (2) yeats from. the date of this Agreement and shall
continue thereafter . automatically for successive twelve-month periods unless, no later than
si.wentY.;five (75) days before this Agreement would .otherwise reneW', either party delivers to the
other party notice of its intention to terminate the Agreement.
(b) In the event (i) a representation 01' warranty made by. either party pursuant to this
Agreement (including any deposit agreement between Bank and Legent relating to an Account.
under this. Agreement) proves to have been incorrect or inaccurate, or (ii) an
undertaken by either party pursuant to this Agreement (including any deposit agreement between
Bank and Legent relating to an Account under this Agreement) is not. fulfilled, resulting in a
material breach ofsu<:h representation, warranty, and such material. breach
continues for a: period of five (5). days folloWing delivery of written notification by any other
party regarding such breach, such other party may, by delivering a written temrlnation. notice to
the breaching party, tenninate this Agreement. effective on the thirtieth (30th) day following the ..
day oif which such written tennination notice is delivered.
(c) In the event that Bank reasonably believes that Legent is or will be incapable of
meeting its obligations under this Agteemen'4 or that a Legent's continued ownership of an
Account at Bank presents unacceptable levels of reputational or compliance risk to Bank, and
. Legent is unable to provide reasonable assurance to Bank within thirty (30) days following
delivery of written notification by Bank regarding such belief that such belief is unfounded,
Bank by delivering a written tenriination notice to Legent, terminate the Legent's Account
at Bank. effective on the thirtieth. (30th) day following the. day on which such written termination
notice is delivered.
(d) In the event any opinion or statement is issued or any determination is made
by any governmental or regulatory authority, including a Bank Regulator, that compliance by
any party with the provisions of this Agreement would result in a violation of a law. regulation,
order, rule or policy of such governmental or regulatory authority, the party receiving such ruling
or determination shall so notify the other parties, and the parties sbl:lll negotiate in good faith tQ
12
1650
modify the Ptogratll and t:his Agreement on commerCially reasonable temSto comply with such
.ru1ing, opinion or statement Ifno such modification can be agreed. within ninety (90) days, or
another time, any party may thereafter. by delivering.a written
teJmination notice to the other patties, terniinate this Agreement effective on the day following
the day on which such termination notice is delivered.
(e) In the event that Bank exercises the right set forth in Section 3(h) above, (i) Legent
may, by delivering a written notice to Bank, terminate the Agreement effective no earlier than
the eighth calendar day f()llowing the day on which the Bank exercised such .right and (ii) .Bank
shall treat such notice. of temtiilation as a notice of withdrawal of all funds in all relevant
Accouttts,and on such eighth calendar day shall cause to be returned to Legent any amounts then
held by such Bank in the relevant AccountS by tranSmitting funds to the relevant Settlement
Accounts. .
SeenOD 17. Other Provisions,
(a) Following the termination of this J\greement.pursuant to Section the
agreements contained in this Agreemen.t shall survive until the Account established at Bank is
.closed. TheprQyisions of Sections 14 and 15 shall survive the termination of this Agreement for
one year after the expiration of the last statute of limitations applicable to a claim made against
either party to this Agreement.
(b) Each party agrees that it will use any and all i.nforJlUition it acquires frQm the other
party pursuant to the tenus of this Agteement (the "Information") only as contemplated hereby,
will keep all of the Infonnation confidential, and will cause its agents,. employees, subcontractors
and representatives to keep all of the Infomiation confidential; provided however. nothing herem
shall be construed to prevent any party from making any disclosure of information otherwise
subject to the tenus hereof (i) if required by any Applicable Law, (ii). to any governmental'
agency or regulatory body having or claiming authority to regulate or oversee any: aspect of its
business or that of its affiliates, including a Bank Regulator, (iii) pursuant to su,bpoena or (iv) to
the extent necesswy or appropriate to enforce any remedy provided for in this Agreement.
(c). This' Agreement may notbereleased,discharged. abandoned, changed or modified
in any manner, except by an instrument in writing signed on behalf of each of Bank and Legent
by their duly authorized representative. The failure orany party to enforce atany time any of the
provisions of thls Agreement shall in no way be construed to be a waiver of any such provision,;
nor in any way to affect the validity of this Agreement or any part thereof or the right of any
party thereafter to enforce each and every such provision. No waiver of any breach of this:
Agreement shall be to be a of any other or su1Jsequent breach.
(d) All notices. or other CommunicationS requited or permitted. hereundershaU be in
writing and shall bedeentedgiven if (i) delivered personally or, (ii) sent by overnight courier
service, or (iii) jfmaiIed, by registered or certified mail (return receipt requested) when received:
(A) if to Legcmt, 9300 Underwood Avenue. Suite 400, Omaha, NE, 68.1 14, Attention: Chris
Frankel, Chief Executive Officer; (B) If to Bank:, 700 17
th
Street, 2100, Denver, Colorado
13
1651
80202, Attention Tom KientZ,. Chief Operating Officer. Each party shall notify the other party in
writing ormy change to its .addressor addressee.
(e) Each party hereto shall pay its own expenses incident to the preparation of this
Agreement and the consummation of the transactiotlScontemplated herein. . .
(f) This Agreement shall be governed by and construed in accordance with the laws of
the State of Colorado, without giving effect to applicable principles of conflicts oflaws.
(g) Disputes arising. out of, .under or in cOlUlectioil with this Agreement shall be
resolved before the American. Arbitration. Ass.ociation ("AAA
n
) in Denver,. Colorado using the
AAA's Arbitration Rules for Commercial Financial Disputes, or if the AM determines that the
Rules for Commercial Financial Disputes is inapplicable then under the AAA Commercial
Arbitration Rules; provided, however. that in any arbitration Ute arbitrator(s) shall (i) be
qualified to serve as (an) arbitratOr(s) for Financial Industry Regulatory AUthority C'FlNRA")
. Dispute Resolution and shall be listed on its roster of approved "non-public" arbitrators (as
defined in FINRA rules) an4(U) be bound by of the following conditions:
(A) The arbitrator shall be prohibited from awarding any
punitive, lost indirect, or other form of4tl1tlages
other than direct or actual damages;
(8) The arbitrator shall not award attOrneys fees to any party;
(el The arbitratOr shall include interest on. the amount of damages
awarded from such d,ate as it deteimines is
(D1For anytnatter in COntroversy less than or equal to. the sum or
value of $10.0 .000, (i) a single arbitratQr shall 1le chosen for the adjudication of
the claim and (ii) the arbitraior shall only have the authority to award up to
$100,000, including all damages and costs of every ldnd. Submission by any
party hereto to arbitration with a siIlgle arbitrator pursuariHo the foregoing shall
be deemed a waiVer of any right to recovet more than $100,.000 in sum or value
from the relevant matter. Any in controversy $100,0.00 shaU.be
decided by a majority vote ofapanel oftbree arbitnttors.
(h) This Agreement shall be binding upon and inure to the benetltoftheparties hereto
and their successors.
(i) This. Agreement .mly 1?e exectited inone or more counterparts, all of which shailbe
Considered one and the same agreement, and shall become a binding agreement when one or
more counterparts have heen signed by each oithe parties and delivered to the other party.
. 0) Titles and headings to sections heteinare inserted for the convenience of reference
only and ate not intended to be a part of or to affect the meaning Or interpretation of this
Agreement.
14
1652
(k) The Attachments to this Agreement shall be construed with and as an integral part
of this Agreement to the same extent as if the same had been set forth herein.
/ .
(1) This Agreement incorporates and supplements the terms of the account agreement,
as amended from time to time, between Bank and Legent. In the event that any provision of this
Agreement shall be inconsistent with the account agreement or any other agreement entered into
between Legent and Bank with respect to Legent's Account, the provisions of this Agreement
shall supersede the inconsistent provision of such other agreement.
[the rest of this page intentionally left blank]
15
1653
IN WITNESSWIIEREOF, the parties hereto have executed thiS" Agreement as ()fthe
Effective Date;
LEGENT CLEARING LLC
Br. C7it
Name: ~ ;=;",.,ke- I
Title: c!. CO
By:
Ntune:
Title:
16
1654
TabC
Exhibit 54 C (g)
1656
FIRST AMENDMENT
This amendment is dated December 3,2010 (the "Amendment") and is between Legent
Clearing LLC (the "Nominee") and United Western Bank, Denver, Colorado (the "Bank");
WHEREAS, Nominee and Bank are parties to that certain Subaccounting Agreement
made as of August 18,2010 (the "Agreement") whereby Nominee, on behalf of the Nominee's
clients and at the direction of the Nominee's clients, directs funds at the Bank for the primary
purpoSe of facilitating customers' purchase and sale of securities and other investments and not
in a capacity of a deposit placement service;
WHEREAS, the Nominee and Bank seek to amend the Agreement effective immediately
in order to re-structure the Agreement to mirror the relationship set forth in FDIC Advisory
Opinion 05-02, dated February 3, 2005;
WHEREAS, the Nominee and Bank acknowledge that time is of the essence;
NOW THEREFORE, in consideration of the mutual promises herein contained, Nominee
and Bank agree to be legally bound by the terms of this Addendum:
1. Effect of this Addendum
The terms of this Addendum shall be deemed to supersede any and all
inconsistent terms of the Agreement. All other terms of the Agreement which are not
. inconsistent with this Addendum shall remain in full force and affect notwithstanding anything
to the contrary herein.
2. Amount of Swept Deposits at the Bank
(a) Nominee shall use its commercially reasonable efforts to ensure that all funds
deposited at the Bank ("Swept Funds") do not exceed 10% of the total client
account assets held in client accounts at the Nominee (the "Ratio"). For purposes
of clarity, Nominee shall use commercially reasonable efforts to prevent the
average daily balance of Swept Funds during anyone month from exceeding the
Ratio, based on the average total client account balances held by the Nominee
during that month (the "Monthly Ratio"), based on the most recently available
data.
(b) At no time shall any Swept Funds be held in time deposits.
3. Reporting
(a) Nominee, through its Chief Executive Officer or Chief Financial Officer shall
provide Bank with a written certification no later than the fifteenth (15th) day of
each calendar month confirming both the Ratio and the Monthly Ratio for the
proceeding calendar month as well as the average number of client sub-accounts
for the proceeding calendar month represented in any omnibus account or
1657
Amendment dated December 3, 2010 by and between Legent Clearing LLC and United Western Bank, Denver; Colorado
December 3, 2010
Page 2
4. m
accounts maintained at the Bank for the benefit of the Nominee's clients. For the
purposes of such certification of the average number of client sub-accounts for
any calendar months shall be the number of client sub-accounts held by the
nominee as of the first and last day of each calendar month divided by a factor of
two (the "Average Accounts"); provided, however, that the Nominee shall never
permit more than average of 66,000 client sub-accounts to be maintained for its
clients at the Bank in any calendar month. Each monthly certification shall
acknowledge that the certification will be used by the Bank for purposes of
reporting to the Federal Deposit Insurance Corporation and may be relied upon by
federal bank regulators during examinations of the Bank.
(a) In lieu of any other sub-accounting or similar fees due to the Nominee under the
terms of the Agreement, the Bank shall pay Nominee a fee for administrative and
other services rendered as are provided for in the Agreement as set forth on
Schedule A hereto (the ("Sub-Accounting Fee"), which is an amount set forth on
a per account or per customer basis and is not calculated on the basis of funds
placed at the Bank. Schedule A is incorporated herein and made a part hereof for
all purposes by this reference.
5. Renegotiation of the Agreement
(a) For purposes of clarity, pending the execution of any renegotiated Agreement, all
terms of the then-current Agreement not inconsistent with Sections 2 through 4 of
this Addendum shall remain in full force and effect.
6. Miscellaneous
(a) This Amendment may be amended or modified only in writing signed by all the
parties hereto. This Amendment shall be construed and governed by the laws of
the State of Colorado. This Amendment sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their successors and assigns, notwithstanding the foregoing, this Amendment
may not be assigned.
(b) This Amendment may be executed in one or more counterparts and by facsimile
signature, each of which shall constitute an original and all which shall constitute
one instrument, in each case, for all purposes including admission into evidence
of the agreement of the parties.
(c) The descriptive headings of the sections of this Amendment are for convenience
only and do not constitute part of this Amendment.
1658
Amendment dated December 3, 2010 by and between Legent Clearing LLC and United Western Bank, Denver, Colorado
December 3, 2010
Page 3
IN WITNESS WHEREOF, with the intention to be bound by the terms of this
Addendum, the parties have executed this Addendum as of the day and year first above written
by causing their respective authorized representatives to sign where indicated below.
LEGENT CLEARING LLC
Title: CEO
1659
Amendment dated December 3, 2010 by and between Legent Clearing LLC and United Western Bank, Denver, Colorado
December 3, 2010
Page4 .
Schedule A
This is Schedule A to the Amendment made as of December 3, 2010 to the
Program Bank Fee Agreement by and between Legent Clearing LLC and United Western Bank
made as of August 18,2010.
Section 1. All capitalized terms not otherwise defined in this Schedule A shall
have meaning attributed to them in the Amendment.
Section 2. The monthly Sub-Accounting Fee to be paid by the Bank to the
Nominee shall be equal to $3.00 per each of the Average Accounts in each calendar month. The
aggregate Sub-Accounting Fee due to the Nominee from the Bank with respect to any calendar
month shall be the amount determined by multiplying the number of Average Accounts times
$3.00 (the "Aggregate Sub-Accounting Pee").
Section 3. The Aggregate Sub-Accounting Fee shall be paid by the Bank to the
Nominee in the month succeeding the calendar month for which the Aggregate Sub-Accounting
Fee is determined within five days of the delivery of the certification of the Average Accounts
for the calendar month in question by the Nominee to the Bank.
1660
TabC
Exhibit 54 C (h)
1661
SUBACCOUNTING AGREEMENT
Lincoln Trust ComEany, a Co!orado industrial bank with trust powers ("LTC"), having its
principal offices at 717 17 Street, Swte 2100, Colorado, 80202, and United Westem Bank
("Bank"), a federal savings bank, having its principal offices at 700 1 i
h
Street, Suite 2100,
Denver, Colorado 80202, hereby enter into this Subaccounting Agreement (the "Agreement")
this 1st day of February, 2010 (the "Effective Date").
RECITALS
WHEREAS, Bank is a member of the Federal Deposit Insurance Corporation
and a FDIC-insured institution; and
WHEREAS, LTC, as custodian or directed tnistee, provides custodial and related
services to employee benefit plan, individual retirement plans and. other qualified plan accounts,
acts as custodian for IRA accounts and other retirement accounts (the "Custodial
. Accounts") for which the account owners ("Owners" or "Clients") have sole responsibility for
the investments within such accounts, and such Owners have instructed LTC with regard to the
cash or funds held in their Custodial Accounts to deposit such Funds with FDIC
insured institutions with which LTC has entered into agreements for such purpose; and
WHEREAS, LTC, as the custodian or directed trustee for the Owners, will deposit
Owners' Funds in an omnibus account described in more detail herein (the "Deposit Account")
with Bank for the benefit of the Owners pursuant to the of this Agreement; and
WHEREAS, the Owners desire that their Funds be insured by the FDIC to the fullest
extent possible; and
(
wHEREAS; the aggregate balance of the is
currently applicable FDIC insurance limits; and
expected to exceed
WHEREAS, FDIC regulations provide that deposit records of insured financial
institutions must disclose the existence of any relationship that provides the basis for additioruil
insurance, and details of that relationship must be ascertainable from the records of the
Bank or by an entity that has undertaken to maintain such records; and
WHEREAS, LTC desires that the Funds maintained in the Deposit Account be insured to
the fullest extent provided by law for each Custodial Account and the Owner, and consequently
records and statements must be prepared for each Custodial Account and Owner regarding the
status of each Custodial Account which is within and a part of the Deposit Account; and
WHEREAS, Bank could provide account holder record-keeping for the Custodial
Accounts and Owners or obtain such services from a third-party provider; and
WHEREAS, LTC is willingto act as limited agent for Bank to provide record-keeping
and certain other services with respect to the account activity by Custodial Accounts and
balances maintained in the Deposit Account by the individual Custodial Accounts; and
. WHEREAS, Bank and LTC believe it appropriate to enter into an agreement that
provides for LTC to act as limited agent for Bank to provide account holder record-keeping and
1662
certain other services with respect to balances maintained in the Deposit Account by the
Custodial Accounts and the Owners, for which Bank will pay a fee to LTC based upon the
aggregate monthly balance of such Custodial Accounts; and
WHEREAS, in order that the interests of the Owners in the Funds deposited with Bank
be ascertainable, LTC will maintain the necessary records; and
WHEREAS, Bank desires to obtain from LTC necessary- data regarding each Custodial
Account Owner's interest in the Deposit Account; and ..
WHEREAS, LTC is willing to provide to Bank recordkeeping and certain other services
with respect to the Funds deposited in the Deposit Account; and
WHEREAS, Bank is willing to pay a sub accounting fee for the recordkeeping and other
services provided by LTC in connection with the Deposit Account; and
WHEREAS, Bank and LTC desire to establish the terms and conditions under' which
LTC will provide account owner record keeping, subaccounting services and certain other
services to Bank in connection with the Deposit Account and the Custodial Accounts.
NOW, THEREFORE, in consideration of the mutual promises herein contained, it is mutually
agreed as follows:
AGREEMENT
1. Deposit Account.
1.1 LTC shall ,establish and maintain during the term of this Agreement the Deposit
Account at Bank for the deposit of funds on behalf of Owners of Individual Retirement Accounts
for which LTC acts as Custodian. LTC shall detennine which Funds from the Owners are to be
deposited in the Deposit Account. The aggregate balance in the Deposit Account maintained at
Bank shall in no event be less $110 million and in no event exceed $150 million.
2. Subaccounting and Recordkeeping Services.
2.1 Bank's records shall expressly provide that the Deposit Account constitute trust fund
deposits made by LTC in its capacity as trustee or trustee for the benefit of account owners,
and that the records reflecting the separate interests of the account owners that compose .
each Deposit Account are maintained by LTC.
2.2 LTC shall maintain separate accounting and record-keeping for each of its Custodial
Accounts which have balances in the Deposit Account. LTC shall be responsible for
providing such accounting and record-keeping services as agent for Bank. LTC
represents and warrants, covenants and agrees that (i) LTC and each of the Custodial
Accounts are, and at all times will continue to be, in compliance with the applicable
provisions of 12 CFR Part 204.130 (Regulation D relating to Eligibility for NOW
Accounts) and 12 CFR Part 230 (Regulation DD, Truth in Savings Act) and (ii) LTC is
either (a) a directed trustee of a pension or other employee benefit plan, with respect to
Page 2 of9
1663
funds of the plan; (b) a person acting as a plan administrator or an investment adviser in
connection with a pension plan or other employee benefit plan provided that that person
is performing managerial functions with respect to the plan; or (c) a trustee or custodian
of a pension or profit sharing plan qualified under section 40 1 (d) or 430(a) of the Internal
Revenue Code of 1986; or (d) an agent or nominee whose primary purpose is not the
placement of funds with depository institutions. LTC, on behalf of the Custodial Account
Owners, shall issue instructions to Bank, by wire transfer, check or other appropriate means
acceptable to LTC and Bank, regarding transactions involving funds in the Deposit Account.
Bank shall be entitled to rely upon such instructions and Bank shall have no liability for any act
or omission hereunder while acting in good faith. Bank shall have no duty to act in regard to the
Deposit Account in the absence of such instructions. LTC shall maintain separate accounting
and record keeping with respect to the interest of each Owner in a Deposit Account and
shall be primarily responsible for providing such subaccounting and record keeping services
to Bank. LTC shall provide account holder record-keeping and certain other services for the
Custodial Accounts and Owners as follows:
a. Deposits to the Deposit Account from all Custodial Accounts;
b. Withdrawals from the Deposit Account for all Custodial Accounts;
c. Accounting services provided to all Custodial Accounts;
d. data processing services required for sub-account administration of the Deposit
Account; and
e. Periodic statements, notices and disclosures in compliance with all applicable federal
and state laws and regulations.
2.3 Notwithstanding the services provided by LTC hereunder, it is understood and agreed
that Bank shall be responsible at all times for maintaining and servicing the Deposit Account.
. 3. Fees and Invoicing.
3.1 Bank agrees to credit to the Deposit Account interest in an amount equal to the
average collected balance in the Deposit Account (as determined inSection 3.2 below)
multiplied by the interest rate based on the annual "Interest Checking" rate as published
by Barron's at the following webpage: http://online.barrons.com!public/page/9 0210-
moneyrates.htrnl (the "Rate") If such Rate is no longer published by Barron's, then the
parties shall mutually agree on a new Rate. The Bank uses the daily-balance method to
calculate the Rate on the Deposit Account (the daily rate is 1/365 of the Rate).
LTC agrees to provide this Rate to Bank no later than 5 days prior to the initial deposit
of funds in the Deposit Account and shall provide Bank notice of any change in such
rate no later than 5 days prior to the effective date of such notice, which effective date
shall always be on the first day of a calendar quarter. Subject to the limitations set forth in
Section4.5 below, Bank shall credit interest to the Deposit Account on the last calendar day of
each month. Bank and LTC agree to use best efforts to promptly resolve any discrepancy
between the records of Bank and the records of LTC with respect to such interest at the end of
each month.
3.2 In addition to the Rate being paid by Bank with respect to the Deposit Account, Bank shall
pay LTC a monthly fee equaling an annual percentage rate of 0.75% (75 basis points) of the
Page 3 of9
1664
/
average collected balance of the Deposit Account It is understood and agreed that such fees
being paid LTC pursuant to this Section 3 (the "Subaccounting Fees'') are intended to
compensate LTC for its prior month's recordkeeping services in connection with the Deposit
Account No other fees of any nature shall be due to LTC for services provided herein. Bank shall
pay LTC the Subaccounting Fees within ten (10) days after receipt of the monthly report referred
to in Section 3.3 below. LTC agrees to send and Bank. agrees to process a daily net transaction,
via wired funds in or out, to reflect transactions on LTC's books that result in a net increase or net
decrease in the aggregate balance of the Deposit Account.
3.3 LTC shall furnish to Bank by the seventh (7th) day of each month a trial balance
which reflects the account number, name, type of account and account balance of existing
Custodial Accounts in the Deposit Account as of the last business day of the preceding
month. Such report shall be accompanied by a summary which is signed and certified as
true and accurate by the chief financial officer or President of LTC.
3.4 Each party agrees to promptly make its personnel available, as may be reasonably
requested by the other party from time to time, to consult with the requesting party in
connection with the performance of its obligations pursuant to this Agreement at no cost to the
requesting party. Upon reasonable written notice to LTC, upon Bank's request, Bank shall
have the right to make a physical audit at any time of LTC's books and records relevant
to the matters covered by this Agreement to verify the accuracy of LTC's monthly report .
of the number of Custodial Accounts within each Deposit Account and other matters
deemed relevant by Bank. Bank shall not make more than four (4) such audits in each
calendar year.
4. Term and Termination.
4.1 Unless earlier terminated as provided below, the initial term of this Agreement will
commence on the Effective Date and continue for one (1) year from the Effective Date
(the "Initial Term"). The Initial Term will be automatically renewed for successive
twelve (12) month periods (each a "Renewal Term"), unless and until either party
indicates in writing its intention not to renew the Agreement at least ninety (90) calendar
days prior to the end of the then-current term.
4.2 Either party may immediately terminate this Agreement upon a material breach by the
other party of any of such other party's obligations, including but not limited to LTC's
failure to maintain the minimum balance in the Deposit Account as provided above,
which breach has not been cured within thirty (30) calendar days after the breaching party
has received notice thereof.
4.3 LTC may terminate this Agreement upon thirty (30) days' written notice to Bank in
the event that Bank. no longer meets the definition of "well-capitalized" pursuant to 12
CFR 565.4(b)(1)(ii). Bank agrees to promptly notify LTC in the event that Bank ceases
to meet the definition of well-capitalized as defined herein.
4.4 The parties may terminate this Agreement at any time for whatever reason(s) by
mutual written consent.
Page 4 of9
1665
4.5 Upon expiration or termination of this Agreement for any reason, any amounts owed
to LTC under this Agreement before such termination will be immediately due and
payable. Upon termination for whatever reason, Bank. agrees to cooperate with LTC in
the prompt and orderly transition of the Deposit Account to another bank of LTC's
choosing at no cost to LTC. Any interest accrued but unpaid with respect to any Deposit
Account will be credited to such account immediately prior to the transition of the
balances in such account to the successor inStitution. All rights and obligations of the
parties under this Agreement trult, by their nature, do not terminate with the expiration or
termination of this Agreement shall survive the expiration or termination of this
Agreement.
5. Liability .
. 5.1 In no event shall LTC be liable for loss of goodwill, or for special, indirect,
incidental, consequential, punitive, exemplary, or tort damages arising out of or relating
to this agreement, regardless of whether such claim arises in tort, contract, or otherwise.
Except for claims related to proprietary rights or payment obligations, neither party may
assert any claim against the other related to this agreement more than 2 years after such
claim accrued. LTC's aggregate liability to Bank and any third party for any and all
claims and obligations relating to this agreement shall be limited to the total fees paid by
Bank to LTC in the six month period preceding the date the claim accrued.
6. Miscellaneous.
6.1 Upon reasonable request in writing no more frequently than once every 12 months,
LTC shall have the right, but not the obligation, to review the books and records of Bank
relevant to the matters set forth in this Agreement
6.2 The parties shall indemnify and hold harmless each other from and againstany and all
claims, losses, liabilities, or damages (including reasonable attorney's fees' and other
related expenses) arising from or in connection with this Agreement to the extent that the
claim, loss, liability or damage is directly related to the indemnifying party's willful
wrongdoing, gross negligence, or material breach of its duties under this Agreement.
Notwithstanding the foregoing, LTC shall indemnify and. hold harmless Bank and its agents,
affiliates and employees from all suits, actions, costs, expenses (including reasonable attorneys'
fees), judgments or claims of any character, type or description brought, incurred or made ("Bank
Costs") arising from or relating to: (A) the gross negligence or willful misconduct of LTC, as
agent for Bank, in the execution of or perfonnance of this Agreement; and (B) any claim or
assertion by any customer of LTC, including but not limited to a Custodial Account Owner,
relating to any Custodial Account or any service provided by LTC to any customer, inclUding but
not limited to a Custodial Account Owner, provided that the foregoing indemnification in this
subparagraph (B) shall not apply to the extent the Bank Costs result directly from the gross
negligence or willful misconduct of Bank.
6.3 Each party will procure and maintain at all times during the term of this Agreement
and for a period of at least two years following any termination of this Agreement, at its
own expense, comprehensive insurance policies to insure against errors, omissions or
Page 5 of9
1666
misfeasance in the performance of such party's obligationS under this Agreement, with
coverage that is reasonable and customary in light of such party's business, as well as
such party's duties and obligations set forth in this Agreement.
6.4 The parties agree that with the exception of claims regarding confidentiality or
proprietary rights, upon the written demand of either party, whether made before or after
the institution of any legal proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Agreement or. otherwise, including without
limitation contract disputes' and tort claims, shall be resolved by binding arbitration
pursuant to the Commercial Ru1es of the American Arbitration Association. Any
arbitration proceeding held pursuant to this arbitration provision shall be conducted in
Denver, Colorado,or at any other place selected by mutual agreement of the parties. The
statute of limitations, estoppel, waiver, laches and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement ofan arbitration proceeding shall be
deemed the commencement of any action for these purposes. The Federal Arbitration
Act (Title 9 of the United States Code) shall apply to the construction, interPretation, and
enforcement of this arbitration provision.
6.5 This Agreement may be executed in two or more counterparts, which together will
constitute one and the same instrument, each of which will be deemed an original. The
parties. authorize each other to detach and combine original signature pages and
consolidate them into a single identical original. Anyone of such completely executed
counterparts will be sufficient proof of this Agreement.
6.6 This Agreement, including all schedules hereto, sets forth the entire understanding
and agreement of the parties with respect to the subject matter hereof, and supersedes any
and all oral or written agreements or understandings between the parties, as to the subject
matter of the Agreement.
6.7 This Agreement,' including any schedule hereto, may be amended only by a writing
signed by both parties. .
6.8 This Agreement will be governed and construed in accordance with the laws of the
State of Colorado, and where applicable, Federal law, without giviIig effect to conflict of
laws principles thereof.
6.9 Each party agrees to abide by all Federal and state laws and regulations applicable to
the performance of its obligations under this Agreement.
6.10 The relationship between the parties is that of independent contractors and no
agency, partnership, franchise, joint venture or employment relationship is intended or
created by this Agreement. Neither party will make any warranties or representations on
behalf of the other party.
Page60f9
1667
6.11 Any notice under this Agreement will be in writing and delivered by personal
delivery, overnight courier, confirmed facsimile, or certified or registered mail, return
receipt requested, and will be deemed given upon personal delivery, one (1) business day
after deposit with an overnight courier, five (5) business days after deposit in the mail, or
upon confirmation of receipt of facsimile. Notices will be sent to a party at its address set
forth above or such other address as that party may specify in writing pursuant to this
Section.
6.12 If any provision herein is held to be invalid or unenforceable for any reason, the
remaining provisions will continue in full force -without being impaired or invalidated in
any way. The parties may agree in writing to replace any invalid provision with a valid
provision that most closely approximates the intent and economic effect of the invalid
provision.
6.13 The waiver of a breach of any.provision of this Agreement.will not operate or be
interpreted as a waiver of any other or subsequent breach:
6.14 (a) Each party will keep confidential any information that it receives from the other
party (the receiving party being the "Recipient" and the other party being the
"Discloser") relating to the organization, finances,business, transactions, or affairs of the
other party and its affiliates , including without limitation, trade secrets and proprietary
information (including that of any client, supplier or licensor), client lists, plans, all
information regarding the services provided hereunder, all software and systems, and any
other information and data received from or on behalf of a party or its affiliates that the
Recipient could reasonably be expected to know is confidential (collectively,
"Confidential Information").
(b) "Confidential Information shall not include any information which (i) has properly
entered the public domain otherwise than through the fault of the other party in violation
of this Agreement, or (ii) Recipient. already possesses without obligation of
confidentiality, develops independently without reference to Confidential Information of
the Discloser, or rightfully receives without obligation of confidentiality from a third
party.
(c) Recipient agrees to hold as confidential all Confidential Information it receives
from the Discloser. All Discloser Confidential Information shall remain the property of
Discloser or its suppliers and liceJilsors. Recipient will use the same care and discretion to
avoid disclosure of Discloser's Confidential Information as it uses with its own similar
information that it does not wish disclosed, but in no event less than a reasonable
standard of care and no less than is required by law. Recipient may only use Discloser's
Confidential Information for the lawful purposes contemplated by this Agreement.
Recipient specifically agrees that it will not use or disclose any "non-public personal
information" about customers in any manner prohibited by Title V of the Gramm.-Leach-
Bliley Act or the regulations issued thereunder ("GLB"),as applicable to Recipient.
Recipient may disclose Discloser's Confidential Information to: (i) its employees and
employees of permitted subcontractors and affiliates who have a need to know; (ii) its
Page 7 of9
1668
attorneys and accountants as necessary in the ordinary course of its business; and (iii) any
other party with Discloser's prior written consent. Before disclosure to any of the above
parties, Recipient will have a written agreement with (or in the case of clause (ii) a
professional obligation of confidentiality from) such party sufficient to require that party
to treat Discloser's Confidential Information in accordance with the requirements of this
Agreement, and Recipient will remain responsible for any breach of this Section by any
of the above parties. Recipient may disclose Discloser's Confidential Information to the
extent required by law or legal process, provided that (A) Recipient gives Discloser
prompt notice, if legally permissible, so that Discloser may seek a protective order, (B)
Recipient reasonably cooperates with Discloser (at Discloser's expense) in seeking such
protective order, and (C) all Discloser Confidential Information shall remain subject to
the tenns of this Agreement in the event of such disclosure. At Recipient's option,
Discloser's Confidential Information will be returned to Discloser or destroyed (except as
may be contained in back-up files created in the ordinary course of business that are
recycled in the ordinary course of business over an approximate 30- to 90-day period or
such .longer period as required by applicable law) at the termination or expiration of this
Agreement, upon Discloser's request, Recipient will certify to Discloser in writing that it
has complied with the requirements of this sentence. Recipient acknowledges that any
breach of this Section may cause irreparable harm to Discloser for which monetary
damages alone may be insufficient, and Recipient therefore acknowledges that Discloser
shall have the right to seek injunctive or other equitable relief against such breach or
threatened breach, in addition to all other remedies available to it at law or otherwise. .
6.15 This Agreement may only be assigned upon the written permission of the non-
assigning party; provided, however, that LTC may assign this agreement to an affiliate or
to a purchaser of all or substantially all of the assets of LTC upon the giving of written
notice of such assignment to Bank.
6.16 LTC and Bank understand and agree that the services provided by each other under
this Agreement are not exclusive and that, subject to the confidentiality provisions above,
either party may enter into agreements with others for the provision of siinilar services.
6.17 With the exception of Bank's payment obligations, neither party shall be responsible
for delays or failures in performance resulting from acts of God, acts of civil or military
authority, fire, flood, strikes, war, epidemics, pandemics, shortage of power, or other acts
or causes reasonably beyond the control of that party. The party experiencing the force
majeure event agrees to give the other party notice promptly following the occurrence of
such event, and to use diligent efforts to re-commence performance as promptly as
commercially practicable.
6.18 The prevailing party in any arbitration, suit, or action brought against the other
party to enforce the terms of this Agreement or any rights or obligations hereunder, shall
be entitled to receive its reasonable costs, expenses, and attorneys' fees of bringing such
arbitration, suit, or action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
Page 80f9
1669
by their respective officers thereto duly authorized as of the day and year first above written.
By
Name
By
Name
LINCOLN TRUST COMPANY (LTC)
--'-.. j
t2.. u (!:> fyL,
UNITED WESTERN BANK
-x:-:er=
r K
0.41\ /e;t.JYL
Title
Title
Page 9 of9
1670
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-
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Justia:: 12 C.F.R. 565.4 Capital measures and capital category definitions. Page lof3
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. Court Center I us Laws I Blawgs.FM I BlawgSearch.com 1.JYIti
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.l.Ymia> 1ii!.W> United Sbates> RegulaUbns> Title 12 - Bal1ls!ti!nl:L6.IUikil.l9>
SUPERVISION, DEPARIMENT OF IHE IREASURY> PART 565-PROMPI QORRECTIVE ACTION> 565.4 Capibal measures
and capital category definitions,
--------... ........ --
12 C.F.R. 565.4 Capital measures and capital category definitions.
Title 12 - Sanks and Banking
Title 12: Banks and Banking
PART 565-PROMeLCQ.RRI;ClIVE ACIION
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Capital measures and capital category definitions.
(a) Capital measures. For purposes of section 38 and this part, the relevant capital measures shall be:
(1) The total risk-based capital ratio;
(2) The Tier 1 risk-based capital ratio; and
(3) The leverage ratio.
(b) Capital categories. For purposes of section 38 and this part, a savings association shall be deemed to be:
(1) Well capitalized if the savings association:
(i) Has a total risk-based capital ratio of 10,0 percent or greater; and
(iii) Has a leverage ratio of 5,0 percent or greater; and
(iv) Is not subject to any written agreement, order, capital directive, or prompt corrective action directive issued by
OTS under section 8 of the FOI Act, the Intemationallending Supervision Act of 1983 (12 U.S.C. 3907), the Home
Owners' loan Act (12 U.S,C. 1464(t)(6)(A)(ii, or section 38 of the FOI Act, or any regulation thereunder, to meet
and maintain a specifiC capital level for any capital measure. .
(2) Adequately capitalized if the savings association:
(i) Has a total risk-based capital ratio of 8,0 petcent or greater; and
http://law.justia.comlus/cfr/title12/12-5.0.1.1At.8.S1:4 ,html
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Justia :: 12 C.F.R. 565.4 Capital measures and capital category defInitions.
Page 2 of3
(ii) Hal3 a Tier 1 risk-based capital ratio of 4.0 percent or greater; and
(iii) Has:
(A) A leverage ratio of 4.0 percent or greater; or
(8) A leverage ratio of 3.0 percent or greater if the savings association is assigned a composite rating of 1, as
composite rating is defined in 516.5(c) of this chapter; and
(iv) Does not meet the definition of a well capitalized savings association.
(3) Undercapitalized if the savings association:
(i) Has a total risk-based capital ratio that is less than 8.0 percent; or
(ii) Has a Tier 1 risk-based capital ratio that is less than 4.0 percent; or
(iii) (A) Except as provided in paragraph (b)(3)(iii) (8) of this section, has a leverage ratio that is less than 4.0
percent; or
(8) Has a leverage ratio that is less than 3.0 percent if the savings association is assigned a composite rating of 1,
. as composite rating is defined in 516.5(c) ofthis chapter. .
(4) Significantly undercapitalized if the savings association has:
(i) A total risk-based capital ratio that is less than 6.0 percent; or
(ii) A Tier 1 risk-based capital ratio that is less than 3.0 percent; or
(iii) A leverage ratio that is less than 3.0 percent.
(5) Critically undercapitalized if the savings association has a ratio of tangible equity to total assets that is equal to
or less than 2.0 percent.
(c) Reclassification based on supervisory criteria other than capital. The OTS may reclassify a well capitalized
savings association as adequately capitalized and may require an adequately capitalized or undercapitalized
. savings association to comply with certain mandatory or discretionary supervisory actions as if the savings
association were in the next lower capital category (except that the OTS may not reclassify a significantly
undercapitalized savings association as critically undercapitalized) (each ofthese actions are hereinafter referred
to generally as "reclassifications) in the following circumstances:
(1) Unsafe or unsound condition. The OTS has determined, after notice and opportunity for hearing pursuant to
565.8(a) of this part, that the savings association is in an unsafe or unsound condition; or
(2) Unsafe or unsound practice. The OTS has determined, after notice and an opportunity for hearing pursuant to
565.8(a) of this part, that the savings association received a rating for any rating category
(other than in a rating category specifically addressing capital adequacy) under the Uniform Financial Institutions
Rating System,1 or an equivalent rating under a comparable rating system adopted by the OTS; and has not
corrected the conditions that served as the basis for the less than satisfactory rating. Ratings under this paragraph
(c)(2) refer ta the most recent ratings (as determined either on-site or off-site by the most recent examination) of
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1129/2010
Justia:: 12 C.F.R. 565.4 Capital measures and capital category defInitions.
Page 3 of3
which the savings association has been notified in writing.
1. Copies are available at the address specified in 516.40 of this chapter.
[57 FR 44903, $ept. 29, 1992, as amended at 62 FR 3781, Jan. 27, 1997; 66 FR 13009, Mar. 2, 2001; 66 FR
65821,Dec.21,2001]
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1/29/2010
TabC
Exhibit 54 C (i)
1674
..... ""'-" .............. ,--- ......... -.- -- _.
FIRST AMENDMENT TO SUBACCOUNTING AGREEMENT
THIS FIRST AMENDMENT TO SUBACCOUNTING AGREEMENT (this
"Amendment") is made and entered into as of this 5
th
day of 2010 (the "Effective
Date"), by and between, LINCOLN TRUST COMPANY, a Colorado industrial bank with trust
powers ("LTC") and UNITED WESTERN BANK, a federal savings bank ("Bank") (LTC and
Bank referred to herein each as a "PartY' and collectively the "Parties").
WITNESSETH
WHEREAS, LTC and Bank are parties to that certain SUBACCOUNTING
AGREEMENT dated February 1, 2010 (the "Agreement"), whereby, LTC provides certain
services, including subaccounting and recordkeeping services, to Bank with respect to Funds
maintained in the Deposit ACCOllllt at Bank for the benefit of Owners of Custodial Accounts; and
WHEREAS, the Parties desire to amend the Agreement as described herein.
NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency ofwbich are hereby acknowledged, the Parties hereby agree to amend the Agreement
in the following respects to wit:
1. The fJIst paragraph in Section 3.1 (Pees and Invoicing) of the Agreement shall be deleted in
its entirety and replaced with the following paragraph:
3.1 Bank agrees to credit to the Deposit Account interest in an amount equal to
the average collected balance in the Deposit Account (as determined in Section
3.2 below) multiplied by the interest rate based on the annual "Interest Checking"
rate as published by at the following webpage:
http://online.barrons.comlpublic/page/9 0210-moneyrates.html (the "Rate"). The
current effective Rate shall be calculated using the arithmetic average of the
available weekly interest rates of the preceding calendar quarter, allowing for the
notice period as provided immediately below. If such Rate is no longer published
by Barron's, then the parties shall mutually agree on a new Rate. The Bank uses
the daily-balance method to calculate the Rate on the Deposit Account (the daily
rate is 11365 of the Rate).
The Parties agree that all other tenns or conditions of the Agreement shall remain in
full force and effect and the Parties reaffirm the same. This Amendment, together with the
Agreement, represents the complete understanding between the Parties.
Capitalized terms used and not defined in this Amendment shall have the meanings
ascribed to them in the Agreement.
. This Amendment shall be binding upon and inure to the beneflt of and be enforceable by
the Parties hereto and their respective successors, assigns (including any direct or indirect
successor by merger or consolidation) and administrators.
1
1675
IN WITNESS WHEREOF, the Parties hereto have entered into this Amendment as of the
date fIrst written above.
LrnCOLNTRUSTCOMPANY
. a ~ ~
BY:, __ ~ __ ~ ~ ______________ _
Name: Robert H. Beriault
Title: President
UNITED WESTERN BANK
.. .
2
1676
TabC
Exhibit 54 C (j)
1677
SECOND AMENDMENT
This amendment is dated December 6, 2010 (the "Amendment'') and is between Lincoln
Trust Company (the ''Nominee'') and United Western Bank, Denver, Colorado (the "Bank");
Nominee and Bank are parties to that certain Subaccounting Agreement
made as of February 1,2010 (the "Agreement") whereby Nominee, on behalf of the Nominee's
clients and at the direction of the Nominee's clients, directs funds at the Bank for the primary
purpose of facilitating customers' purchase and sale of securities and other investments and not
in a capacity of a deposit placement service;
WHEREAS, the Nominee and Bank seek to amend the Agreement effective immediately
in order to re-structure the Agreement to mirror the relationship set forth in FDIC Advisory
Opinion 05-02, dated February 3, 2005;
WHEREAS, the Nominee and Bank acknowledge that time is of the essence;
NOW TIIEREFORE, in consideration of the mutual promises herein contained, Nominee
and Bank agree to be legally bound by the terms of this Addendum: .
1. Effect of this Addendum
The terms of this Addendum shall be deemed to supersede any and all
inconsistent terms of the Agreement. All other terms of the Agreement which are not
inconsistent with this Addendum shall remain in full force and affect notwithstanding anything
to the contrary herein.
2. Amount of Swept Deposits at the Bank
(a) .Nominee shall use its commercially reasonable efforts to ensure that all funds
deposited at the Bank ("Swept Funds") do not exceed 10% of the total client
account assets held in client accounts at the Nominee (the "Ratio"). For purposes
of clarity, Nominee shall use COlnmerciallyreasonable efforts to prevent the
average daily balance of Swept Funds during anyone month from exceeding the
Ratio, based on the average total client account balances held by the Nominee
during that month (the "Monthly based on the most recently available
data. .
(b) At no time shall any Swept Funds be held in time deposits.
3. Reporting
(a) Nominee, through its Chief Executive Officer or Chief Financial Officer shall.
provide Bank with a written certification no -later than the fifteenth (15th) day of
each calendar month confirming both the Ratio and the Monthly Ratio for the
proceeding calendar month as as the average number of client sub-accounts
for the proceeding calendar month represented in any omnibus account or
1678
4. Fees
(a)
accounts maintained at the Bank for the benefit of the Nominee's clients. For the
purposes of such certification of the average number.of client sub-accounts for
any calendar months shall be the number of client sub-accounts held by the
nominee as of the first and last day of each calendar month divided by a factor of '
two (the "A.verage Accounts"); provided, however, that the Nominee shall never
permit more than average of30;000 client sub-accounts to be maintained for its
clients at the Bank in any calendar month. Each monthly certification shall
acknowledge that the certification will be used by the Bank for purposes of
reporting to the Federal Deposit Insurance Corporation and may be relied upon by
federal bank regulators during examinations of the Bank ..
In lieu of any other sub-accounting or similar fees due to the Nominee under the
terms of the Agreement, the Bank shall pay Nominee a fee for administrative and
other services rendered as are provided for in the Agreement as set forth on
Schedule A hereto {the ("Sub-Accounting Fee"), which is an amount set forth on
a per account or per customer l?asis and is not calculated on the basis of funds
placed 'at the Bank. Schedule A is incorporated herein and made a part hereof for
all purposes by this reference.
/
5.
Impact to the Agreement
...
(a)
For purposes of clarity, pending the execution of any renegotiated Agreement; all
terms of the then-current Agreement not inconsistent with Sections 2 through 4 of
this Addendum shall remain in full force and effect.
6. Miscellaneous
{a}
(b)
(c)
This Amendment may be amended or modified only in writing sigD,ed by all the
parties hereto. This Amendment shall be construed and governed by the laws of
the State of Colorado. This Amendment sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their successors and assigns, notwithstanding the foregoing, this Amendment
may not be assigned. '
This Amendment may be executed in one or more counterparts and by facsimile
signature, each of which shall constitute an original and all which shall constitute
one instrument, in each case, for all purposes including admission into evidence
of the agreement of the parties.
The descriptive headings of the sections of this Amendment are for convenience
only and do not constitute part of this Amendment.
1679
Schedule A
This is Schedule A to the Amendment made as of November 30,2010 to the
Subaccounting Agreement by and between Lincoln Trust Company and United Western Bank
made as of February 1,2010. .
Section 1. All capitalized terms not otherwise defined in this Schedule A shall
have meaning attributed to them in the Amendment.
..
Section 2. The monthly Sub-Accounting Fee to be paid by the Bankto the
Nominee shall be equal to $3.00 per each of the Average Accounts. in each calendar month. The
aggregate Sub-Accounting Fee due to the Nominee from the Bank. with respect to any calendar
month shall be the amount determined by multiplying the number of Average Accounts times
$3.00 (the "Aggregate Sub-Accounting Fee").
Section 3. The Aggregate Sub-Accounting Fee shall be paid by the Bank to the
Nominee in the month succeeding the calendar month for which the Aggregate Sub-Accounting
. FeelS determined within five days of the delivery of the certification of the Average Accounts
for the calendar month in question by the Nominee to the Bank.
1680
IN WITNESS WHEREOF, with the intention to be bound by the terms of this
Addendum, the parties have executed this Addendum as of the day and year first above written
by causing their respective authorized representatives to. sign where indicated below.
LINCOLN TRUST COMPANY
.,.., __ ._/ ;t... /I
By:
Title: V
1681
TabC
Exhibit 54 C(k)
1682
THIRD AMENDED AND REsTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF .
JULY 5, 2007
This nIIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
(this "Agreement") is made and into as of Ju1y 5, 2007 (the "Effective Pate"), by and among
United Western Bank, formerly know as Matrix Capital Bank, a federal savings bank (the "JaDk"), Matrix
.Settlement and Clearance Services, L.L.C., a New York limited liability company and MG
Colorado Holdings, Inc., a Delawsnlcorporation ("MG Colorado Holdings") (eacb a "fmY' and
collective1y, the
WITNESSETH
WHEREAS, MSCS, either through its affiliates and subsidiary, performs certain
business activities that consist primarily of facilitating the clearing of purchase and redemption trades of
various mutual fund sbares (sucb clearing of purchase and redemption trades of various mutual funds being
referred to herein as the "Trading Services") for the customer accounts of financial institutions, such as
third-party record keepers, banks. and registered investment advisors (the "Customers"); and
WHEREAS, in the course of performing the Trading Services for the Customers, the Customers
may transfer funds to certain accounts at the Bank for deposit or for the purpose of settlement of trades (the
"Accounts"); and
WHEREAS. the funds being transferred are generally qualified employee benefit plan participant
funds held in a fiduciary capacity by a custodian or other third parties; and
WHEREAS, the Customers require certain administrative services from MSCS, including but not
limited to, the automated transmission of data, the creation of data interfi;l.ces, the automation of funds
movement from the Customers' primary financial institution to the Bank, and the ongoing maintenance and
support required for such services provided to facilitate the transfer of funds into and out of the Accounts
(together referred to berein as .. Administrative Services"); and
WHEREAS, the Bank desires to provide Administrative Services to the Customers to facilitate
and receive the benefit of the deposit relationship(s) resulting there from; and
WHEREAS, Bank could provide Administrative Services itself or obtain such services from a
third party; and
1683
'I "
THIRD AMENDBD AND RESTATED ADMINISTRATIVE SBRVICES AGREEMENT
MADE AS OF JULY 5. 2007
PAGE 2 of14
WHEREAS, MSCS has the expertise, staff, and third party relationships to provide the required
Administrative Services on behalf of the Bank; and
WHEREAS, upon and subject to the terms hereof, MSCS and Bank desire Bank to act as "Settling
Bank OJ:llY Member" in connection with the Trading Services in accordance with the rules of the National
Securities Clearing Corporation (the "NSCC"), dated as of December 13, 2006 (as amended from time to
time the "NSCe Rules" - which such Rules can be found in their current form at
http://www.nscc.comlIegallnsccrules.pdf); and
WHEREAS, MSCS and Bank have heretofore entered into an AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT, effective as of December 1, 2004, to provide for the
provision of the Administrative Services by MSCS on behalf of the Bank to the Customers (as amended to
date, the "Amended Administrative Services Agreemenf'); and
WHEREAS, the Parties hereto wish to amend and restate such Amended Administrative Services
Agreement, effective as of the Effective Date, by entering into this Agreement; and
WHEREAS, the Parties hereto, and others, entered into a Contribution Agreement, effective as of
December 1, 2004 (the "Contribution Agreement"), which, among other things, provides for the
reorganization of various business enterprises, a copy of which is attached hereto for reference purposes;
and
WHEREAS, conunencing on the Effective Date, the Parties hereto intend that the Administrative
Services will continue to be provided by MSCS; and
WHEREAS, the Parties intend that MSCS will continue to receive fees for such Administrative
Services.
NOW, THEREFORE, in consideration of the recitals above, the mutual premises set forth herein
and other good and valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Defined TetlPS. All capitalized terms not defmed herein shall have the meaning ascribed to them in
the Contribution Agreement.
2
1684
THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF JULY 5, 2007
PAGS30f14
2. Amended Administrative SetVices Agreement Void. The Amended Administrative Services
Agreement is hereby superseded and restated by this Agreement
3. pmvi$ion of Settlement Bank Services. The NSCC Rules, inchlding without limitation the
''Procedures'' (as defined in the NSCC Rules) promulgated under Rule 33 of the NSCC Rutes, are
incorporated herein by reference. During the term of this Agreement, pursuant and subject to and in
accordance with Rules 54 a n ~ 55 of the NSCC Rules, including the Procedures promulgated by the
NSCC pursuant to Rule 33 of the NSCC Rules that relate t ~ actions or inactions of a "Settling Bank"
under Rules 54 and 55 of the NSCC Rllles. Bank hereby agrees to act as a "Settling Bank Only
. Member" in connection with the Trading Services provided to Customers by MSCSj provided, that
nothing herein shall be construed to obligate the Bank to provide any overdraft or loan to MSCS, MG
Colorado Holdings, any CustoDlln' or any Affiliate of any of the foregoing (the "MSCS Related
Entities"). Without limiting the generality of the foregoing, MSCS and MG Colorado Holdings hereby:
(A) acknowledge the refusal rights of ~ Bank under Section 3 of Rllie 55 of the NSCC Rules and
Procedure vm, D of the Procedures promulgated under Rule 33 of the NSCC Rules; (B) agree that the
Bank shall have no liability to any MSCS Related Entities in the event that the Bank refuses to settle
one or more trades with NSCC on any given day or days as a result of a net-debit position for any
MSCS Related Entity on such day or days; and (C) jointly and severally, covenant and agree to
immediately upon demand from Bank: indemnify, defend and hold harmleSs the Bank and its officers,
directOIS, parents, subsidiaries and employees, from and against any and all liabilities, costs, expenses
(including reasonable attomeys' fees), fines and penalties arising from or relating to: (i) a refusal of
the Bank to settle with NSCC any trades on any given day or days as a result of a net-debit position of
any MSCS Related Entity on such day or days; or (ii) despite the existence of any such net-debit
position of any such MSCS Related Entity, the settlement by the Bank of trades with NSCC on any
given day or days. Bank. shall indemnify and hold harmless MSCS, MG Colorado Holdings; and their
.. respective subsidiaries, affiliates, managers, officers, directors and employees froin all liabilities, costs
and expenses (including reasonable attorneys' fees), fmes and penalties arising from or relating to:
errors, mistakes or inaccuracies in the settlement of NSCC trades by Bank , as a settling bank, in
connection with the Trading Services provided to Customers by MSCS (except that Bank shall have no
indemnification obJigations under this Section 3 to the extent any such errors, mistakes or inaccuracies
are attributed to the actions or inactions of MSCS. The provisions in this Section 3 relating to the
indemnification obligations of the parties shall survive the tennination of this Agreement ..
4. Provision of Administrative Services.
(a) MSCS will provide the Administrative Services requested by the Customers who agree to
transfer funds into and out of the Bank.
3
1685
" '.,
THIRD AMENDED AND RESTA'lBD ADMINISTRATIVE SERVICES AOREEMENT
MADE AS OF JULY 5, 2007
PAoE4of14
(b) During the tenn of this Agreement, MSCS will cause and agree that the aggregate
deposits in the Accounts shall have a minimum average monthly balance of $100,000,000 (the "Minimum
Deposit Level'').
(c) MSCS shall be responsible for determining the nature and extent of the Administrative
Services based on the instructions from the Customers and shall be responsible for the decision to provide
such Administrative Services. MSCS shall be solely responsible for all costs incuIted in providing the
Administrative Services, including, but not limited to, third party vendor costs, internal staft'ing
requirements, and other costs, fees and expenses incurred in connection with ongoing maintenance and '
support for the Customers. Notwithstanding the foregoing, MSCS agrees to consult, with the Bank. in each
case where the furnishing of Administrative Services to a Customer requires the participation of the Bank.
, (d) The Bank and MSCS acknowledge that the primary benefit to the Bank of MSCS
furnishing Administrative Services to Customers is the deposit relationship resulting from the transfer of
funds into and out of the Accounts. As such, the Bank desires to limit the fees paid to MSCS pursuant to
this Agreement to an amount based upon the acroal deposits generated by MSCS furnishing Administrative
SerVices to those Customers who have chosen to deposit their funds with the Bank. For each Customer
which deposits fundS into an Account, except for the Special Account for the Exclusive Benefit of
Customers of MSCS Financial Services, L.L.C (Account No. 0138042817) [and except for the escrow
account of MG Trust LLC for the benefit of the State of Colorado (Account No. 27-820001303)], the Bank .
will pay MSCS the fees set forth in Exhibit A hereto as consideration of MSCS timely and adequately
furnishing the Administrative Services required by the Customer. The fees set forth in Exhibit A hereto will
be paid on a monthly basis and may be amended or modified only by written agreement of the Parties
hereto from time to time.
(e) MSCS will request from or provide to the Bank by the third (3rd) business day of any
month, a detailed record of all deposits held at the Bank as a result of Administrative Services provided by
MSCS for the preceding calendar month. Such report shan be in a form and format that allows MSCS to
detenDme the average dally balance and the average monthly balance of the deposits in the Accounts for
the preceding calendar month (the aggregate of such average daily baIaD.ces in the Accounts for a calendar
month in question being referred to herein as the "Average Daily Balance" for such calendar month in
question). The Bank shall further provide such other records of deposits or Account activity as reasonably
required and mutually agreed upon to facilitate the calculation of the fees due MSCS pursuant to Exhibit A
hereto or the calculation of the average monthly balances of the Accounts as set forth in Section 4(b).
4
1686
"
THIRD AMENDED AND RESTATED ADMlNISTRA TIVE SERVICES AGREEMENT
MADE AS OF JULY 5, 2007
PAGES of14
(f) MSCS will provide the Bank with a detailed invoice reflecting the Average Daily
Balances for each month as well as MSCS's calculation of the fees provided for in Exhibit A hereto by the
third ( 3 ~ business day of the calendar month. Fees invoiced shall be due three (3) business days following
receipt by the Bank of the invoice. It is understood and agreed that such fee is intended to compensate
MSCS for its furnishing Administrative Services to Customers. No other fees of any nature shall be due to
MSCS from Bank for Administrative Services provided hereunder. MSCS shall also provide such other
reports and documents to the Bank, as may be reasonably necessary in order for the Bank. to verify or audit
any infonnation in connection with the Administration Services. To the extent reasonably practicable, such
reports and documents shall be in substantially the same form as have heretofore been provided by MSCS
to the Bank.
(g) Bank. personnel will be made available, as may be reasonably requested, to consult with
MSCS in coordinating its operationS and the provision of Administrative Services pursuant to this
Agreement.
5. Th!:m-
(a) The term of this Agreement commenced on July 5, 2007 and shall, unless earlier
terminated pursuant to this Section 5, continue until July 5, 2010 (the "Initial Term"). At the end of the
Initial TenD, this Agreement shall automatically renew for two successive one-year terms (each a
"Renewal Term") unless MSCS notifies the Bank in writing at least 90 days before the expiration of the
Initial Term or a Renewal Term of its intent to solicit bids from other depositories (the "Bid Notice"). In
the event a Bid Notice is timely delivered to the Bank, then MSCS shall have 45 days after delivery of such
Bid Notice (the "Bid Period") in which to solicit bona fide offers .from independent financial institutions of
the t e ~ upon which such financial institutions desire to provide the Administrative Services (the "Bona
Fide Bids"). Prior to the end of the Bid Period, MSCS shall notify the Bank either that (i) it has received no
Bona Fide Bids, in which case the Renewal Term in question shall automatically renew or (ii) it has
received one or more Bona Fide Bids, and the contents of the one Bona Fide Bid that it desires to accept
(the "Desired Bid"). The Bank. shall have 30 days after receipt of the contents of the Desired Bid in which
to either (x) match the Desired Bid, in which case the Parties hereto shall mutually negotiate and execute
defmitive agreements reflecting the same within 15 days, or (y) notify MSCS that it will not match the
Desired Bid, in which case this Agreement shall terminate as of the end of the Initial Term or the Renewal
Tenn in question as the case may be. The failure of the Bank to notify MSCS that it will match the Desired
Bid as set forth in (x) above shall be deemed to be a notice that it shall not match the Desired Bid. In the
event the Parties shall fail to execute defmitive agreements within the time period prescribed in clause (x)
above and provided that such failure shallllot be due to the fault of MSCS, then MSCS shaIl have the right
5
1687
"
nDRD AMENDBD AND RBSTATBDADMINISTRA TIVB SERVICES AGREEMENT
MADB AS OF JuLY 5, 2007
PAGB60f14
to accept the Desired Bid and enter into definitive agreements with the third-party depository set forth in
the Desired Bid.
(b) This Agreement shan also be subject to termination at a date earlier than that provided
in s u b s ~ o n 5 (a) above as follows:
i. By MSCS, if at any time the Bank is not "adequately capitalized" within the
meaning of 12 CPR 565.4, as amended from time to time;
ii. By MSCS, if at any time the Bank ceases to qualify as a "Settling Bank Only
Member" within the NSCC Rules;
ill. (A) by MSCS, upon the occurrence of a Change in Control (as defined below) of
the Bank or (B) by the Bank upon a Change in Control (as defined below) of
MSCS;
. iv. By the Bank, upon the occurrence of a Regulatory Objection (as defined below);
v. (A) by the Bank, upon the material breach by MSCS or'MG Colorado Holdings
of this Agreement or (B) by MSCS. upon the material breach by the Bank oftbis
Agreement;
vi. By the Bank, if Customers fail to at anytime maintain the .Minimum Deposit
Level. Notwithstanding anything to the contrary .contained intbis Agreement, in
the event that the Minimum Deposit Level is not maintained with Bank and
Bank provides written notice to MSCS regarding such.breach , MSCS shall have
90 days from the date of the breach to ,cure such breach and in the event MSCS
fails to cure such breach within 90' days of the breach, then. Bank may
itmnediately terminate this Agreement;
vii. By either the Bank or MSCS, in the event the Bank's continued performance of
services under this Agreement win result in or is likely to result in a violation of
any federal, state, local or regulatory rules or regulations applicable to the Bank
or United Western Bancorp. Inc and/or the Bank's inability to provide such
services, including, but not limited to, the Bank's inability to bandle increases in
trading volmne, in all material respects in accordance . with the current existing
6
1688
THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF JULY 5, 2007
PAGE 7 of14
service standards. The Bank shall provide prompt written notice to MSCS in the
event that the Bank shall determine, in its reasonable judgment, that its
continued performance of services under this Agreement will result in .or is
likely to result in a violation of any applicable federal, state, local or regulatory
rules or regulations by the Bank or United Western BancOIp, Inc. and/or its
inability to provide such services in all material respects in accordance with the
. current existing service standards. In the event a Party elects to terminate this
Agreement pursuant to this Section 5(b)(vii), the Bank shall cooperate with
MSCS to effectuate an orderly transition;
viii. By MSCS. immediately, in the event the Bank is subject to a cease and desist
order issued by the Bank's regulator for unsafe and unsound banking practices;
ix. By MSCS. immediately following the maturity date of the Bank's $10 million
line of credit to MG Trust Company, LLC (and guaranteed by MG Colorado
Holdings) (the "Line of Credit"), such Line of Credit provided to MG Colorado
Holdings for liquidity purposes, and in the event the Bank refuses to renew the
Line of Credit on tenns that are substantially sbniJar to the tenns existing on the
Line of Credit currently existing as of the date of this Agreement; or
x. By MSCS without notice in the event that Bank's OTS charter is revoked.
(c) A party wishing to terminate this Agreement pursuant to Sections 5(b)(i) through (v), or
5(b)(vii) must provide the other Party with written notice that the initiating Party is terminating this
Agreement sixty (60) days following receipt of such notice (a "Termination Noticej. A termination of this
Agreement pUrsuant to the provisions of Section S(b)(i) -(v), or S(b)(vii) shall be effective ontbe 61
st
day
following the delivery of a Termination Notice unless the breaching party cures all breaches detailed in the
applicable Tennination Notice Within the sixty (60) day notice period following receipt of the Termination
Notice; provided, however, that: (i) a termination by MSCS or the Bank due to a Change in Control of
Bank or MSCS, as the case may be, shall be effective immediately if the party acquiring such Party is a.
business competitor of the other Party; or (ii) if an earlier tennination is required by law.
(d) The term "Change in Control" ofMSCS shall mean any transaction (which shall include
a series of related transactions or a transaction occurring pursuant to a plan) that has the result that the
members ofMSCS or stockholders ofMG Colorado Holdings, as of the Effective Date, cease to. directly or
indirectly, own (individually or collectively) more than fifty percent (50%) of: (x) the membership
7
1689
THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF JULY 5,2007
PAGE 8 of14
interests of MSCS or capital stock of MG Colorado Holdings, as the case may be); or (y) any entity that
results from the participation of MSCS or MG Colorado Holdings in a consolidation, merger or other
similar form of corporate transaction.
(e) The term "Change in Control" of the Bank shall mean: (A) the unqualified approval by
the Office of Thrift Supervision ("OTS") of a Holding Company Application with ,the Office of Thrift
Supervision by a person or group of persons seeking to acquire more than fifty percent (50%) of the
outstanding common stock of United Western Bancorp, Inc. or the Bank; or (B) the unqualified approval
by the OTS of a Notice or Application of Change in Control with the OTS by a person or group of persons
seeking to acquire more than fifty percent (50%) of the outstanding common stock of United Western
Bancorp, Inc. or the Bank.
(f) The term "Regulatory Objection" shall mean any order, directive, or demand by Bank's
primary federal regulatory body that prohibits, objects to or otherwise restricts any of the terms or
provisions of this Agreement.
6. Miscellaneous.
(a) Without limiting the provisions of Section 3 above and in addition to the indemnification
provisions contained therein, (i) Bank shall indemnify and hold hal1nless MG Colorado Holdings, MSCS
and their respective subsidiaries, affiliates, agents, officers, managers and employees from all suits, losses,
damages, reasonable attorneys' fees, legal expenses, actions or claims of any character, type, or desCription
brought or made for or on account of, or occasioned by the acts of gross negligence' or willful misconduct
of Bank or its agents or employees in the execution of or performance of this Agreement, and (ii) MG
Colorado Holdings and MSCS shall indemnify and hold harmless Bank and its subsidiaries, affiliates,
officers, directors, agents and employees from all suits, losses, damages, reasonable attorneys' fees, legal
expenses, actions or claims of any character, type, or description brought or made for or on account of, or
occasioned by the acts of gross negligence or willful misconduct ofMG Colorado Holdings, MSCS or their
respective agents or employees in the execution of or performance of this Agreement. The provisions of
this Section 6 (a) shall survive the termination of this Agreement.
(b) This Agreement contains the entire agreement amongst the Parties hereto relating k, the
subject matter hereof. There are no unwritten agreements between the Parties hereto relating to the subject
matter hereof. This Agreement may be amended or modified only by written agreement signed by each of
the parties hereto, except the Parties may agree by electronic mail that Exhibit B as agreed to by the Parties
may be replaced as necessary without a formal amendment.
8
1690
THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF JULY 5,2007
PAGE 9 of 14
(c) This Agreement shall be governed by and construed in accordance with the intemallaws of the
State of New York, without giving effect to the choice oflaw principles
(d) Confidential Nature of Customer and Account Information. MSCS acknowledges that the
Customer information and Account information received by MSCS in connection with its performance
under the terms of this Agreement (collectively, the "Customer Information"), are owned and controlled by
the Bank. To the extent applicable, MSCS agrees to the following: (i) MSCS shall not use all or any part of
the Customer Information other than as necessary to perfonn the selVices required of it hereunder; (ii)
MSCS agrees not to disclose any part of the Customer Information to any third party, other than third party
vendors who are involved in the Trading SelVices for Customers and to other third parties as required by
law or as allowed pursuant to this Agreement; (iii) MSCS further agrees that it may not disclose or use any
information regarding the Customer Information other than to carry out the purposes for which the
information was disclosed under this Agreement. Upon termination of this Agreement, MSCS agrees
promptly to return to the Bank all Customer Information provided to or received by MSCS; to refrain from
disclosing any Customer Information to any third party, except as required or allowed by law, and to take
all necessary steps to discontinue immediately its use of the Customer Information. NotwithstaDding the
foregoing, MSCS may retain any part of the Customer Information under applicable record retention
requirements; and MSCS may disclose the Customer Information to third party depositories in the event
MSCS is soliciting Bona Fide Bids pursuant to this Agreement. MSCS shall require any such depositories
to execute a confidentiality agreement with terms similar to the terms contained in this Agreement. To the
extent applicable, MSCS hereby agrees to comply with the Gramm-Leach-Bliley Act (the "GLB Acf') as in
effect from time to time, any successor statute, and any rules and regulations promulgated thereunder.
[Signature Page Follows]
9
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THIRD AMENDED AND RESTATED ADMINISTRA TlVE SERVICES AGREEMENT
MADE AS OF JULY 5, 2007
PAGE lOof14
INWITNESS WHEREOF. this Agreement has been executed in multiple counterparts on the date fIrst set
forth above, e,ach of which shall, for all purposes, be deemed an original and all of which shall evidence but
one agreement between the parties hereto.
UNITED WESTERN BANK.
A federally chartered savings bank
By:
Name:
Title:
MG COLORADO HOLDINGS, INC.
a Delaware corporation
By:
Name:
Title:
MATRIX SETTLEMENT & CLEARANCE
SERVICES. LLC
By:
Name:
Title:
10
1692
EXBlBITA
To THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT MADE
AS OF JULY 5, 2007
EXHIBIT A
With respect to the various types of Accounts that MSCS maintains at the Bank (other than the
three unitized accounts listed at the end of this Exhibit A, which will be assessed a fee of thirty (30) basis
points of the Average Daily Balance (as defined in Section 3(e) of this Agreement, the Bank shall be
obligated to pay to MSCS under the Agreement a monthly fee consisting ofan amount equal to the product
of the Average Daily Balance of any deposit at the Bank, regardless of type of deposit or account, and the
Cap Rate. "Cap Rate" shall mean, the "Cap Rate" identified in the attached Schedule A-I that corresponds
to the Average Daily Fed Funds Target Rate set forth next to each such "Cap Rate." For example, if the
Average Daily Fed Funds Target Rate of interest for a period in question is: (A) 2.5()oAI, then the "Cap
. Rate" is 2.50% for the same period in question; and (B) 8.00%. then the Cap Rate for the same period in
question is 7.25%. For all purposes under this Agreement, the "Average Daily Fed Funds Target Rate" is
defined to be, for a calendar month in question, the average of: (A) the Fed Funds Target Rate as published
in the Wall Street Journal on the first business day of the calendar month in question for each day during
such month until such time as the Board of Governors of the Federal Reserve System changes such rate;
and (B) for each day during.the month in question after the day on which such change in rate is made, such
changed rate. By way of example and to avoid confusion, if: (X) the Fed Funds Target Rate as published in
the Wall Street Journal on November 1. 2006, was 2.00%. and (Y) on November IS. 2006, the Board of
Govemors of the Federal Reserve System increases the Fed Funds Target Rate to 2.50%, then (Z) the
"Average Daily Fed Funds Target Rate" for November 2006 would have been the average over the 30 days
for the month of November 2006 of 2.00% for the first 15 days of November 2006 and 2.50% for the
remaining 15 days of November 2006, or 2.25%. In the event that the Average Daily Fed Funds Target
Rate is greater than 8.0%, then the Cap Rate shall be deemed to be the Average Daily Fed Funds Target
Rate less. 75%.
Notwithstanding the above, with regard to any deposits attributable to Constellation Trust
Company, a Nebraska trust company ("Constellation"), any fees payable to MSCS will be reduced by the
sum of: (a) 10 basis points (0.10%); plus (b) the "Bank Account Interest Rate" as defined in that certain
Subaccounting Agreement dated as of May 11, 2005 by and between the Bank and Constellation (a copy of
which has been reviewed and approved by MSCS); By. way of example. if the "Cap Rate" as determined
under this Exhibit A any for a period in question is ordinarily 3.000% and the "Bank Account Interest
Rate" for the same period in question is 1.000%, then the Cap Rate for the purpose of determining the fees
to be paid to MSCS in respect of any deposits attributable to Constellation (and only the Constellation
deposits) shall be deemed to be 1.900% ( ~ . e . , 3.000% minus 1.000% minus 0.10%).
Notwithstanding the above, with regard to any deposits attributable to MG Trust IRA Investment Account
(identified on Exhibit B) and any similar account added (to be mutually agreed upon), any fees payable to
1693
EXHIBIT A TO THIRD AMENDED AND RESTATED ADMJNISTRATlVBSERVICES AGREEMeNT
MADB AS OF JULY 5, 2007
PAos2of3
MSCS will be reduced by the "Bank Account Interest Rate". By way of example, if the "Cap Rate" as
detennined under this Exhibit A any for,a period in question is ordinarily 3.0000A, and the "Bank Account
Interest Rate" for the same period in question is 1.OOOOA" then the Cap Rate for' the purpose of determining
the fees to be paid to MSCS in respect of any deposits attributable to the MG Trust IRA Investment
Account shall be deemed to be 2.000% (t.e., 3.000% minus 1.000%).
Notwithstanding the any of the above, with regard to any deposits attributable to CPI Qualified
Plan Consultants, Inc. ("CPI"). the fees payable to MSCS with regard to providing Administrative Services
to CPI shall be equal to the "CPI Revised Cap Rate" as shown in Schedule A-2. For ~ l e , with.regard
to any deposits :made at the Bank on behalf of CPI only, if the Average Daily Fed Funds Target Rate of
interest for a period in question is: (A) 2.50%. then the "cpr Revised Cap Rate" is 3.25% for the same
period in question; and (B) 8.00%. then the cpr Revised Cap Rate for the same period in question is 6.50%.
Average Dally Federal
Funds Target Rate
0.50%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
3.75%
4.00%
4.250/0
4.50%
4.75%'
5.00%
5.25%
5.50%
5.75%
6.00%
6.25%
6.50%
6.75%
7.00%
7.25%
7.50%
7.75%
8.00%
Schedule A-I
2
1694
CapRate
1.500%
1.625%
1.750%
1.875%
2.000%
2.125%
2.250%
'2.375%
2.50%
2.625%
2.750%
2.875%
3.000%
3.125%
3.25%
3.50%
3.75%
4.00%
4.25%
4.50%
4.75%
5.000'{'
5.25%
5.50%
5.75%
6.00%
'6.25%
6.500A,
6.75%
7.00%
7.25%
EXHIBIT A TO THIRD AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
MADE AS OF JULY 5, 2007
PAGE 3 of3
Schedule A-2
Average Daily Federal CPI Revised
Funds Target Rate Cap Rate
0.50% 1.750%
0.75% 1.875%
1.00% 2.000%
1.25% 2.125%
1.50% 2.250%
1.75% 2.375%
2.00% 3.000%
2.25% 3.125%
2.50% 3.250%
2.75% 3.375%
3.00% 3.500%
3.25% 3.625%
3.50% 3.750%
3.75% 3.875%
4.00% 4.000%
4.25% 4.125%
4.50% 4.250%
4.75% 4.375%
5.00% 5.000%
5.25% 5.125%
5.50% 5.250%
5.75% 5.375%
6.00% 5.500%
6.25% 5.625%
6.50% 5.750%
6.75% 5.875%
7.00% 6.000%
7.25% 6.125%
7.50% 6.250%
7.75% 6.375%
8.00% 6.500%
3
1695
ExhibitB
To Third Amended And Restated Administrative Services Agreement Made
As of July 5, 2007
Account
Number Account Name
27-0000001-7 MG Trust
58-3810046-8 Constellation
58-3810044-3 Constellation
58-3800018-9 Frontier
54-3900001-8 Unitized Account Name
MG Trust FBO
54-3900002-6 Managed
MG Trust IRA
54-3900010-9 Investment
54-3900011-7 MG Trust FBO Bisys
54-3900012-5 Mg Trust FBO Mutual
MG Trust FBO
54-3900007-5 Managed
58-3800098-1 Quads Trust
58-3800099-9 US Bank
54-0000005-4 Tax Remit AlC
54-3900008-3 STC Stale Checks
54-3900013-3 MOO Companion
1696
TabC
Exhibit 54 C (I)
1697
.,
AMENDMENT TO THE THIRD ADDENDUM AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
THIS AMENDMENT TO THE THIRD AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is made and
entered into as of February 11,2010 ("Effective Date"), by and among United Western
Bank, formerly know as Matrix Capital Bank, a federal savings bank (the "Bank"),
Matrix Settlement and Clearance Services, LLC, a New York limited liability company
("MSCS"), and Matrix Financial Solutions, Inc. fka MG Colorado Holdings, Inc., a
Delaware corporation ("Matrix") (each a " ~ ' and collectively, the "Parties").
WITNESSETH
WHEREAS, the Parties have entered into that certain Agreement, dated as of July 5,
2007;
WHEREAS, capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Agreement; and
WHEREAS, the Parties desire to amend the Agreement as described herein.
NOW, THEREFORE, in consideration of the preambles and the agreements contained
herein, and for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties hereto agrees as follows:
1. Termination. The Parties agree to amend and replace Section 5 (b) (viii) with
the following amended section:
(viii). By MSCS, immediately, in the event the Bank is subject to a cease and desist order
issued by the Bank's regulator that includes an allegation of unsafe and unsound practices other
than those pertaining to any matter included in the Memorandum of Understanding entered into
by and between the Bank and the Office of Thrift Supervision on December 10,2009.
2. Miscellaneous. Except as specifically modified hereby, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed in mUltiple counterparts
on the date first set forth above, each of which shall, for all purposes, be deemed an original and
all of which shall evidence but one agreement between the parties hereto.
1698
UNITED WESTERN BANK
A federally chartered savings bank
Title: fAt.>
MATRIX FINANCIAL SOLUTIONS, INC.
a Delaware corporation
By:
Name:
Title:
\Ii /I.

MATRIX SETTLEMENT & CLEARANCE
SERVICES, LLC
a New York limited li
By:

Name:
Title:
1699
TabC
Exhibit 54 C (m)
1700
SUBACCQUNTING SERVICES AGREEMENT
This Agreementis made and entered into by and between MATRIX CAPITAL BANK
("BANK"), a Federal savings bank. and Trust Management, Inc., a Texas trust company
("TMI"), as of this /011. day of M A - ~ , 1999, to be effective as of May 31, 1997
(the "Effective Date"). .' .
WHEREAS, certain accounts maintained for customers of TMI ("Deposit Accounts")
are commingled into separate omnibus accounts (the "Bank Accounts") at BANK; and
WHEREAS, the aggregate balances of the Bank Accounts are. on average, in excess of
the FDIC insurance per account limit of $100,000 and represent numerous Deposit Accounts; .
and
WHEREAS, insurance regulations of the FDIC provide that deposit account records of
an insured financial institution must disclose the existence of a relationship that provides the
basis for additional insurance, and the details of that relationship must be ascertainable from
the records of a bank or the records of the depository institution; and
WHEREAS, the customers whose funds are held in the Deposit Accounts desire that
the funds maintained in the Bank Accounts be insured to the fullest exurnt provided by law for
. each Deposit Account customer; and
WHEREAS, the customers whose funds are held in the Deposit Accounts wish to avoid
charges for failure to maintain minimum balance levels in their accounts; and
WHEREAS, asa consequence of such customer desires, records must be prepared
regarding the status of each Deposit Account that comprises a part of each Bank Account; and
WHEREAS, BANK has determined that it is in its best interest to obtain account holder
record keeping for the Deposit Accounts from a third party; and .
WHEREAS, TMI is willing to provide to BANK recordkeeping and certain other
services with respect to the Deposit Accounts comprising the Bank Accounts; and
WHEREAS, BANK is willing to provide a subaccounting fee for the services TMI is
willing to provide in connection with the Bank Accounts; and
WHEREAS, BANK and TMI desire to enter into an agreement that provides for the
tenns and conditions under which TMI will provide account holder record keeping and certain
other services to BANK in connection with the Bank Accounts. .
fINJ.DAL:S3340.S 1392.2-00015
1701
NOW, THEREFORE, in consideration of the mutual promises herein contained, it is
mutually agreed as follows:
1. BANICs deposit account records shall expressly provide that the Bank Accounts
constitute deposits held by TMI in a custodial capacity, and that the records reflecting the
separate interests of the account holders of the Deposit Accounts comprising such Bank.
AccoWlts are maintained by TJ\.fl.
2. TMI shall maintain separate accounting. and record keeping for each Deposit
Account that has a balance in the Bank Accounts. TMI shall be primarily responsible for
providing such accounting and record keeping services.
3. Notwithstanding the services provided by TMl hereurider, it is understood and
agreed that BANK shall be responsible at all times for maintaining and servicing of the Bank.
Accounts.
4. TM1 shall provide account holder record keeping and certainothei services for the
Deposit Accounts as follows:
(a) accounting services provided to all Deposit Accounts; and
(b) data processing services required for subaccmUlting administration of
theBank. Accounts.
5. TMI shall furnish to BANK by the fifth (5th) day of each month the aggregate
number of Deposit Accounts (the "Active Accounts") that had balances in the Bank. Accounts as
of the last business day of the preceding month. Such report shall be signedand certified as true
and accurate by the chief financial officer of TMI or his or her designate. This report shall be
used to determine the fee BANK shall pay to 1MI for the account holder record keeping services
TMI provides hereunder.
6. Within three (3) days after receipt of the monthly report referred to in Section 5
above, BANK shall pay to 1MI a monthly fee equal to $3.00 multiplied by the number of Active
Accounts, as determined by the provisions of Section 5. It is understood and agreed that such fee
is intended to compensate TMI for its record keeping services in connection with the Deposit
Accounts. No other fees of any nature shall be due to TMI from BANK for services provided
hereunder.
7. BANK shall have the right, but not the obligation, to make a physical audit at any
time upon reasonable request by the BANK of TMI's books and records relevant to the matters
covered by this Agreement to verify the accuracy of TMI's monthly report of the number of
Deposit Accounts comprising each Bank Account.
8. BANK personnel shall be made available, as may be reasonably requested, to
consult with TMI and to assist TMI in connection with the perfonnance of its obligations
pursuant to this Agreement.
FJNIDAL:S33405 13922-00015
1702
9. Subject to any notice of termination given, this Agreement shall be
automatically renewed for successive periods of one (1) month each (each such one (1) month
period a "Renewal Term") unless either party gives the other written notice. of termination not
less than thirty (30) days, or in the case of February (28) days, prior to the end of
the then-current Renewal Term.
10. Either party may terminate this Agreement inunediately if the other party
becomes insolvent, is the subject of a bankruptcy filing that is not dismissed within sixty (60)
days after such fIling, makes an assignment for the benefit of creditors, applies for or consents
to the appointment of a trustee or receiver. or a trustee or receiver is appointed for such party,
and such proceeding is not dismissed within thirty (30) days after such appointment.
Furthermore, this Agreement may be terminated at any time by the written consent of both
BANK and TMI.
11. The parties to this Agreement recognize that they are both subject to supervision
and regulation by various regulatory authorities, and that compliance with the requests of such
regulatory authorities is important in order that TMI and the BANK retain their strong ratings
and credibility with such authorities. Accordingly. TMI and the BANK agree to act in good
faith in considering and negotiating modifications to this Agreement (or even terminating this
Agreement if need be) in order to comply as best they are able with any regulatory concerns.
12. Upon a breach by TMl of any covenant or promise herein contained, BANK
may terminate thisAgreement with ten (10) days' prior written notice to TMI. Upon a breach
by BANK of any covenant or promise herein contained, TMI may terminate this Agreement at
any time upon ten (10) days' prior written notice to BANK.
13. TMI shall indemnify and hold harmless BANK and its agents and employees
from all suits, actions or claims of any character, type, or description brought or made for or
on account of, or occasioned by the acts of gross negligence or willful misconduct of TMI or
its agents or employees in the execution of or performance of this contract.
FINIDAL:53340.5 13922.00015
1703
14. BANK. shall indemnify and hold harmless TMI and its agents and employees
from all suits, actions or claims of any character, type, or description brought or made for or
on account of, or occasioned by the acts of gross negligence or willful misconduct of BANK or
its agents or employees in the execution of or performance of this contract.
MATRIX CAPITAL BANK
FINlDAL:S3340.S 1392200015
1704
TabC
Exhibit 54 C (n)
1705
AMENDED AND RESTATED
. OMNIBUS SUBACCOUNTING AGREEMENT
This Amended and Restated Omnibus SubAccounting Agreement (the "Agreement") is
made and entered into by and between United Westem Bank ("Bank"), a federal savings bank,
and United Western Trust Company, a South. Dakota trust company ("UWTC")(Bank. arid UWTC
each a "Party" and collectively, the "Parties"), as oftbis 26th day of April, 2010.
WHEREAS, certain accounts maintained for customers of UWTC (the "Deposit
Account") are maintained in certain omnibus accounts at Bank (the "Bank. Accounts") for the
benefit of such customers ofUWTC;
WHEREAS, the aggregate balances of the Bank Accounts are, on average, in excess of
the FDIC insurance per account limits whether they are retirement or non-retirement accounts
and represent numeroUs Deposit Accounts;
WHEREAS, regulations of the FDIC provide that deposit account records of an insmed
financial institution. must disclose the existence of a relationship that provides the basis for
additional insurance, and the details of that relationship. must be ascertainable from the records
of a bank or the records of the depository institution;
WHEREAS, UWTC has determined that it is in the best interests ofits customers whose
funds are held in the Deposit Accounts that such funds maintained in the Bank Accounts be
insured to the fullest e,rnmt provided by law for each Deposit Account customer;
WHEREAS, UWTC has determined that it is in the best interest of its customers whose
funds are held in the Deposit Accounts to avoid charges for failure to maintain minimum
balance levels in their accounts;
WHEREAS, based on UWTC's determinations as described herein, records must be
prepared regarding the status of each Deposit Account that comprises a part of each Bank
Account; .
WHEREAS, Bank has determined that itis in its best interest to obtain account holder
record keeping for the Deposit Accounts from a third party;
WHEREAS, UWTC is willing to senre as Bank's agent in providing record keeping and
certain other services with respect to the Deposit Accounts comprising the Bank Accounts; and
WHEREAS, Bank and UWTC desire to enter into this Agreement that provides for the
terms and conditions under which UWTC will provide account holder record keeping and certain
other services to Bank in connection with the Bank Accounts.
NOW, THEREFORE, in consideration of the mutual promises herein contained, from
the date of this Agreement until terminated pursuant to the terms herein, it is mutually agreed as
follows: .
1. Bank's deposit account records shall expressly indicate that the Bank Accounts
1
1706
constitute deposits held in a custodial or trustee capacity, and that the separate interest
of the account holders of the Deposit Accounts comprising such Bank Accounts are
maintained by UWTC, as agent for Bank.
2. UWTC shall maintain separate accounting and record keeping for each Deposit
Account that has a balance in the Bank Accounts. UWTC shall be primarily
responsible for providing such accounting and record keeping services. UWTC,
on behalf of its customers, shall issue instructions to Bank, by wire transfer, check or
other appropriate means acceptable to UWTC and Bank,. regarding transactions involving
funds in the Bank Accounts. Bank shall be entitled to rely upon such instructions and
Bank shall have no liability for any act or omission hereunder while acting in good faith.
3. Bank shall provide customary banking services for the Bank Accounts. It is understood
and agreed that the Bank shall be responsible under this Agreement for the servicing of
the Bank Accounts and not for servicing the individual UWTC customer Deposit
Accounts. Bank shall furnish to UWTC on a monthly basis a bank statement for each
Bank: Account as requested by UWTC. Such statements shall be mailed by Bank or be
made available to UWTC on the third business day following the close of the period being
reported.
4. UWTC and not the Bank: is the custodian or trustee to its customers who have interests in
the Bank Accounts. Bank shall have no fiduciary or custodial obligation to any UWTC
customers who have interests in a Bank: Account. In particular, Bank shall have no
responsibility for any bookkeeping or record-keeping functions of UWTC on behalf
of any UWTC customers or for receipt or disposition of funds in the Bank
Accounts; provided, however, that the Bank shall honor UWTC's written instructions
regarding disposition of the Bank Accounts.
5. UWTC. shall provide account holder record keeping and certain other services for the
Deposit Accounts as follows:
(a) Accounting services provided to all Deposit Accounts; and
(b) Data processing services required for subaccounting administration of the
Bank Accounts.
6. UWTC shall furnish to Bank by the fifth (5th) business day of each month a report
detailing the following:
(a) the aggregate number of Deposit Accounts (the "Subaccounts") that (i) had
balances in the Bank Accounts as of the last business day of the preceding
month, or (ii) had activity in the Bank Accounts during the preceding month;
and
(b) the average daily deposit balance for the prior month maintained by UWTC at
Bank.
Such report shall be signed and certified as true and accurate by the chief fmancial
officer of UWTC or his or her designate. This report shall be used to determine the fee
2
1707
Bank shall pay to UWTC for the account holder record keeping services UWTC provides
hereunder.
7. Within ten (10) business days after receipt of the monthly report referred to in Section 5
above, Bank shall pay to UWTC a monthly subaccounting fee based on the greater of:
(a) flat fee of $3.00 per recording-keeping non-zero balance account (with the
number of accounts and activity measured down to the individual investor
level); or
. (b) a1 % annual fixed rate (prorated and paid monthly) on the average daily
deposit balances maintained by UWTC at Bank
8. It is understood and agreed that such fee is intended to compensate UWTC for its record
keeping services in connection with the Deposit Accounts. No other fees of any nature
shall be due to UWTC from Bank for serVices provided hereunder. UWTC and Bank
recognize that the costs associated with providing the services contemplated by this
Agreement are likely to increase over time. Consequently, the Parties agree that UWTC
shall be entitled to request adjustments from time to time, to the subaccounting fee set
. forth. herein, and that Bank shall act, in good faith, in considering and negotiating any
such adjustments.
9. Bank shall have the right, but not the obligation, to make a physical audit at any time
upon reasonable requests by Bank of UWTC's books and records relevant to the matters
covered by this Agreement to verify the accuracy of UWTC's monthly report of the
number of Deposit Accounts comprising each Bank Account,
. 10. Bank personnel shall be made available as may be reasonably requested, to consult with
UWTC and to assist UWTC in connection with the performance of its obligations
pursuant to this Agreement.
11. Any amendment to this Agreement shall be valid only if in writing and signed by the
Parties. After 180 days from the date hereof, Bank and UWTC shall each have the right
'upon thirty (30) days prior written notice to the other party to terminate this Agreement
for any reason. The parties to this Agreement recognize that they are both subject to
supervision and regulations by various regulatory authorities and that compliance with
the requests of such regulatory authorities is important in order that UWTC and the Bank
retain their strong ratings and credibility with such authorities. Accordingly, UWTC
and the Bank agree to act in good faith in considering and negotiating modifications to
this .
Agreement (or even terminating this Agreement if need be) in order to comply as best
they are able with any regulatory concerns.
12. Upon a breach by UWTC of any covenant or promise herein contained, Bank may
terminate this Agreement with ten (10) days prior written notice to UWTC. Upon a
breach by Bank of any covenant or promise herein contained, UWTC may
terminate this Agreement at any time upon ten (10) days prior written notice to Bank.
3
1708
13. The Bank shall-provide UWTC upon request (but no more than. once a quarter) with
financial. information about the Bank including capital ratios to assist UWTC in
assessing the financial capacity of the Bank to hold the Bank Accounts.
14. UWTC shall indemnify and hold harmless Bank and its agents and employees from all
suits, actions or claims of any character, type, or description brought or made for or on
account of or occasioned by the acts of gross negligence or willful misconduct of
UWTC or its agents or employees in the execution of or performance of this contract. Bank
shall indemnify and hold harmless UWTC and its agents and employees from all suits,
actions or claims of any character, type, or description brought or made for or on account.
of: or occasioned by the acts of gross negligence or willful misconduct of Bank or its agents
or employees in the execution of or performance of this contract; provided however,
that Bank shall have no liability to UWTC for any acts or omissions taken or not taken in
good faith by Bank.
15. This Agreement shall be governed by the laws of the United States of America and the
. applicable laws of the State of Colorado.
16. Any notices provided for under this Agreement shall be in writing delivered by mail, fax,
email, or overnight delivery to:
Jf1o: United Western Trust Company
700 17th Street, Suite 2100
Denver, CO 80202
Phone: (720) 956-5558
Fax: (303) 550-9020
Attention: Paul Maxwell
Email: pmaxwell@uwbank.com
Jf1o: United Western Bank
700 17th Street, Suite 2100
Denver, CO 80202
Phone: (720) 956-6548
Fax: (720) 932-3993


[Signature page follows.]
4-
1709
The foregoing Agreement has been ex:ecutedas of1he date and year first written above.
UNITED WESTERN BANK

Thomas J. , Cill[
UNITED WESTERN TRUST COMPANY

Paul E. Maxwell, CEO
5
1710
TabC
Exhibit 54 C (0)
1711
:',..
FIRST AMENDMENT
This amendment is dated November 30,2010 (the "Amendment") and is between United
Western Trust Company (the "Nominee") and United Western Bank, Denver, Colorado (the
"Bank"); .
WHEREAS, Nominee and Bank are parties to that certain Amended and Restated
Omnibus Sub-Accounting Agreement made as of April 26, 2010 (the "Agreement") whereby
Nominee, on behalf of the Nominee's clients and at the direction of the Nominee's clients,
directs funds at the Bank for the primary purpose of facilitating customers' purchase and sale of
securities and other investments and not in a capacity of a deposit placement service;
WHEREAS, tb,e Nominee and Bank seek to amend the Agreement effective immediately
in order to re-structure the Agreement to mirror the relationship set forth in FDIC Advisory
Opinion 05-02, dated February 3, 2005;
WHEREAS, the Nominee and Bank acknowledge that time is of the essence;
NOW THEREFORE, in consideration of the mutual promises herein contained, Nominee
and Bank agree to be legally bound by the terms of this Addendum:
1. Effect of this Addendum
The terms of this Addendum shall be deemed to supersede any and all
inconsistent terms of the Agreement. All other terms of the Agreement which are not
inconsistent with this Addendwn shall remain in full force and affect notwithstanding anything
to the contrary herein.
2. Amount -of Swept Deposits at the Bank
. (a)
(b)
Nominee sball use its conuuercially reasonable efforts to.ensure that all funds
deposited at the Bank ("Swept Funds
U
) do not exceed 10% of the total client
account assets held in client accounts at the Nominee (the "Ratio"). For purposes
of clarity, Nominee shall use commercially reasonable efforts to prevent the
average daily balance of Swept Funds during anyone month from exceeding the
Ratio, based on the average total client account balances held by the Nominee
during that month (the "Monthly Ratio"), based on the most recently available
data.
At no time shall any Swept Funds 'be held in time deposits.
3. Reportinv:
(a)
-Nominee, through its Chief Executive Officer or Chief Financial Officer shall
provide Bank with a written certification no later than the fifteenth (lStb.) day of
each calendar month confirming both the R a ~ o and the Monthly Ratio for the
proceeding calendar month as well as the average number of client sub-accounts
1712
4. Fees
(a)
for the proceeding calendar month represented in any omnibus account or
accounts maintained at the Bank for the benefit of the Nominee's clients .. For the
purposes of such certification of the average number of client sub-accounts for
any calendar months shall be the number of client sub-accounts held by the
nominee as of the first and last day of each calendar month divided by a factor of
two (the "Average Accounts"); provided, however, that the Nominee shall never
permit more than an average of 10,500 client sub-accounts to be maintained for its
clients at the Bank in any calendar month. Each monthly certification shall
acknowledge that the certification will be used by the Bank for purposes of
reporting to the Federal Deposit Insurance Corporation and may be relied upon by
federal bank regulators during examinations of the Bank.
In lieu orany other sub-accounting or similar fees due to the Nominee under the
terms of the Agreement, the Bank shall pay Nominee a fee for administrative and
other services rendered as are provided for in the Agreement as set forth on
Schedule A hereto (the ("Sub-Accounting Fee"), which is an amount set forth on
a per account or per customer basis and is not calculated on the basis of funds
placed at the Bank. Schedule A is incorporated herein and made a part hereof for
all purposes by this reference.
5. Impact to Remainder of Agreement
(a)
For purposes of clarity, pending the execution of any renegotiated Agreement, all
terms of the then-current Agreement not inconsistent with Sections 2 through 4 of
this Addendumsha11 remain in full force and effect.
6. Miscellaneous
(a)
(b)
(c)
This Amendment may be ~ e n d e d or modified only in writing signed by all the
parties hereto. This Amendment shall be construed and governed by the laws of
the State of Colorado. This Amendment sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their successors and assigns, notwithstanding the foregoing, this Amendment
may not be assigned.
This Amendment inay be executed in one or more counterparts and by facsimile
signature, each of which shall constitute an original and all which shall constitute
one instrument, in each case, for all purposes including admission into evidence
of the agreement of the parties. .
The descriptive headings of the sections of this Amendment are for convenience
only and do hot constitute part of this Amendment.
1713
IN WITNESS WHEREOF, with the intention to be bound by the terms of this
Addendum, the parties have executed this Addendum as of the day and year first above written
by causing their respective authorized representatives to sign where indicated belo-w:.
UNITED WESTERN TRUST COMPANY
UNITED WESTERN BANK
By: .
~ - v e . ~ -
James R. Peoples
Chairman of the Board and Chief Executive Chairman of the Board and Chief Executive
Officer Officer' .
1714
. Schedule A This is Schedule A to the Amendment made as of November 30,
2010 to the Amended and Restated Omnibus Sub-Accounting Agreement by and between United
Western Trust Company and United Westem Bank made as of April 26, 20 to.
Section 1. All capitalized tenns not otherwise defined in this Schedule A shall
. have meaning attributed to them in the Amendment.
Section 2. The monthly Sub-Accounting Fee to be paid by the Bank to the
Nominee shall be equal to $3.00 per each of the Average Accounts in each calendar month. The
aggregate Sub-Accounting Fee due to the Nominee from the Bank with respect to any calendar
month shall be the amount determined by multiplying the number of Average Accounts times
$3.00 (the "Aggregate Sub-Accounting Fee").
Section 3. The Aggregate Sub-Accounting Fee shall be paid by the Bank to the
Nominee in the month succeeding the calendar month for which the Aggregate Sub-Accounting
Fee is detennined within five days of the delivery of the certification of the Average Accounts
for the calendar month in question by the Nominee to the Bank.
1715
TabC
Exhibit 54 C (p)
1716
FIRST AMENDMENT
'This amendment is dated December 3, 2010 (the "Amendment") and is between United
Western Trust Company (the "Nominee") and United Western Bank, Denver, Colorado (the
"Bank");
WHEREAS, Nominee and Bank are parties to that certain Amended and Restated
Omnibus Sub-Accounting Agreement made as of April 26, 2010 (the "Agreement") whereby
Nominee, on behalf of the Nominee's clients and at the direction of the Nominee's clients,
directs funds at the Bank for the primary purpose of facilitating customers' purchase and sale of
securities and other investments and not in a capacity of a deposit placement service;
WHEREAS, the Nominee and Bank seek to amend the Agreement effective immediately
in order to re-structure the Agreement to mirror the relationship set forth in FDIC Advisory
Opinion 05-02, dated February 3, 2005;
WHEREAS, the Nominee and Bank acknowledge that time is of the essence;
NOW THEREFORE, in consideration of the mutual promises herein contained, Nominee
and Bank agree to be legally bound by the terms of this Addendum:
1. Effect of this Addendum
The terms of this Addendum shall be deemed to supersede any and all
inconsistent terms of the Agreement. All other terms of the Agreement which are not
inconsistent with this Addendum shall remain in full force and affect notwithstanding anything
to the contrary herein.
2. Amount of Swept Deposits at the Bank
(a)
(b)
Nominee shall use its commercially reasonable efforts to ensure that all funds
deposited at the Bank ("Swept Funds") do not exceed 10% of the total client
account assets held in client accounts at the Nominee (the "Ratio"). For purposes
of clarity, Nominee shall use commercially reasonable efforts to prevent the
average daily balance of Swept Funds during any one month from exceeding the
Ratio, based on the average total client account balances held by the Nominee
during that month (the "Monthly Ratio"), based on the most recently available
data.
At no time shall any Swept Funds be held in time deposits.
3. Reporting
(a)
Nominee, through its Chief Executive Officer or Chief Financial Officer shall
provide Bank with a written certification no later than the fifteenth (15th) day of
each calendar month con:finhlng both the Ratio and the Monthly Ratio for the
proceeding calendar month as well as the average number of client sub-accounts
1717
4. Fees
for the proceeding calendar month represented in any omnibus account or
accounts maintained at the Bank for the benefit of the Nominee's clients .. For the
purposes of such certification of the average number of client .sub-accounts for
any calendar months shall be the number of client sub-accounts held by the
nominee as of the first and last day of each calendar month divided by a factor of
two (the "Average Accounts"); provided, however, that the Nominee shall never
permit more than an average of 11,000 client sub-accounts to be maintained for its
clients at the Bank in any calendar month. Each monthly certification shall
acknowledge that the certification will be used by the Bank for purposes of
reporting to the Federal Deposit Insurance Corporation and may be relied upon by
federal bank regulators during examinations of the Bank.
(a) In lieu of any other sub-accounting or similar fees due to the Nominee under the
terms of the Agreement, the Bank shall pay Nominee a fee for administrative and
other services rendered as are provided for in the Agreement as set forth on
Schedule A hereto (the ("Sub-Accounting Fee"), which is an amount set forth on
a per account or per customer basis and is not calculated on the basis of funds
placed at the Bank. Schedule A is incorporated herein and made a part hereof for
all purposes by this reference.
5. Impact to Remainder of Agreement
(a) For purposes of clarity, pending the execution of any renegotiated Agreement, all
terms of the then-current Agreement not inconsistent with Sections 2 through 4 of
this Addendum shall remain in full force and effect.
6.
(a)
(b)
(c)
This Amendment may be amended or modified only in writing signed by all the
parties hereto. This Amendment shall be construed and governed by the laws of
the State of Colorado. This Amendment sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their successors and assigns, notwithstanding the foregoing, this Amendment
may not be assigned.
This Amendment may be executed in one or more counterparts and by facsimile
signature, each of which shall constitute an original and all which shall constitute
one instrument, in each case, for all purposes including admission into evidence
of the agreement of the parties.
The descriptive headings of the sections of this Amendment are for convenience
only and do not constitute part of this Amendment.
1718
IN WI1NESS WHEREOF, with the intention to be bound by the terms of this
Addendum, the parties have executed this Addendum as of the day and year ftrst above written
by causing their respective authorized representatives to sign where indicated below.
UNITED WESTERN TRUST COMPANY UNITED WESTERN BANK
By: Paul E. Maxwell James R. Peoples
Chairman of the Board and Chief Executive Chairman of the Board and Chief Executive
Offtcer Officer
1719
Sehedule A This is Schedule A to the Amendment made as of November 30,
2010 to the Amended and Restated Omnibus Sub-Accounting Agreement by and between United
Western Trust Company and United Western Bank made as of April 26, 2010.
Section 1. All capitalized terms not otherwise defined in this Schedule Ashall
have meaning attributed to them in the Amendment.
Section 2. The monthly Sub-Accounting Fee to be paid by the Bank. to the
Nominee shall be equal to $3.00 per each of the Average Accounts in each calendar month. The
aggregate Sub-Accounting Fee due to the Nominee from the Bank with respect to any calendar
month shall be the amount determined by multiplying the number of Average Accounts times
.$3.00 (the "Aggregate Sub-Accounting Fee").
Section 3. The Aggregate Sub-Accounting Fee shall be paid by the Bank to the
Nominee in the month succeeding the calendar month for which the Aggregate Sub-Accounting
Fee is determined within five days of the delivery of the certification of the Average Accounts
for the calendar month in question by the Nominee to the Bank.
1720
TabC
Exhibit 54 D
1721
"
EXhibitD
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TabC
Exhibit 55
1726
Decmber 29, 2010
Board ofDirectol's
Attn: Mr. JaIIles R. Peoples
CEO, and Presidf,mt
UnitedWestem Batik
700 l7
ih
Street, Suite 100
Denver, cO 80202
Do&rMembersofthe

We have completed an orr;.site review of United WeStemBank. As a result of that review and as
described in the attached We are downgrading the Cl:}plW and Eamings
component ratings from to "5," As.a those component downgrades, and the fact
that the Liquidity component is currently rated "5," we are also downgrading the Composite
rating ofllie institution from "4" to "5!'
The attachment is an official Report. of ExaIIlin$()n, OTS furnishes this doc.ument to the
. institution for its confidential use; Except as provided in 12 C;F,R. Section 51Q;5"the
institution's directors, officers, or employees may not disclose. the reporttorany portionaf it; to
unauthorized persons or organizations. Unauthorized persons or organizations include anyone
. not officially connected With the institution as ah.officer, director,employee, attorney, auditor,
independent auditor. or paren( holding company. . .
If the institution receives a subpoena: or other legal process calling for production of this
document. notify the Regional. Directori"mmediately. Advise the attorney and, if m;cessar;y. the.
court ()f the above prohibition and reterlliem to 12 C.F,.R. Section 510.5,
If you have comments or this letter, please contact me at (650) 746-7025, Field
Manager KeVihSwanson at (415) 271-7140, or Office Examiner Steve Hairisat (650) 7048.
Sincerely.
NicholtlS J. Dyer
Assistant Direttor
Attachment
1727
TabC
Exhibit 55 A
1728
Office of Thrift Supervision
epartment of the Treasury
Pacific Plaza, 200 I Junipero Serra Boulevard. Suite 650, Daly City. CA 94014-3897
Telephone: (650) 746-7000 Fax: (650) 7467001
Docket Number: 06679
REPORT OF EXAMINATION
United Western Bank
Denver, CO
Type of Examination: Comprehensive Limited
Examination Start Date: December 20,2010
Steve Harris
Examination Completion Date: December 22.2010
Western Region
Daly City Area Office
Based on findings. of our Examination that began on September 27. 2010 and on off-site review, we are
downgradirig the Capital and Earnings component ratings of United Western Bank (Institution) from
"4;' to "5," As a result of the component downgrades, we are also downgrading the Composite rating
from "4" to "5."
The new ratings reflect the changes in the Institution's condition that have occurred since the OTS
Field Visit of January 11,2010 and the off-site downgrade of the Liquidity component on June 22,
2010. The definition of the "5" Composite rating is as follows:
Financial institutions with a composite rating of 5 exhibit extremely unsafe and unsound practices or
conditions,' exhibit a critically deficient performance; often contain inadequate risk management
practices relative to the institution's size, complexity. and risk profile,' and are of the greatest
supervisory concern. The volume and severity of problems are beyond management's ability or
willingness to control or correct, Immediate outside financial or other assistance is needed in order
jor the financial institution to be viable. Ongoing supervisory attention is necessary, Institutions in
this group pose a signijicantrisk to the deposit insurancefund andfailure is highly probable.
At our direction. the Institution re-filed its Thrift Financial Report (TFR) for September 30, 2010 on
December 8, 2010. The revised report reflected the recognition of an additional $16.3 million in
charges for other-than-temporary impairment (OTTI) on private label mortgage-backed securities. As
a result of those charges, the Institution'S total risk-based capital ratio declined to 7.80 percent, and
United Western Bank became Undercapitalized under the PCA standards.
Combined with its unsatisfactory liquidity position (reflected in the current "5" rating in the Liquidity
component), United Western Bank's Undercapitalized status greatly raises the level of risk at the
Institution. That status increases the possibility that institutional depositors will reduce their deposits
to the contractual minimum amounts and submit notices of withdrawal of deposits, precludes the
institution from continuing to accept employee benefit plan deposits, and prevents the FDIC from
considering a waiver of its brokered deposit regulations in connection with United Western Bank's
institutional deposits.
1729
Page 2
The institution is unable to augment its capital level through earnings. Net losses have accelerated in
.2010. The net loss ofS68.8 million through September 30,2010 was almost. as large as t.he $69.4
million recorded for all of calendar 2009. Core earnings (net interest income and fees less G&A costs)
remained weak, and credit losses on loans and securities increased. Although there was $930,000 in
positive core earnings in the third quarter of the year, there was a year-to-date core loss of$1.5 million
through September 30, 2010. Through that date, there was $38.7 million in loan loss provisions.
OrrI charges were $27.8 million. Without a capital infusion that would allow the restructuring of the
balance sheet and the disposition of problem loans and securities, there is little prospect for earnings to
become positive in the .immediate future.
With the new ratings described above, United Western Bank now has component ratings of"5" in
Capital, Earnings, and Liquidity. "While we continue to evaluate the other component ratings as part of
our current Examination, we conclude that the condition of the Institution requires an immediate
downgrade of the Composite rating to "5,u
1730
epdf: P. Gerbick
G.Scott
D. Jenkins-King
C.Coon .
N.Dyer
K. Swanson
W. Santos
L. Hearick
S. Harris
Y. Sosa
K. Walter
J. CoITal-Chavez
Record Copy: Daly City Record Center
1731
TabC
Exhibit 56
1732
December 29,2010
Board ofDirectots
Guy A. Gibson., Chairman
United W.stem Ba.ncorp.lnc,
700 17
th
' Suit\,: 100
. Denver, CO 80202
Dear Members orthe Boatd:
Daly City AI'cil ()ffice
We, have completed anolf-site review. ofUnitedWestern:8ancorp. Inc. A$ a result of that
review and as described in the attached Report ofExatnination, we are downgrading the Capital
and EarningslLiquiditycomponent ratings and Composite rating of the. holdirigcompany to "5."
The is an official Report of Examination. OTS furnishes thisdoeliinent to the.
holding 'comPanY for its.confidentiat use .. EXCept as provided in 12C.F.R.. Section tne
h.olding company. its dfrectors.officers, ot employees may not dil3close the any portion
of to unauthorized persons. or Unauthorized pe.rsong or organizations include
anyone tiotoffici.aUy cQtulected with .theholding company. as at1 director, employee,
attorney. auditor, independent auditor, subsidiary institution, or affiliated holdingeompany.
If the holding company receiVesasubpoenaot'other legal process calling for prodllctionof this,
document, notify theapprQpriate Of lice immediately. Advise the attorney and. if
the COllrt of the above pr()hjbition and. refer them to 12 C.F .R: Section 51 a,s.
If you have comments orquestionsontllis letter, plea$e contactille at (6$0) Field
Mariager Kevin Swanson at (415) 271..;7140. 01' Office Harris at (650J 746,..704S:.
Sincerely,
f&'d-k T:i)r
Dyer
Assistant Director
Attachment
1733
TabC
Exhibit 56 A
1734
"
Docket Number: H-2192
REPORT OF EXAMINATION
United Western Bancorp
Denver, CO 80202-3501
Type of Examination: He Limited
Examination Start Date: December 20,2010
Examiner-in-Charge: Steve Harris
Examination Completion Date: December 22, 2010
Western Region
Daly City Area Office
Our Examination of United Western Bancorp, Inc. (the Company) began on September 27, 2010.
While that Examination is still in process, we have completed an off-site review of the Company.
Based on our review, we are downgrading the Capital and EamingslLiquidity component ratings and
Composite rating of the Company to "5."
The new rating reflects the changes in the Company's condition that have occurred since the OTS
Examination of March 30, 2009. The definition of the "5" Composite rating is as follows:
Composite 5. The magnitude and character of the risk management or financial weaknesses of a
holding company enterprise in this category could lead to insolvency without immediate aid from
shareholders or supervisory action. The volume and severity of problems are beyond the board and
management's ability or willingness to control or correct. The effectiveness of the organizational
structure and risk management practices are inadequate relative to the enterprise's size, complexity,
and risk profile. The inability to prevent liquidity or capital depletion places the holding company
enterprise's continued viability in serious doubt.
The poor financial condition of the Company largely reflects that of its principal subsidiary, United
Western Bank (Institution). As a result of our concurrent off-site review of the Institution, we have
downgraded its Capital and Earnings component ratings and its Composite rating to "5." Because of
United Western Bank's inadequate levels of capital and earnings, it is unable to pay dividends to
United Western Bancorp to cover the Company's debt service needs. Instead of having resources from
. United Western Bank available to it, the Company made capital contributions to the Institution and the
Institution transferred some of its below-investment-grade mortgage-backed securities to the parent's
balance sheet.
1735
Page 2
Because of United Western Bancorp's diminished liquidity and capital resow-ces, the Company is in
default on its debt obligation to JPMorganChase. On November 9,2010, the Company notified us that
it had reached a "Fifth Forebearance and Amendment Agreement" under which Chase would, in
exchange for interest payments, forebear from exercisiJ?g its right to collect the principal amount due
until January 14,2011. The agreement stipulates that United Western Bancorp will pay $10.6 million
on that date to fully satisfy the obligation.
The Forebearance Agreement anticipates that the Company will pay the principal amount from part of
the proceeds of the capital transaction outlined in the current Investment Agreement. On December
20, 2010, the Institution submitted its Capital Restoration Plan, which r e f ~ r e n c e d the completion of a
capital raise as soon as practicable and before January 31; 2011. There are several conditions that must
be met before such capital raise could be completed within this timeframe. According to the
information available to us, United Western Bancorp would not have sufficient cash resources to meet
a demand from JPMorganChase for payment of the principal balance by January 14,2011. The
Company also does not have resources to reimburse the Institution $10,008,301 pursuant to the Tax
Allocation Agreement, dated January 1, 2008.
The financial viability of the Company is in strong dOUbt. While we continue to evaluate the other
component ratings as part of our current Examination, we conclude that the condition of United
Western Bancorp requires an immediate downgrade of the Composite rating to "5." .
1736
TabC
Exhibit 57
1737
Office of Thrift Supervision
epartment of the Treasury
RegiOfUll Director. Western Region
225 East John Carpenter Freeway, Suite SOO, Irving, TX 75062-2326 Telephone: (972) 277-9500
P.O. Box 619027. DallasIFort Worth, TX 75261-9027 Fax: (972) 277-9501
December 29,2010
OTS Docket No. 06679
Board of Directors
Attn: Mr. James R. Peoples
Chairman, CEO and President
United Western Bank
700 17th Street, Suite 100
Denver, CO 80202
Re: Request for non-objection to Controlled Asset Growth as of December 31, 2010
Dear Members of the Board:
This letter.is in response to Chairman and CEO James Peoples' letter dated today requesting
non-objection to controlled asset growth pursuant to Section 26 of United Western Bank's
(United Western or bank) Cease and Desist Order dated June 25, 2010 .
. In his letter, CEO Peoples requested the prior written non-objection of the Office of Thrift
. Supervision to increase United Western's total assets to approximately $2.250 billion in the
quarter ending December 31, 2010, representing an increase in total assets of approximately
$193 million from quarter ended September 30, 2010. The purpose of this asset growth is to
increase the bank's liquid assets. This growth will be funded by FHLB Advances and deposit
liabilities raised through QwickRate and other similar deposit programs. Asset growth will be
reported in the bank's December 31, 2010 Thrift Financial Report reflecting an increased
balance due from the Federal Reserve Bank of Kansas City.
As a resUlt of our review, this serves as my prior written non-objection to the subject request.
This approval of growth is strictly limited ~ o the growth parameters as outlined in Mr. Peoples'
letter and is for the sole purpose of bolstering the bank's liquidity position.
Should you have any question regarding this letter, please contact Assistant Director Nicholas
Dyer at (650) 746-7025. . .
~ 5 ' c .IY, CL f) I.
,"C - c . . ~
Philip . Gerbick
Regional Director
1738
Letter to Board of Directors
United Western Bank
December 29,2010
Page 2
Cc: Mr. Joseph A. Meade, Assistant Regional Director, FDIC-Dallas
Mr. Lawrence Kaplan, Paul, Hastings, Janofsky & Walker LLP
1739
Letter to Board of Directors
United Western Bank
December 29,2010
Page 5
bcc/epdf: S. Auchterlonie
F. Augello
J. Chen
C. Coon
K. Corcoran
A. Dayao
N. Dyer
S. Harris
G. Jeffers
D. Jenkins-King
D. Roberts
w. Santos
Y. Sosa
C. Sterbenz
K. Swanson
M. Sweeney
K. Walter
1740
TabC
Exhibit 58
1741
December 29, 2010
Board of Directors
Attn: Mr. James R. Peoples
Chairman, CEO, and President
United Western Bank
700 17th Street, Suite 100
Denver, CO 80202
RE: Revised Liquidity Contingency Plan
Dear Members of the Board:
Westel1l Region
Only City Area Office
VIA SECURE EMAIL
Our Directive of December 21,2010 required United Western Bank (Bank) to submit a revised
Liquidity Contingency Plan (LCP). By letter dated December 28,2010, the Bank provided a
revised Liquidity Policy and Contingency Funding Plan. By electronic communications on
December 29, 2010, the Bank provided a revised Attachment A and additional correspondence.
Although we may have additional questions in connection with the LCP, our initial review of the
Plan and the letter raises issues that require immediate clarification.
1. Page 30 of the revised LCP states that" ... the Bank could call on up to $400 million of
additional processing and trust deposits from Legent prior to closing of the purchase if such
deposits were necessary relative to a risk of the withdrawal of Equity Trust deposits or a
regulatory requirement to move such deposits." fu addition, Appendix A to the revised LCP
indicates that "additional Legent deposits" are available to offset losses of various other deposits.
Provide the OTS with any written communications or agreement with Legent that indicate
Legent is willing to place up to $400 million in additional deposits with the Bank under the
circumstances contemplated in the revised Liquidity Plan. State whether Legent has entered into
any binding comniitment or agreement to place deposits with the Bank in excess of the $170
million minimum amount currently required by the Subaccounting Agreement between the Bank
and Legellt dated August 18,2010. Advise us as to any conditions that apply to any such
binding commitment or agreement by Legent. Identify how any such commitment from Legent
is consistent with the $350 million "Maximum Balance" provided for in Section 6 of the
Sub accounting Agreement. State whether Legent and the Bank have entered into any written
1742
Board of Directors
United Western Bank
December 29, 2010
Page 2
modification of either the "Target Balance" amount of $170 million or the "Maximum Balance"
amount of $350 million. If Legent has not entered into a binding agreement to place an
additional $400 million in the Bank, please advise why the Bankbelieves that this is a viable
option to handle demands for withdrawals of other institutional depositors.
2. The letter and the LCP indicate that FHLB advances would be an important source of
liquidity in the event that institutional depositors withdrew portions of their funds from United
Western Banlc From our telephonic discussion with Mr. Peoples and others on December 29,
2010, we understand that the Bank has now drawn down nearly all of its FHLB-Topeka
borrowing capacity. A substantial portion of the advances appear to be short-term in nature.
Provide the details of the terms of such short-term advances. Indicate the conditions under
which FHLB-Topeka may refuse to rollover maturing advances and the notice, if any, that the
FHLB would be required to provide to United Western Bank.
3. The letter and the LCP indicate that QwickRate deposits would also be a source of
liquidity to replace any institutional deposits that flowed out of the bank. On December 29,
2010, the Bank reported to us that, while keeping offered rates well below FDIC maximums,
United Western Bank had attracted approximately $14 million in QwickRate and similar deposits
by the end of the day. Provide us with estimates of the amounts of such deposits that the Bank
projects it could obtain each week during the month of January 2011 while still observing the
FDIC national rate cap limits.
4. As detailed in our Directive of December 21,2010, the Equity Trust Company Deposit
Agreement calls for the termination of the contract within 10 days of a determination that it
violates any statute or regulation. Provide an assessment of the conditions under which Equity
Trust might make that determination, the probability of that eventuality, and the actions that
United Western Bank could take to meet such a demand for funds. Please identify any
contractual provisions or other agreements that would require ETC to withdraw its funds over six
months or otherwise over an extended period of time in the event the contract were terminated
other than pursuant to Section 9 of the contract.
1743
Board of Directors
United Westem Bank
December 29, 2010
Page 3
Please provide us with the information requested in this letter by 5 PM Central Time on
Thursday, December 30,2010. The OTS reserves all of its rights. If you have questions or
comments, please contact Assistant Director Nicholas Dyer at (650) 746-7025 or Senior
Attorney Clay T. Coon at (650) 746-7042.
Sincerely,
Nicholas J. Dyer
Assistant Director
1744
Board of Directors
United Western Bank
December 29,2010
Page 4
bcc/epdf: S. AuchterIonie
F. Augello
J. Chen
C. Coon
K. Corcoran
A.Oayao
N. Dyer
S. Harris
G. Jeffers
D. Jenkins-King
D. Roberts
W. Santos
Y. So sa
C. Sterbenz
K. Swanson
M. Sweeney
K. Walter
1745
TabC
Exhibit 59
1746 .
WESTERN WAJ
,J
u, N, IT, ED,
" " BANCORP
December 29,2010
Philip A. Gerbick
Regional Director
Office of Thrift Supervision
Western Regional Office
225 E. John Carpenter Freeway, Suite 500
Irving, TX 75062-2326
Michael J. McCloskey
Executive Vice President and
Chief Operating Officer
Tel: 720-932-4282
mmccloskey@uwbank.com
CONFIDENTIAL TREATMENT REOUESTED
1
Kristie K. Elmquist
Acting Regional Director
Federal Deposit Insurance Corporation
1601 Bryan Street
Dallas, TX 75201
Re: United Western Bancorp, Inc. capital formation efforts
Dear Ms. Elmquist and Mr. Gerbick:
James R. Peoples, Chairman of the Board and Chief Executive Officer of United
Western Bank, has asked me to confirm to you the status of the capital formation efforts bY'
United Western Bancorp, Inc., (the "Company") as of this date. At this time I can report the
following:
1 This letter confidential business information of United Western Bank and its holding company United Western Bancotp,
Inc. that is not in the public domain. This letter is being provided to the federal bank regulators of united Western Bank in their
supervisory capacity over the Bank and there,fore should be granted confidential tre!J,tment pursuant to the confidential commercial
information and bank examination and supervision exemptions to the Freedom of Information Act. Accordingly, we request,
pursuant to 5 U.S.c. 552(b)(4) and confidential treatment of this letter. Please notify us if anyone submits a Freedom of
Information Act request for a copy of this letter.
United Westem Financial Center
700 Seventeenth Street, Suite 2100
Denver, Colorado 80202
WWWuwbank.com
1747
Ms. Kristie Elmquist
Mr. Philip Gerbick
December 29, 2010
Page 2
,
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The table above represents the Company's best estimate at this time and is subject to revision
based on changes in circumstances. All of the investors' obligations are, or will be, subject to
significant conditions precedent as we have discussed with you in the past. The Company
continues to discuss possible investment with other investors as well in order to properly explore
all avenues of any possible recapitalization.
Mr. Gerbick has requested additional information concerning Olympus Partners, a private equity
group founded in 1998 and based in Connecticut. We commenced discussions with Olympus
surrounding this capital formation effort in June 2010. Olympus spent a considerable amount of
time vetting our business plan prior to commencing more detailed due diligence late in the third
calendar quarter of2010. Olympus is in the process of reviewing fmal personal references for the
1748
Ms. Kristie Elmquist
Mr. Philip Gerbick
December 29.2010
Page 3
management team and will conduct a site visit in Denver next week. At this time, we expect
Olympus will give us a :firm investment commitment, subject to document review and execution,
sometime late next week. We are advised that the Olympus attorneys are already reviewing the
proposed form of investment agreement.
Olympus has made several investments in the financial services and bank space including,
among others:
American Residential, a national residential mortgage company focused on the
Western U.S. The company originates loans through both wholesale and retail
production.
Ariel Re, a Class 4 Bermuda property and casualty reinsurance company with
over $1 billion of equity capital. Ariel was formed in 2005 in response to the
reinsurance capacity shortage caused primarily by Hurricane Katrina.
Aspen Re, a leading, worldwide property and casualty reinsurance underwriter.
The company has operations in London and Bermuda.
Eldorado Bancshares which provides commercial banking services to medium
sized businesses and retail customers. The company consolidates community
banks in Southern California.
CountryBanc, a bank providing commercial banking services to medium sized
businesses and retail customers. They emphasize agricultural, livestock, and real
estate lending. CountryBanc was acquired by Gold Banc (NASDAQ: GLDB) in
2000
I am available to discuss this with you at any time.
Cordially,
Michael J. McCloskey
Executive Vice President and Chief Operating Officer
1749
Ms. Kristie Elmquist
Mr. Philip Gerbick
December 29,2010
Page 4
cc:
Guy A. Gibson
James R. Peoples
John E. Bowman, Acting Director
Thomas A. Barnes
Deborah Dakin, Esq.
Susan L. Chomicz, Esq.
Michael Simone
Lori Quigley
Nicholas Dyer
Kevin A. Corcoran, Esq.
Frances Augello, Esq.
Brian A. Steffey, Esq.
Richard Osterman, Esq.
Serena Owens
Andrew L. Sandler, Esq.
Liana Prieto, Esq
1750
TabC
Exhibit 60
1751
Coon. Clayton T
From:
Sent:
To:
Cc:
Subject:
Attachments:
Importance:
, Kaplan, Lawrence D. [lawrencekaplan@Paulhastings.com]
Tuesday, January 04,2011 1:36 PM
Bowman, John E; Bames, ~ h o m a s A; Gerbick, Philip A; Quigley, Lori J; kelmquist@fdic.gov;
Meade, Joseph A.; Dyer, Nicholas J; Coon, Clayton T; Chomicz, Susan L; Jenkins-King,
Deborah C; Dakin, Deborah; Corcoran, Kevin; Marcotte, Karen; Augello, Frances;
sowens@fdic.gov; ctoppings@fdic.gov; mkrimminger@fdic.gov; Bahin, Charlotte M' Steffey
Brian S; Simone, Michael L; chencke@fdic.gov; Dwyer, Donald W "
Jim Peoples; Michael J. McCloskey; Ted Abariotes; ggibson@uwbank.com
United Western Bank - SARC Appeal of Brokered Deposit Determination
Ltr to S Thompson re UWB 1 4 11.pdf
High
The attached is being filed with the FDIC this aftemoon, along with the various exhibits. To avoid clogging everyone's e-
mail boxes, the referenced exhibits have been excluded from this e-:mail, but they are available upon request.
Lawrence D. Kaplan 1 Paul, Hastings, Janofsky & Walker LLP 1 875 15th Street, N.W., Washington, DC
20005 1 direct: 20255118291 fax: 2025510229 1 main: 20255117001
I lawrencekaplan@paulhastings.com 1 www.paulhastings.com http://www.umich.eduJ-mgoblue/soundslvictors.wav
Paul Hastings is committed to sustainable practices. Reducing printed waste sa.ves resources.
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hereby advised that any written tax advice contained
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1
1752
TabC
Exhibit 60 A
1753

Sandler l.LP
VIA HAND DELIVERY
Sandra L. Thompson
Director
Division of Supervision and Conswner Protection
Federal Deposit Insurance Corporation
550 17th StreetNW
RoomF-4076
Washington, DC 20429
January 4,2011
Andrew L. Sandler
1250 24th Street, NW
Suite 700
Washington, DC 20037
t 202.349.8001
asandler@buckleysandler.com
Re: UriitedWeBterli
Dear Ms. Thompson:
This request for review of a material supervisory determination is provided on behalf of United
Western Bank ("UWB" or the "Bank"), to the Federal Deposit Insurance Corporation ("FDIC")
in response to the November 5,2010 letter from Kristie K. Elmquist, Acting Regional Director
of the FDIC's Dallas Regional Office, to the Bank's Board of Directors (the "Brokered Deposit
Determination") stating that the FDIC had concluded that certain institutional depositors
2
with
relationships with UWB are deposit brokers as defined in Section 29 of the Federal Deposit
Insurance Act ("FDIA,,).3 12 U.S.C. 183lf ("Section 29"). This request for review and the
attached docwnents demonstrate that, based on the language in the relevant statute and
regulation, the Institutional Depositors clearly fall within the "primary purpose" exclusion and
are, therefore, not deposit brokers. Accordingly, pursuant to the FDIC Guidelines for Appeals of
Material Supervisory Determinations, UWBrespectfully requests that the Brokered Deposit
Determination be
4
I This letter contains confidential infonnation concerning United Western Bancorp :mc. ("Bancorp") and United
Western Bank: ("UWB") and is not in the public domain. This information is being provided to the Federal Deposit
Insurance Corporation and the Office of Thrift Supervision, the agencies responsible for the regulation and
supervision of Bancorp and UWB as materials related to the examination and operations of Ban corp and UWB.
Any public disclosure ofthis confidential information could result in substantial harm to Bancorp and UWB.
Accordingly, confidential treatment of this letter, pursuant to 5 U.S.C. 552(b)(4) and (8), is requested.
2 These institutional depositors are Legent Clearing, LLC; Matrix Settlement and Clearing Services, LLC; Equity
Trust; Lincoln Trust Company; Constellation Trust Company; Trust Management, Inc.; and, United Western Trust
Company ("Institutional Depositors").
3 November 5, 2010 Letter from Ms. Elmquist to James R. Peoples attached as Exhibit 1.
4 UWB' s board of directors has considered the merits of this request and authorized it be filed.
WASHINGTON. DC
Corifidential and Proprietary Information
Not Subject to FOIA Disclosure
NEWYORK,NY
1754
lOS ANGELES, CA
Sandra L. Thompson
January 4,2011
Page 2
Executive Summary
The Institutional Depositors are excluded from the definition of deposit brokers because,
pursuant to the primary purpose exclusion, they are agents who place funds into. a
depository institution for a substantial purpose other than to obtain deposit insurance
coverage or to provide customers with a deposit placement service. The Institutional
Depositors provide deposit placement services to their customers as an incidental
accommodation and their primary purpose in depositing these funds is to facilitate the
functioning of their primary custodial, settlement, clearing and escrow businesses.
The Brokered Deposit Detennination wrongly concludes that, because the Institutional
Depositor relationships do not comply with the non-binding FDIC Advisory Opinion 05-
02 dated February 3, 2005 ("Advisory Opinion 05-02"), the Institutional Depositors do
not come within the primary purpose exclusion from the defmition of deposit brokers.
This advisory opinion does not carry the force of law and may not be read to set forth
"rules" or alter the plain statutory language of Section 29 that clearly states that any agent
"whose primary purpose is not the placement of funds with the depository institution" is
not a deposit broker. The FDIC is charged with interpreting the FDIA, but it cannot do so
in a way that obviates the plain statutory language as it has done here.
To the extent that advisory opinions are considered in analyzing this issue, it is arbitrary
and unreasonable to limit that consideration to Advisory Opinion 05-02 when there are
other advisory opinions that also address the primary purpose exclusion. There are
numerous advisory opinions stating that where a depositor has a substantial purpose other
than obtaining deposit insurance for the deposits, the depositor is not a deposit broker.
The Institutional Depositors' primary intent and substantial purpose in depositing funds
at the Bank is (i) to facilitate the self-directed investment, reinvestment, or disbursement
of funds to and from retirement accounts; eii) to facilitate the settlement and clearing of
mutual fund trades; or (iii) to facilitate customers' purchase and sale of securities. Thus,
a review of the publicly available advisory opinions addressing this issue support the
conclusion that the Institutional Depositors are not deposit brokers.
Since March 2010, the Bank has provided the FDIC with substantial evidentiary support
demonstrating that the Institutional Depositors fall squarely within the primary purpose
exclusion. The FDIC's assertion that the Bank submitted "no proof' in support of its
position that the Institutional Depositors are not deposit brokers is completely meritless in
light of the volume and substance of infonnation provided to the FDIC.
The conclusion that the Institutional Depositors are not deposit brokers is further
supported by the legislative history of Section 29. Restrictions on brokered deposits were
driven by Congress' . concern about ''the ready availability of brokered funds, obtained
through the payment of above-market rates, and their potential use to support risky and
Confidential and Proprietary Information
Not Subject to FOIA Disclosure
1755
Sandra L. Thompson
January 4, 2011
Page 3
speculative asset investment by weak and insolvent The deposits at issue
are stable, low-rate deposits that carry none of the indicia of "bot" money, and to
characterize them as brokered deposits is to lose sight of the purpose of Section 29.
Finally, the determination as to whether an entity is.a deposit broker is a fact-specific
inquiry dependent on the depositor's activities, not the depository institution at which
deposits are placed. However, we have become aware thai: FDIC examiners difect:ed
another institution not to treat an Institutional Depositor's deposits as brokered. The
practical effect of the Brokered Deposit Determination is that dollar x placed by an
Institutional Depositor at UWB is deemed. a brokered deposit, while dollary placed by
the same Institutional Depositor at another depository institution is not For the FDIC to .
treat the Institutional Depositors' deposits differently depending on whether they are
placed at UWB or at another institution is inconsistent with the language and intent of
Section 29, with fundamental notions of fairness. .
For these reasons, the Bank respectfully submits that there is no basis to conclude that the
Institutional Depositors are deposit brokers. Resolution of this dispute will materially affect the
Bank because a failure to reverse the detemiination will require the Bank. to abandon what has
been its fundamentally successful business model for 17 years and also may jeopardize the
Bank's pending $200mi1lion private-sector recapitalization. The Bank, therefore, requests that .
the Brokered Deposit Determination, whicb has no basis in law, regulation, or fact, be reversed.
Background
UWB is a federal savings bank whose primary regulator is the Office of Thrift Supervision
("OTS',). However, the FDIC also possesses regulatory authority over UWB as UWB's deposit
liabilities are insured by the FDIC. UWB, in addition to providing community banking services
in Colorado, has primarily served as a processing and settlement institution for institutional
depositors with whom the Bank has long term contractual relationShips. These processing and
settlement functions have been an integral portion of the Bank's business for the past 17 years.
Since 1993, the Bank has entered into a number of agreements with institutions that have custody
of customer funds, pursuant to which these institutions, as agents for their respective customers,
maintain deposit funds in money market andlor demand deposit accounts at the Bank. These are
ordinary course deposit relationships between the Institutional Depositors and their customers,
which are provided to their customers as an incident to the Institutional Depositors' primary
businesses; in no instance is it the primary purpose of any of these entities to place deposits with
UWB. The current institutional relationships, some ofwhicb date back over 13 years, have
shown consistent growth and stability over the time period the funds have been on deposit with
the Bank. None of the deposits in question constitute "hot" money that has been gathered by a
deposit broker.that shops for financial institutions paying the.highest rates. Rates paid on the
; See Senate and of the 101 at Congress, First Session, on the Financial Institutions Refonn, .
Recovery, and Enforcem.entAct ofl989 (,'FIRREA") at 135 Congo Record 84071 (Apri118, 1989).
Corifidential anti Information
Not Subject to FOIA Disclosure
1756
Sandra L. Thompson
January 4, 2011
Page 4
deposits held by the Bank under its contractual relationships currently range from 0 to 110 basis
points. Moreover, these deposits are stable and not likely to move out of the Bank absent an
adverse, inappropriate regulatory determination. As such, it is only the FDIC's own actions in
wrongly reclassifying these deposits as "brokered" that risk making these deposits unstable.
In early 2010, after the Bank had been in this business for 16 years, the FDIC first raised
questions regarding whether the Institutional Depositors were deposit brokers. In March 2010,
UWB responded to these questions by providing the FDIC with substantial documentary
evidence demonstrating that the Institutional Depositors are not deposit brokers.
6
On June 2, 201 0, the Bank received a preliminary determination issued by the FDIC Dallas
Regional Office dated May 24, 2010,deeming the Institutional Depositors as "deposit brokers.'"
At no time prior to this determination had the FDIC or OTS taken such a position, despite the
fact that both agencies have long been aware of UWB' s relationships with the Institutional
Depositors. As a consequence of this determination andUWB's status as an adequately
capitalized institution under the OTS's prompt corrective action ("PCA").regulations, certain
restrictions pertaining to the deposits became applicable to UWB.
On June 10,2010, at the direction of the OTS, UWB filed a waiver request with the FDIC
requesting the FDIC issue a waiver pursuant to 12 C.F.R 337.6(c), allowing the Bank to
continue to accept, renew and roll over deposits associated with the Institutional Depositors.
8
On June lS, 2010, UWB announced its intention to acquire 100% ofLegent Clearing LLC
one of the Institutional Depositors.
9
This acquisition willptovide the Bank with
access to a stable, long-term funding source. In connection withthe proposed acquisition, UWB
has submitted applications for approval to the OTS and FDIC with detailed information about
Legent's business that demonstrates that Legent is not a deposit broker.
10
Both the OTS and
FDIC have taken the position that they will riot act on the application until the brokered d.eposit
issue is resolved. Accordingly, the applications for approval of the Legentacquisition remain
pending before the agencies .
. ..... H'.
6 See, e.g., "United Western Bank Core Deposit Management Strategic Planning and Regulatory (Mar. 8,
2010) attached hereto as Exhibit 2; March 10, 2010 Letter from BuckleySaildler LLP to UWB attached hereto as
Exhibit 3; February 23, 2010 and March 8, 2010 Letters from Luse Gorman Pomerenk & Schick to U\VB attached
hereto as Exhibit 4; "Legent and the Clearing Industry" Memorandum from Guy A. Gibson, Michael J. McCloskey
and MichaelA. Stallings to the Board ofDirectDrs ofUWB (Jan. 1,2010) attachedheteto as ExhibitS.
7 May 24,2010 Letterfrom Ms. ElmqWst to Mr. Peoples attached hereto as Exhibit 6.
B June 10,2010 Letter from Mr. Peoples to Ms. Elmquist attached hereto as Exhibit 1.
9 June 28,2010 "Acquisition ofLegentClearing and Impact on Deposits with United Western Bank Under 12
C.F.R. 337.6" Memorandum from UWB and Bancorp to the FDIC attached hereto as Exhibit 8.
10 See July 21,2010 Letter from Michael J. Blayney, Hunton & Williams, to Mr. Philip A. Gerbick, Regional
Director, OTS Western Region attached hereto as Exhibit 9; September 9,2010 Letter:from Bowman W. Lee, OTS
Applications Analyst, to Mr. Blayney attached hereto as Exhibit 10; October 8, 2010 Letter from Mr. Blayney to Mr.
QerbIck attached hereto as Exhibit II; Additional Information Filing Number 2 to Operating Subsidiary Application
fUedby UWB to acquire"Legent, Confidential Volumes 1 of2 and 2 of2 (filed November 17,20 10) attached hereto
as Exhibits 12 and 13, respectively. ' .
Corifidential and Proprietary lyiformation
Not Subject to FOIA Disclosure
1757
Sandra L. Thompson
January 4, 2011
PageS
On June 25, 2010, after the Bank and its parent holding company, United Western Bancorp Inc.
("Bancorp") executed stipulations and consents to issuance of an order to cease and desist, the
OTS issued orders against the Bank and Bancorp. The order issued to the Bank. (the "Bank
Order") imposes a requirement on the Bank to "meet and maintain" a Tier 1 (Core) Capital ratio
of 8% and a minimum Total Risk-Based Capital of 12%. The effect of such requirement is to
disqualify the Bank from being deemed "well capitalized" and, therefore, indefinitely subject to
restrictions on the acceptance of broke red deposits absent the issuanceofa waiver by the FDIC.
On June 30, 2010, representatives ofUWB met with representatives of the FDIC and OTS in
Washington, DC.
II
At the meeting, UWB reviewed its long-standing business model with the
agencies and answered questions from the agencies regarding the Bank.' relationships with the
Institutional Depositors and its plans for recapitalization. Also at the meeting, the FDIC
confinned that its May 24 determination was preliminary. Senior FDIC legal staff specifically
advised UWB that Advisory Opinion 05-02 was not controlling with respect to whether a deposit
is a "brokered deposit," but rather illustrative ofthe factors the FDIC reviews in making a
brokered deposit determination in the context of "sweep" accounts. Ms. Serena L. Owens,
Associate Director, Division of Supervision and Consumer Protection, confirmed at this meeting
that the Supervisory Appeal Review Committee process was available to the Bank. to challenge a
final determination on the brokered deposit issue. The meeting appeared to be positive and
productive, and the Bank believed that progress was being made toward a reasoned, final
detennination regarding the Institutional Depositors.
On July 12,2010, the Bank. received a letter dated July 8 from the FDIC stating that the Bank's
June 10 application for a waiver was incomplete and not accepted, pending the provision of
certain supplemental information.
I2
On July 19, 2010, the Bank requested an extension and, on
July 30, provided the supplemental informatio:n requested by the FDIC.13
On August 26,2010, the FDIC requested additional information.
14
The Bank's September 15,
2010 response, like previous communications, addressed the FDIC's questions and provided
extensive documentation in support of the conclusion that the Institutional Depositors are not
deposit brokers. IS
As UWB continued to attempt to work with the FDIC toward a resolution ofthe brokered deposit
issue, UWB and Bancorp simultaneously arranged for a private sector $200 million
II July 2,2010 Letter from Lawrence D. Kaplan, Paul Hastings, Janofsky& WalkerLLP to Lori J. Quigley, Acting
Regional Director, OTS Western Region and Nicholas J. Dyer, Assistant Director, OTS Western Region, attached
hereto as Exhibit 14;July 8, 2010 Letter from Mr. Kaplanto Ms. Owens attachedheretoas Exhibit 15: July 27,
2010 Letter from Ms. Owens to Mr. Kaplan attached hereto as Exhibit 16.
12 July 8, 2010 Letter from Ms. Elmquist to Mr. Peoples attached hereto as Exhibit 17.
13 July 19,2010 Letter from Mr. Peoples to Ms. Elmquist attached hereto as Exhibit 18; July 30, 2010 Letter from
Mr. Peoples to Ms. Elmquist attached hereto as Exhibit 19.
14 August 26, 2010 Letter from Ms. Elmquist to Mr. Peoples attached hereto as Exhibit 20.
tS September 15,2010 Letter from Mr. Peoples to Ms. Elmquist attached hereto as Exhibit 21.
Confidential and Proprietary Information
Not Subject to FOIA Disclosure
1758
Sandra L. Thompson
January 4, 2011
Page 6
recapitalization of the Bank (the "Recapitalization Transaction"). On October 29,2010, the
Bank provided the FDIC and OTS with the investment agreement with three anchor investors
and requested a meeting to discuss the transaction. 16 The Recapitalization Transaction, which is
currently scheduled to close on or before January 31, 2011, will result in the recapitalization of
UWB as well as a significant de-risking of its balance sheet through the removal of certain direct
credit substitute securities.
17
This private sector solution to the issues facing UWB is contingent
on the FDIC and OTS taking reasonable and timely actions.
On November 5, 2010, the FDIC issued the Brokered Deposit Determination concluding thatthe
Bank's deposits from the Institutional Depositors were brokered deposits. UWB promptly
notified the FDIC of its appeal and the FDIC awed not to take any
action to enforce the detennmatlOn pending resolution of UWB' s appeals. g
After numerous requests for a meeting to discuss the Recapitalization Transaction, the FDIC and
OTS met with representatives of UWB on November 17, 20 to. The purpose of this meeting was
to explain the transaction and secure the agencies' cooperation in achieving a private sector
resolution ofUWB's issues.
19
As a result of the issues raised by the agencies at this meeting,
UWB has engaged in further negotiations with the anchor investors to the terms of the
October 29 investment agreement in order to satisfy regulatory expectations. 0
Since the November 17th meeting, however, the Bank has been subject to a flurry of supervisory
actions that threaten to jeopardize the success of the Recapitalization Transaction and potentially
result in an avoidable loss to the Deposit Insurlil11ce Fund of hundreds of millions of dollars. 21
These questionable exercises of regulatory discretion include the December 3 OTS directive
mandating that UWB recognize, as of September 30, 2010, additional other-than-temporary-
impairment on certain securities that will be removed from the Bank's balance sheet upon
consummation of the Recapitalization Transaction, rendering the Bank undercapitalized under
the peA standards; the December 13 PCA notification and employee benefit plan deposit
directive; and a December 21 OTS directive requiring the filing of a revised liquidity plan .
. i6 October 29,2010 Letter from Andrew L. Sandler to John E. Bowman, Acting Director, OTS and Ms. Thompson
attached hereto as Exhibit 22.
17 Currently, the Bank estimates that the Recapitalization Transaction will result in the Bank having projected capital
ratios of 8.5% for core capital and 16.3% for total risk based capital, well in excess of the minimum standards for a
well-capitalized institution and in excess of the requirements set forth in the Bank Order.
18 See November 11,2010 Letter from Mr. Sandler to Ms. Thompson attached hereto as Exhibit 23.
19 See November 16,2010 Email from Mr. Kaplan to FDIC and OTS representatives attached hereto as Exhibit 24;
see November 18, 2010 Email from Mr. Kaplan to Mr. Gerbick, attached hereto as Exhibit 25.
20 See November 23, 20 I 0 Letter from Mr. Peoples to Mr. Bowman and Ms. Thompson attached hereto as Exhibit
26; November 29,20 10 Letter from Mr. Peoples to Mr. Gerbick and Ms. Elmquist attached hereto as Exhibit 27. To
date the investment agreement dated October 28, 2010 with the anchor investors has not been fonnally amended
because as a publicly-traded company Bancorp would be required to publicly disclose an amendment to a material
contract on Securities and Exchange Commission ("SEC") Fonn 8-K. Once all modifications have been agreed
upon by the parties to the investment agreement, an amendment will be filed pursuant to the requirements of SEC
Form 8-K.
21 December 30, 2010 Letter from Mr. Peoples to Mr. Bowman attached hereto as Exhibit 28.
Confidential and Proprietary ltiformation
Not Subject to FOIA Disclosure
1759
Sandra L. Thompson
January 4,2011
Page 7
UWB has taken action to comply with each of these directives. Despite the challenges presented
by these regulatory actions, UWB continues to progress towards a January 31, 2011 closing for
the Recapitalization Transaction. 22 . .
The Brokered Deposit Statute and Regulation
A "brokered deposit" is "any deposit that is obtained, directly or indirectly, from or through the
mediation or assistance of a deposit broker." 12 U .S.C. 183lf(g). A "deposit broker" is "any
person engaged in the business of placing deposits, or facilitating the placement of deposits, of
third parties with insured depository institutions." 12 U.S.C. 183lf(g)(1)(A). Excluded from
the definition of deposit broker is any "agent or nominee whose primary purpose is not the
placement of funds with the depository institution." 12 U.S.C. 183lf(g)(2)(1). The
implementing regulations promulgated by the FDIC repeat the clear, plain statutory language.
12 C.F.R. 336.7. The FDIC has not issued any generally applicable guidance or interpretations
of the primary purpose exclusion, presumably because the plain meaning of the exclusion is clear
on its face. Under the plain language of the statute, if the primary purpose of an entity is not to
place or facilitate the placement of deposits of third parties with a depository institution, such
entity is not a deposit broker.
The Institutional Depositors
At the time of the Brokered Deposit Determination, approximately $1.2 billion, or 74% of the
Bank's deposits, were deposits associated with the Institutional Depositors. The Institutional
Depositors are trust companies and settlement companies that provide significant and regulated
trust or brokerage services to millions of customers. As a byproduct of their primary business
activities the Institutional Depositors regularly handle idle customer funds that are in transit to
, .
or from external investments or are awaiting distribution. The Institutional Depositors place
these funds on deposit at omnibus deposit accounts at the Bank. during these transitory periods.
It is clear that the primary purpose of each Institutional Depositor is not the placement of funds
with the Bank.. The Bank has previously provided to the FDIC a significant amount of
information describing the Institutional Depositors' businesses and supporting the conclusion
that they are not deposit brokers. For ease of reference, a brief summary of the business of each
Institutional Depositor is provided below.
Legent Clearing LLC provides securities clearing and settlement services for approximately 79
FINRA member correspondent firms.
23
Legentprocesses more than 590,000 transactions each
month, for over 270,000 individual accounts. Legent's primary purpose in depositing funds at
the Bank is to facilitate customers' purchase and sale of securities. Legent's placement of
deposits at the Bank is merely incidental to its business.
22 December 29, 2010 Letter from Mr. McCloskey to Mr. Gerbick and Ms. Elmquist attached hereto as Exhibit 29.
23 Legent Agreements attached hereto as Exhibits 30-31. .
Confidential and Proprietary ltiformation
Not Subject to FOIA Disclosure
1760
Sandra: L. Thompson
January 4, 2011
Page 8
Equity Trust Company ("ETC") is the nation's leading provider of self-directed individual
retirement accOmts ("IRAs'') and 401(k) plans,24 with over 140,000 clients in'aIl50 states and
close to $10 billion of retirement assets mder management 25 It operates as a qualified custodian
for its clients' funds mder Internal Revenue Code Section 408 and its implementing regulation
26, C.F.R. Part 1.408-2. Incidental to customers funding these retirement accounts and
purchasing retirement investments, there are times when customers have idle cash balances that
are deposited by ETC at the Bank. ETC's primary purpose in depositing funds at the Bank is to
maintain the uninvested cash in each retirement accomt at the Bank is to take advantage of the
Bank's settlement capabilities to facilitate the daily transfers of cash necessary for ETC's '
customers to make investments,
Three other Institutional Depositors are trust companies With operations similar to E T C ~ Lincoln
Trust Company ("LTC") is one of the largest independent providers of trust and custodial
services in the United States.
26
LTC administers accounts that hold a variety of traditional and
non-traditional investment assets including, but not limited to, real estate, trust deeds/mortgages,
hedge funds, private equity, private debt, limited partnerships, limited liability companies, and
offshore funds. Constellation Trust Company ("CTC") provides custodial services to individuals
regarding 1RAs, and acts as an agent and custodian to Registered Investment Advisors, financial
institutions and their clients.
27
Trust Management. Inc. ("TMI") provides trust and custodial
services, including acting as an agent to individuals regarding self-directed IRAs.28 LTC, CTC,
'and TMI have the same primary purpose in depositing funds at the Bank. as ETC, i.e., to take
advantage of the Bank's settlement capabilities and facilitate the daily transfers of cash necessary
for customers to make investments.
United Western Trust Company (''UWTC''). an affiliate of the Bank, provides trust, custodial
and escrow administration services for individuals, bUsinesses, attorneys, retirement plan clients,
and financial representatives,29 UWTC's primary purpose in depositing funds at the Bank is to
maintain the cash related to the services UWTCprovides to its clients until such proceeds are
disbursed in accordance with either direction from its clients or in accordance with escrow
instructions. UWTC deposits funds at the Bank because the Bank has the settlement capabilities
to facilitate the periodic transfers of cash necessary for UWTC to conduct business.
,Matrix Settlement and Clearanye Services. LLC ("MSCS") provides back-office, mutual fund
processing and settlement services as agent, trustee' and custodian for financial institutions,
including banks, trust ,companies, registered investment advisors and record-keeperslthird-party
24 We note that Section 1 1 (a)(lXDXii)of tbe FDIA currently precludes the Bank's acceptance of 401{k) deposits as
they constitute employee benefit plan deposits. These deposits will once again be acceptable when the Bank regains
at least adequately capitalized status under the PCA.
25ETC Agreements and Amendments attached hereto as Exhibits 32-37.
26 L rC Agreements attachedbereto as Exhibits 38-40.
27 CTC Agreements attached hereto as Exhibit 41.
28 TMI Agreements attached hereto as Exhibit 42.
29 UWTC Agreements attached hereto as Exhibits 43-45.
Confidential and Proprietary ltiformation .
Not Subject to FOIA Diaclosure
1761
Sandra L. Thompson
January 4, 2011
Page 9
administrators.
30
MSCS serves more than 300 institutions and has over $100 billion in assets on
its platform. MSCS's primary purpose in depositing funds at the Bank was incidental to its
primary business; specifically, MSCS utilized the Bank's settlement capabilities to facilitate the
clearing of purchase and redemption trades of various mutual fund shares for its customers.
31
In sum, each of the Institutional Depositors' businesses resultin a need to manage customers'
uninvested or transitory cash. The flow' of these funds through the Bank is entirely incidental to
the Institutional Depositors' primary business and does not alter the conclusion that the
Institutional Depositors are not deposit brokers.
There Is No Basis in Law, Regulation, or Fact for the Brokered Deposit Determination
As set forth above and in detail in previous submissions to the FDIC, the Institutional
Depositors'. placement of funds at the Bank is an incidental accommodation to customers in
connection with their primary businesses. The InstitutioIial Depositors' primary purpose in
placing funds at deposit at the Bank is to facilitate the functioning of their primary trust and
settlement businesses. The Brokered Deposit Determination, therefore, should be reversed.
Section29 Excludes the Institutional Depositorsfrom the Definition o/Deposit Brokers
Any agent or nominee whose primary purpose is not the placement of funds with the depository
institution is excluded from the definition of "deposit broker." 12 U.S.C. 1831ftg)(2)(1). The
statutory language is not ambiguous and leaves no key terms undefined: if an agent places funds
with an insured depository institution but its primary purpose is not that placement of funds, it is
not a deposit broker. The FDIC's unreasonably narrow interpretation of the primary purpose
exclusion, which limits the exclusion to the very specific facts set forth in Advisory Opinion 05-
02, changes the meaning and purpose of the exclusion in violation of the basic principles of
statutory Courts have long held that every clause and word of a statute must be
given effect to avoid rendering superfluous any statutory language.
32
To limit the primary .
purpose exclusion to the facts of Advisory Opinion 05-02 is to vitiate the broader statutory
exclusion, and the FDIC is not at liberty to do so. If the Institutional Depositors are agents
whose ''primary purpose is not the placement Of deposits," they are not deposit brokers within
the meaning of Section 29 regardless of whether the relationships mirror the particular
relationship that is the subject of Advisory Opinion 05-02.
For example, when a consumer chooses tooJ?Cn an IRA with ETC, the customer is not engaging
ETC to act as a deposit broker. However, on a daily basis, there are inflows and outflows of
millions of dollars to and from UWB as ETC's customers fund their accounts, make investments,
30 MSCS Agreements attached hereto as Exhibits 46-47.
31 After the Bank's receipt ofOTS's December 13,2010 directive on employee benefit pIan deposits, MSCS
withdrew all of its deposits at the Bank to facilitate the Bank's compliance with Section 1I(aXI)(DXii) of the FDIA.
See December 22, 2010 Letter from Mr. Peoples to Mr. Gerbick attached hereto as Exhibit 48.
32See, e.g., Astoria Fed Savings & LoanAss'n v. Solimino, SOl U.S. 104,112 (1991).
Co'1/idential and Proprietary I1fformation
. Not Subject to FOIA DisclOSUl'e
1762
Sandra L. Thompson
January 4, 2011
Page 10
and liquidate investments.
33
Thus, incidentally to ETC's primary business purpose of providing
trust and custodial services, there will be times when ETC will be in possession of the
customer's uninvested cash (e.g., when the customer funds the account but prior to investment,
or in the period between a liquidation of an investment and reinvestment of funds). As an
accommodation to its customers, ETC places these funds at UWB, which has the settlement
capabilities to facilitate the daily transfers of cash necessary for ETC's customers to make
investments. Thus, ETC places deposits of third partie"s with insured depository institutions, but
is also an agent whose primary purpose is not the placement of funds with an insured depository
institution. It follows that ETC is not a deposit broker. The same analysis and conclusion
applies to each of the Institutional Depositors; there is no basis to conclude otherwise.
Non-Binding Advisory Opinions Cannot Alter the Plain Language o/Section 29
Despite the fact thatadvisory opinions lack the force oflaw, the Brokered Deposit Determination
states that the Institutional Depositors are deposit brokers because of a failure to "invoke the
10% rule" set forth in Advisory Opinion 05-02. The fact that these relationships did not mirror
the relationship described in Advisory Opinion 05-02 is not determinative of whether the
primary purpose exclusion applies .. Fact-specific, non-binding advisory opinions simply do not
establish rules of general applicability that allow banks to conform their activities to legal
requirements. Advisory opinions are "merely opinions of individual attorneys in the FDIC Legal
Division" and not formal, binding interpretations of FDIC rules and regulations issued pursuant
to the notice and comment process?4 If the FDIC wishes to convert the non-binding opinions
expressed in Advisory Opinion 05-02 into rules of generally applicability, it must do so through
a formal rulemaking process that allows for notice and comment. If and until that is done,
however, and so long as the Institutional Depositors satisfy the statutory primary purpose
exclusion, there is no rational basis to the relationships to conform to Advisory Opinion
05-02 to satisfy the statutory exclusion.
3
,
33 For example, on December 27,2010, approximately $24.8 million in funds was deposited in ETC accounts at the
Bank and $16.7 million was withdrawn.
34 Adagio Inv. Holding Ltd v. FDIC, 338 F. Supp.2d 71,82-83 (D.D.C. 2004) (Advisory opinions are "merely
opinions of individual attorneys in the FDIC Legal Division and the mere fact ofthcir publication as advisory
opinions does not substantially elevate the degree of respect they deserve under Skidmore v. Swift & Co., 323 U.S.
134,140, 89L. Ed. 124,65 S. Ct. 161 (1944)"). See also First Am. Bank v. Resolution Trust Corp., 30 F.3d 644,
648 (5th Cit. 1994) (court declined to defer to five unpublished FSLlC opinion letters because the opinions set forth
in them was "so clearly contrary to the plain and unambiguous language of the statute").
3S Although the Bank strongly disagrees with the FDIC position that the Institutional Depositor relationships must
cotifotnl with Advisory Opinion the Bank amended its contractual arrangements with ETC, Legent, LTC, and
UWTC. As a result of those amendments, these relationships now mirror the facts that underlie the FDIC's
interpretation of the primary purpose exclusion as set forth in Advisory Opinion Thus, even if this request
for review does not result in a reversal of the erroneous Brokered Deposit Detennination, there is no basis, even
under the FDIC's flawed reasoning, to require the Bank to stop accepting, renewing or rolling over these deposits.
See December 6, 2010 Letter from Mr. Kaplan to Ms. Ehnquist attached hereto as Exhibit 49. .
Confidential and Proprietary Information
Not Subject to FOIA Disclosure
1763
Sandra L. Thompson
January 4, 2011
Page 11
Advisory opinions simply do not carry the force oflaw.
36
The FDIC has consistently taken the
view that these "letters express the views and opinions of individual FDIC staff lawyers and are
not binding on the FDIC ... [and] should only be considered advisory in nature, and the reader
bears the responsibility for relying on them.,;)7 At the June 30 meeting, senior FDIC legal staff
specifically addressed the precedential status of Advisory Opinion 05-02 and stated that it does
not set forth a test that must be satisfied in all cases in order to qualify for the primary purpose
exclusion. Instead the analysis of whether the Institutional Depositors come within the primary
purpose exclusion must be based on the statutory language and the specific facts and
circumstances of these relationships. As set forth above, this analysis clearly and convincingly
demonstrates that the Institutional Depositors are not acting as deposit brokers.
FDIC Advisory Opinions Provide Support/or the Conclusion that the Institutional
Depositors are Not Deposit Brokers
Although they are not binding and cannot alter the plain language of the law, advisory opinions
may be informative to this analysis. To the extent that advisory opinions are considered, there is
no basis to limit the consideration to a single advisory opinion addressing a relationship that
differs substantially from the relationships at issue. A review of the totality of the publicly
available advisory opinions addressing the primary purpose exclusion supports the conclusion
that the Institutional Depositors are not deposit brokers.
38
The FDIC has consistently stated that "primary purpose" means "primary intent.,,39
Accordingly, FDIC staff has set forth a long-standing view that the "primary purpose exception"
applies to an agent who places funds into a depository institution for a substantial purpose other
than to obtain deposit insurance coverage for a customer or to provide the customer with a
deposit placement service. Applying this analysis in various circumstances, FDIC staff has taken
the position that a credit card bank assisting potential cardholders in placing security deposits at
another bank would not be a deposit broker because the primary purpose of the credit card bank
was ''to obtain a perfected security interest in collateral;,,4o FDIC staff also found that.a
registered broker-dealer placing client funds into an account at a bank in order to satisfy a
reserve requirement enforced by the Securities and Exchange Commission ("SEC") satisfies the
36 See. e.g., Christensen v. Harris County, 529 U.S. 576, 587 (2000) (Interpretations such as those in opinion letters-
-like interpretations contained in policy statements, agency manuals, and enforcement guidelines [ ... ] lack the force
oflaw.").
31 FDIC Laws, RegUlations, and Related Acts - Advisory Opinions, (emphasis added),
http://www.fdic.gov/regulations/laws/rules/4000-300.html.
38 It must be noted that the FDIC does not make public all advisory opinions. We understand that there are
numerous unpublished advisory opinions regarding this subject. On October 14,2010, UWB's regulatory counsel .
submitted a Freedom of Infonnation Act ("FOIA") request for these advisory opinions. See FDIC FOIA Request
11-0059. The FDIC has not, to date, provided any documents in response to the request. For the FDIC to assert that
selected published letters establish rules of general applicability while providing private opinions to other
institutions that mayor may not follow those same "rules" is patently unfair and further undermines the rationale in
the Brokered Deposit Detennination.
39See, e.g., FDIC Advisory Opinion 90-21 (May 29, 1990).
40 FDIC Advisory Opinion 94-13 (Mar. 11, 1994).
Confidential and Proprietary Information
Not Subject to FOIA Disclosure
1764
Sandra L. Thompson
January 4, 2011
Page 12
''primary purpose exception" because the broker-dealer's pritnary purpose was to satisfy the SEC
rule.
41
In Advisoiy Opinion 05-02, FDIC staff concluded that deposits in an investment
company's sweep program in which the company transferred idle customer funds into deposit
accounts at an affiliated depository institution were not brokered deposits because the investment
company's primary pUrpose was ''to facilitate the custoniers' purchase of securities." Like the
institutions that were the subjects of the advisory opinions summarized above, the Institutional
Depositors are providing a service to their customers and incidental to these services, there.arises
a need to place customer funds at an insured depository institution.
In another advisory opinion directed at the activities of a trust department of a bank, the FDIC
staff set forth a list of criteria to help "identify arrangements that have the primary Puipose of
placing funds with insured institutions.,,42 These criteria include the examination of the fees
received, the "but for" test, and th:e substantial purpose test. When examined in the context of the
criteria in this advisory opinion, it is very clear that the Institutional Depositors' primary purpose
is not the placement of deposits.
Under the "fees received" test, if the trust department of an insured depository institution
receives a fee for its account from the depositQry institution with which it places the funds, the
trust department is a deposit broker as tothat trust. As set forth in detaiHn the July 30 letter, the
Institutional Depositors receive fees for administrative and recordkeeping services provided, and
not fees for the placement offunds.
43
Moreover, inAdvisory Opinion05-02, FDIC staff
concluded that when fees are paid for recordkeeping or administrative services and not [as]
payment for the placement of deposits, ... the existence of fees does not change [the FDIC's]
conclusion" that the primary purpose exclusion is satisfied.
Under the "but for" test, if the trust would not have been established but for the purpose of
placing fundsin an insured depository institution, the trust department is a deposit broker as to
that trust. Under the substantial purpose test, if there is no substantial Puipose for the trust other
than the placement of funds in insured depository institutions, the trust department is a deposit
broker as to that trust An examination of the Institutional Depositor relationships under both of
these tests supports the conclusion that they are not deposit brokers. Though a small portion of
customer assets may be held in cash at any point, the l.IIl.derlying retirement accounts were liot
fonned for the purpose of placing funds at a depository institution; they were formed to facilitate
customers' investment in traditional and non-traditional investments, not to hold uninvested
cash. Thus, when all of the publicly available advisory opinions are considered, they further
support the conclusion that the Institutional Depositors are not deposit brokers.
,.: .............................. ,.-. ...
41 FDIC Advisory Opinion 94-39 (Aug. J 7, 1994).
42 FDIC Advisory Opinion 92-51 (Aug. 3; 1992).
43 See Exhibit 19.
Confidential and Proprietary Information
Not Subject to FOIA Discloaure
1765
Sandra L. Thompson
January 4,2011
Page 13
The Legislative History o/Section 29 and Public Policy Militate/or Reversal o/the
Brokered Deposit Determination
Congress sought to regulate brokered deposits because of concern about the use of "hot" money
( i ~ e . , short-term, volatile, high-rate deposits) to fund imprudent growth by unstable institutions.
44
Those legitimate concerns are inapplicable to the stable, low-rate deposits placed at the Bank by
the Institutional Depositors. These deposits carry none of the indicia of "hot" money or the
accompanying risks that Congress sought to eliminate. Because the brokered deposit restrictions
are intended to limit reliance on volatile and high cost non-core deposits, the purpose of the
restrictions would not be served by deeming the Institutional Depositors to be deposit brokers.
Moreover, disparate treatment of deposits by the same depositor is entirely inconsistent with
Section 29 and its statutory exclusions, which clearly apply on a per depositor basis, and cannot
be permitted. Whether an entity is a deposit broker, and whether the primary purpose exclusion
applies, is fact-specific inquiry as to such entity's activities and is not dependent upon the
depository institution at which the broker places deposits are placed.
45
However, we note that
some of the deposits placed by Institutional Depositors at other insured depository institutions
have not been deemed by the FDIC to be brokered. The Bank was informed by an Institutional
Depositor that FDIC examiners directed another institution not to treat an Institutional
Depositor's deposits as brokered after the other institution learned oftheBrokered Deposit
Determination and sought to reject deposits by the Institutional Depositor. To deem the
Institutional Depositors as deposit brokers for purposes of UWB and to not apply such status to
their relationships with other insured depository institutions at which they place funds is
incompatible with the language and intent of Section 29.
44 See, e.g" Insured Brokered Deposits and Federal Depository Institutions Before the Subcomm. on Gen. Oversight
and Investigations of the Comm. on Banking, Fin. And Urban Affairs, lOI
st
Cong., First Session, statement ofL.
William Seidman, Chairman, FDIC, (May 17, 1989). See also Remarks of Sen. Murkowksi in connection with his
amendment to the brokered deposit provision in FIRREA at 135 Congo Record S4238 (Apr. 19,1989).
4S In fact, prior to 2001, entities engaged in deposit brokerage were required to register with the FDIC, providing
notice to all institutions that interact with them that such entity is a deposit broker. See FDIC Financial Institution
Letter FIL-16-200 1, b!J;p:llwww .fdic.gov/news/news/financialJ2001/fllOl16.html.
Corifidential and Proprietary lriformation
Not Subject to FOJA Disclosure
1766
Sandra L. Thompson

Page 14
Fundamentally, none of the Institutional Depositors are primarily engaged in the of
placing deposits or :facilitating the placement of deposits at any insured depository institution.
Therefore. the Institutional Depositors clearly fall within the primary purpose exclusion and are
not deposit brokers. Accordingly, the Brokered Deposit Determination must be reversed.
co: Serena L. Owens
Kristie K. Elmquist
John E. Bowman, Esq.
Thomas A. Barnes
Philip A. Oerbick
Board of Directors, United Western Bank:
Lawrence D. Kaplan, Esq.
Cfinflikntk:fl.ondProprield1"jilnforifialiitn
... Nt>.tSubjfli:t Ii' FQIAlJ.i$I{jJw-e
1767
TabC
Exhibit 61
1768

Equi'Y
Net Uu-rozed(Oaili) Loss
T.nllMeJlquil1 . .. . .
Di .. Asseu
CoreCapilal

(aiiu) LoasHl'S
raugllile .... seI$ ... . . .
pisiliowCdSemcitig
Miui.ted ..
RIsk S dC.pitlll
Co",Cap(!al ..
La;mii.iid VaI .. tiim.A1lowaiioe

A<ljustl Tobii Capi.;.1 .
RistAvciJ>l!i cilg_
0% Risk W.lgb!:
Cosh
Se(ilri\ilis Bidttdby I,I.S.Oo\ll.

J'ederal.l\esont Bank .
.
\lbJ. RWcWOlgktTo\ll1
iIi% Ri$lc Wtigllc

C;1oi,,1S on FIJUJ.

Re;"""';' serocjiigFHA . . .,.
(jill!:> .
Torol
50% RUkWight


fllJUII M';1iLoII!i ..
...
Olhet
tirial
ioP%
. liio/j;,(oI:Mori:)
.Eq.iV2lent
Lines of Credit BISEqu'v t:
Recotlfae Delinquent i.oans

rn5lilloweclSi:Mtl'ngi\lf
.
1:otal
IOO'YoRI$k WeighlTotal
SU\llOlltiRiskWeig1!I4 J\$$$
BxCess Aliowilll ... fur toaD and Leasol.Osso$
T.;1aI .. ...
Illik Ba.ed Capilli!
UNl'l'lID \VES1ERNIl
AN
KCONSOUOATEO
CAPITAl. RATIOS . . .
REVISED
I'II'/AL
.0913\\110
REVISED
10I.l1l10

.$10"'.

Ul3lIItlr'
'i01 ;4!,39$
6;$81,038. 6,581.Q38 .
i2.7.916.:m
2,050.650.155
6,Stl),OOS
2;Q51 ill Ic19l
l,oS1;1ll.793
121,535,546
11.5\\4.141
Q'T,OS).09if
101l,()61.190
1.432,3W
l86;7lj,IH1
51;631
lC>9.m,sSl
39,659,01\9

11!9J,1':l
1,795,637
58,6S0.S1l

11.9?S,645
261.888.316
15;5!4.iiIl3

227 ,l92;G1t1
51l1;5ll,i11
29,911,IOR .
lo,t61.666
\0,161,666

I i;:l.41.S911
{!29.151
3,112,603
1,102:335.,<)8&
1,120,654;436
1,laO;916,tot

21,613,026
1.38S.189;II3S
1.80%
6.53%
61.5W.
12.'NJ16;m
2.074.5".105
6,sin,Il3s


. \27,916,311
11,546,974
.. (3f>.3liti.i>33)


283,989;0$8
34,4!!S
173.826.1191

11),O91'()25

1,19S,637
51.227.410
146,4t)S.C)10
29481,1)14
lS6,4,l),64S
lS,s84,liOl
'J;?51,22S
223,309,116
498,113;191
249,136;596

10.123,549

II
.829,151
3.112;6113
1.096.937;()7!
t,lIs,sil,519
l.ii5)19;06S
I,4iIJ;796.677
2U33,02(1

7.811%
6:61",:\0
61iM%
IH;!)St),433.
20060,015.$64
,SSM18


5.5i%
iH,08();433
[7,0$,14$
pS,:!$o.f161
i,4liilll4
2S1,39.4,l1411
11,2.11
2Q3.4%.OOI
4S6.3:!1.1>87
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1),828.182
4II,l$'liJ0l
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15,$14,1103
l;9$7.2ia:

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8Z? 1$ I
3,112,603

1,019,817,619
'1089(;;73,16:5
l,3uS,s4I,Si,9
20.494,470
1,34S;047,3S9
7.11%
$.801%
65.12%
1769



(l4.SI1;S4Ij
(14.SU,54i)
14"s12.$o(1) .

(471;8:19)
9OS.s17' .
(4,0?1)

.. (11.21:1)
29j fiijg,l:10
Q,36G;$14)
(16t.i42j
32,82t
I,UZ;SSl
(l,4?3.1S53)
(494.131l
(I,621i4S7)

(4,$09,626)
0
13,254.8I:l) .
i77AOSl
(17,405)

(3M27.&99}
1l5,s(l5.:1O<!l
0
{11!,2S4,l!4lI)
{U8.SS21
(17,416,29$)
;0.111%
-0;78%
-1;1SV.
TabC
Exhibit 62
1770
TabC
Exhibit 63
1775
OFFICE OF THRIFT SUPERVISION
EXCEPTION SHEET
(Number 6)
Date: January 5, 2011
Management Response Required by: January 12, 2011
Institution: United Western Bank
C.ity, State: Denver, Colorado
Workpaper ReferelJee: 070-06
Docket No.: 06679
Exam Date: November 27, 2010
Subject: OTS C&D Order; Transactions
With Affiliates; Loans to One Borrower
or Regulatory Guidance Reference: OTS Order No. WN-IO-01; 12 C.F.R. 560.93 and
563.41
Background (context and basis):
The Association is curretltly operating under a Cease and Desist Order issued on June 25, 2010
(Association Order) (OTS Order No. WN-I0-019). The results of our examination to date indicate that the
Association is currently not in compliance with the Association Order. In addition, the Association has
violated regulations. This Exception Sheet details certain violations by the Association of the Association
Order and of regulations.
Exception No.1: Since June 30, 2010, the Association has been in violation of the requirements contained
in the Association Order to meet and maintain a Tier 1 (Core) capital ratio ofB percent and a total risk-
based capital ratio of 12 percent.
Corrective Actions Required:
Explain Violations and omissions and corrective action taken or to be taken by the Association.
Exception No.2: In 2009, the Association entered into a series of transactions with its holding company,
United Western Bancorp, Inc. (UWBK) that involved the Association's purchase from UWBK of two
, participation interests in an approximately $46 million loan to Equity Trust Company (ETC). This series of
transactions constituted an extension of credit to ETC in excess of the Association's. loan-to one-borrower
(LTOB) limit set forth in 12 C.F.R. 560.93, as well as a violation of 12 C.F.R. 563.41 (as a purchase of
assets from an affiliate in excess of the quantitative transaction with affiliate (TWA) limit set forth in 12
C.F.R. 223.11). On January 11, 2010, the OTS issued a 15-day letter to the Association regarding
possible civil money penalties (CMPs) in connection with these violations. Paragrapb33 of the
Association Order required the Association, by August 31, 2010, to adjust its loan portfolio to comply with
the quantitative limitations regarding covered transactions with a single affiliate set forth in 12 C.F.R.
563.41 and Regulation W, 12 C.F.R. Part 223. Likewise, Paragraph 35 of the Association Order required
the Association to reduce its loan concentrations to comply with the lending limitations set forth in 12
C.F.R. 560.93. To date, the Association has not complied with either of these provisions of the
Association Order. The Association also has failed to correct the violations of the above-referenced
regulations. The Association is also in violation of Paragraphs 2 and 37 of the Association Order,which
require the Association to ensure that these violations were corrected and that adequate policies and
procedures were adopted to prevent future violations within forty-five days after the Effective Date of the
Association Order .
1776
Corrective Actions Required: .
Explain violations and omissions and corrective action taken or to be taken by the Association.
Exception No.3: The Association's parent UWBK does not have the financial capability of reimbursing
the Association for an income tax receivable amount reflected on the Association's books (as required by
the Tax Allocation Agreement dated January 1,2008, between UWBK and the Association). This
transaction appeared to constitute an extension of credit and thus is a covered transaction with an affiliate
of the Association. By letter dated December 20,2010, and as stated in its proposed business plan
submitted to the OT8 the same day, the Association indicated that it has made a $10,008,301 capital
distribution to its parent UWBK. However, the Association did not obtain the prior written approval of the
Regional Director to make this capital distribution, and thus this capital distribution is a violation of
Paragraph 32 of the Association Order.
Corrective Actions Required:
Explain violations and omissions and corrective action taken or to be taken by the Association. Explain
whether this capital distribution, had it been properly recorded, would have caused the Association to
become "undercapitalized," in violation of 12 U.S.C. 18310 (d) (1) (A).
Examiner: David L. Nossaman
Walter Santos
1777
Date: January 5, 2011
TabC
Exhibit 64
1778
1779
I-l
-....,J
00
o
WI
) UN. I. TE .. n
. WESTERN
BANCORP
Discussion Topics
1. Experienced ManagementTeam
2. Successfully Reduced Concentration of Equity Trust Deposits
3.UnitedWestem Bank Forecastof Operations 2010-2013 With Reduction in Equity TrustDeposits-:-Base Case
4. StaWs of Discussions With JP Morgan Chase Regarding Revolving Credit Line
5. Status of Legent Clearing Acquisition
6. UnitedWestem Bank Forecast of Operations 2010-2013 With Equity Trust DepositReduction And Legent
Clearing Acquisition
Status of Goldman Sa?ps Offering .

.......
00

YJlJ
.. J UN ...... I ... TE ... D .. .
. . WESTERN
... BANCORP
Management Team
Guy A.ait)son UnitedWesteri)
Baneoi'p,
Michael J. MCCloskey Executive. Vice President. General Counsel 4
and ctiiefOperating Officer,' United
Western Bancorpj Joo.
James R. Peoples
Chairman' oftha . Board, Chief Execl;itive Since February
Officer and President; Unltec:l Western .Bank 2010
Benjamin .C. Hirsh
.. .
22
33
35
LLC, United Rnancial, Uncoln
Paine Webber ..
Legeot Clearing. LLC. Tril,llllph .Capitai Partners,
ImPeria/Bank, Recycling fndustriestColonel's
Internation8J! PwneWebber, E. F. Hutton
Key Bank. Omni Bank, FirstlnterstateBancorp
and.Sank. NatiOnalWestrninster Bank USA,
Central. National Bank (now Key Sank)
1-1
--..J
co
N
Successfully Reduced Concel1tration
of Equity Trust Deposits
111.11 ..

0$350 million of Equity Trust deposits moved to third party bank by Equity Trust on
lvIay 3, 2010
ClNo obligation for United Western Bank to ('wrap" subaccounring fees for these
deposits
o EAl' ected first yea! savings in sub accounting fees, $6.8 million
DSuhaccQunting Agteementa:mended to limitmaximU111deposits .. atUnited.Westcrn

-....J
00
W
YJlJ
UNITED
. WE. ST. ERN
... BANCORP
United Western Bank Operations 2010-2013 With Reduction In Equity Trust
Deposits-Base Case
o Actively de-risking United Western Bank balance sheet
o Current focus on government guaranteed lending and government
guaranteed investments-generally 0% to 20% risk weighted assets
o Lowering concentration of Equity Trust deposits
o Core capital at June 30, 2010 (est.) given transfer of $350 million of
Equity Trust deposits and run-off of maturing brokered deposits-7.50%
FOCUS0111l1anaging'currentc9]J.ll11unitybaJJk19anstored"na
1-"
""'-I
co
..j:::.
WESTERN
'" BANCORP
MlI
J J,'. , UN,ITED
UDited Westem'BankForecast Of Operations 2010.,2013 With 'Reduction In Equity
, Trust Deposit$..;Base, Case
1010 2010 3010 4010 Ytcl 2010 Ytd 2011 Ytd 2012 Vtd 2013
.. --.-
Total interest income
Total iriterest,exp.".
Net:\nte(est Income
for loan Icis$
Total non-interest income
'total nQn-inter. expenSfl,
Pre-tax (Loss) '
N!It(LoSs} Income
AIUIii.
Cash
GNMA's'
lnveslmen1s
Community loans
Other Loans
Allowance for credit IOst!es

Tot;;JAsset!;
$
$" 311.00Q $ 136,000$ 57;000
68,803, 63,1;343 ,64;030 145,001
342.511 325.586 308..662 291.737
1.074,356 1.055,725 1:.052.681 1,057,385,
342,541 317.215 '290A07
(41;614) (41,614) (4O;251.) (39.439)
'135
1
92{ '149'1561 1481991
$ 2, 1f!7,476 $ 1.m.90s $1.951.082
$ '8$.OQEI $ 9:i;i'3j$ 95,972,. 1Gp.8'13
21281 ___
66;718 73.8.80 7!M 10 82.937
(1.784) (1.917) (1,47$)
(2,0()0) 11;978 13,712 13.3117
(78,141) , (Ei8.fj!)Q) (68,758) (69,386)
(35;171) 15.518 ,21.44725.472
$ (32.275) $ 12;414 $ 17.158 $ 18.849
$ 57.000 $ 70,000, $ 62,000 $ 81,000
145;001: 160;212 209;771 257,228
291.737 239,225' '195.164 160.855
1,0571385 1,130.900. 1;21:9;226 1.283,.906
290.407 232,692 180.232 140.875
(39;439) (37.873) (37,790) (37,866)
148;991 131;601 131.312 1301772
.$ 1;95M82 $1,925.7'51 ,$ $2.01EI.770
f-l
-.....J
ex>
l.n
~
.. J.J UNI. TED ..
. WESTERN
BANCORP
Status Of Discussions With JPMorgan Chase Regarding Revolving Credit Line
o Conversations on-going with expected completion May 31,
2010
o Expected outcome:
-Extend credit line to September 30, 2010
Waive all possible events of default other than payment default
t-I
-.J
00
00
. '. ' . YlI' JUN ...... ITED. ' " . WESTERN
'" " . BANCORP
. United Western Bank Forecast Of Operations 2010-2013 With Equity Trust Deposit . ,
Reduction.And Legent Clearing Acquisition
o Assumes flat interest rate environment. Bank is'modestly asset sensitive
;and thus shollid improve performance as rates rise
[J Bank achieves profitability in Q4 2010
D Bank eliminatesall traditional brokered deposits by Q3 2010. CDARs
mature through. Decerober.2011
o Bank achieves significantly higher operating results asa result of
Status of Goldman Sachs. Offering
. WI .. ) J . UN. I.T. ED. .
.. WESTERN
. BANCORP .
1--1
-...J
\0
o
<+
J
... J JI UNITED
. .. WESTERN
. Further . . BANCORP.
De-Risking With Goldman Sachs Offering Proceoos
,. .. ------. -". . ...... : '. ..
o Western Bank balance sheet is principal goal of Goldman
Sachs offering
o . Effected by related party transaction in which holdilig company acquires impaired
mortgage backed Bank
o Transfer effected at Bank carrying value for impaired MBS classified as Hdollar for
. dollai'
. 0 Pay-off JPMQrgan reyolvmglineofcredit
I-'
-....I
1.0
N
tuI
.... J. U. NlTE ... D
WESTERN
BANCORP
United Western Bank Forecast Of Operations 2010-2013 "Vith Equity TrustDeposit
Reduction, Legent Clearing Acquisition and Goldman Sachs Offering
. 0 . Exchange all dollar for dollar securities withUWBI ($51 million)
contribute $20 million to BanIe
o Assumes flat interest rate environment. Bank is modestly asset sensitive
and thus should improve perfonnance as rates rise.
o Bank achieves profitability in Q4 2010.
o Bank eliminates aU traditional brokered deposits by Q3 2010. CDARs
mature through December 2011.
1-1
.......

w

J
UN... ITED .
. WESTERN
.. BANCORP
Questions and Answers
. .
o United Western Bancorp, Ine. and United WestemBailkmanagement will
be glad to respond to any questiol!,s OTS representatives
1l1ayhave.
..
"
~ .
1794
TabC
Exhibit 65
1795
Holding Company Docket Print
iJnks OTSYieb
Coogle diIi
Holding Company l)Oc:ketPrlnt
Office of Thrift Supervision'
Financial System
bocicetl 06679
LOCationl D.Bnvw. CO
01'5 Rai/loli' western
Thrill
'1:Ffl Edit 'C!,IlTliilete
Date: iql0
Docketi :1:I2t92 Structure:'S1601
Name, Unl.ted Western Bancorp, Inc.
. LOCatil,.,: [leilvei", i;O
OTSReglllnl Midwest
lic 'Edlt: StatUs; Ci:nnplete
He Edlt'Stlitils Date:
HC Ib!iported Oata Date: NOVember, 20lD.
OascrlptlOl1
HoldIng :CQ. FIscal YearEnd
stOck exChange TICker SYmbol
sec Fill! NI!Riber
w!llislte (7e m.xtm!lll1i
hit,p:llwv.,,., ,uwbililcorp;coin
PARENT ONLY

Total Llablittles
1;qu\tV:
""rpetiJiil preferred Stodt:'
Q;miJiatMi
N,oncumUlatlVe

Par Value
Paid In exceSS of Par
Report'
Name: IfJIldlng Company
9uarter Qf, $epte.nb"" 2010
Run Dat";, lanuary17. 2011. l:iiBPM
Data: .\\eiJIIla\OlY ($JhOusands)
TFIt RePlrted ,Data D;ltOj; Pi!o!:mber 8.2010
CPI;
'HI: RepoJtFl1er
Docket: 06679
Name: United .western Bank
.LOcatl",n: CO,
Oi's t<\ldweSt
, ,...It: Statu,. compiete
Tl'R, Edit staws Date, .D!!C8\f1ber 9.'zoio
TFR Data Date, Pi!o!:mb"" B, 201,0
Line item
"CUD
IICUS
HCUO

HCll0
HC220
H021
HC222
HC223
HC224
AccumUlated otiter COmprehensive income:
, unre.a1\Zeil CIIrtiIlnS!.!cui1t!es
(lo.,s) on (:;ish, flOlN
!'IG22S
':!ezi6
tithill"
Retained Eamlrigs
Other Componeritsof,Equlty
,Total Equltv
Totai Uabllitll!l\ and Equity
NetInccIine !lAISS)' AWlbirtabie to:
. (loIdlng COmpany
QiVld!l!nils pediii'Sd A,Wll1utabletl!;
CQinll8ny
'lf1dudedln Total.A55ets:'
casb. Qeposits, ,andlnvestml!!1t Secur'lUeS'
rrom SUbs!dl;vies:
Savings AsSodatlon
oi:l\"" 'SiiiJsldllli1es
.lnvestment, In Subsidlar.es:

OtherSubsldlllrie.
intangible ASSets:
MortgBgeServid"g,AssetS'
Sl!rvlclitg Assets and Other'
POlitY Acqu1IHtlpn'CQ5I:s
11'lCiuded In Total Uabllitle. (ElCCfudl/lli DeposItS):,
. ,
H.C227
H(:228
H:<:229
HC240
1:tC;2!l
HC250,

HOOl
!iC310
HCl20
HC330
HC340
HelSO
HC360
HC370,
Page 1 of3
September
2Dl0Ylilue
Dece'1"ber
UWBK,
21231
,$.:173,597
$79,118
'$,0
$0
$;3'
$.108,073
$- 4,187
$0
$0
$-9.410,
$0
$ 94,47"
$1,73.597

$0
$6.251,
$321
$ 2,41$
.$i40;026
$17,753
$0
$21
JO
http://otsnetoilappsifrslil)de]{.cfin1dook,et=066798cgest1,tre=lIoldingCottlpany&method=pri...l/17/2011
1796
Holding Company Docket Print
savings Association SubSidiaries: .
TrallSactlonal
Debt
Other Subsidiaries:
Transactional
Debt
Trust PrefelTed Instruments
Other Debt Mawrtng In 12 Mos or Less
Other Debt MaWrlng In More Than 12 Mos
Reflected In Net Income:
klterest Income
Dividends,
From Savings Association Subsldlartes
From Other Subsldiarie5
Total Income
Interest Expense'
Trust Preferred Instruments
All Otber Debt
Total Expenses
Total Income Taxes
Net cash Flow from Operations Attributable to Holding Company
Year-to-Date:
YTD - Net Income (LoSS) Attributable to Holding Company
YTD - Dividend Income From Savings ASsociatton Subsidiaries
YTD - Dlvldend Income From Other Subsidiaries
YTD - Interest Expense: Trust Preferred Instruments
YTD - Interest Expense: All Other Debt
YTD - Net cash Flow From Operations Attributable to Holding Company
CONSOUDATI!D
Total ASsets
Total Liabilities
Equity:
Perpetual preferred Stock:
Cumulative
NoncumlllatlVe
Common Stock:
Par Value
Paid In Excess of Par
Accumulated Other COmprehensive Income:
UnrealIZed Gains (Losses) on Accum Gains (Losses) on Certain Securities
Gains (Losses) on cash Flow Hedges
Other
Retained Earnings
Other COmponents of Ectulty
Total Holding Company Equity
Noncontrolllng Interests In Consolidated SubSidiaries
Total Equity
Total LIabilities and Equity
Net Intorne (Loss) Attributable to:
Holding COmpany and Nonc:vntrollIng Interests
Holding company
Dividends Dedared Attributable to:
Holding COmpany
klduded In Total ASsets:
Cash, Deposits, and Investment Securities
kltanglble ASSets:
Mortgage Servicing Assets
Nonmortgage Servldng ASSets and Other
Deferred Policy Acquisition Costs
Included In Total Liabilities (Exdudlng DeposItS):
Trust Preferred Instruments
Other Debt Maturing In 12 Mos or Less
Other Debt Maturing In More Tllan 12 Mos
Ret1eC1ed In Net Income:
Interest Income
Total Income
Interest expense:
Trust Preferred Instruments
All Other Oebt
Total Expenses
Total Income Taxes
Net casb Flow from Operations Attributable to Holding Companv
HC410
.,
..
HC420
HC430
HC440
HC445
HC450
HC41i0
HCSOS
HCS25
HCS3S
Ha09
HCS4S
HCS5S
HC570
HCS71
HCS6S
Y_HC250
Y_HC525
Y_HC535
Y_HC545
Y_HC555
Y_HC565
HC600
HC610
HC621
HC622
HC623
HC624
HC625
HC626
HC627
HC628
HC629
HC6D
HC620
HC630
HOO
HC635
HC640
HC77S
HC6Dl
HC650
HC655
He660
HC670
HC680
HC690
HODS
H009
H010
H020
HC770
HC771
HOlD
..
Page 2 of3
$0
$0
$0
$0
$ 30,442
$11i.250
$ 10,000
$99
$0
$0
$103
$460
$ 390
$24,088
$- 681
$- 2,883
$- 67,164
$0
$0
$1,459
$1,169
$-7,021
$ 2.084.611
$1,990.127
$0
$0
$3
$108,073
$-4.187
$0
$0
$- 9.410
$0
$ 94,479
$5
$ 94.484
.$ 2.084.611
$" 23.304
$- 23.304
$0
$653.793
$ 5,844
$746
$0
$30.442
$ 24.236
$ 265.516
$ 21.185
$ 20,119
$460
$ 2.351
$ 43.844
$-421
$ 3,706
1/17/2011
Holding Company Docket Print
Year-tn-Date:
YTD - Net Income (LOSS) AttrIbulilble to HC .. NDntontrolllng Interests
YTD - Net Income (Loss) Attrlbulilbte to Holding Company
YTD - Interest Expense: Trust Prererred Instruments
YTD - Interest Expense: All Other Debt
YTD - Net cash Flow From Operations Attrlbulable to Holding Company
SUPPLEMENTAL QUESTIONS
Any significant subs of the HC formed, sold, or dissolved during the qtr?
HC/any sub a broker or dealer registered under the SEC Act of 1934?
HC/any sub an Investment advisor regulated by the SEC or any Slate?
HC/any sub an Investment company reglsterd under tile Invest Co Act of 194D7
HC/any sub an Insurance comp subj to supervision by a State Ins Regulator?
HC/any sub subject to regulation by the CFTC?
HC/anv affiliates conduct oper outslde U.S. thru foreign branch/subsidiary?
Has the HC appointed any new senior exec offlcersldlrectors during the qtr?
HC/any sub entered Into a new pledge or changed the terms of capital stack?
HC/anv sub changed any security that would negatively Impact Investors?
HC/anv sub defaUlted In the payment of prln, tnt, Installment durtng qtr?
Change In the holding company's Independent auditors during the quarter?
Change In the holding companv's fiscal year end during the quarter?
HC/anv GAAPconsoRdated subs control other U.S. depOSitory Institutions?
If located In the US or Its territories, provide the FDIC certificate no.
If located In the US or Its territories, proVide the FDIC certificate no.#2
If located In the US or Its territories, proVide the FDIC certificate no.#3
If located In the US or ItS territories, provide the FDIC certificate no.1I4
If located In lIle US or Its territories, provide the FDIC certificate no.IIS
Page 3 of3
Y_HC635 $- 67,164
Y_HC64 0 $- 67,164
Y_HC710 $ 1,459
Y_HC720 $ 6,983
Y_HC730 $- 16,945
HCS1D
No
HC81S
Yes
HC820
No
HCB25
No
HCSlD
Yes
HCB3S
No
HCS4D
No
HCMS
No
HC8SD
No
HCSSS No
HC860
Yes
HCS65
No
HC870
No
HCS75
No
HC876
N/A
HC8n
tl/A.
Hee7S
lilA
HC879
II/A
HCBBO
N/A

. 1798
Tab C/
Exhibit 66
1799
I J
..
J
I. UN .............. IT ... E. .. D.: ..... . . STERN .'.
WE
., .....
. .
... : ..... ,., ..... BANCORP'
January
PbilipA.Gerbick
Regi.onal Director .
Office. of Thrift Supervision
Wet!tem Office
225 E. John Suite 500
Irving, TX 75062.;2)26
MichaelJ. McCloskey
ExecutiVe Vice Presldent
Chlef Operating Ofi:ice.r
Tel: 720-932-4282

CONFlPBNTIAL TREATMENT llEOUESTEIJ!
Kristie K Elmquist
Acting Regional Director.
Fedeml Deposit InsliraneeCorporation
1601 Street .
Dallas,TX 75201
Re;, United Western Banootp, Inc. capital formatiOn efforts; developinetitSwith J.P.
Morgan-Chase and depOSit update .
Dear Ms. Elmquist andMf. Gerbick:
R. PeQples,Chiirrrui.n of the Board and Chief Executive , oftioot of United
Western Bank, has asked me to confirmto you the status oithe capital formation efforts by
UnitedWestem Ban-cOrp, Inc., (the "COmpaily'')as ofthis date. At this time on 'behalf of the
. Company we can report the following; ,
I This letter contains confidentIal busli1essinformation of'United Wes:tein Bank and its holding company United WestemBancorp.
Inc. not in the puplic; doirulin; I!o!tte!:'isbeing to 1hee4er;albar)k regulators o.f'Unite4 in ,their
supenisory capaCity ovetthe Bank should. he granted confidentilll trlllltment pursuant to. the collfideiltiid commercilll
Infonnation and bank examination and to the Freedom of Infonnlltion Act. req\l&lst,.
pursuant'!o.5 U.s.C,552{b)(4) and (b)(8). If!iIr letter . PI!!asc notify us ifapyonesul:miit$11 Freedom of
I ntCirmationAct reqliest.fora cOpY of this lettel'. . .
United Westetn Financiai Center
700Seventtenth Street, Suite 2100
Den\ret, G:;lorado 80.202
\"WW;\lwhank.com
1800
1I4S. Kristie E/DJql,Iisi
Mr. Philip Oerbick
II), lOll
Page. 2
!Soll efrcles with Investors in dQCliment revieW ' ' , I
.-.. ,--.-... .......... ",. - , ... .. ..
iCommencing duedR!gence, noexpl:8
sslc
m of interest . " _ ........ q ..................... j
.. .....- ..-.. ..._......1'.. ", ..... -'" -=1
1801
Ms. KristieElmquist
Mr.pnilip Gerbick
January 10,200
Page 3
The table above represents the Company'sbestestirnate at this time and is subject to revision
based on changes in circumstances. At this time, all of the investors' ol)ligations m:c; or will be,
subject to conditions precedent as we have discussed with you in the past. The Company
continues to discuss possible investment with other investors as well in order topropetly explote
all avenues of any possible recapitalization.
Moreover, we have been advised that Olympus Partners will now visit our Denver location on
January 13 and 14, 2011, Auda Alternative Investments has advised us that their interest is at the
approxitnate $25 milliOn level and they have retained counsel to review the investment
agreement form to permit an expedited signing. We understand that Auda will confirm their
investment interest to us mid this week.
With regard to the Company's debt obligation to JP Morgan Chase Bank, N.A. ("Chase"), weare
advised that Chase will enter into a sixth forbearance agreement allowing our Company
additional time to comply with the repayment terms articulated in the fifth forbearance
agreement previouslyteported to you. We are currently drafting this forbearance agreement and
expect Chase to executethisagreementwith us intbe very near future.
Lastly, United Western Bank has acquired deposits from QwickRate and similar non-brokered
providers in the amotmtof$46.7 million during the week ended January 7,
2011. In total,atJanuary 7,2011 such deposits reached $240.8 million and total cash on deposit
at the Federal Reserve Bank of Kansas City was $375.9 million.
lam available to djscuss this With you at any tiIIJe.
Michael J.McClo$key
Executive Vice President and Chief OPerating Officer
cc: Guy A. Gibson
James R. Peoples
JohnE. Bowman, Acting Director
Thomas A. Barnes
Michael Simone
Lori Quigley
Nicholas Dyer
Kevin A. Corcoran, Esq,
Frances Augello, Esq.
Brian A. Steffey,
Joseph A. Meade
Serena Owens
A1ldrew Sandler, Esq.
Liana Prieto, Esq
1802
TabC
Exhibit 67
1803
I
...
J
.....
J
... I. . .. U .. .... N .. .... I.T ..: ... E ..... D .......
. . WESTERN
. BANCORP
January 2011
VIA OVERNIGH1' DELMRY
Mr. PhiUpA Gerbick
Regional Director
Otlice of Thrift Supervision
225 East Jobn Carpenter Freeway. Suite 500
Irving, TX 750622326
Re: United Western Bank (OTS N(}. H-2192)
Debt LimitationslRestrictions
Dear Mr. Gerbick:
. In accordance with the Cease and Desist Order ("C&D") between United Western BancQfp, Inc.
(the . and the Office. of Thrift. Supervision. and in with the Troubled
Condition lette.r of March 4, 20 I 0, of the COmpany is hereWith ptovidiqR this written
notice requesting your non-objection for the Company to make the following regularly scheduled
iliterest paymeriton outstandinB.debt: .
Issue: Subordinated debt
Amount: $77,609.16
This amount is thetnterest due ,on thesubol'dinated debt securities
Period: Actual days/360
Principal: Amount outstanding . $10 :million, no principal payment will be made at this time.
Rate: 3 month Libor + 2.75%
Date: Fel)ruary8,2011
We have previously submitted for your review cl'lsh flow proJections of the Company for a tiu-ec
year period tln'ough December 2012, which demonstratesthatthe Company's cash flow resources
are adequate. to make this payment and thus respectivelytequest your non-objectiOIL
Umteci Welltlli'n FinanmalOentr .. . ...
700 SllventeC)nth 2100- CO 8(1202
tel; 303.{)95.9898. fax: 3()3,1l9Q.0952
.. www.uwhancOrjJ.com
1804
Mr. O:erbicIc
Office ofThriftSUpervisiori
Januaty6, 2011
Page 2
Please also note sUbordinated debt to this request dos not cOntain a pro.Yision that
would allow Company to
Please aclQJOwtedge receipt of thi$ filing by da.te stamping the enclosed copy of this iequest and
it to ine in the postage-paid enveiopeprovided
If YOll haveanyq\lCSuQll$ regardmg the req,uest or need any additiopW. pltl$e contact
Michael McCloskey at 720 ... 9),24282 or myself at 710-956-6503 ..


.
.. .... ...... , .... ,.
. .
. ..,.' '. .'.
Benjamin C. Hirsh
Chief AccounUng offic(rr
Enclosures
cc:Mt. <3ary A.. Scott, 'Director
Mr .. Nic401asbyert
Robert J. Knecht, AruUY$t
Steven Harris, Analyst
Michael t McCloskey
1805
TabC
Exhibit 68
1806
1807
~
(Xl
o
(Xl
. Discussion Topics
-<>- Status of Capital Formation Activities
YJI
.. J.J . UN.I.TED
... WESTERN
BANCORP
-<> UnitedWestem Bank Forecast of Operations 2010-2013 with $200 million capital
.
raIse
Change from Prior presentation
Assumptions
Impact of Order on Capital Raise
Other Matters Related to the Order
Financial Model with $200 :million Capital Raise
-<> Status of Discussions WithJP Morgan Chase Regarding Revolving Credit Line
-<> Status of Legent Clearing Acquisition
-<> Status of FDIC Brokered Deposit Determination
-<>- Status of Sale of Equity Trust Note
<-Questions and Answers
~
co

0
~
ua.
J J..
. UNITED
WESTERN
.......... BANCORP
Status of Capital Formation Activities
-c}
.-'-
4-
4-
4-
4-
Company narrowed list to four participants in early August 2010.
One participantdropped out due to deal size (too small- Warburg Pincus).
Three large participants renlain - KKR, Loven Minnick, a.nd Oak Hill.
Active due diligence commenced mid-August 2010.
Majority of due diligence successfully completed at this time.
Transaction size: Currently projected at $200 lnillion to $250 million. For
modeling and business planning purposes the Company has used $200 million.
.-c} Term sheets expected by September27, 2010.
-c} .Each large investor expected to be up to a 24.9% investor in United Western
Bancorp.
~ Company through Goldman Sachs will also offer equity to existing and other
smaller investors to complete raise.
-c} Tinling of receipt of rebuttal of presumption of control will significantly impact
ultimate date of closing.
(-I
00
(-I
o
YJI
'J, J, "UN,' ',ITE, i
D
,'
... ' WESTERN
BANCORP
Change from Prior Presentation
, . . . .
Bank previously submitted its Business Plan Update to the
OTS on Ju.ty 26, 20 lOin accordance with the Cease & Desist Order
("Order") ..
{i- At that time the anticipated level of capital to be raised was
estimated at $65 million, $125 million and $200 million.
expectations are for a $200 million capital raise at. the

mmtmum.
the new capital and outlook for the :economy and lilies of
business in which the Bank has a competitive advantage,
management anticipates, additional growth ofGNMA securities and
SBA lending in its prospective, ..
1-1.
ao
1-1
1-1
I n l . ~ . N ~ ....
. BANCORP
Assumptions
--. United We stem Bancorp raises $200 million.
~ Capital injected into Bank $150 million.
~ Significantly de-risk Bank balance sheet through elimination
of non-agency MBS ..
-This may occur via transfer to United Western Bancorp.
~ .Sale at loss of $65millioJ} in Bank and $9 million at UWBK
. .
. .
of all non-agency MBS -.basedon IDC pricing.
--} As a result of the foregoing assumptions, the Bank capital
ratios are estimated as - Core 9.02%; Risk Based Capital
19.73%
I-'
00
I-'
tv
BANCORP
IUJI
J J. .UN. ITED
WESTERN
Impact of Order on Capital Raise
-{>- The Bank and United Western Bancorp request upon closing of a capital
raise the OTS grant the following:
-'-. Capital- paragraphs 3. and 4 - ~ ~ m . e e t and maintain"
-{>-
Elimination of the "meet and maintain" language in the Order so that the Bank will be deemed well
capitalized for regulatory capital ratio purposes.
Construction and Land Loans - paragraph 19 - origination
Allow the Banka $10 million incremental construction loan allocation over the balance outstanding
at date of request to provide vertical financing for existingJand loans. No new land loans are
requested or will be made while under the Order. This incremental construction loan allocation will
be used to maximize recovery of selected land loans .. Estimated allocation of three pre sales per
model with two model per development limit.
-'- Growth Restrictions - paragraph 26- total assets
Elimination of the current language of growth at net interest credited to deposits and allow the Bank
to increase assets in accordance with its revised and updated business plan.
-{>- Specific to United WestelTI Bancorp - . Payment LimitationslRestrictions -
paragraph 6
I-'
00
I-'
W
YJI.J.
J
..... U. N. IT. ED
. WESTERN
BANCORP
Other Matters Related to the Order
--} Bank credit administration department works diligently to
reduce classified loans consistent with classified assetreductiol1
plan.
--} Bank has no intention of purchasing non-agency MBS.
--} Bank adheres to its Liquidity Plan.
--} Bank does not foresee need for capital distribution through
2012.
~ Bank and Board closely monitorand comply with LTOB and .
Regulation W.
--} Bank fully adheres to other requirements of the Order and works
diligently with OTS for appropriate removal of Order over time.
.......
OJ
.......
U1
Status Of Discussions WithJP Morgan Cbase
Regarding Revolving Credit Line,
IIJI, ,

Verbally negotiatedfQr revised interest only payments through October 31,
2010.
Pending review pf written agreement.
Submit to OTS for non-objection .
{i- Expected outcome:
,. Continue to waive all possIble events of default. '
'Allows Company to complete capital raise.
Request OTS approval to make i.nterimperiQd interest
Estimated United WestemBancorpcash positionjs adequate to make interest
only payments.'
Retire debt upon closing of capital formation. transaction.
I-l
co
I-l
(j)
WESTERN
BANCORP
. ~ J .
. J. .. UNITED.
Status of Legent Clearing Acquisition
4- Critical to new equity investment (distinguishing factor against many other
banks seeking capital)
4- Current and significant precedent authorizing acquisition of securities
clearing firm within banks and thrifts
4- Allows the Bank to control significantretail and commercial deposits (this
acquisition replaces Sterling Trust Company client deposits transferred to
Equity Trust Company in 2009)
4-' . Significant growth anticipated in next 20-24 months
4- Protects the Bank against change in circumstances surrounding other
liquidity sources (e.g., Equity Trust Company and Lincoln Trust Company
clients)
-<} Due diligence completed and closing scheduled for on or before October
31, 2010 pendingOTSIFDIC approval of operating subsidiary
I-l
00
I-l
""'-.I
~ ~ ~
Status of FDIC Brokered Deposit Determination
-<>- June 30, 2010, Serena Owens, Deputy Director, Supervision and Consumer Affairs,
advised the Bank that the June 2010 FDIC determination regarding "brokered
deposits" "vas "preliminary."
-<>- Many other insured institutions with similar issues are treateddifferently.
-} Industry participants concerned about outcome and ready to form coalition to contest
FDIC determination.
-<>- FDIC Washington appears to want to avoid precipitating a liquidity crisis at the Bank
over this issue.
~ Washington FDIC now actively involved in review of facts and circumstances
surrounding the Bank's institutionaJ deposits.
~ F D I C continues to solicit information on the brokered deposit issue from the Bank.
{>- Latest information submission was September 15,2010.
--- FDIC urged the Bank to request extension of the review by the Supervision Appeals
Review Committee. The Bank submitted a request for an extension to December 15,
2010. (Previously the FDIC granted an extension from August 2,2010 to October 2,
201
I-'
CD
I-'
CD
WE
C"'1""'1::]Tl ..... T
YJI
.
. JUNIT ... .ED ...... .
. Bmcoo
Status of Sale of Equity Trust Note
''- . Contacted numerous parties directly and throll:gh agents.
. Missed August 31, 2010 deadline in paragraphs 33 and 35 of the
Order to reduce the loan to meet the loans-to-one borrower limitation.
. . '... .. . . .' ..... .. . . .' . .':" ".. . . ".' .
Ongoing discussions with 10 banksin various stages from
preliminary through completion of signed non-disclosure agreement
to participate or refinancethel10te to reduce the balance to meet the
loans .. to-ol1.C borrower limitation.
Many potential participants have indicated a :reluctance to, particip(1te .
in a loan with a Bank under aC&D Order.
Anticipate participation of loan. during the fourth quarter ..
J-l
ex:>
J-l
~
Questions and Answers
~
. J J UNIT.E .... D ...
WESTERN
......... BANCORP
<} United Western Bancorp, Inc. and United Western Bank
management will be glad to respond to any questions or
comments the OTS representatives may have.
..... ~ . , . , ..... ~ ......
. " . I
Q
.
'.. .' ." . ~ . .
0 ~ ~ ' ..... .
.. . ~ . , . . . . ..... . O ~ .......
~ . .
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~ . ~ ~
1820
TabC
Exhibit 69
1821
1822
I. ) IJII

Discussion Topics
. .
{- Meeting Objectives
{- Status of Capital FOTIllation Activities
{- Transaction Overview
{- United Western Value Proposition
{- United Western Business Mix
{- Benefits From Capital Formation
{- United Western Bank Forecast of Operations 2010-2012 with $200 million capital raise
Assumptions
Financial Model 'With $200 million Capital Raise
Change from September Presentation
{- Legent Clearing Acquisition
Extending Our Processing Franchise and Controlling New Deposits with Legent Clearing
Why Legent Clearing?
Legent Clearing - Summary Statement of Operations
Legent Clearing - Customer Deposit Costs
{- Conditions to Closing of Capital Raise
{- Revisions to the Bank C&D Required for Closing
{- Revisions to the Company C&D Required for Closing
{- Other Matters Related to the Order
{- Status of FDIC Brokered Deposit Determination
{- Questions and Answers
United Western Bancorp, Inc. (the "Company" or "UWBI"), United Western Bank (the "Bank")


Meeting Objectives
<} Secure a consensus to accomplish a private-sector
recapitalization of the Bank at no cost to the FDIC
<} Achieve coordination of action among regulatory agencies
and the Company/Bank
<} Review the proposed reduction in the risk profile of the Bank
and the improvement in the Bank's prospective regulatory
capital ratios
{-- Review justification for Legent Clearing acquisition and
safety and soundness of Legent Clearing operations


Status of Capital Formation Activities
-- Anchor Investors commit to $103 million of $200 million to $205 million total
-- The Company executed Investment Agreement October 28, 2010 raise
Lead Anchor Investors - Oak Hill Capital Partners and Lovell Minnick Equity Partners
Each commits to a purchase of $47 million, dependent upon the other. Giving effect to
exercise of warrants, the Lead Anchor Investors will each own 23.1% of the Company
Legent Group, LLC parent ofLegent Clearing LLC and Ric Duques constitute Duques
Anchor Investor
Legent Group will purchase $3 million and Ric Duqueswill purchase $6 million and will
own, directly and indirectly, approximately 5% of the Company
-- Private placement of remaining $97 million. is ongoing
Meetings held through November 12, 2010 with 13 ftrms, all but one have indicated
further interest, over 20 have executed non-disclosure agreements and are reviewing
information in data room.
Additional contacts and potential meetings are in process with 53 ftrms .
Anticipate completion of remaining private placement by end of November
-- Closing is scheduled to occur by December 31, 2010 and is dependent upon a
nUlnber of conditions
Transaction Overview
$200mm Capital R.aise to De-Risk B,alance Sheet and Support Growth
Transaction Rationale
Bolster regulatory capital ratios in excess of "well capitalized" thresholds
Allows for de-risking of Bank balance sheet
Securities portfolio issues have been identified and will be addressed at closing
Pay-off Holding Company debt at a 35% discount ($ 16.3mm face value)
IJJIEI&

Provides capital to grow balance sheet and take advantage of significant growth opportunities
Securities clearing, including acquisition of Legent Clearing
Community banking (organic and acquisition)
SBA lending
Pro Forma Banli: Capital Ratios 1
Tier 1 Core CapitaJ
9.7%
6.9%
3Ql0A 3Ql0PF
... 8.0''10
-5.0%
3Ql0A
C&DLevel
Note: 3QlOPF capital ratios shown pro forma for acquisition of Legent Clearing
Tier 1 RBC
16.8%
3Q10PF
Well Capitalized
Total RnC
8.1%
-
---
I Estimated $25mmadditional cash flows generated from Support Securities at Holding Company available to be invested in the Bank.
I. JIJII

Benefits From Capital Formation
-- At closing, the Company will contribute $83 tuillion to the Bank
-} Bank will operate above 8% core capital ratio and 12% total risked based capital ratio
-} At closing, the Company will purchase 100% of the million in direct credit substitute
tuortgage backed securities from the Bank
-} The Bank's balance sheet will be substantially "de-risked;" the risk of loss from remaining
assets is adequately reserved and manageable
-- Bank will be \vell capitalized and the brokered deposit issue will becOlue moot
-- Enhances Bank's ability to grow community bank deposits from existing eight branch
network - forecast to grow to --$644 ll1illion by year end 2013
-- Bank \;yill reenter cotmuunity lending in Colorado providing fmancing to local businesses
-} Bank will expand emphasis on SBA PrefelTed Lender Division to provide fnlancing to small
businesses across Atnerica
-- Bank willtuaintain substantial liquidity prospectively through guaranteed potiions of SBA
loans, GNMA securities and cash
United Western Value Proposition
Low Cost Deposit Gathering
Processing & Trust Deposits
{- Client deposits ii'om uninvested cash
balances and liquidity float
Low cost and relatively rate-insensitive
Contractual and "sticky"
Highly scalable platform
Legent Clearing Deposits
(Pending Acquisition)
4- Client deposits and float from clearing
operations
Post acquisition, Bank will control strong
source of 100v-cost deposits
Bank affiliation is competitive advantage
for Legent
Substantial deposits available immediately,
with significant growth expected thereafter
Community Bank Deposits
4- Business focused Community Bank
Presence in markets with strong economic
growth and t1lVorabie demographics
"First mover" advantage being the first
local bank to be recapitalized
+
Lower Risk Asset Generation
Community Bank Lending
4- Well-positioned to capture market share post-
recapitalization
Focus on increasing C&1 lending
Experienced team led by long-tenured in-market
bankers
SBA Lending Franchise
4- Leading national "SBA preferred" lender
Veteran team with 13-year track record
{- Attractive risk-adjusted yields on loans, high
retum on equity
Legent Related Opportunities
4- Uniquely positioned to make margin loans
through Legent's correspondents
4- Commercial lending opportunities to
correspondent broker-dealers
Lower Risk Securities Portfolio
4- Conservative ALCO policies
4- Investment in lower risk Agency securities
Conservatively manage liquidity position
,'''''''''-'1
;- t


UW Value Proposition
4- Unique low-cost deposit
gathering coupled with
attractive lower risk asset
__ ___ _
: 4- Robust Det interest margin
I with fee income I

Relatively rate-insensitive
liabilities
Expected to be profitable ill
CutTent rate environment
Well-positioned for future
interest rate increase
NIM to exceed 4.5% under
current rate forecast

l __ !b2!.e .!n2!!s!.rr ___ ....
Scalable nature of model
results in consistent
profitability improvement
ROE's approaching 20% in
2012
- -g';;th p';fll; - - - - :
- - .. - 1>OisedtocapltaflZe cn - - - -
opportunities today - first
mover advantage
Well positioned to compete
United We'ste'mBusine'ss Mix


Shift in Business Mix and Balance Sheet Growth Results in NlM and ROE Expansion
2010E Pro Forma
I
Community
Bank Deposits
23%
Average: $2.1bn
Processing and
Trust Deposits
54%
Community
Bank Loans
56%
20BE Pro Forma
Other Liabilities
7%
;t
SBA
Loans
17%
_ Community
Bank Deposits
21%
Average: $2.9bn
,---- Margin Lending
10%
Pro Forma 2013E NIM: 4.6% 1
Pro Forma 2013E ROE: 19%
? Significant increase in
low-cost deposits from
Legent
Reduced overall cost of
funding
Reduced reliance on
other processing & trust
deposits and relatively
expensive community
bank deposits
? Margin lending and
increased SBA loan
originations further
diversify asset portfolio
? Highly scalable platfonn
results in ROE expansion
with growth in balance
sheet
United Western Bank Forecast of
Op'erations 2010-2012 -Assumptions
-c> The Company raises $200 million


-c> Capital injected into the Bank $83.2 million in fourth quarter 2010
As a result of the foregoing assumptions the Bank capital ratios are estimated at December
31,2010 as -Core 9.8%; Risk Based Capita118.3%
-c> The Bank transfers all direct credit substitute ("DCS") securities to the
Company at book value ($92.8 million at September 30, 2010)
Significantly de-risk Bank balance sheet through elimination of DCS MBS
-c> Additional capital injection from cash flows fromDCS securities of $14
million in Q3 2011
-c> Legent Clearing acquisition closes and March 31, 2011 estimated capital
ratios are - Core 8.4%; Risk Based Capita116.3%


Change from September Presentation
-} The Bank previously provided the OTS with a financiallnodel assuming a $200 million
capital raise
-} Based on fuliher analysis performed by third party, Spring Hill, Bank will retain Senior non-
agency MBS based on risk reward profile
-} The Bank underperformed relative to the Septelnber presentation and its business plan in Q3
2010. (Note the information contained herein does not reflect the conclusion on OTTI for
Q32010)
Provision for credit losses was impacted by updated appraisals received on certain loans and several
loans with partial charge offs including largest land loan. Charge offs totaled $16.9 million in Q3
2010 and provision was $18.9 million compared to September presentation of$5.4 million and
business plan of $4 million.
Net interest income ("NIl") was lower than estimated due to higher levels of nonaccrualloans and
lower than planned assets. NIl was $16.6 million for Q3 compared to September presentation of
$17.5 million and business plan of $16.6 million.
Prospectively the Bank will return to profitability as a result of the increased capital allowing the
Bank to increase interest earning assets with low cost liabilities, thus increasing NIl, elimination of
substantial recurring OTTI charges, and stabilization and improvement in the loan portfolio asset
quality reducing provision charges.


Legent Clearing Acquisition
The acquisition of LegentClearing, LLC ("Legent
Clearing") is a condition precedent to closing the $200
million capital formation' ,
The Bank has timely responded to all questions regarding
Legent Clearing asked by OTS
Application being processed concurrently in OTS Dallas
and OTS Washington
FDIC has determined that application is not accepted due
to brokered deposit issue
Extending Our Processing Franchise and
Controlling New Deposits With Legent Clearing
I ) J I tWllr>RN

{>- COlnpanylBank have been engaged in the processing business for well over 20 years
{>- Bank balance sheet has been built on processing COlnpany deposits for 17 years
{>- The Legent Clearing acquisition is squarely in line with the Company's history of serving
. .
processIng companIes
{>- Historical examples of owned companies providing processing related deposits to the Bank:
Sterling Trust Company; Texas chartered trust company, owned by the Company from 1997 to
2009; customer deposits held at Bank; provided over $400 million of deposits to the Bank at the
high water mark
Matrix Settlement and Clearance Services, LLC; mutual fund clearing and settlement services
provider, owned by the Company from 1997 to 2009; provides approximately $200 million of
. deposits to the Bank today
Bank today provides NSCC settlement services to over 300 retirement plan administrators across
the country including the Bank of New York, Fifth Third Bank and others representing
billion in retirement assets from Americans across the country
-- Securities clearing finns within bank operating subsidiaries are clearly well established
-- The Legent Clearing acquisition by the Bank does not break new regulatory ground


Conditions to Closing of Capital Raise
->- OTS acceptance .ofthe rebuttals of control filed by the Lead Anchor Investors pursuant to OTS
procedures
->- . Modification of certairi elements of the Bank and Company Orders to Cease and Desist
->- Approval by OTS, FDIC and FINRA for the acquisition by the Bank ofLegent Clearing prior to or
contemporaneously with Closing
->- Other conditions include
NASDAQ approval to issue the securities
ProforIna capital ratios will result in well capitalized status
No material adverse effect
The Bank's non-agency securities have not declined in value by more than $20 million since August 2010
The Bank has deposits of at least $1.5 billion at time of closing
The Company and the Bank enter into employment agreements with five individuals
The OTS provides its non-objection to the Company paying off JPMorgan at 35% discount
The Company appoints two new members to board of directors of seven members
The Bank appoints two new members to board of directors of seven members
The OTS provides its non-objection to the Company's revised Business Plan, which contemplates the
closing of the private placement transactions .


Revisions to Bank C&DRequired for Closing
-9- As a condition of closing, the Bank Order must be modified as follows:
-9- Capital- paragraph 3.- "meetand maintain"
Elimination of the "meet and maintain" language in the Order so that the Bank will be deemed well
capitalized for regulatory capital ratio purposes.
-9- Construction and Land Loans - paragraph 19 - origination of construction and land loans
The Bank contemplates the origination of incremental construction loans for the near future. The
origination of incremental construction loans will be used to maximize recovery of selected land loans.
Estimated allocation of three pre sales per model with two model per development limit.
-9- Growth Restrictions --' paragraph 26 - total assets
Elimination of the current language of growth at net interest credited to deposits and allow the Bank to
increase assets in accordance with its revised and updated business plan.
-9- Directorate and Management Changes - paragraph 27 - directors
Provide non-objection to Bank to appoint two new board members selected by the Lead Anchor Investors
who will join the Bank board of directors. The Board will consist of 7 members Bank Chairman, Bank
Vice-Chairman, the two new board members and three outside independent directors
-9- Employment Contracts and Compensation Arrangements - paragraph 29 - key personnel
. Provide non-objection to the Bank for the execution of employment contracts and compensation
arrangements with Bank Chairman, Bank Vice-Chairman, Company Chief Operating Officer, Division
Head ofSBA and President of Legent Clearing


Revisions to the Company C&D Required for Closing
As a condition of closing, the Company Order must be modified as follows:
{-- Payment LimitationslRestrictions - paragraph 6 - retirement
Eliminate this restriction thereby allowing the Company to retire the outstanding
balance due JP Morgan at 35% discount to current principal balance
Directorate and Management Changes - paragraph 13 - directors
Eliminate this provision thereby allowing the Company to appoint two new board
members selected by the Lead Anchor Investors who will join the Company board of
directors. The Board will consist of 7 members Company Chairman, the two new
board members and four outside independent directors
Employment Contracts and Compensation Arrangements - paragraph 14 - key
personnel
. Eliminate this restriction thereby allowing the Company to enter into employment
contracts and compensation arrangements with the Company Chairman and Company
Chief Operating Officer


Other'Matters Related to the, Order
{>- The Bank's credit administration department continues to work
diligently to reduce classified loans consistent with classified asset
reduction plan
{>- The Bank will not purchase any non-agency MBS in the future
{>- The Bank is adhering to its Liquidity Plan
{>-. The Bank does not foresee need for capital distribution through 2012
{>- . The Bank and Board are closely lTIonitoring and complying with
LTOB and Regulation W
{>- The Bank is fully adhering to other requirements of the Order and
works diligently with OTS for appropriate relTIoval of Order over time


Status of FDIC Brokered Deposit Determination
{- November 5, 2010, Kristie Ehnquist, Acting Regional Director, Dallas
. Regional Office, advised the Bank that seven institutional relationships,
which constituted $1.22 billion or 74.1 % of Bank's deposits, are
brokered
{- The Bank has notified the FDIC of its decision to appeal the FDIC's
Regional Office's determination .
{- The FDIC Washington, D'.C. Office has confmned that the Bank can
. continue to accept, renew or rollover the deposits related to the seven
institutional deposit relationships pending resolution of the Bank's
appeals .
{- The recapitalization contemplated by the Investment Agreement will
result in the Bank being well capitalized and no longer subject to a meet
and maintain requirement, so the issue of broke red deposits becomes
moot
Questions and Answers
UNITED
Y J I ~
~ United Western Bancorp, Inc. and United Western Bank
management will be glad to respond to any questions Qr
comments the OTS and FDIC representatives may have
TabC
)
Exhibit 70
1844
UNITED WESTERN BANK
BOARD MEETING
January 5, 2011
I. Approval of Minutes
II. New Loan Growth & Paid Loans
m. Loan Portfolio Trend & Monthly Summary
(a) Recommended ConcentrationGuideHnes
(b) Portfolio Concentration Summary
IV. Asset Quality Reports
(a) Risk Trend
(b) Non-Accrual Trend
(e) Problem Asset Trend
(d) Delinquency Trend
(e) Problem Asset Report
(t) Top 20 Problem Assets
(g) Delinquency Reports
(h) Asset Quality Summary
(i) Asset Quality Summary - Single-FamHy Portfolio
i. Single-Family Delinquency - Borrower DetaR
H. Single-Family Delinquency - Geographic Detail
(j) Non-Accrual Loans - Loan & Portfolio Detail
i. Community Bank Non-Accrual Loan Changes in November
ii. SBA Non-Accrual Loan Changes in November
iii. Singie-FamHy Non-Accrual Loan Changes in November
V. Chargeoff & Recoveries
VI. Real Estate Owned
VII. Overdraft Report
1845
United Western BIIIIk - Consolidated
New Loan Production Report
November 30, 2010
BOl'rower Loan#-
Commitment Current
Note Date
Interest Floor Fixed 1
Amount Batance
Maturity Date Type Desaiptlon Officer Name
4,195,000.00 0.00 11124/10
Rate Rftte Var.lndex
02124136 Commen:ial Real Estate Mike Ramsey 6.00% 0.00"10 WSJPrime
3,840,000.00 3,840,000.00 11129/10 11129120 Commercial Real Estate John Fiedler 3.375% Fixed
1,485,000.00 1,135,009.39 11117/10 11117135 Commercial Real Estate Mike Ramsey 6.00"10 0.00% WSJPrime
1,465,000.00 1,465,000.00 11119/10 11119135 Commercial Real Estate Mike Ramsey 6.00% 0.00010 WSJPrime
880,000.00 880,000.00 llJI9110 11/19120 Cammerical Ken Allen 6.00% 0.00% WSJPrime
S53,ooO.00 553,000.00 11/04/10 11104120 Commerlcal MikeRmnsey 6.00% 0.00".4 WSJPrime
540,000.00 285,003.41 11/03/10 11103120 Commen:iaI Real Estate Dave Painter 6.00% 0.00"10 WSJPrime
390,000.00 348,790.00 11129/10 11129120 Commcrica\ Michelle BtOWII 6.00% 0.00% WSJPrime
150,000.00 150,000.00 1lI02l10 03/02111 Commercial John Fiedler 6.50"10 Fixed
SO,OOO.OO 50,000.00 11101110 10129/10 Commerica1 John Fiedler 6.75% 0.00% Fixed
45,200.00 45,200.00 1lI15/10 08115/11 CollUllCtCial TimOstic 6.50% 6.50% WSJPrime
24,578.02 24,578.02 11102110 11102114 CODSUmer Van Horsley 6.50% Fixed
10.000.00 0;00 11119/10 11118/11 COI1IIIlen:ial TimOstic 6.25% 0.00% WSJPrime
Total New LoaD5 13.,627.778.02 8.776,s8t.88
5.27"
Estensions/ReuewlIlt/Modilieations New Monev
50,000,000.00 26,031,909.68 25,000,000.00 09130fll Iotra-Company Loan Anthony Codori 3.25% O.OO"A WSJPrime
10,500,000.00 10,500,000.00 0.00 10/15/11 Construction - Residential Carl Kuhlman 3.75% 3.75% WSJPrime
7,571,000.00 4,695,000.00 0.00 11117135 Commercial Real Estate 4.75% NfA WSJPrime
I-' 3,379.539.65 3,379,539.65 0.00 01131111 Commercial Real Estate Tim Ostic 5.75% S.75% WSJPrime
00 2,100,000.00 2,100,000.00 0.00 08/31111 Construction - Residential John Merchant 5.00% 5.00% WSJPrime
+:>
2,000,000.00 0.00 0.00 09/13/11 Commen:ial Greg Atkinson 6.25% 6.25% WSJPrime
O'l
1,649,434.61 1,649,434.61 0.00 01128flJ Land & Development GellY Gilmore 5.00% 5.00% WSJPrime
1,249,913.94 1,249,913.94 0.00 06130/11 Residential Real Estate Michelle Watwood 3.00% Fixed
776,250.00 776,2S0.00 0.00 09127111 Construction - Residential Tim Ostic 5.75% 5.75% WSJPrime
563,739.19 425,103.80 0.00 0211311 ) Land & Development Greg Atkinson 5.00% 5.00% WSJPrlme
500,000.00 344,893.70 0.00 09/13111 Commercial Greg Atkinson 4.50% 4.50% WSJPrime
467,500.00 0.00 0.00 12111fll Commercial Van Horsley 6.00"10 6.00% WSJPrime
269,873.29 269,873.29 0.00 10118/11 Land & Development Carl Kuhlman 5.75% 5.75% WSJPrime
228,253.42 228,253.42 0.00 12105/11 Land & Development TimOstic 5.75% 5.75% WSlPrime
200,200.00 200,200.00 0.00 01106/12 Land & Development TimOstic 5.75% 5.75% WSJPrime
200,000.00 199,974.48 0.00 10124111 'Residential Real Estate ErIc Keams 6.50% 6.50"A WSIPrime
150,000.00 149,499.54 0.00 02/10/11 Commercial Real Estate Bret Duston 6.50% 6.S0% WSlPrime
140,800.00 140,800.00 0.00 01106112 Land & Development TimOstic 5.75% 5.75% WSIPrime
100,000.00 100,000.00 0.00 WI 0/1) Commercial Real Estate Bret Duston 6.50% 6.50% WSIPrime
100,000.00 99,617.23 MO '11102111 Commercial BretDuston 6.so% 6.50% WSJPrime
85,000.00 24,368.50 0.00 11/22/11 Residential Real Estate LiamGirard 6.50% 6.50% WSJPrime
72,000.00 72,000.00 0.00 01106112 Land & Development TimOstic 5.75% 5.75% WSJPrime
64.7S0.00 64.750.00 0.00 10105/11 Land & Development TimOstic 5.75% 5.75% WSJPrime
64,749.00 64,749.00 0.00 10105/11 Land & Development TJID Ostic 5.75% 5.75% WSIPrime
29.024.76 29.024.76 0.00 10123/11 Commercial John Merchant 6.00".4 6.00% WSIPrime
Tolnl ExteuslonsiRenewals/Modifications 82,462.027.86 52,795,155.60 25,000,000.00 3.82%
Pnge2 of66
J--I
OJ

.......
United Western Bank - Consolidated
Paid Loan Report
November 30. 2010
Borrower Loan # CommitmeDt Current Note Date Maturity Date Paid Type Descrlptioa . Ol'flcer Name Interest Floor Fixed 1
Amount Balaaee Date Of[ Bale Rate VaMIt
6.273,430.00 6,273,430.00 06l22I07 12131/10 11/15110 CommeIcialRcalBatate JohnF'iedicr S.5O% S.SO% LIBOR-30clay
3.839,452.31 3,301,258.34 08114109 J.2J31110 11129110 ConsItuction-CommerciaI1ohnFied1cr 6.50%- 6.50% WSJPrimc
3,12S,842.14 3,12S,842.14 04110108 10110110 11130110 Constmcdon -Residential Jobn Merchant 6.110% 6.00% WSJ Prime
2,430,494.01 2,430,494.01 12118/07 04114111 11102110 Commercial MiIllhBenneIt 6.00% 6.00% WSJPrIme
1,861,667.00 1,861,667.00 12118/07 01101/13 11130110 COIDIIICCCial MitehBennett 3.25% 0.00% WSJPrima
381,498.23 381,498.23 12I05I08 12115113 11123110 CommercilIl RcvJ Estate Brie Keams 5.50% 5.50% WSJ PrIme
371,562.00 371,562.00 06I06I08 12f061O!) 11130110 Conslnlction - Residential Mitch Bennett 5.2S% 5.2S% WSI Prime
279,580.15 2",580.15 07130107 01115110 11130110 CoDstIUction-Residc:ntlal GenyOilmore 3.75% 0.00% WSJPrIme
248,645.32 248,645.32 08118108 07125/10 11130110 CllIIIIDOldal MichaelSaun 6.50% 6.50% WSJPrimc
199,584.20 199,58420 00I05I08 09l04I10 11130110 Commercial Resl Bstate MiChael Saun 6.00% 6.00% WSJ PrIme
195,000.00 195,000.00 0112Sl10 12104110 11IHi/l0 CoImmm:ial Brie Keams 4.85% Fixed
191,651.98 191,651.98 04118108 04118111 11/24/10 Commcn:ialResiBalate TimOatic 6.25% Fixed
165,600.00 165,600.00 04101110 03112112 11130110 CommercilIl MichaelSaun 0.00% 0.00% Fixed
136.,146.66 136,146.66 08121107 01115110 11130110 Land & Development Geny ODmorc 3.75% 0.00% WSJ Primo
12S.000.00 125,000.00 11103108 11103110 1111!WIO Commen:ia1. WilIiaql Stone Fixed
54,365.09 54,365.09 04109108 07/10110 11115110 ComInercial . T'IUI 10.00% Fil!d
34,142.32 34,142.32 10131108 10131110 1l/lSllO Ccmstruction - ResIdential Tim Osric 6.00% 6.00% WSJ Prime
28,25D.63 28,250.6310131107 09105110 11130110 Consumer MilllhBennett 4.00% 4.00% WSJPrime
16,059.80 16.059.80 06113107 1011S111 11124110 Conunercial BmDuston 7.75% Fixed
11,131.47 11,131.47 06126107 03115111 11130110 Commemial Bret Duston 7.90% F"llIed
11,327.82 9,327.82 10111107 12115/10 11124110 Coaunmcial BretDuston 7.15% Fixed
8,024.19 8,024.19 06l26I07 11115110 11112110 Commercial Bret Duston 7.900.4 F"lXed
2.923.60 2,923.60 03/19197 03ll91.Z2 111OInO ConunercialResiBslate 7.68% N/A SyrCMT
2,548.58 2,548.58 11l03l00 11103110 11112/10 Commem\alReslBalate 5.00% N1A
1.367.80 1,367.80 08123106 12110110 11110110 Commercial BretDusLOll 3.75% 0.00% WSJPrime
Total Paid Loans 19-"3.295.30 It.455.1.L33 5.64%
I Moved 10 REO I Partial dwp Off
2C111qeOlJ'
J Short SalelSbmt PayolJ'
Pap3otG6
United Western Bank - Consolidated
November 30,2010
Loan Portfolio Trend Report
Sep-09 Dec-09 Oct-l0
Held for Investment Portfolio
Construction $ 238,990,479 $ 212,394,412 $ 167,104,265 $ 147,937.959 $ 106,077,703 $ 105,635,431 $ 94,444,617
Construction -SBA Originated $ 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
Land $ 98,526,691 $ 92,248,426 $ 90,250,468 $ 87,473,656 $ 75,632,691 $ 75,631,012 $ 75,669,694
Commercial Real Estate $ 381,921,009 $ 371,772,487 $ 392,592,768 $ 383,376,311 $ 391,526,965 $ 392,585,744 $ 388,231,094
Commercial Real Estate -SSA Originated $ 58,537,406 $ 59,272,636 $ 61,039,681 $ 61,074,705 $ 84,851,012 $ 65,360,137 $ 65,602,928
Conunercial Real Estate -SBA Investments $ 66,787,650 $ 64,452,178 $ 62,159,457 $ 59,851,469 $ 58,225,688 $ 58,066,020 $ 57,805,576
Single Tenant $ 35,860,649 $ 35,738,823 $ 35,610,113 $ 35,476,752 $ 35,344,127 $ 35,296,610 $ 35.250,091
Multi-Family $ 18,662,744 $ 19,282,752 $ 21,538,161 $ 27,748,876 $ 26,506,744 . $ 27,248,037 $ 27,222,832
Single Family $ 112,758,922 $ 108,643,065 $ 108,772,397 $ 106,930,751 $ 99,093,670 $ 96,447,633 $ 95,386,949
Other Commercial $ 148,659,798 $ 144,799,199 $ 140,891,121 $ 144,406,898 $ 148,351,941 $ 149,563,679 $ 144,488,370
Other Commercial - SSA Originated $ 2,934,140 $ 3,089,148 $ 2,955,676 $ 5,547,973 $ 4,045,632 $ 4,091,852 $ 4,251,036
Other Commercial- SSA Investmenl$ $ 7,566,571 $ 6,231,676 $ 5,996,133 $ 5,762,771 $ 5,308,563 $ 5,235,097 $ 5,158,064
I-'
Consumer $ 25,780,626 $ 28,330,448 $ 27,549,009 $ 27,019,998 "$ 26,407,305 $ 26,113,783 $ 26,060,411
$ 1.055.933.381
CO
$ 1.235,139,076 $ 1,184.835,848 $ 1,140,491,247 $ 1.106,251,967 $ 1,075,462,709 $ 1.027,447.059
.l:::o
Net Premiums $ 471,229 $ 604,717 $ 610,028 $ 687,991 $ 615,737 $ 650,827 $ 726,038 CO
Net Unearned Fees $ (4,721,016) $ (4,413,083) $ (4,153,926) $ (3,917,144) 5) (3,976,021) $ (4,063,104) :& (3,866,250)
Allowance for Credit Losses $ (27,253,944) $ (34,668,978) $ (41,613,901) $ (43,424,705) $ (45,445,712) $ (45,031,727) $ (47,146,681)
S 1,203,635,344 S 1.146,358,504 $ 1,095,333,449 $ 1,059,598.109 S 1,026,656,714 $ 1,007.489,378 $ 977, 160.J66
Held for Sale PortfoHo
Commercial Real Estate -SBA Originated $ 60,610,474 $ 59,678,311 $ 79,703,782 $ 84,984,128 $ 66,711,965 $ 84,104,635 $ 89,992,717
. Multi-Family $ 22,266,440 $ 17,468,846 $ 17,377,271 $ 17,285,486 $ 17,193,729 $ 16,298,651 $ 16,268,669
Single Family $ 193,537,402 $ 188,120,419 $ 187,767,770 $ 182,428,265 $ 177,594,446 $ 177,103,349 $ 176,500,042
$ 276,414.316 $ 265.267,575 $ 284,848.823 $ 284,697,879 $ 261,500,140 S 277.506,635 $ 282,761,429
Allowance for Lower of Cost or Market $ (4,443,582) $ (4,510,373) $ (4,902,559) $ (5,481,350) .$ (6,127,530) . $ (6,052, 153} $ (5,951,276)
S 271,970,734 S 260,757,202 S 279.946,264 S 279,216,529 $ 255,372,610 $ 271,454,482 $ 276.810,152
Total Portfolio
$ 1.475,606,018 $ 1,401,115,706 $ 1,375,219,713 $ 1,338,814,638 S 1,282,029,324 S 1,278.943,861 $ 1,253,970,.319
Page4of66
United Western Bank - Consolidated
November 30, 2010
Loan Portfolio Trend Report
Sep-09 Dec-09 Mar-l0 Jon-l0 Sep--l0 Oct-l0 Nov-l0
Commercial Loan Portfolio
Construction $ 238,990,479 $ 212,394,412 $ 167,104,265 $ 147,937,959 $ 106,077,703 $ 105,635,431 $ 94,444,617
Construction - SBA Orig. $ 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
Land $ 98,526,691 $ 92,248,426 $ 90,250,468 $ 87,473,656 $ 75,632,691 $ 75,631,012 $ 75,669,694
Commercial Real Estate $ 381,921,009 $ 371,772,487 $ 392,592,768 $ 383.376,311 $ 391,526,965 $ 392,585,744 $ 388,231,094
Commercial Real Estate - SBA Orig. $ 119,147,880 $ 118,950,947 $ 140,743,463 $ 146,058,834 $ 151,562,977 $ 149,464.773 $ 155,595,645
Single Tenant $ 35,860,649 $ 35,738,823 $ 35,610,113 $ 35,476,752 $ 35,344,127 $ 35,296,610 $ 35,250,091
Multi-Family $ 40,929,184 $ 36,751,598 $ 38,915,432 $ 45,034,362 $ 43,700,474 $ 43,546,688 $ 43,491,501
Single Family $ 18,359,156 $ 18,237,862 $ 22,155,168 $ 24,939,060 $ 20,895,008 $ 20,782,338 $ 20,764,849
Otber Commercial $ 148,659,798 $ 144,799,199 $ 140,891,121 $ 144,406,898 $ 148,351,941 $ 149,563,679 $ 144,488,370
Other Commercial SBA Orig. $ 2,934,140 $ 3,089,148 $ 2,955,676 $ 5,547,973 $ 4,045,632 $ 4,091,852 $ 4,251,036
Consumer $ 25,780,626 $ 28
1
330,448 $ 27,549
2
09 $ $ 26,407,305 $ 26,113,783 $ 26,060,411
$ 1,149,262yOO3 $ 1,100,893,948 $ 1,082,799,481 $ 1,060,915,649 $ 1,017,635,490 $ 1,017,370,256 $ 996,122,706
I-'
CO
.J::>
Commercial Real Estate - SBA Investments $ 66,787,650 $ 64,452,178 $ 62,159,457 $ 59,851,469 $ 58,225,688 $ 58,066,020 $ 57,805,576
\.0
Single Family $ 287,937,168 $ 278,525,622 $ 274,384,999 $ 264,419,957 $ 255,793,108 $ 252,768,644 $ 251,122,143
Other Commercial- SBA Jnvesbnents $ 7:566,571 $ 6,231,676 $ 5,996,133 $ 5,762,771 $ 5,308
1
563 $ 5
1
235,097 $ 5,158,064
$ 362,291,390 $ 349,2Q9,475 $ 342,540,589 $ 330,034,197 $ 319,327,359 $ 316.069,760 $ 314,085.782
Premiums
l
Fees
z
& Allowance
Net Premiums $ 471,229 $ 604,717 $ 610.028 $ 687,991 $ 615,737 $ 650,827 $ 726,038
Net Unearned Fees $ (4,721,016) $ (4,413,083) $ (4,153,926) $ (3,917,144) $ (3,976,021) $ (4,063,lO4) :I) (3,866,250)
Allowance for Credit Losses $ (27,253,944) $ (34,668,978) $ (41,613,901) $ (43,424,705) $ (45,445,712) $ (45,031,727) $ (47,146,681)
Allowance for Lower of Cost or Market $ (4,443,582) . $ {4.510!373) $ (4
1
902,559) $ (5.4811350) $ (6,127.530) $ (6.052.153) $ (5.951..276)
$ (35,947,314) $ (42,987,717) $ (50,060,357) $ (52,135,208) $ (54,933,525) $ (54,496,156) $ (56,238,169)
Total Portfolio
$ 1,475,606,078 $ 1,407,115,706 $ 1,375,279,713 $ 1,338,814,638 $ 1,282.029,324 $ 1,278,943,861 $ 1,253,970,319
Page S of66
United Western Bank
Policy Guidelines with Reaped to PorttilUo Conce.tratlODl and Regulatory CompUaace
To: UWB ofDlreeton
From: Gary G. Petak, ceo
ConeentratioD ReeommeadatiOllS - Catepry:
12131/08 Actual 12131/09 Actual 09130110 Actual 11130110 Actual
Policy Internal
Guideline Limits
Total Construction &; Land Loans
S 399,512,258 S 342,230,270 S 192,489,055 S 172,425,712
CompPrison to 11er \ CapICai + ALLL
210.79% 149.85% 110;7% 100.23% 125.0%
Subcomponents oeConstruction " Land Loans
Construction Loans
S 276,117,010 S 250,003,908 S 118,739,724 S . 98,609,612
Comparison to Tier \ Capilll\ + ALLL
14S.68% 109.47% 68.3% 57.32% 100.0%
Land Loans
$ 123,395,247 S 92,226,361
S 73,749,331 S 73,816,101
ComparisOD to Tier \ Capital + ALLL
65.10% 40.38% 42.4% 42.91% 50.0%
Total Non-Residential Real Bslaie LoaDs
S 556,430,264 S 550,209,189 S 603,445,232 S 604,948,568
Comparison to Tier I CapiCa\ + ALLL
293.58% 240.91% 346.9% 351.66% 300.0%
Subcompononts of Non-Residential Real Eslate Loaos
Non-Residential - Non-Owner Oce.
S 296,448,644 S 279.650,663 S 292,341,496 S 283,078,574
ComparisoD to Tier I Capital + ALLL
156.41% 122.45% 168.1% 164.56% 175.0%
- Owner Occupied
S 265,467,083 S 273,845,031 S 317,501,688 S 329,105,711
Comparison to Tier 1 Capital + ALlJ.
140.06% 119.90% 182.5% 191.31% 150.0%
Totsl Multl-Family LOaDS
S 49.046,762 $ 36,761,618 S 43,455,796 S 43,249,111
Comparison to.Tier I capital + ALLL
25.88% 16.10"A. 25.0% 25.14% 50.0%
Combined C&D, Non-Res., and Multi-Family
$ 1,004,989,283 S
929,201,077 ..
S 839,390,084 S 820,623.391
Comparison to Tier 1 Capital + ALLL
530.24% 406.86% 482.6% 477.04% 400.0%
Total SiDgIe Family Loans I
$ 383,747,944 S 350,580,696 S 316,953,656 S 310,401,659
Comparison to Tier 1 Capital + AlJ.L
202.47% 153.50% 182.2% 180.44% 300.0% 300.0%
Total Commercial Loans
S 147, 165,4S 1 S 153,337,341 S 157,155,398 $ 153,479,167
Comparison to Tier 1 Capital + ALLL
77.65% 67.14% 90.3% 89.22% 100.0% 100%
20% of Total Loans, with more than 10% used for small busioess
Total Consumer Loans
$ 1,784,928 $ . 9,422,281 $ 8,956,032 $ 8,945,799
Comparison to Tiec I Capital + ALLL
0.94% 4.13% 5.1% 5.20% 50.0% 50.0%
Total Loans
$ 1,525,061,302 S 1,407,115,706 S 1,282,029,324 S 1,253,970,319
Comparison to Tier 1 Capital + AlJ.L
804.64% 616.11% 737.0% 728.9S%
Tier 1 Capital + Allowance for Loan & Lease Losses .
$ 189.534.412 S 228,385.333
.$
173,947,238 $ 172,025.141
I Single F8l1ll1y Total includes first mortgages, second mortgageS. and 1'OVolving lines
,.60166
1850
Vatted Western Baok
C1assifted Asset Reduction Plan
To:
UWB Board
From:
Gary G, Petak, CCO
Concentration Recommendations - Categol')':
12131108 Actual 12131109 Actual 09130110 Actual 11130110 Actual
Classified Assets - Loans '" REO
S 49,321,574 S 158,371,445 S 192,767,561 S 197,284,355
Comparison 10 Tier 1 capitBl + ALLL
"26.02% 69.34% 110.82% 114.68%
Subcomponents of Classified Assets - Loans '" REO
Substandard Loans S 43,446,834
$ 135,945,195 $ 163,178,691 S 160,668,527
Comparlson to Tier I Capital + ALLL
22.92% 59.52% 93.81% 93.40%
SubstaDdard Loans - Commercial Loans
33,600..632 119,806,064 145,431,894 144,284,812
Substandard Loans - Other Loans
9,392,044 13,594,646 14,489,363 14,033,645
Substandard Loans - unf.imded
176,879 1,225,803 1,400,801 493,437
Substandani Assets - Other
277,280 1,318,682 1,856,633 1,856,633
DDUbtfcll Loans
$ 1,457,391 S 5,180,499 S 5,733,130 S 7,6]4,]63
Comparlson to Tier 1 Capital + ALLL
0.77% 2.27% 3.30% 4.43%
Loans - Commercial Loans
1.457,391 5,180,499 5,733,130 7,614,163
Doubtfcll Loans - Unfunded
0 .0 0 0
R.eaI Bstate Owned
S
4,417,348 $ 17,245,750 $ 23,85S,741 $ 29,001,665
Comparison 10 Tier 1 Capital + ALLL
2.33% 7.S5% 13.71% 16.86%
Classified Assets - including MBS '" Otber
$ 159,866,109 $ 345,471,260 .$ 348,240,771 $ 345,246,110
Comparison to Tier 1 Capllal + ALLL
84.35% 151.27% 200.20% 200.70%
Mortgage Backed Sccuritics
$ ] 10,544,536 $ 187,099,815 $ .155,473,210 S ]47,961,756
Comparison to Tier 1 Capital + ALLL
58.32% 81.92% 89.38% 86.01%
Total Loans
$ 1,525,061,302 $ 1,407,115,706 S 1,282.029,324 S 1,253,970,319
Comparillon to Tier 1 Capital + ALLL
804.64% 616.11% 737.02% 728.9S%
Tier 1 Capital + Allowance for Loan '" Lease Losses .
$ 189,534,412 $ 228.385,333 S 173,947,238 S 172,025,141
Pap70flili
1851.
United Western Bank
Internal EvaluatioD of Portfolio Concentrations
From: Gary G. Petak, CCO
Date: November 30, 2010
Concentration Recommendations - Category:
12131108 Actual 12131109 Actual 09/30/10 Actual 11130fl0 Actual
Policy Internal
Guideline Limits
Construction & Land Loans
$ 399,512,258 $ 342,230,270 $ 192,489,055 $ 172,425,712
Comparison to Tier I Capital + ACL
210.8% ]49.8% 110.7% 100.2% 125.0%
Total Assets 17.8% 13.7% 9.4% 8.3% ]5.0%
Total Loans
26.2% 24.3% 15.0% 13.8% 20.0%
Total HFI Loaus
32.4% 29.9% 18.7% 17.6% 25.0%
Construction Loans
$ 276,117,010 $ 250,003,908 $ 118,739,724 $ 98,609,612
Comparison to Tier 1 Capital + ACL
]45.7% 109.5% 68.3% 57.3% 100.0%
Total Assets
12.3% 10.0% 5.8% 4.8%
Total LoBus
18.1% 17.8% 9.3% 7.9%
Total HFl Loans 22.4% 21.8% 11.6% 10.1%
Land Loans
$ 123,395,247 $ 92,226,361 $ 73,749,331 $ 73,816,101
Comparison to Tier 1 Capital + ACL
65.1% 40.4% 42.4% 42.9% 50.0%
Total Assets
5.5% 3.7% 3.6% 3.6%
Total LoBus
8.1% 6.6% 5.8% 5.9%
Total HFl Loans
10.O"h 8.0% 7.2% 7.6%
Non-Residential Real Estate Loans
$ 556,430,264 $ 550,209,189 $ 603,445,232 $ 604,948,568
Comparison to Tier 1 Capital + ACL
293.6% 24D.9% 346.9% 351.7% 300.0%
Total Assets
24.8% 22.0% 29.4% 29.2% 20.0%
Total Loans
36.5% 39.1% 47.1% 48.2% 30.0%
Tolal HFI Loans
45.1% 48.0% 58.8% 61.9% 30.0%
Non-Residential - Non-Owner Occupied
$ 296,448,644 $ 279.650,663 $ 292,341,496 $ 283,078,574
Comparison to Tier I Capital + ACL
156.4% 122.4% 168.1% 164.6% 175.0%
Total Assets 13.2% 11.2% 14.3% 13.7%
Total Loans 19.4% 19.9% 22.8% 22.6%
Total HPJ Loans 24.0% 24.4% 28.5% 29.0%
Non-Residential - Owner Occupied
$ 265,467,083 $ 273,845,031 $ 317,501,688 $ 329,105,711
Comparison to Tier I Capital + ACL
140.1% 119.9% 182.5% 191.3% 150.0%
Total AssetS
11.8% 10.9% 15.5% 15.9%
Total Loans
17.4% 19.5% 24.8% 26.2%
Total HPJ Loans
21.5% 23.9% 30.9% 33.7%
Multi-Family Loans
$ 49,046,762 $ 36,761,618 $ 43,455,796 $ 43,249,111
Comparison to Tier I Capital + ACL
25.9% 16.1% 25.0% 25.1% 50.0%
Total Assets
2.2% 1.5% 2.1% 2.1%
TotalLoaus
3.2% 2.6% 3.4% 3.4%
Total HFI Loans
4.0% 3.2% 4.2% 4.4%
Combined C&D, Non-Res., and Multi-Family
$ 1,004,989,283 $ 929,201,077 9: 839,390,084 $ 820,623,391
Comparison to Tier I Capital + ACL
530.2% 406.9% 482.6% 477.0% 400.0%
Total Assets
44.9% 37.1% 40.9% 39.6% 35.0%
Total Loans
65.9% 66.0% 65.5% 65.4% 50.0%
Total HPI l.(!ans 81.5% 81.1% 81.8% 84.0% 50.0%
Single Family Loans
$ 383,747,944 $ 350,580,696 $ 316,953,656 $ 310,401,659
Comparison to Tier I Capital + ACL
202.5% 153.5% 182.2% 18G.4% 300.0% 300.0%
Total Assets
17.1% . 14.0% 15.5% 15.0% 20.0%
Total Loaus
25.2% 24.9% 24.7% 24.8% 25.0%
Total HFI Loaus
31.1% 30.6% 30.9% 31.8% 30.0%
Page8of66
1852
CODeeJltratiOD RecommendatioDs - category:
12131/08 Actual 12131/09 Actual 09130110 Actual 11130110 Actual
Policy
..
Intemal
GuideUne Limits
Commereial Loaus
S 147,165,451 $ 153,337,341 S ]57,155,398 $ ]53,479,]67
Comparison to Tier I Capital + ACL
77.6% 67.1% 90.3% 89.2% 100.0% 100.0%
Total Assail
6.6% 6.1% 7.7% 7.4% 15.0%
Total LoIIns
9.6% 10.9% 12.3% 12.2% 20.()II"
Total Hfl LoaDs
11.9% 13.4% 15.3% IS.7% 20.0%
Consumer Loans
S 1.784,928 S 9,422,281 $ 8,956.032 $ 8,945,799
Comparison to Tier I Capital + ACL
0.9% 4.1% 5.1% 5.2% 25.0% 25.0%
Total AssaIl
0.1% 0.4% 0.4% .0.4% 10.()II"
Total Loans
0.1% 0.7% 0.7% 0.7% 10.0%
Total HFI l.oaDs
0.1% 0.8% 0.9% 0.9% 10.0%
Classified Assets
$ 49,321,574 S 158,371,445 S 192,767,561 S 197,284.355
Comparison to Tier 1 Capllal + ACL
26.0% 69.3% 110.8% 114.7% 50.0%
Total AssaIl
2.2% 6.3% 9.4% 9.5%
Total Loans
3.2% 11.3% 15.0% 15.7%
Total UP[ LoaDs
4.0% 13.8% ]8.8% 20.2%
Substandard Loans
S 43,446,834 $ 135,945,195 S 163,178,691 S 160,668,527
Comparison to Tier I Capital + ACL
22.9% 59.5% 93.8% 93.4%
Total AIlsctB
1.9% 504% 8.0% 7.8%
TolBlLoans
2.8% 9.7% 12.7% 12.8%
Total HP1 Loans . 3.5% 11.9% 15.,-" 16.4%
Doubtfid Loans
S 1,457,391 S
5,180,499 S 5,733,130 S 7,614,163
Comparison to Tier I Capital + ACL
0'&% 2.3% 3.3% 4,4% .
Total AIlsctB
0.1% 0.2% 0.3% 0.4%
Total Loans
0.1% 0.4% 0.4% 0.6%
Total UP[ Loans
0.1% 0.5% 0.6% 0.8%
Real Estate Owned
S 4,417,348 . S 17,245,750 S 23,855,741 S 29,001,665
Comparison to Tier I Cspita! + ACL
2.3% 7.6% 13.7% 16.9%
Total Assets
0.2% 0.7% 1.2% 1.4%
Total Loans
0.3% 1.20" 1.9% 2.3%
Total HI'I Loans
0.4% 1.S".A. 2.3% 3.0%
Classified Assets (including MBS)
S 159,866,109 S 345,471,260 S 348,240,771 S 345,246,110
Comparison to Tier J CapilBl + ACL
84.3% 151.3% 200.2% 200.7%
ToIBI Assets
7.1% 13.8% 17.0% 16.7%
Mortgage Backed Securities
S 110,544,536 S 187.099,815 S 155,473,210 S 147,961,756
Comparison to Tier 1 Capital + ACL
58.3% 81.9% 8904% 86.0%
Total AsseIII
4.9% 7.5% 7.6% 7.1%
Total Loans
S 1,525,061,302 S 1,407,115,706 S 1,282.029,324 $ 1,253,970,319
Comparison to Tier I Capital + ACL
804.6% 616.1% . 737.0%
728.91'''
Total Assels
68.1% 56.2% 62.5% 60.6%
Total Loans
100.0% 100.0% 100.0% 100.0%
Total HPl Loans
123.6% 122.7% 124.9010 128.3%
Tier 1 Capital + Allowance for Credit Losses
S 189,534,412 S 228,385,333 S 173.947,238 $ 172,025,141
Total Assets
S 2.240,378,000 . $ 2,502,727,269 $ 2.050,650,755 S 2.070,083.865
Total Loans
S 1,525,061,302 S 1,407,115,706 S 1,282.029,324 S 1,253,970,319
Total HFI Loans
$ 1,233,470,565 S 1,146.358,504 $ 1,026.656.714 S 977,160,166
1853
United Western Bank - Consolidated
November 30, 2010
Loan Portfolio Concen1:I'ation Trends
Sel!:09 Dec-09 Mar-lO Jun-lO Se!;:10 Oct-l0 Nov-l0
Tier 1 Capital + ACL S 256,214,180 $ 118,385,333 S 214,735,787 S 208,582,000 S 173,947,238 $ 173,898,706 $ 171,025,141
Total Loans S 1,475,606,078 S 1,407,115,706 $ 1,375,279,713 S 1,338,814,638 S 1,282,019,324 S 1,278,943,861 S 1,253,970,319
Total Commercial Loans (Gross) $ 1,263,933,631 $ 1,210,387,731 $ 1,191,869,577 $ 1,160,791,432 $ 1,017,635,490 $ 1,017,370,256 $ 996,122,706
Total HFI Loans $ 1,203,635,344 $ 1,146,358,504 $ 1,095,333,449 $ 1,059,598,109 $ 1,026,656,714 $ 1,007,489,378 $ 977,160,166
Total HFS Loans $ 271,970,734 $ 260,757,202 $ 279,946,264 $ 279,216,529 $ 255,372,610 $ 271,454,482 $ 276,810,152
Total Assets $ 2,598.534,171 S 2,502.727,269 S 2,588,703,285 S 2,205,709,091 S 2,050,650,755 S 2,074,588,105 S 2,070,083,865
Total Construction & Land Loans S 374,858,385 $ 342,230,270 $ 275,511,793 $ 244,817,113 $ 192,489,055 $ 192,684,180 $ 172,425,712
Total for Bank $ 337,517,170 $ 304,642,838 $ 257,354,733 $ 235,289,110 $ 181,710,393 $ 181,266,443 $ 170,114,312
Total for SBA $ 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
Deferred Fees & Specific Reserves $ (811,178) $ (99:3,166) $ (5,874,937) $ (4,115,843) $ (:3 ,:312,004) $ (3,240,609) $ (5,563,996)
Comparison to ReglIlatory Capital 146.3% 149.8% 128.3% 117.4% 110.7% 1l0.8% 100.2%
Total Assets 14.4% .13.7% 10.6% 11.1% 9.4% 9.3% 8.3%
Totnl Loans
25.4% 24.3% 20.0% 18.3% 15.0% 15.1% 13.8%
Total HF1 Loans 31.1% 29.9% 25.2% 23.1% 18.7% 19.1% 17.6%
~
Total Construction Loans $ 276,387,534 $ 250,003,908 $ 185,301,714 $ 157,508,866 $ 118,739,724 $ 118,932,630 $ 98,609,612
00
Total for Bank
$ 238,990,479 $ 212,394,412 $ 167,104,265 $ 147,937,959 $ 106,077,703 $ 105,635,431 $ 94,444,617
U1
..j::>.
Total for SBA S 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
Deferred Fees & Specific Reserves $ (755,338) $ (971,102) $ (5,834,549) $ (4,072,939) $ (1,428,645) $ (1,361,147) $ (3,710.403)
Comparison to Regulatory Capital
107.9% 109.5% 86.3% 75.5% 68.3% 68.4% 57.3%
Total Assets
10.6% 10.O"A 7.2% 7.1% 5.8% 5.7% 4.8%
Total Loans
18.7% 17.8% 13.5% 11.8% 9.3% 9.3% 7.9%
Total HF1 Loans
23.0% 21.8% 16.9% 14.9% 11.6% 11.8% 10.1%
Total Land Loans
$ 98,470,851 $ 92,226,361 $ 90,210,080 $ 87,308,247 $ 73,749,331 $ 73,751,550 $ 73,816,101
Total for Bank
$ 98,526,691 $ 92,248,426 $ 90,250,468 $ 87,351,151 $ 75,632,690 $ 75,.631,012 $ 75,669,694
Deferred Fees
$ (55,840) $ (22,065) $ (40,388) $ (42,904) $ (1,883,359) $ (1,879,462) $ (1.853,594)
Comparison to Regulatory Capital
38.4% 40.4% 42.0% 41.9% 42.4% 42.4% 42.9%
Total AsSeIS
3.8% a.7% 3.5% 4.0% 3.6% 3.6% 3.6%
Total Loans
6.7% 6.6% 6.6% 6.5% 5.8% 5.8% S.9%
Total HF1 Loans
8.2% 8.0% 8.2% 8.2% 7.2% 7.3% 7.6%
Concentration Totals reflect totals as reported for TFR pmposes
Page 10 of 66
United Western Bank - Consolidated
November 30, 2010
Loan Portfolio Concentration Trends
Sel!...o9 Dec..(l9 Mar-10 Jun-lO SeJ!-lO Oct-tO Nov-IO
Total Non-Residential Real Estate Loans $ 553,552,858 S 550,209,189 $ 590,557,376 $ 592,797,266 S 603,445,232 $ 604,271,050 $ 604,948,568
Total for Bank $ 381,303,504 $ 370,092,570 $ 391,648,199 $ 390,263,866 $ 400,054,518 $ 403,157,765 $ 398,783,065
Total for SBA $ 119,147,880 $ 118,950,947 $ 140,743,463 $ 146,058,834 $ 151,562,977 $ 149,464,773 $ 155,595,645
Total for SBA Investments $ 66,787,650 $ 64,452,178 $ 62,159,457 $ 59,851,469 $ 58,225,688 $ 58,066,020 $ 57,805,576
Deferred Fees & Specific Reserves $ (13,686,177) $ (3,286,506) $ (3,993,743) $ (3,376.903) $ (6,397,952) $ (6,417.507) $ (7,235.717)
Comparison to ReguiatoI}' Capital 216.0% 240.9% 275.0% 284.2% 346.9% 347.5% 351.7%
Total Assets 21.3% 22.0% 22.8% 26.9"A. 29.4% 29.1%
"
29.2%
TotnlLoans 37.5% 39.1% 42.9% 44.3% 47.1% 47.2% 48.2%
Total HFI Loans 46.0% 48.0% 53.9% 55.9% 58.8% 60.0% 61.9%
Total Non-Residential Loans - Non-Owm $ 290,630,885 $ 279,650,663 $ 284,595,660 $ 282,750,005 $ 292,341,496 $ 289,398,003 $ 283,078,574
Total for Bank $ 254,770,236 $ 243,911,840 $ 248,985,547 $ 247,273,253 $ 256,997,368 $ 254,101,392 $ 247,828,483
Total for Bank (Single Tenant) $ 35,860,649 $ 35,738,823 $ 35,610.113 $ 35,476,752 $ 35,344,127 $ 35,296,610 $ 35,250,091
Comparison to Regulatory Capital 113.4% 122.4% 132.S% 135.6% 168.1% 166.4% 164.6%
Total Assets 11.2% 11.2% 11.0% 12.8% 14.3% 13.9% 13.7%
Total Loans 19.70/0 19.9% 20.7% 21.1% 22.8% 22.6% 22.6%
Total HFI Loans
24.1% 24.4% 26.0";' 26.7% 28.5% 28.7% 29.0%
.....
Total Non-Residential Loans - Owner Qc. $
276,608,150 $ 273,845,031 $ 309,955,458 $ 313,424,164 $ 317,501,688 $ 321,290,554 $ 329,105,711
00
L11
Total for Bank
$ 90,672,619 $ 90,441,907 $ 107,052,538 $ 107,513,861 $ 107,713,022 $ 113,759,762 $ 115,704,491
L11
Total for SBA
$ 119,147,880 $ 118,950,947 $ 140,743,463 $ 146,058,834 $ 151,562,977 $ 149,464,773 $ 155,595,645
Total for SBA Investments
$ 66,787,650 $ 64,452,178 $ 62,159,457 $ 59,851,469 $ 58,225,688 $ 58,066,020 $ 57,805,576
Comparison to Regulatory Capital
108.0% 119.9% 144.3% 150.3% 182.5% 184.8% 191.3%
Total Assets
10.6% 10.9% 12.0% 14.2% 15.5% 15.5% 15.9%
Total Loans
18.7% 19.5% 22.5% 23.4% 24.8% 25.1% 26.2%
Total HPI Loans
23.0% 23.9% 28.3% 29.6% 30.9"A. 31.9% 33.7%
Total Multi-Family Loans $ 40,936,792 $ 36,761,618 $ 38,919,244 $ 45,018,439 $ 43,455,796 $ 43,303,912 $ 43,249,111
Total for Bank
$ 40,929,184 $ 36,751,598 $ 38,915,432 $ 45,034,362 $ 43,700,474 $ 43,546,688 $ 43,491,501
Deferred Fees & Specific Reserves $ 7,608 $ 10,020 $ 3,811 5; (15.923) $ (244.677) $ (242,776) $ (242,391)
Comparison to RegulatoI}' Capital
16.0% 16.1% 18.1% 21.6% 25.0"A. 24.9% 25.1%
Total AsHets
1.6% 1.5% 1.5% 2.0% 2.1% 2.1% 2.1%
Total Loans
2.8% 2.6% 2.8% 3.4% 3.4% 3.4% 3.4%
Total HFI Loans
3.4% 3.2% 3.6% 4.2% 4.2% 4.3% 4.4%
Total Non-Res. RE & Multi-Family Loan. $
594,489,650 $ 586,970,807 $ 629,476,620 $ 637,815,705 $ 646,901,028 $ 647,574,963 $ 648,197,679
Comparison to Regulatory Capital
232.0% 257.0% 293.1% 305.8% 371.9% 372.4% 376.8%
Total Assets
22.9% 23.5% 243% 28.9% 31.5% 31.2% 31.3%
Total Loans
40.3% 41.7% 45.8% 47.6% 50.S% 50.6% 51.7%
Total HFl Loans
49.4% 51.2% 57.5% 60.2% 63.0% 643% 66.3%
Concentmtion Totals mfIect totals as reported for TFR purposes
Page 11 of66
United western Bank - Consolidated
November 30. 2010
Loan Portfolio Concentration Trends
Sep-09 Dec-09 Mar-l0 In-IO See:1O Ott-l0 Nov-l0
Total C&D, Non-Res., &; Multi-Family L $ 930,384.465 $ 889,627,312 $ 875,081,478$ 864,873,129 $ 821,987,414 $ 822,360,187 S 807,183,998
Total for Bank $ 759.749,859 S 711,487.006 $ 687,918,364 S 670,587.337 S 625,465,385 $ 627,970,896 S 612,388,878
Total for SBA $ 118,336,703 $ 117,957,781 $ 134,868,525 $ 141,942,991 $ 148,250,974 S 146,224,163 $ 150,031,649
Total for SBA Investments S 66,787,650 S 64,452,178 S 62,is9,457 $ 59,851,469 $ 58,225,688 S 58,066,020 $ 57,805.576
Deferred Fees &; Specific Reserves $ (14,489,747) S (4,269,652) S (9,864.868) $ (7,508.668) $ (9,954.633) $ (9,900,892) S (13.042.104)
Comparison co Regulatory Capital 363.1% 389.5% 414.6% 472.5% 472.9% 469.2%
Total Assets 35.8% 35.5% 33.8% 39.2% 40.1% 39.6% 39.0%
TotalLolms 63.1% 63.2% 63.6% 64.6% 64.1% 64.3% 64.4%
Total HFr Loaus 77.3% 77.6% 79.9% 81.6% 80.1% 81.6% 82.6%
Total Single Family Loans $ 361.080,885 $ 350,580,696 $ 347,695,035 $ 332,468,279 S 316.953,656 S 312,118,252 $ 310,401,659
Total for Bank S 73,244,576 $ 72,125,425 $ 73,361,760 $ 68,077,999 $ 65,164.664 $ 62,664,771 $ 62,578,168
Total for Other Loans (SBO &; MFSC) .$ 287,937,168 $ 278,525,622 $ 274,384,999 S 264,419,957 $ 255,793,108 $ 252,768.644 S 251,122,143
Deferred Fees &; Specific Reserves $ (100.859) $ (70,351) $ (51,723) $ (29,677) S (4,004,115) $ {3.315,162} $ (3.298.652)
Comparison co Regu1acory Capital
140.9% 153.5% 161.9% 182.2% 179.5% 180.4%
Total Assets
13.9% 14.0% 13.4% IS.1% 15.5% 15.0% 15.0%
Total Loans
24.5% 24.9% 2S.3% 24.8% 24.7% 24.4% 24.8%
..... Total HFI L08IIlI
30.0% 30.6% 31.7% 31.4% 30,9% 31.0% 31.8%
CD Single Family Loaus combine totals as reported on TFR 118 loans Secured by First Lieus and Secuted by Junior Lleus
U1
0"1
Total Commercial Loans
$ . $ 153,337,341 $ 149.196,888 . :& 155,062,880 S 157,155,398 $ 158,456,146 $ 153,479.167
Total for Bank
$ 148,301,923 $ 144,586,927 S 140,784,263 :& 144,406,898 $ 148,351,941 :& 149,563,679 :& 144,488,370
Total for SBA
S
2,934,140$ 3,089,148 $ 2,955,676 $ 5,547,973 S 4,045,632 $ 4,091,852 $ 4,251,036
Total for SBA Investments
$ 7,566,571 S 6,231,676 :& 5,996,133 $ 5,762,771 :& 5,308,563 $ $ 5,158,064 .
DefeIred Fees &; Specific Reserves $ (383,780) S (570,410) $ (539,184) :& (654,762) $ (550,738) $ (434,482) $ (418.302)
Comparison to Regulato1}' Capital
61.8% 67.1% 69.5% 74.3% 90.3% 91.1% 89.2%
Total A88eIS
6.1% 6.1% 5.8% 7.0% 7.7% 7.6% 7.4%
Total LoaDS
10.7% 10.9% 10.8% 11.6% 12.3% 12.4% 12.2%
Total HFI Loaus
13.2% 13.4% 13.6% 14.6% 15.3% 15.7% 15.7%
Total Consumer Loans
$ 7,365,495$ 9,422,281 $ 9,590,222 $ 9,386,281 $ 8,956,032 S 8,957,700 $ 8,945,799
Total for Bank
S 7,361,544 $ 9,422,383 $ 9,586,769 $ 9,383,764 $ 8,954,223 $ 8,955,940 $ 8,945,212
Defmed Fees &; Specific Reserves $ 3,951 $ (102) $ 3,453 $ 2,517 :& 1,809 $ 1,761 $ 587
Comparison co Regulatory Capital
2.9% 4.1% 4.5% 4.5% 5.1% 5.2% 5.2%
Total Assets
0.3% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4%
Total LoaDS
0.5% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7%
Total HFI Loams
O.6"Ai 0.8% 0.9% 0.9% 0.9% 0.9% 0.9%
Total Loans
S 1,475,Qt6,078 S 1,407,115,70(; S 1,375,179,713 $ 1,33Bt814,638 S 1,281,029,314- $ 1,278,943,861 $ 1,253,970,319
Comparison co ReguialOly Capital
575.9% 616.1% 640.5% 641.9% 737.0% 735.5% 728.9%
Total Assets
56.8% 56.2% 53.1% 60.7% 62.5% 61.6% 60.6%
Total HFI Loans
122.6% 122.7% . 125.6% 126.4"Ai 124.9% 126.9% 128.3%
Coucemration Totals reflect totals as JqIOrled for TFR purposes
Pap 12of66
I-'
CO
VI
-....J
United Western Bank - Consolidated
Loan Portfolio Concentration Trends
$1,650MM
_Total Loans
$1,600MM
...... Tgtal Land loans
_Total Multi-Family Loans
$1,5S0MM
_Total Consumer loans
$1,500MM
~
_Total Non-Residential Loans - Non-Owner Occunied
_Total Single Family Loans
$1,450MM
$1,400MM
~
$l,3S0MM
$1,300MM
$1,2S0MM
$4S0MM
$400MM
$3S0MM
$300MM
-
-
$2S0MM
$200MM
~
---..
$150MM
$100MM
~ ~
$SOMM
-
-
$OMM

Sep-09 Dec-09 Mar-IO Jun-IO
November 30, 2010
...... Total Construction Loans
_Total Non-ReSidential Loans - Owner Occupied
...... Total Commercial Loans
---.........-.
-----..........
-'
...
A
............
v
- -
Sep-10
Page 13 of66
United Western Bank - Consolidated
November 30, 2010
Loan Portfolio Trend Report
Sep-09 Dec-09 Mar-IO Jun-IO Sep-l0 Oct-l0
Nov-lO
Construction & Laud Summary (Outstanding Balanees as a % of the Olltstanding Commercial Porti'oDo)
Construction $ 238,990,479 $ 212,394,412 $ 167,104,265 $ 147,937,959 $ 106,077,703 $ 105,635,431 $ 94,444,617
% of Commercial Portfolio 20.8% 19.3% 15.4% 13.9% 10.4% ID.4% 9.5%
Construction - SBA Orig. $ 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
% of Commercial Portfolio 3.3% 3.5% 2.2% 1.3% 1.4% 1.4% 0.8%
Construction Type Breakdown:
Const. - 14 Family $ 96,320,643 $ 87,594,688 $ 78,617,837 $ 72,473,522 $ 63,609,003 $ 63,155,148 $ 56,729,050
Const. - Commercial $ 71,771,521 $ 62,946,353 $ 41,842,181 $ 37,792,072 $ 15,684,806 $ 15,698,963 $ 12,539,941
Const. - Commerci.al (00) $ 8,051,475 $ 8,044,562 $ 8,037,179 $ 8,030,357 $ 1,749,978 $ 1,747,404 $ 1,745,159
Const. ,. Commercial (SBA) $ 38,152,392 $ 38,580,598 $ 24,031,998 $ 13,643,846 $ 14,090,666 $ 14,658,346 $ 7,875,397
Const. - Multi-Family $ 47,180,397 $ 44,540,622 $ 34,305,870 $ 29,642,008 $ 25,033,916 $ 25,033,916 $ 23,430,467
Const. - 14 Family (Consumer) $ 15,666,444 $ 9,268,187 $ 4,301,197 $ 0 $ 0 $ 0 $ 0
Land $ 98,353,984 $ 92,248.426 $ 90,250,468 $ 87,473,656 $ 75,632,691 $ 75,631,012 $ 75,669,694
% of Commercial Portfolio 8.6% 8.4% 8.3% 8.2% 7.4% 7.4% 7.6%
Land Type Breakdown:
Land Development $ 86,111,933 $ 79,184,908 $ 80,882,676 $ 78,844,467 . $ 67,301,861 $ 67,295,258 $ 67,376,104
I-'
Undeveloped Land $ 11,202,816 $ 12,238,507 $ 8,545,771 $ 7,942,656 $ 7,900,647 $ 7,906,043 $ 7,903,782
00
U1 Undeveloped Land (Consumer) $ 1,039
1
235 $ 825,Oll $ 822,020 $ 686,533 $ 430!182 $ 429
1
711 $ 389,808
00
$ 375,496,855 S 343,223,436 S 281,386,731 $ 249,055,%2 $ 195.801,060 $ 195.924,789 $ 177,989,768
COmp:ired to Commercial Portfolio 32.7% 31.2% 26.0% 23.5% 19.2% 19.3% 17.9"10
Compared to HPI Portfolio 31.2% 29.9% 25.7% 23.5% 19.1% 19.4% 18.2%
Commercial Real Estate Summary (Outstanding Balances as a % of the Outstandin! Commercial Portfolio)
Commercial Real Estate (Non-OO) $ 291,248,389 $ 281,330,580 $ 285,540,230 $ 275,862,451 $ 283,8l3,942 $ 278,825,982 $ 272,526,604
% of Commercial Portfolio 25.3% 25.6% 26.4% 26.0% 27.9% 27.4% 27.4%
Commercial Real Estate (00) $ 90,672,619 $ 90,441,907 $ 107,052,538 $ 107,513,861 $ 107,713,022 $ 113,759,762 $ 115,704,491
% of Commercial. Portfolio 7.9% 8.2% . 9.9% 10.1% 10.6"04 11.2% 11.6%
Commercial Real Estate (SBA) $ 119,147,880 $ 118,950,947 $ 140,743,463 $ 146,058,834 $ 15i.562,977 $ 149,464,773 $ 155,595,645
% of Commercial Portfolio 10.4% 10.8% 13.0% 13.8% 14.9% 14.7% 15.6%
Commercial Real Estate (SBA Inv.) $ 66,787,650 $ 64,452,178 S 62,159,457 $ 59,851,469 $ 58,225,688 $ 58,066,020 $ 57,805,576
% of Commercial Portfolio 5.8% 5.9% 5.7% 5.6% 5.7% 5.7% 5.8%
Single Tenant eRE $ 35,860,649 $ 35,738,823 $ 35,610,113 $ 35,476,752 $ 35,344,127 $ 35,296,610 $ 35,250,091
% of Commercial Portfolio 3.1% 3.2% 3.3% 3.3% 3.5% 3.5% 3,5%
$ 603,717,188 S 590,914,435 $ 631,165,801 S 624,763,366 $ 636,659,758 $ 635,413.147 $ 636,882,406
(".ampore<! to Commercial Portfolir) 52.5% 53.7% 58.3% 58.9% 62.6"04 62.5% 63.9%
C o m ~ 10 HPJ Portfulio 50.2% 5].5% 57.6% 59.0% 62.0% 63.1% 65.2%
Page 14 of 66
United Western Bank - Consolidated
C&D Trend Chart
$750MM
_ner1 C8pltal+ ACl
$700MM
I
...... Constructlon 1-4 Family
$650MM
$600MM
$550MM
$500MM
$450MM
f-I
$400MM
00
VI
- \.0
$350MM
$300MM
$250MM
$200MM
$lSOMM
$100MM
$SOMM
$OMM
Sep-09
t':1
_Total Construction 8. Development
..... COnstructlon
Mar-10
November 30,2010
-"-Constructlon Commercia I
...... Land&
Sep-10
Page 15 of66
J--I
ex>
(j)
o
United Western Bank: - Consolidated
Non-Residential Trend Chart
$750MM
_ Tier 1 cap1tal + ACL
$700MM
$650MM
$600MM
$550MM
$500MM
$450MM
$400MM
$350MM
$300MM
$250MM
$200MM
$150MM
$100MM
$50MM
$OMM
Sep-09
_Total Commercial Real Estate
..... CRE- Owner Occupied
Mar-l0
November 30, 2010
....... CRE - Non-Owner Occupied
...... S1ngle Tenant - Non-Owner Occupied
., .
I I .
I I

I I
Sep-l0
Page 16 of66
United western Bank - Consolidated
November 30, 2010
Commercial Real Estate Concentrations
Pr0l!erty Tn!e Commuui!I Bank SBA CDF-IzCFF-IV & CFF-5 Total
Assisted Living Facility
6,580,324.79 0.7%
6,580,324.79 0.7%
Car Wash
16,380,569.62 1.6%
16,380,569.62 1.6%
ChurcblNon-ProfitlEducational Facility 173,148.12 O.O"A. .
4,114,456.15 0.4%
4,287,604.27 0.4%
Dental Office
5,933,056.69 0.6%
5,933,056.69 0.6%
Gas & seTvice Station
8,350,132.07 0.8% 9,234,970.34 0.9% 17,585,102.41 1.8%
Health Care Facility 32,904,234.48 3.3%
32,904,234.48 3.3%
Hospitality 13,197,455.85 1.3% 41,751,259.20 4.2% 8,035,000.00 0.8% 62,983,715.05 6.3%
Medical Use Facility (non Vet or Dentist)
3,965,529.39 0.4%
3,965,529.39 0.4%
Mixed Use Property 60,137,662.97 6.0%
60,137,662.97 6.0%
Multi-Family Property 6,553,851.69 0.7% 3,085,000.00 0.3% 9,638,851.69 1.0%
Office Building 58,849,095.18 5.9% 7,526,010.56 0.8% 8,906,000.00 0.9% 75,281,105.74 7.6%
Restaurant, Bar, Nightclub 32,300,180.60 3.2% 14,586,097.64 1.5% 46,886,278.24 4.7%
Retail Building 52,559,892.59 5.3% 2,671,394.26 0.3% 9,686,863.00 1.0% 64,918,149.85 6.5%
Shopping Center 9,126,660.37 0.9% 9,126,660.37 0.9%
Sports/Leisure Facility 6,841,857.02 0.7% 4,966,564.63 0.5% 854,000.00 0.1% 12,662,421.65 1.3%
Veterinary Clinic 14,917,478.29 1.5% 14,917,478.29 1.5%
Warehouse & Industrial Property 20,362,999.18 2.0"A. 7,465,672.81 0.7% 10,961,000.00 1.1% 38,789,671.99 3.9%
I--'
Multiple DOTs or CRE wI Other Collateral 16,475,089.87 1.7% 16,475,089.87
00
1.7%
0'1
Other Commercial Real Estate 9,245,723.04 0.9% 4,128,942.56 0.4% 13,374,665.60 1.3%
I--'
Other Commercial Real Estate - SBA Investments 57,805,575.56 5.8% 57,805,575.56 5.8%
New-Market Tax Credit
5,635,750.00 0.6% 5,635,750.00 0.6%
1-4 Family Property 37,074,876.08 3.7% 37,074,876.08 3.7%
Agricultural Land & Land 13,514,335.78 1.4% 994,358.03 0.1% 14,508,693.81 I.S%
Letter of Credit - RE Secured 0.0%
Non-RE Collateral Code 1,735,377.50 0.2% 7,293,960.01 0.7% 9,029,337.51 0.9%
379.402,571.39 38.1% 213.401,220.53 Zl.4% 44,078,613.00 4.4% 636,882,405.92 63.9%
Geogral!hy Communi!! Bank SBA CDF-I,CFF-IV & CFF-5 Total
Denver Metro Area 175,917,892.62 17.7% . 45,387,160.91 4.6% 13,031,750.00 1.3% 234,336,803.53 23.5%
Mountain Communities - Aspen, Roaring Fork Valley 45,243,479.99 4.5% 20,116.71 0.0% 45,263,596.70 4.5%
North Central Colorado - Steamboat Springs 3,742.132.83 0.4% 190.400.28 0.0% 3,932,533.11 0.4%
North Eastem Colorado - Fort Collins 56,812,825.42 5.7% 2,609,902.31 0.3% 59,422,727.73 6.0%
Other Colorado Areas 21,057,018.64 2.1% 9,719,539.48 I.00Ai 5,940,000.00 0.6% 36,716,558.12 3.7%
Outside Colorado ... 76,629,222.89 7.7% 155,474,100.84 15.6% 25,106,863.00 2.5% 257,210,186.73 25.8%
Needs Geography Infonnation 0.0%
379,402,572.39 38.1% 213,401.220.53 21.4% 44,078,613.00 4.4% 636,882,405.92 63.9%
lI< SBA Total includes SBA Investments, all of which are located outside of Colorado
Page 17 of66

00
O'l
tv
United Western Bank - Consolidated
Loan Portfolio Risk & Delinquency Trends
Regwatory Risk Based Capital
Total Loans
Total Commercial Loans
Total HFI Loans
SBA Investments & Gtd. Single Family
Total Assets
Non-Accrual Trend
Total LoaD Portfolio
Sel!-09
$ 256,224,180
$ 1,475,606,078
$ 1,263,933,631
:Ii 1,203,635,344
$ 74,354,221
$ 2,598,534,171
Dec-09 Mar-l0
S 228,385,333 $ 214,735,787
$ 1,407,115,706 S 1,375,279,713
$ 1,210,387,731 $ 1,191,869,577
$ 1,146,358,504 :Ii 1,095,333,449
:Ii 70,683,854 $ 68,155,590
S 2,502,7:Z7 ,269 $ 2,588,703,285
November 30, 2010
Jon-l0 Sep-lO Oct-l0 Nov-l0
$ 208,582,000 S 173,947,238 $ 173,898,706 $ 172,025,141
S 1,338,814,638 $ 1,282,029,324 S 1,278,943,861 S 1,253,970,319
:Ii 1,160,791,432 $ 1,017,635,490 $ 1,017,370,256 :Ii 996,122,706
$ 1,059,598,109 :Ii 1,026,656,714 $ 1,007,489,378 :Ii 977,160,166
$ 65,614,241 $ 63,534,251 $ 63,301,117 :Ii 62,963,639
S 2,205,709,091 $ 2,050,650,755 S 2,074,588,105 S 2,070,083,865
Total Non-Accrual Loans :Ii 39,374,309 $ 54,162,337 $ 68,793,605 $ 70,061,364 $ 69,382,663 $ 82,344,395 $ 101,501,461
Less: Specific Impairments :Ii (876,764):Ii (1,238,279) $ (8,056,675) $ (5,073,374):Ii (6,478,143):Ii (7,042,335) $ (10,372.191)
Tota190-Days - Still Accruing $ 1,327,816 $ 9,866,971 $ 14,731,947 $ 8,463,904 $ 9,693,848 $ 13,723,965 $ 12,094,462
Total Non-Perfoming Loans $ 45,825,361 $ 62,791,029 S 75,468,877 $ 73,506,632 $ 72,598,368 $ 89,026,025 $ 103.223,132
Total Real Estate Owned $ 13,324,688 $ 17,245
1
750 $ 21,756,634 $ 14,220,037 $ 23,855,741 $ 25,682,252 $ 29,001,665
Total Non-PerfomingAssets S 59,150,049 S 80,036,779 $ 97,225,511 $ 87.726,669 $ 96,454,109 $ 114,708.278 S 132.224,797
Total Non-Accrual Loans 2.67% 3.85% 5.00010 5.23%' 5.41 % 6.44% 8.09%
to Total Loans Ratio
. Total Real Estate Owned 0.51 % 0.69% 0.84% 0.64% 1.16% 1.24% 1.40%
to Total Assets Ratio
Total Non-Perfoming Assets 2.28% 3.20% 3.76% 3.98% 4.70% 5.53% 6.39%
to Total Assets Ratio
Total Classifed Assets 53.16% 68.23% 83.23% 82.39% 108.95% 107.03% 113.32%
to Tier 1 Capital + ALLL
Texas Ratio 20.59% 31.29% 42.22% 40.46% 53.60% 62.12% 75.86%
Total Non-Accrual Loans (w/o Jmpairments) plus REO to Tangible Common Equity Capital
Commercial Loans
Commercial Non-Accrual Loans $ 26,138,956:1i 40,567,691 $ 56,292,893 $ 56,795,885 $ 54,089,261 $ 67,359,893 $ 86,682,771
Less: Specific Impairments $ (876,764):Ii (1,238,279) $ (8,056,675) $ (5,073,374) $ (6,478,143) $ (1.042,335) $ (10,388.013)
Commercial90-Days - Still Accruing $ 123,872 $ 1,881,305 $ 5,016,835:& 0 $ 500,000 9; 4,129,087 s: 1,936,048
Commercial Loans Non-Perfoming Loam S 25,386,064 $ 41,210.717 S 53,253,052 S 51,828,649 $ 48,111,119 S 64,446,644 $ 78,230.805
Commercial Loans Real Estate Owned $ $ 16,799.723:& 21.756,634 $ 14,220,037 $ $ 29,001,665
Commercial Loans NOll-Perfoming Asset S 38,710,751 S 58,010,440 $ 75,009,686 $ 63,919,859 $ 71.966,859 S 98,128,897:& 107,232,471
Commercial Loans Non-Accrual Loans 2.07% 3.35% 4.72% 4.89% 5.32% 5.62% 8.70%
to Total Community Bank Loans Ratio
Commercial Loans Non-Accrual Loans 1.87% 3.04% 4.31% 4.46% 4.44% 5.54% 7.28%
to Total Loans Ratio (excluding guaranteed)
Non-Accrual Totals reflect the Gross Book Balance and do not account for Guaranteed Amounts
Page 18 of66
United Western Bank - Consolidated
Loan Portfolio Risk & Delinquency Trends
November 30, 2010
Sep-09 Dec.-09 Mar-l0 JUD-I0 Sep-l0 Oct-l0 Nov-to
Problem Loan Trend
Watch $ 34,816,416 $ 70,266,393 $ 72,694,662 $ 111,291,161 $ 90,989,849 $ 91,375,734 $ 87,607,358
Special Mention $ 36,207,667 $ 42,270,270 $ 47,042,920 $ 65,568,408 $ 59,784,993 $ 61,790,286 $ 56,619,929
Substandard - Commercial Loans $ 106,230,697 $ 119,806,064 $ 139,515,921 $ 138,030,105 $ 145,431,894 $ 141,175,546 $ 144,284,812
Substandard - Other Loans $ 13,235,353 $ 13,594,646 $ 12,500,713 $ 13,265,479 $ 14,489,363 $ 14,199,458 $ 14,033,645
Doubtful $ 3,410,799 $ 5,180,499 $ 4,955,020 $ 6,325,779 $ 5,733,130 $ 5
z
068,095 $ 7.614
z
163
Problem Loan Totals $ 193,900,932 $ 251,117,873 $ 276,709,236 S 334.480,933 S 316,429,229 $ 313,609,119 $ 310.159,907
Loss $ 7,275,906 $ 7,344,231 $ 6,716
1
493 $ 1,756,538 $ 12,339,907 $ 598,869 $ 1,708,607
Problem Loan & Loss Totals $ 201,176,839 $ 258,462,104 $ 283,425,729 $ 336,237,471 $ 328,769,135 $ 314.207,988 $ 311,868,514
Mortgage Backed Securities $ 145,945,436 $ 187,099,815 $ 183,275,133 $ 183,756,StW $ 155,473,210 $ 151,766,245 $ 147,961,756
Other Substandard Assets $ 1,507,793 $ 1,318,682 $ 1,478,011 $ 1,419,945 $ 1,856,633 $ lz856
z
633 $
Problem Asset Totals $ 341,354,161 $ 439,536,370 $ 461,462,379 $ 519,657,417 $ 473,759,071 $ 467,,231,997 $ 459,978,296
Problem Asset & Loss Totals $ 348,630,068 $ 446,880.600 $ 468.178,872 $ 521,413,956 $ 486,098.978 $ 467.830.866 $ 461.686,902
Problem Trend - Unfunded Commitments
Watch $ 3,770,939 $ 3,394,742 $ 1,792,547 $ .2,153,961 . $ 1,458,881 $ 1,071,967 $ 985,195
I-' Special Mention
$ 679,829 $ 1,186,834. $ 2,468,333 $ 577,724 $ 477,998 $ 375,489 $ 333,489
00
Substandard - Commercial Loans $ 2,669,492 $ 1,225,803 $ 842,535 $ 1,542,685 $ 1,400,801 $ 1,257,806 $ 493,437
(j\
W Doubtful $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Total. Problem Unfunded Commitments S 7,120,260 $ 5,807,379 $ 5,103,415 S 4,274,371 $ 3,337,680 $ 2,705,262 $ 1,812.120
Allowance Trend (figures reflect Allowance for Credit Losses (HFI) and Allowance for Lower of Cost or Market (HFS
General Valuation Allowance $ 28,490,236 $ 35,432,000 $ 35,698,326 $ 40,586,625 $ 45,095,099 $ 44,056,767 $ 42,725,166
Seecific Valuation Allowance $ 876,764 $ 1,238,000 $ 8,056
1
674 $ 5,073
1
375 $ 7,213,931 $ 7,027,113 $ 10,372,791
. Total Allowance for Credit Losses $ 29,367,000 $ 36,670,000 $ 43,755,000 $ 45,660,000 $ 52,309,029 $ 51,083,879 $ 53,097.957
Allowance for Credit Loss Ratios
ACL I Total Loans 1.99% 2.61% 3.18% 3.41% 4.08% 3.99% 4.23%
ACL I Total HPI Loans 2.44% 3.20% 3.99% 4.31% 5.10% 5.07% 5.43%
ACL I Regulatory Capital 11.46% 16.06% 20.38% 21.89% 30.07% 29.38% 30.87%
ACL I Criticized & Classified Loans 18.46% 20.28% 21.45% 20.66% 23.20% 22.99% 23.86%
ACL I Classified Loans 23.90% 26.46% 21.87% 28.97% 31.58% 31.84% 32.00%
ACL I Non-Accxual Loans 16.28% 69.29% 72.04% 70.26% 83.16% 67.84% 58.27%
ACL I Non-Accrual & Past Due 90+ Day 64.08% 58.40% 57.98% 62.12% 7205% 57.38% 51.44%
Charge Off Trend
YTD Cbarge Offs $ 10,816,000 $ 18,429,000 $ 7,476,000 :& 10,605,000 $ 28,003,000 $ 28,650,000 $ 30,368,000
YTD Recoveries :& $ (115,000) :& (34,OOOl $ (116.000) $ (190,000) $ (239,000) $ (248200)
YTD Net Charge Off $ 10,724,000 $ 18,314,000 $ 7.442,000 $ 10,489,000 $ 27,813,000 $ 28.411,000 $ 30,120,000
TID Provision Expense $ 21,022,000 $ 35,915,000 $ 14,527,000 S 19,479,000 $ 40,227,000 S 40,316,000 $ 44.059,000
Page 190f66
United Western Bank - Consolidated November 30,2010
Loan Portfolio Risk & Delinquency Trends
SeJ!-69 Dec-09 Mar-IO Jun-l0 SeE-I0 Oct-IO Nov-IO
Past Due Trend
Total Loan Portfolio
Total Loans 30-59 Days $ 24,297,095 $ 21,036,473 $ 32,310,886 $ 36,253,446 $ 23,818,788 $ 36,643,418 $ 61,082,281
% of Total Loans 1.65% 1.50% 2.35% 2.71% 1.86% 2.87% 4.87%
Total Loans 60-89 Days S 35,830,494 S 15,776,021 $ 25,725,858 $ 18,446,909 $ 25,532,705 S 16,430,684 $ 17,626,254
% of Total Loans 2.43% 1.12410 1.87% 1.38% 1.99% 1.28% 1.41%
Total Loans Non-Accrual & 90+ Days $ 45,982,904 $ 63,951.081 $ 75,585,059 $ 73,558,033 $ 72,598,368 $ 89,041,247 $ 103.223,132
% of Total Loans 3.12% 4.54% 5.50% 5.49% 5.66% 6.96% 8.23%
Total Loans Past Due $ 106,110,493 $ 100,763,575 $ 133,621,804 $ 128,258,388 $ 121,949,861 $ 142,115,350 $ 181,931,667
% of Total Loans 7.19% 7.16% 9.72% 9.58% 9.51% 11.11% 14.51%
Commercial Loans
Commercial Loans 30-59 Days $ 28,463,620 $ 10,481,348 $ 24,055,926 $ 28,553,681 $ 17,513,742 $ 29,445,577 $ 55,160,226
% of Commercial Loans
2 ~ 2 5 % 0.87% 2.02% 2.46% 1.72% 2.89% 5.54%
Commercial Loans 60-89 Days
$ 16,730,244 $ 11,413,455 $ 22,248.142 $ 14,421,576 $ 21,929,563 S 12,946,392 $ 12,795,072
% of Commercial Loans
1.32% 0.94% 1.87% 1.24% . 2.15% 1.27% 1.28%
.....
Commercial Loans Non-Accrual & 90+ r $
25,385,558 $ 41.210,717 $ 53,369,234 $ 51,828,649 $ 48,915,157 $ 65,246,911 $ 79,031,072
00
0) % of Commercial Loans
2.01% 3.40% 4.48% 4.46% 4.81% 6.41% 7.93%
.j:::.
Total Past Due Commercial Loans . $ 70,579,422 $ 63,105,520 $ 99,673,302 $ 94,803,907 $ 88,358,462 $ 107,638,879 $ 146,986,370
% of Commerciai Loans
5.58% 5.21% 8.36% 8.17% 8.68% 10.58% 14.76%
Past due totals above are reflected net of impairments and government guarantees
Page20of66
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00
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U1
United Western Bank: - Consolidated
Non-Performing Chart
$200MM
Allowance for Credit Losses
_Total Non-Perfoming Assets
Non-Accrual Loans ....... Total9O-0avs - Still Accruing ..... Total Real Estate OWned
$180MM
$160MM
$140MM
$120MM
$lOOMM
$80MM
$60MM
$40MM
$20MM
$OMM
Sep-09 Oec-09 Mar-10 Jun-10

Sep-10
Page 21 of66
United western Bank - Consolidated
Classified Asset Chart
$200MM
_Total Aliowam:e for Credit Losses ,
$180MM
$l60MM
$140MM
$120MM
1--1
en I $l00MM
0'1
0'1
. $80MM
$60MM
$40MM
$20MM
$OMM
Sep-09 Oec-09
November 30, 2010
....... Sped.1 Mention -Commercl.1 Loans ..... Ooubtful
Mar-l0 Jun-l0 Sep-l0
Page 22 of 66
United Western Bank: - Consolidated
November 30. 2010
Past Due Chart
$200MM
_ Total Allowance for Credit losses
_Total Loans Past Due
...... Total Loans Non-Accrual &.. 90+ Days
...... Total Loans 60-89 Days
..... Totalloans 30-59 Days
$180MM
$160MM
$140MM
$120MM
.....
$100MM CO
0'\
-....I
$80MM
$60MM
$40MM
$20MM
$OMM
Sep-09 Oec-09 Mar-10 Jun-1O Sep-1O
Page230f66
t-l
(Xl
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(Xl
United Western BlQIk - Consolidated
Non-Accn18l Portfolio Trends
Commercial Loan Portfolio
Sep..o9
Dec..o'
Mar-l0
November 30, 2010
Jun-l0 Sep-l0 Oct-l0 Nov-IO
Commercial Lending $ 20,345,488 $ 28,773,438 $ 49,957;1.37 $ 48,902,752 $ 47,050,111 $ 59,715,493:1i 73,529,527
Less: SpecificImpainnents $ (580,916) $ (912,421) S (7,714,617) $ (4,557,657) $ (4.915,818) $ (5,464,788) $ (8,810,466)
CDF-VCFF-IV Loans $ $ S $ 2,100,000 S 2,100,000 $ 2,100,000 $ 2,100,000
Less: Specific Impairments S $ S :J. S (1,187,800) S 0,187,800) S (1.187,800)
SBAOriginated $ 5,793,468 $ 11,794;1.53 $ 6,335,656 $ 5,793,132 S 4,939,150 S 5,544,400 S 11,053,243
Less: Specific Impairments $ (295.848) $ (325.858) $ (342,058) $ (515.717) :Ii (374.525) :Ii (374.525) :Ii (374.525)
S lS,l62,l!t2 S 39,319,411 S 48,236,118 S 51.722,510 S 47.611.119 S 60,331,780 S 76.309,980
% ofCol1U'lleroial toon Portfolio 2.2% 3.6% 4.5% 4.9% 4.7% 5.9% . 7.7%
Other Lous Portfolio
Single Family Loans $ 13,392,897 $ 13,722,796 $ 12,500,713 $ 13,265,479 $ 14,489,363 $ 14,199,458 $ 14,033,645
Less: Specific Impairments
.-
$ S $ S S $
~
SBA Investments $ $ $ $ $ 804,039 S. 785,045 :Ii 785,045
Less: Specific Imgainnents
:0; $ S $ S S
.,
:J>
S 13,392,897 S 13,712,796 $ 11,500,713 S 13,265,479 S 15,293,402 S 14,984,502 S 14,818,690
% of Other Loons Ponfolio 3.7% 3.9% 3.6% 4.0% 4.8%
. 4.7% 4.7%
Total PortfOlio - NOR-Accrual
S 38;655,089 S 53.052,207 S 60,736,930 $ 64,987,990 $ 61;904,520 S 75,317,282 S 91,128,670
% ofTolIII Ponfollo
2.6% 3.8% 4.4% 4.9% 4.9% S-"Ai 7.3%
Non-Acerual Totals reflect the Gross Book Balance and do not account for Guaranteed Amo1Dlts. including loans that are delinquent 90+ days that are fillly government
insured, or for which the non-accrual decision has been deferred. '
Portfolio Totals used for Commercial LoSDS and Other Loans are gross totals before Premiums, Fees, or Gene.ral Allowances. The Total Portfolio is net of these amonts.
Page24of66
1--1
CD
0'1

United western Bank - Consolidated
Problem Asset Trend
$ 34.816,416 .. ill!' $ 72,694,662
"
$ 36;1.07,667
. Substandard -Commetcial Loans S .
Impainnents
Substandard - Other Loans
% ofTOIDl LoaDs
Commercial Loans Only
% of Commercial Loans
s
s
$
s
s
s
Non-Accrual Total $ 38,655,089
'Ii ofTomI LoaDs 2.6%
Non-Accrual Total- Commercial Loans 25,262,192
% ofColIJIIIeI'Ciai Loans 2.11%
Non-Accrual Total- Other Loans 13,392,897
60,736,930
4.4%
48,236,218
4.0%
12,Soo,713
90,989.849
59,784,993
November 30, 2010
87,607,358
56,619,929
313,577,120
25.0%
299,543,475
30.1%
222,552,549
17.1%
208,5 18,903
20.9%
165,932,620
13.2%
151,898.974
15.2%
91,128,670
7.3%
76,309.980
7.7%
14,818,69.0
Page2Sof66
1--1
00
......
o
United Western Bank - Consolidated
Problem Asset Report Trend - Commercial Loans
Non-Accmal Totals reflect the Gross Book Balance and do not accolDlt for Guaranteed Amounts.
November 30, 2010
Page 26 of 66
1--1
OJ
-...J
1--1
United Western Bank - CoDSOlidated
Problem Asset Report - Commercial Loans - Top 20
Borrower LoaD Loan Type
Commercial Real Es.-
and
and
ommercial
onsttuction - Resi.dcntial
Construction - Multi-Fmmly
Construction - Multi-Family
Residential Real

Land
Residential Real Estate - ConSI
Construction - Commercial
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Construction - Residential
Commercial Real Estate
Commercial Real Estate
Commercial RIIII Estate
Commercial Real Estate
November 2010
SpecIal Accrual
Watch MentiOn Substandard DoulltfOl impairment Guarantee % Status
13,499,975
-
12,561,022 Non-Accrual
11,121,425
-
10,750,000
-
8,853,696
-
8,840,959
-
7,215,251
-
6,611,407
-
6,200,000
-
5,765,001 1,008,875 Non-Accrual
5,475;385 Non-Accrual
5,454,509 2,727,255 Non-Accrual
4,915,769 Non-Accrual
4,912,123
-
4,817,408 -
4,711,958 -
4,603,299 -
4,418,992"
-
4,171,569 -
I
4150387 -
32,101,OQ :l6.0218IZ 75.4'72.75:1 5.454,509 3.736.130 34.171.686
Page27of66
I-'
co
-...J
FV
United Western Bank - Consolidated
Problem Asset Report - Commercial Loans
LOGnType
Construction - Residential
Residential Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial
Commercial
Commercial Real Estate
Construction - Commercial
Commercial
Commercial
Land
Commercial Real Estate
Land
Commercial Real Estate
Residlllltial Real Estate - Consume
Commercial Real Estate
Residential Real Estate
MultiFamil)
Commercial
Commercial Real Estate
Multi-Fsmil)'
Commercial Real Estate
Multi-Family
Commercial
Residential Real Estate -Consume
Commercial Real Estate
Residential Real Estate
Multi-Family
Construction - Multi.Farnil>
Letter of Credit
Construction Multi-Famil)
Commercial .
Commercial Real Estate
Commercial
COmmercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial
Residential Real Estate
Commercial
Commercial
Commercial
Commercinl
Commercial Real Estate
Single Tenant
Commercial
Commercial Real Estate
CODSIrUCtion MultiPamil)
Multi-Famill'
Single Tenant
November 30. 2010
Commercial Portfolio
Watch Secial Mention Substandard Doubtful Imuainilent SBAGuar.% Accrual Status
100.138 Non-Accrual
936,333
-
525,000
-
I,S50,539 -
3.632,927 -
224,453
-
405,000
-
4,912,123
-
2,384,997
-
647.389 -
14,08B -
5,765,001 1.008.875 Non-Accrual
4,811,408 -
1,768,504 -
1,467,325 220,099 Non-Accrual
10,521 -
617,271 -
S92,500 Non-Accrual
856,094
892,582 Non-Accrual
4,150,387 -
1,466,119
Non-Accrual
1,712,411
400,002 -
91,044
182,038
-
902,414
-
636,569
50,000 NonAccrual
831,230 -
3,000,000
600,000 Non-Accrual
0 -
724,999 126,875 Non-Accrual
10,750,000
210.438 -
69,721
-
1,553.834 939,010 Non-Accrual
4,171,569 -
13,499,975 -
864,643 -
569,878
-
47,764
-
500,000
2,840,171 -
1,243,529 -
500,000 -
232,841 -
83S,834
576,517 -
630,582 -
316,567 -
8,840,959
1,657,659 -
671,915 -
Pago2.8 or66
J--I
00
-....J
W
United Western Bank - Consolidaled
Problem Asset Report - COIIIII1ICCiaI Loans
Borrower Lon LonTne
Single TcmaDt
Commercial
Multi-Family
Commercial Real Estate
Commereia\
Land
Land
Land
Land
Land
Laud
Commercial
Land
~
Commercial Real &tate
Commercial Real Estate
Commcm:ial Real Estate
LaDd'
Letter of Credit
Commercial Real &tate
Land
Commcm:ial Real Estate
Land
Residential Real Estate
Commercial
Commen:iaI
Commercial Real EsIIIte
Commercial Real Estnte
Commercial Real Estate
Residential Real Estate - Consume
Land
Land
Land
Residential Real Estate
Cominercial Real EataIe
Commercial Rea11!s1ate
CommctcIal Real Estare
COIIIII1ICCiaI Rea11!s1ate
Residential Real Estate CODS1IIJH
Resiclcntial Real Estate
Land
LeIter of Credit .
Comlllercial Real Estare
Construction - Residential
Land
Commercial
Multi-Famib
Mult1-Fami1y
Commercial
Commercial
Residential Real Estate
Commercial
Commereial, .
November 30, 2010
Watch SDeeIaJ. Mention SubstaDdard DDIIbtful IlDbairmeut SBA Gur. o/a Aecnlal Status
445,620
-
46,675 .
702,362
.
3,209,555 -
198,038
-
123,358 20,354 Non-ACCI'UIII
123,205 20,329 NonAccma\
123,229 20,333 Non.AccruaI
123,116 20,314 Non-Accma\
3,678,!)39 735,788 Non-AcCmal
11,121,425
-
3,562,500

12,561,022 Non-ACCI'UIII
34,307 Non-Accrual
26,062 Non-Ac:cmal
4,000,000 -
1,250,000 625,000 Non-Accrual
894,348
2,477,908 -
0 - ~
2,556,894 -
29,409 -
3,203,217 - -
11;4,707 -
500,000 -
85,304 Non-Accma\
1,447,670 -
277,771 -
682,649 -
28,443
-
1,249,914 -
637,694
-
320.803
89,981
-
360,148
-
212,426 -
228,728 38,884- Non-Accrual
260,511
67,311 Non-Accma\
4,418,992 -
5,475,385
NoD-Accrual
137,837
Non-Accma\
1,649.435 -
0

1,499,798 -
8,853,696 -
2,617,970
-
130,000 -
1,201,565 -
1,206,104 -
3,197.843
4 6 ~ , 8 3 4
6,6it,407

304,275 -
84,247
. .'
Pqe29ar66
I-'
ex>
-.....J

United Western Bank - Consolidated
Problem Asset Report - Commercial Loans
Borrower Loau Loan Type
Commorcial
CommeJ:Cial
Construction - Commercial
Construction - CommoJ:Cial
Commercial
Commercial
Commercial
Commercial Real Estate
Construction - Residential
Residential Real Estate Consume
Commercial
Commercial
Residential Real Estate
Multi-Famil)
Commetclal
. Commercial Real Estate
Commercial
Commercial Real Estate
Commercial
Commercial
Residential Real Estate - Consume
Commercial
Land
Commercial
Land
Commercial
Construction - Residential
Commercial
Commercial
Construction - Residential
Construction - Residential
ColISIrUction - Residential
Land
Commercial Real Estate
Commercial Real Estate
CommeJ:Ci1li Real Estate
Multi-Family
Residential Real Estate
Commercial
Commercial
Land
Land
Construction - Residential
Construction - MultiFamil)
Commercial
Commercial
Consumer
Commeteial Real Estate
Commercial Real Estate
Construction - CommeJ:Cial
Commercial

Commercial Real Estate
Commercial Real Estate
November 30, 2010
Watch I Special Mention Snbstllndard Doubtful IIIlPllirment SBAGuar.% Atenlal Status
149,198
-
191,500
Non-Accrual
236,210
28,345
Non-Accrual
187,142
24.903
Non-Accrual
181,111
-
122.428 95,137
Non-Accrual
220,470
93,881
Non-Accrual
998,160
-
1,320.000
Non-Accrulli
1,315,380
-
1,040,517
-
2,876
-
1,409,147
-
2,310,000 231,000
Non-Accrual
2,050,000
-
4,915,169
Non-Accrual
230,000
-
2,738,796
Non-Accrual
230,000
-
224,958
-
775,000
-
29,025 Non-Accrual
2,856,160

1,670,!Ml
-
.1,799,990
-
430,282

2,100,000

429,895 Non-Accrual
1,298,079 Non-Accrual
899,435
-
178,048
-
1,195,000 143,400 Non-Accrual
168,000
-
2,455,000 417,350 Non-Accrual
582,402 99,602 Non-Accrual
444.184
-
6,200,000
-
307,921
-
127,716
Non-Accrual
100,000
Non-Accrual
199,817
-
275,501
-
4,7I1,9S8
-
7,215,251
-
1I4,OS9
-
230,996
NonAcCIUlII
9.690
Non-Accrual
2,684,835 456,422 Non-AcClUllI
1,113,264
.
5,454,509 2,727,255 Non-Accrual
100,000
-
445,777
-
3,500,000
Non-Accrual
2,495,293
Non-Accrual
Pagr:30066
I-'
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......,J
lJ1
United Western Bank - Consolidated
Problem Asset Report - Commelcial Loans
IBarrawer Loall



'LoanTYlle
Land
Multi-Fauul)
Commercia\
Multi-Famil)
Commen:iaI Real Estate
CoDsmner
Commercial
Commercial
Residential Real EslBte
CommerQial Real Estate
Commercld Rea1 Estate
Comm.et'l:ial Real :Estate
COIJIIIIeI'Cial Real Estal!:
Commercial Rea1 EsIBI!:
Commercial Real Estal!:
COIJIIIIeI'Cial
ComIIIercIaI
Commercial Real BsIate
Commercial Rea1 :Estate
Commercial Real BsIate
Commetcia1
CommerciaIlleaI1!sIate
COIlIIDeIclal Real BsIate
Commercial Real EsIaIe
Commerclallleal BsIate
ConImcRlial Real BsIate
Commercial
CommerCial Real Estate
Colllllllll'Cial Real Estate
Commerciallleal Estal!:
Commercial Rea1 Estate
. COIJIIIIeI'Cial Rea1 Estab:
Commercial Real Estate
Commerciai Real Estate
C ~ a 1
COJIIIIIerIlial Real BsIate
Commercial
Commercial Real Estate
Co_IaI Real Estate
Commercial Real Estate
COIIIIIIIIciaI Real Eslab:
COIIIIIIBfCial Real EsIBI!:
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
Commema1 Real Estate
Commen:iaI
Watdl 8veelal Mendonl Snbstlllldard
1,495,000
2,143,289
581,698
715,000
88,451
1.067,498
1;050,000
3,541,294
38,631
1,209,964
. 264,339 f
2,388,354
. 30,014
292,912
70,867
651.864
1,016
2;625
1,652
63,701
23;822
61,631
10,079
13,467
760,000'
1,405,766
264,102
116,965
16,101
1,027
43,526
206,221
88,387
1,336,673
17;581
9,192
222,171 I
443,333
244,
132
1
01
319.257
7,,327
174;511
3,129
24,324
44;504
11,370
13,140
November 3D, 2010
DoalJdUl Imllllirmeat SBAGaar.% Accrual Status
Non-Accrual
1,187.800 Non-Accrual
"--,J66
S 75,629,521
I Non-Accrual
75.0%
88.0%
75.0%
75.0%
75.0%
0 Non-Accrual
75.0% Non-Accrual
75.0% Non-Accrual
15.0% Non-Accrual
75.0%
75.0%
90.0%
75.0% I Non-Accrual
85.0%
66,025 75.0% I Non-Accrual
85.0%
86.0%
80;0%
86.0%
75.0%
75.0%
75.0%
75.0%
75.0%
75.0%
75.0%
80.0%
85.0%
..... 310f66
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00
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O"l
United Western Bank - Consolidated
Problem Asset Report - Commercial Loans
Borrower Loan
November 30, 2010
Loan Type Watcli I SDeeiid Mention Substandard Doubtful Impairment SBAGuar.% Accrual Stutus
Construction
3,703,968
Non-Accrual
Construction
1,421.075
Non-Accrual
Commercial Real Estate
166,784
Non-Accrual
Commercial Real Estate
1,268,178
-
Commercial Real Estate
132,864
15.0%
- I
Commercial Real Estate 507.580
-
Commercial Real Estate
114,616 75.0%
-
Commercial Real Estate 13,457
75.0%
-
Commercial
63,574 75.0% Non-Accmal
Commercial 57,172 75.0% Non-Accrual
Commercial 0 80.0% Non-ACCI'IIaI
Commercial 4,842 75.0% -
Commercial Real Estate 3.085,000 308.500 Non-Accrual
Commercial Real Estate 215,21S
-
Commercial Real Estate S4,091 7S.0%
-
Commercial Real Estate 120,509 15.0%
-
Commercial Real Estate 4,603,299
-
Commercial Real Estate 877.439
-
l,408,94l 12,5So,sS2 0 374,525 :II
I Totul CODlDlerdal and SBA Portfolio I
r Watcli lSlIeclal MentioDl Subst\lndard T Doubtful -y mmairment I r Non-Accrual'"
C!?,667,358 I 56,619,929 I 14.9,178,538 I 13,093,228 I 10,372,791 I IS 86,681,771
"Non-Accrual Totals renut IlI"Oross BookBaliiiCo II!1d do not =oUDt rOr OUlIIlUIIcod J\mOUlllS.
Borrowers with Unused Commitments
. Dorrower {;ommu:men g OutslWlOllll! unuseG {;OIDDUtment
06 641,389 S 2,611 S 650,000
08 o .$ 486,000 .$ 486,000
06 47.764 .$ 2,236 .$ SO,OOO
08 8,840,959 .$ 1,250 $ 8,842,209
07 3,562,500 .$ o S 3,562,SOO
06 2,477,908 .$ 332,945 S 2,8 I 0,8S3
06 o .$ 371,182 S 371,182
06 2,556,894 $ 84 .$ 2.S56,978
08 o $ 5,985 $ 5,985
08 1,499,798 $ 202 .$ 1,500,000
06 8,853,696 $ 160.152 .$ 9.013,849
06 3,197,843 .$ 2.157 .$ 3.200,000
07 469,834 .$ 30,166 .$ 500,000
07 1.040,517 .$ 159,484 $ 1,200.000
06 2,050,000 . $ 450,000 $ 2,500,000 i
01 2.856,160 $ 143,840 .$
3.000,000 I
06 1.199,990 .$ 10 $ 1.800,000
06 715.000 $ 35,000 $ 1S0000
2,183,302 42,799ftj6_1
Page 32 .r66
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'-...I
United Western Bank - Consolidated
Problem Asset Report - Commercial Loans
Changes for the November Problem Asset Report
Borrower Loan Action Outstandins
I Yngrades I
Upgrade 6 to S 20,903
U::6t05 . 106.155
Total Upgrades: 127,US8l
ngr,
Downglllde 5 to 6 182,038
DOWDglllde 5 to 6 7,215,251
Downgrade 5 to 6 70,867
Downgrade 5 to 8 1,249,914
Downgrade 5 to 8 2,100,000
Downglllde 6 to 7 13,140
Downgrade 6 to 7 44,504
DOWDglllde 6 to 7 10,750,000
Downgrade 6 to 7 210,438
DOWDglllde 6 to 8 46,675
DowDgllIde 7 to 8 6,200,000
Downgrade 7 to 8 230,000
Downgrade 7 to 8 230,000
Downgrade 7 to 8 224,958
Downgrade 7 to 8 1,649,435
Downgrade 7 to 8 0
Downglllde 8 to 9 5,454,509.
Iotal Downgrades:
Acgual
Total Non-AcCl'Ual Activity:
om Non Accrual
None
n -- Total Loans RetUmediOAccruaJ; . -If I
November 30,2010
Page 33 0(66
1-1
co
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co
United Western Bank - COnsolidated
Problem Asset Report - Commercial Loans
Changes for tile November Problem Asset Report
Berrmr Loan MSo' 9!1t!tandle'
I ~ m d m m w I
539,910
3;127,152
";" LoaDS Tnmsferred to REO: 3 667,062 J
Pardal Charge Off 168,348
Partial Charge ott . 222
Partial Charge ott 92,371
Fun Charge Off 165,600 .
Fun Charge ott 248.645
Fun Charge Off 199,584
PattiaI Charge Off 9;251
PanIa1 Charge Off . 430,000
Partial Charge Off 300,000
Total Cllarp-Offs: 1,614.12%1
November 30, 2010
Page34of66
United Western Bank - Consolidated
November 30, 2010
Loan Portfolio Delinquency Trends
Portfolio
Community Bank :707,V. I ,J7 J. !tlJ,UOa,-''I'I-
828,400,628
SBALoans 160,234,412 167,731,137
161,722,078
SBA Investments 7,566,571 5,996,133
5,158,064
Single Family Loans 287,937,168
274,384,999
251,122,143
Total Outstanding $ of an Loans 1,444,765,742 1,363,180,613
1,252,402,912
efinquent 30-59 Days
Construction & Land
6,987,210
18,815,629
Non-Residential Real Estate
19,462,611
Multi-Family Loans
0
Single Family Loans 8254961 ":.
13;598,464 , , (;Jii
Commercial 202,653 I. 7,158,902
.\"
Consumer
7,820 <.;
. 2,046,675
Total Outstanding 30-Days 32,310,886 .. 61,082,281
Total DeUnquent:y % 3D-Day Loans 4.9%
J-1
Delinquent 60-89 Days
CO
.....,J
Construction & Land
20,027,967 ':';>. 6,899,598 " 786,707
\0
Non-Residential Real Estate 11,255,078 14,448,619 4,974,920
Multi-Family Loans 0 0 6,200,000
Single Family Loans 4,039,228 3,477,716 5,331,182
Commercial 508,221 629,958 333,445
Consumer 0 269,967 0
Total Outstanding 6O-Days . 25,725,858 ]7,626,254
Total Delillqueney % 6O-Day Loans I.9% 1.4%
90+ Days
Construction& Land 15,847,101 r. 30,893,138 29,300,068
Non-Residential Real Estate 7,338,743 18,148,204 33,505,829
Multi-Family Loans 1,510,903 0 3,545,119
Single Family Loans 20,596,840 22,215,825 30,984,351
Commercial 4,327,892 5,613,973
Consumer 0 273,792
Total Outstanding 90-Days & NOD-A 75,585,059 103,223,132
Total DeHnqueney % 9D-Day Loans
lquency
AI Loans
, .. '-.--_TT..... "..... .. L_ ......_'.-II!iI1' .
Page 3S of66

co
co
o
United Western Bank - Consolidated
Past Due - Commercial Loans by Officer
Loans Reportable as Three or More Months Past Payment DUe Date or Maturity
November 30, 2010
Borrower Aceount # omeer Note Loan Type Risk Due Days Mature Non- Bank BlUIk Past Due
0; Grade Date Post Date Aq;ruaJ S'PDge Qpnmihnent Amnpnt
TIm Om: CmI Res 1-4 Fam Hfi 08 O6f05/10 178 07129/10 Y 592,499.99 592,499.99 612,184.16
Greg Atkinson Loc-borrBase 07 07/30110 123 07130/10 430,28200 43028200 43028200
Loc-borrBase 07 07130/10 123 07130110 100,000:00 100:000:00 100:000:00
GregAtkinson CoJlSUnsecuredTerm 08 05/22110 192 06122110 Y 9,690.18 9,690.18 10.202.00
lobnStramel Commercial Real Estate 08 07/05110 148 03/06131 Y 716,965.06 716.965.06 24.028.00
lobn Stramel Commercial Real Estate 08 07/05/10 148 01105129 Y 1,336,673.07 1,336.673.07 37.644.00
JobnStramel Commercial 08 02105110 298 ll105/i7 Y 17,581.26 17,58126 64.197.00
IobnStramel Commercial Real Estate 08 05105/10 209 ltf05/19 Y 55,121.49 55,121.49 4,260.00
JohnStramel Commercial Real Estate 08 09/05/10 86 06103132 Y 222,171.16 222,171.16 11,228.00
Jobn Stramel Commercial Real Estate 09 03/05/10 270 06106133 Y 2.100,000.00 2,100,000.00 104,472.09
Jobn Stramel Commercial Real Estate 08 10117/10 44 12117/12 Y 32,026.88 32.026.88 6.000.00
John Stramcl Commercial Real Estate 08 06/05110 178 10/01131 Y 174,510.91 174,510.91 23,480.00
Jobn StraDlel Construction - Commerci 08 08/15110 107 08131/10 Y 3,703,968.00 3,703,968.00 47,895.00
Jobn Stramel Construction - Commerci 08 08131110 91 08131110 Y 1,421,075.00 1,421.075.00 18,414.00
JobnStramel Commercial Real Estate 08 08/15/10 107 08131110 Y 166.783.75 166,783.75 2,232.00
JobnStramel Commercial 08 07114110 139 06114/12 Y 63,574.03 63,574.03 31,248.00
JoJmStramel Commercial 08 08105110 111 12117116 Y 57,17225 57.172.25 9,195.00
Jobn Stramel Commercial 08 12117110 (I7) 02114114 Y 620.49 620.49 0.00
JohnSlramel Commercial Real Estate 08 12105/08 725 08131133 Y 3.085,000.00 3.085,000.00 . 644.460.00
Anthony Codori Constr-conunl-presold 09 12/15/09 350 09130112 Y 5.454,509.21 5,454,509.21 203,136.52
Brad Good CmI- Business Asset' 08 03127109 613 03127/09 Y 220,410.00 220,470.00 234.180.46
BradGood CmI-BusinessAsset 08 03/27109 613 03127109 Y 122,428.34 122,428.34 182,953.30
Brad Good Cml- Lease Receivab 08 07/01110 152 04/01113 Y 127,716.27 127,716.27 19,350.95
GenyGilmore CmlOtherSecured 08 07120110 133 07120110 1,405,765.64 1,405.765.64 1,411.81825
Geny Gilmore Constr-rnultifam-spec 08 11128/10 2 10128111 Y 3.000,000.00 3,000,000.00 15.500.00
Geny Gilmore Constr-rnultifam-spec 08 10128/11 (332) 10128/11 Y 724,999.01 724.999.01 0.00
Geny Gilmore Finished Lots 08 01115/10 319 01115/10 Y 123,357.90 123,357.90 203,374.94
GenyGilmore FinisbedLots OB 01115110 319 01115110 Y 123,205.45 123,205.45 203,124.99
GerryGilmore FinisbedLots 08 01115/10 319 01115/10 Y 123,229.29 123,22929 203.163.61
Gerry Gilmore Finisbed Lots 08 01115/10 319 01/15/10 Y 123,116.17 123.116.17 202,977.95
Geny Gilmore Finisbed Lots 08 07/15/11 (227) 07115/11 Y 3,678,939.44 3,618.939.44 0.00
GerryGilmore CmlRea1Estate 09 12131111 (396) 12131111 Y 1.250,000.00 1,250.000.00 0.00
GenyGilmore ConsMortg14 1st 08 01130/10 304 06/30110 Y 5,475,385.14 5,475,385.14 5.639.196.85
GerryGilmore Loc-reSec-singleFa 08 02128/10 275 12130110 Y 137,836.84 137,836.84 6,914.82
Geny Gilmore CmI Consllllction 08 02127/09 641 08109/09 Y 236,210.00 236,210.00 755,655.25
GerryGilmore CmlConsllllction 08 02127/09 641 08/09109 Y 187,142.03 187,142.03 740,537.41
GerryGilmore Constr-res-specBldr 08 07125109 493 07125/09 Y 1.320,000.00 ].320.000.00 3,869.495.82
GerryGilmore CmlReaIEstate 08 08105110 117 01105/13 Y 4,915,169.21 4.915,169.21 146.014.44
GenyGilmore CmlRea1Estate 08 08105/10 117 01/05113 Y 2,738,195.74 2.738,795.74 81,390.44
GerryGilmore Cml LineRle Secured 08 05129/10 18S 05129/10 Y 3.500.000.00 3,500.000.00 3.607,333.33
Geny Gilmore eml Line Rle Secured 08 05129/10 185 05129/10 Y 2,495,293.32 2,495,293.32 2,571,815.65
GerryGilmore ConsClsedEnd-9Qs 08 llf05ItO 25 1II05nO Y 264,101.82 264.101.82 275.880.52
JobnMercbant Crnl Unsecured 09 12126110 (26) 03126111 Y 892,582.42 892,582.42 0.00
JobnMerchant CmI Unsecured 09 11/02110 2802101111 Y 85,303.70 85,303.70 537.30
JobnMerchant CmI-BusinessAsse! 08 08/17/10 105 09117110 Y 191,500.00 191.500.00 195,596.99
Pagc36of66
United Western Bank - Consolidated
PllSt Due - Commercial Loans by Officer
November 30, 2010
John Merchant Cml Unsecured 09 12/23flO (23) 10/23/11 Y 29.024.76 29.024.76 0.00
John Merchant Cml Non Rle - Equip 08 12118/10 (18) 09/18112 Y 230,995.81 230,995.81 . 0.00
Michael Saun Land Development-()ml 08 06/01110 182 06/01110 Y 5,765,000.82 5,765.000.82 22,805,659.17
Michael Snun Cml 5+ Multi-fam Hfs 08 07/01/10 152 04101/11 Y 1,466,118.95 1,466,118.95
33.815.80
Michael Saun Cml S+ Multi-fum Hfi 08 05/01110 213 07/01116 Y 2,310,000.00 2,310,000.00 148,016.67
Michael Saun
ConstT-res-spec Bldr 08 08/01109 486 09/01109 Y 1,195.000.00 1.195,000.00 2,054,203.05
Michael Saun Cm} Real Estate 08 12101110 (1) 07/01111 Y 2.455,000.00 2.455,000.00 13,297.92
Michael Saun eml Real Estate 08 12101110 (1) 07101/11 Y 582,401.61 582,401.61 3,173.59
Michael Saun Cml Unsecured 08 09/01(09 455 09/01109 Y 100,000.00 100,000.00 110.472.91
Mitch Bennett Constr-m-spec BIdr 08 07/14110 139 12114110 Y 100,73&.11 100,738.11 67,500.00
Mitch Bennett Cml Real Estatc 08 01105/10 329 09/05110 Y 1.467,324.62 1.467,324.62 2,330,612.29
Mitch Bennett Cml Res 1-4 Fam Hfi 08 09/05/10 86 09/05110 Y 636,569.03 636,569.03 643,076.18
Mitch Bennett Cm! Real Estate 09 10/01112 (671) 10101112 Y 1.553,833.62 1.553.833.62 0.00
Mitch Bennett Land Development-()ml 08 09/01110 90 09/01110 Y 26,062.00 26,062.00 27,315.87
Mitch Bennett Land Development-cmI 08 09/01/10 90 09/01/10 Y 34,307.07 34,307.07 35,957.62
Mitch Bennett Land Development-cml 08 07131/10 122 07131110 Y 12.561,021.57 12.561.021.57 12,751.246.00
Mitch Bennett Cm! Real Estate 08 07129/10 124 07129110 Y 228.727.93 228,727.93 233.786.81
Mitch Bennett Cm! Real Estate 08 07129/10 124 07129/10 Y 260.511.32 260.511.32 266.313.12
Mitch Bennett Cml Non RIc - Equip 09 08/05/10 117 09/05/10 Y 429.895.31 429,895.31 447.83280
Mitch Bennett Cml - Business Asset 09 08/05/10 117 09/05110 Y 1,298,078.53 1,298,078.53 1,362,615.35
Mitch Bennett Comml Re OwnIoce 08 09/05110 86 09/05/10
.y
2.684.834.89 2.684.834.89 2.712.279.87
I-l
66 Lollns Weigbled AverageS! 8.14 88.618.818.41 88,618,818.41 68,998.606.06
00
00 Non-Accrual Total":
llriJi!!!!2.7D.n
86.682..7711.11
I-l
Loans Reportable as Two Months Past Payment Due Date or MaturJty
*Total does not account for inipnirsnenl$ or guanmteed pottion of SSA loans
Officer Note LoaD Type
Risk Due Days Mature Non- Bank Bank Past Due
Borrower Account #
Gl:adt Dati Ent DatI: a"cww BulaD!: CGmmlmll:at amaDot
Carl Kuhlman Finished LoIS as 09/09/10 82 10109/10 555.000.00 555,000.00 563.510.00
John Fiedler LocUnsecured 05 09/08/10 83 03/08/11 100,000.00 100,000.00 1,405.55
Diane Craig Conslr-res-spec Bldr 05 09/14110 77 09114110 231,706.98 231,706.98 235.278.20
Van Horsley Cml Line RIc Secured OS 09118/10 73 09/18110 2,000,000.00 2,000.000.00 2,000,000.00
Van Horsley Cml Real Estate 06 09128110 63 09128/10 581,698.46 581.698.46 581.698.46
Bret Duston Cml- Business Asset 07 09/15/10 76 02115/11 84,241.32 84,247.32 4,432.20
Greg Atkinson Cml Real Estate 05 09127/10 64 09127fl0 486,511.93 486,511.93 493,972.49
Gerry Gilmore Cm15+ Multi-fum Hfi 08 09/30110 61 09/30/10 6,200;000.00 6,200.000.00 6,252,527.78
10hn Merchant Coroml Re OwnIocc 08 09122110 69 04122111 617,271.40 617,271.40 14.815.02
John Merchant Loc-borr Base 08 09117/10 74 09/17110 149,197.68 149,197.68 151,485.38
Michael Saun Loc-re Sec-single Fa 08 09128110 63 12/28110 500.000.00 500,000.00 5,107.75
Mitch Bennett Cml Real Estate 08 09101110 90 11101/11 835.833.71 835,833.71 12.796.41
ULoans WclJ:bted Awruges' 7_08 12.,141,461.48 12,341,467.48 10,317,029.24
Loans Reportable as One Month Past Payment Due Dnte or Maturity
Bo er Account # Officer Note Loan T e Risk Due Days Mature NOD- Bank Bank Past Due
Fro IV yP Gradt Date past Date 4t:m!aJ Bolam:, Commitment Amollot
Cari Kuhlman Cml Unsecured 05 10121/10 40 10121110 214.999.80 214.999.80 216.203.40
Carl Kuhlman Cml Res 1-4 Fam Hfi 06 10122110 39 04122111 6,611,407.26 6,611,407.26 94.945.77
CarlKuhlman Loe-borrBase 06 10104/10 57 10104110 2.050,000.00 2.500,000.00 2,060,000.00
Carl Kuhlman Lac-re Sec-single Fa OS 10/12/10 49 0711lfll 500,000.00 500.000.00 5,116.60
Carl Kuhlman Constr-res-specBldr OS 10113/10 48 12113/10 8,989,198.34 8,989.198.34 91,390.18
Poge37of66
United Western Bank Consolidated
November 30. 2010
Past Due Commercia1 Loans by Officer
ohn Fiedler Constr.commlpresold OS 10f30/lO 31 08f31f12 1.277,082.47 1.277,082.47 17.711.02
ohn Fiedler eml Real Estate OS 10128/10 33 08128112 2,087,625.14 2.087,625.14 28.948.46
ohn Fiedler em! Line Ric Secured 05 10f3I1J0 30 10131/10 719,790.36 750,000.00 719.790.36
ohn Fiedler Cml- Business Asset OS 10/01110 60 11101110 440.677.72 440,677.72 443.142.31
ohn Fiedler Cm! Constr - Res 5+ 06 10/01110 60 10/01/10 7,215,250.83 7.215,250.83 7,249,428.28
iane Craig Land Development-cml 05 10101110 60 10101/10 439.535.00 439,535.00 439,535.00
Van Horsley Cml- Business Asset 08 10/17110 44 12117110 2,840,171.12 2.840,171.12 28.875.08
Van Horsley Cm! - Business Asset 08 10117/10 44 12117110 1.243,529.02 1,243.529.02 12.642.55
William Stone Term Loan - Vehicles 08 10/01110 60 1 0/0 1f13 46,674.82 46,674.82 1.997.78
im Oslie Comml Re OwnIocc 07 10127/10 34 06128111 277.771.00 277,771.00 2.536.34
Tim Oslic Caroml Re OwuIocc 07 10128/10 33 06129/11 682,648.67 682,648.67 4.048.90
Tim Oslic Loe-re Sec Own/occ 07 10128110 . 33 06128111 28,443.12 28,443.12 259.78
Tim Ostic Land Development-em! OS 10/14/10 47 10114110 729,85538 729,855.38 733,651.89
Tim Ostie Cml Real Estate OS 10/08110 53 11/08f12 192,041.79 192,041.79 2,435.66
Bret Duston Cml Business Asset 07 10/15110 46 02115/11 304,274.66 304,274.66 2.835.67
Greg Atkinson Loc-barr Base 05 10120/10 41 10120/10 65.250.00 100,000.00 65.587.13
Greg Atkinson Cml Res 1-4 Fam Hfi OS 10120110 41 10120/10 65.001.70 65,001.70 65,001;70
Greg Atkinson CMMT Letter of Credit 05 10/07/10 54 10107110 0.00 269,300.81 0.00
Commercial Real Estate 05 10/30110 31 08130116 19.337.92 19,337.92 1.320.00
Commercial Real Estate 06 10/05/10 56 06120/16 54,090.61 54.090.61 3,696.00
Brad Good eml Undeveloped Land 08 10/05/10 56 10/05110 164,706.63 164.706.63 164.706.63
I-'
Gerry Gilmore Loc-re Sec-single Fa 08 10128110 33 04128112 500.000.00 500,000.00 5,083.33
00
Michael Saun em! Deposit Secured 05 101211]0 40 12108110 2,000,000.00 2,000,000.00 11,861.11
00
IV Mitch Bennett
eml Real Estate 08 10121110 40 0512]/11 13,499,975.00 13,499,975.00 68,624.87
Mitch Bennett eml Line Rle Secured 08 10121110 40 05120111 1.499.798.40 1,500.000.00 7.623.97
Welgllled "l'l!l'8\le5' 6.41
S4, 759,136. 76 55,543,598.81 12.548,999.77
Page3Sof66
United Western Bank - Consolidated
Past Due - Community Bank Loans
November 30. 2010
Days
Non-Accrual Past Loan # Borrower Loan Officer UWBBalance Iml!olrments Collateral
Class Next Due Mllturitv
CONSTRUCTION COMMERCIAL
31
John Fiedler 1.277,082 Construction - Commercial HFI 10130110 08131/12
3D-Days
------_ ... -
1,277,082 0
60-Days
0 0
90-Days - StiU Accruing
0 0
Non-Accrual 350 Anthony Codori 5,454,509 2,727,255 Construction - Commercial HPJ 11115/09 09/30/12
Non-Accrual 641 Geny Gilmore 236,210 28,345 Construction Commercial HFI 02127109 08/09109
Non-Accrual 641
187,142 24,903 Construction Commercial HFI 02/21109 08109/09
Non-Accrual
5,877,861 2,780,503
CONSTRUCTION
48 Carl Kuhlman 8,989,198 Construction - Residential HFI 10/13/10 11113/10
60 lohn Fiedler 7,215,251 Construction - Multi-Fami1X HFI 10/01/10 10/01110
30-Days 16.204,449 o
I--'
11 Diane Craig 231,707 Construction - ResidentiaL HPJ 09/14110 09/14110
CO
00 6O-Days 2311707 0
W
gO-Days - StUl AccJ1 0 0
Non-Accrual 0 Geny Gilmore 3,000,000 600,000 Construction - Multi-Family HFl 11128110 10128/11
Non-Accrual 493 J Geny Gilmore 1,320,000 Construction Residential HFI 07125109 07125109
Non-Accnml 486 Michael Saun 1,195,000 143,400 Construction - Residential HPI 08101109 09101/09
Non-Accrual 0 Gcny Gilmore 724,999 126,875 Construction - Multi-Family HFI 10128/11 10128111
Non-Accrual 139 Mitch Bennett 100,738 Construction Residential HFI 07/14/10 11114110
Non-Accrual 6,340.737 870,275
LAND
47 Tim Ostic 729,855 Land HFl 10114/10 10114110
60 Diane Craig 439,535 Land HFI 10/01110 10/01/10
56 Brad Good 164,707 Land HFI 10/05110 10105/10
3D-Days 1,334.0!17 0
82 Carl Kuhlman 555.000 Land HFI 09/09/10 10/09/10
liD-Days 555,000 0
90-Days - Still Accruing 0 D
Page390f66
United Western Bank - Consolidated
November 30. 201 0
Past Due - Community Bank Loans
Days
Non-AcCl'tlal Past 1.o8n# Borrower Loan OfIlc:er . UWB Balance
Iml!!irments . Collateral
Class Next Due Matu!!.x
Non-Accrual 122 ti Mitch Bennett
12,561,022 Land HPJ 07/31110 07131110
. Non-Accrual 182
Michael Saw 5,765,001 1,008,875 Land
HPI 06101110 06/01110
Non-Accrual 0 Gerry Gilmore
3,678,939 735,788 Land HFI 07/15/11 07115111
Non-Accrual 319 Gerry Gilmore
123,358 +0,354 Land HFl .. 01115/10 01115/10
Non-Accrual 319 Gerry Gilmore
123,229 20,333 Land HFl 01115/10 01115/10
Non-Accrual 319 Gerry Gilmore 123,205 20,329 Land HPJ 01/1 S/I 0 01115110
Non-ACCIUlII 319 Gerry GJ1more
123,116 20,314 Land HFl 01/15110 01115/10
Non-Accrual 90 ctiMitcb Bennett
34,307 Land HFI 09101/10 09101110
Non-Accrual 90 ti Mitch Bennett 26,062 Land BPI 09101110 09101110
Non-Aeeroal
22.558.240 1,825.9"
COMMERCIAL R
40 s, Mitch Bennett 13,499,975 Commercial Real Estate BPI 10121110 05121111
33 John Fiedler 2.087,625 Commercial Real Estate HFI 10128/10 08128112
40 Mitch Bennett 1.499,798 Commercial Real Estate HFI 10121110 05120111
30 John Fiedler 719,790 Commercial Real Estate HFI 10131/10 10131110
33 TimOstie 682,649 Commen:ial Real Estate HFI 10128110 06129/11.
34 TimOstie 277,771 . Commercial Real Estate HFI 10127110 06/28111
I-' S3 at Tim Ostie 192,042 Commercial Real Estate BPI 10108110 11/08/12
ex> 33 TimOstic 28,443 CommerCial Real Estate HFI 10128110 06/28111
ex>
~
31-Days 18,988.. 0
73 Van Horsley 2,000,000 Commercial Real Estate HFI 09/18110 09/18110
90 Mitch Bennett 835,834 Coinniercial Real Estate HPI 09/01110 11101/11
69 10hn Mcm:hant 617,271 Commercial Real Estate HPI 09122110 . 04/22111
63 . Van Horsley 581,698 Commercial Real Estate HFI 09128110 09128110
64 area Atkinson 486
1
512 Commercial Real Estate HFI 09127110 09127110
6O-Days 4.521,316 ..
98-Days - Still Accru 0 0
Non-Accrual 117 L Gerry Gilmore $ 4,915,769 Commercial Real Estate HFI 08/05110 01lOS/13
Non-Accrual 185 n:Gerry Gilmore $ 3,Soo,OOO Commercial Real Estate HFI 05129110 OS129110
Non-Accrual 117 L Gerry GiJmore $ 2,738,796 Commercial Real Estate HFI 08/05110 011OS/13
Non-Accrual 86 Mitch Beonett $ 2,684,835 456,422 Commercial Real Estate HFI 09105110 09105/10
Non-Accrual 185 :: Gerry Gilmore $ 2.495,293 conim.ercial Real Estate HFI OS129110 . 05129/10
Non-Accrual 0 Michael SaUD S 2,455,000 417,350 Commercial Real Estate HFI 12/01/10 07101/11
Non-Accrual 0 nMitch Bennett $ I,S53,834 939,010 Commercial Real Estate HFI 10101112 10101/12
Non-Acmual 329 Mitch Bennett $ 1,467,325 220,099 Commercial Real Estate HFI 011OS/10 09105/10
Non-Accrual 0 Gerry Gilmore $ 1,2S0,OOO 625,000 Commercial Real Estate HFI 1213]/11 12131111
Non-Accrual 0 Michael SaUD $ 582,402 99,602 Commercial Real Estate HFI 12/01110 07IOJnl
Non-Accrual 124 Mitch Bennett $ 260,511 67,311 Commercial Real Esbite HFI 07129110 07129110
Non-Accrual 124 Mitch Bennett $ 228,728 38,884 Commercial Real Estate HFI 07129/10 07129/10
Non-Accrual 270 John Stramel $ 21100100 1
1
187,800 Commercial Real Estate - CJ HFI 03/05110 06/06133
Non-Aemtal 26,232,4!JI2. 4,051,478
Page40ofG6
1--1
en
en
U1
United western Bank - CODSOlidated .
Past Due - Community Bank: Loans
Days
Nou-Ac:cnt81 Past Loau#
RESIDENTIAL REAL ESTATE
3O-Days
39
33
49
41
Borrower
63
6O-D8YS
9O-DaJS - StJU Ac:cn
Non-Accrual 304
Non-Accrual 86
Non-Accrual 178
Non-Accrual 275
Non-Acenal
November 30,2010
LoaJiOBicer UWB Daimee impairments Collateral Class Next Due Maturity
Carl KuhI:man 6.611,407
Gerry Gihnore 500,000
Carl Kuhlman .500,000
Greg Atkinson .65.002
Michael Saun
Gmy Gilinore
Mitch Bennett
TimOstic
GenyGi]mON
$
$
S
$
.7,676,409
500,000
500,000
-0
5.475.385
636,569
592;500
137.837
6,842.291
o
o
o
Residential Real Estate
Residential Real Estate
Residential Real Estate
Residential Real Estate
Residential Real Estate
Residential Real Estate
50,000 Residential Real Estate
Residential Real Estate
Residential Real Estate
50,000
HFI
HFI
HFI
IfFI
10122110
10128110
10112110
10120110
04122111
04128112
07l1ll11
10120110
HFI 09128110 12/28110
HFI 01/30110 06130110
HFI . 09105110 09105110
HFI 06105/10 07129/10
BFJ 02128110 12/30110
P/I&1'41of66
I-'
00
00
en
United Western Bank - Consolidated
Past Due - Community Bank Loans
Days
Non-Accrual Past Loan # Borrower Loan Ofticer UWB Balance Impairments CoDateral

30-Day$ o o
61 Gilmore . _ .6.200.000 Multi-Family
fiO-Days 6.200,000 0
gO-Days - Stili Accr 0 0
Non-Accrual 213 Michael Saun 2,310,000 231,000 Multi-Family
Non-Accraal 152 icbae1 Saun l.466,119 Multi-Family
Non-Aeerual 3.776,119 231.000
COMMERCIAL
44 VmHors1ey 2,840,171 Commercial
57 i Cari Kuhlman 2,050,000 Commercial
44 VaoHorsley 1,243,529 Commercial
60
JohnFiedler . 440,678 Commercial
46
BmDuston 304,275 Commercial.
40
Carl Kuhlman 215,000 Commercial
41
(]reI Atkinson 65
1
250 Commercial
3O-Days
7,158,9OZ 0
74 ; John Merchant
149;198 Commercial
83
John Fiedler 100,000 Commercial
76
BretDuston 841247 Commercial
fiO-Days
333,445 0
133 Gerry 0iIm0re 1,405,766 Commercial
123 Greg Atkinson 430,282 Commercial
123 1001000 Commercial
9O-Days - StID Accr
1,936.048

November 30. 2010
Class Next Due MaturitY
HFI 09130/10 09130/10
F[fI 05ADI/I0 07101/16
ltFS 07ADI/10 04101111
HFI 10117110 12117110
HFI 10104110 10104110
F[fI 10117110 12117110
F[fI 10101110 11101110
HFI 10/fSIl0 02I151l1
HFI 10121110 10121110
F[fI 10120110 10120110
HFl 09117/10 09/17110
HFI 09/08/10 03AD8Ill
BFI 09/15110 02115111
HFI 07120110 07120110
HFI 07130/10 07130110
HFI 07130110 07130/10
Page 42 of 66
United Western Bank - Consolidated
November 30.2010
Past Due - Community Bank Loans
Days
Non-Accrual Past Loan # Borrower Loan Officer UWBBaiance Imeairments Collateral
Class Next Due Matoritv
Non-Accrual 117
itch Bennett 1,298,079 Commercial HFI 08/05/10 09105110
Non-Accrual 0 0hn Merchant 892,582 Commercial HFI 12126/10 03126/11
Non-Accrual 117
itch Bennett 429,895 Commercial HFI 08/05/10 09/05/10
Non-Accrual 0
ohn Merchant 230,996 Commercial HFI ]2118/10 09118112
Non-Accrual 613 rad Good
220,470 93,881 Commercial HFI 03127109 03127/09
Non-Accrual 105 ohn Merchant
191,500 Commercial HFI 08/17/10 09/17/10
Non-Accrual 152 rad Good 127,716 Commercial HFI 07/01/10 04101113
Non-Accrual 613 rad Good 122,428 95,137 Commercial HFI 03127/09 03127/09
Non-Accrual 455 ohn Merchant 100,000 Commercial HFI 09/01/09 09/01/09
Non-Accrual 28 ohn Merchant 85,304 Commercial EFI 11102110 02101/11
Non-Accrual 0 ohn Merchant 29,025 Commercial HFl 12123/10 10123/11
Non-Accrual
3.727.995 189,018
CONSUMER LOA
40 Michael Saun 2.000,000 Consumer HFI 10/21110 12/08/10
60 William Stone 46
1
675 Consumer HFI 10/01110 10101/13
30-ay9 2,046,675 O.
f-I
ex>
ex>
GO-Days 0 0
-.....J
90-Days - StiD 0 0
Non-Accrual 25 Gerry Gilmore 264,102 Consumer HFT 11105110 1115110
192 Greg Atkinson 9,690 Consumer HFI 05/22110 6122110
Non-Accrual 273,792 0
Page 43 of 66
United Western Bank Consolidated
November 30. 2010
Past Due SBA Loans &. SBA Investment Loans
Days
SBAGrty SSA
Non-Accrual Past Loan # Borrower AC!l!!isition UWBBalance Iml!airments CoUaternI Class Ne,,1; Due Maturill: % Gunran!)'
SBA ORIGINATED - COMMERCIAL REAL ESTATE
56 SBA 54,091 Commercial Real Estate HFI 10/05/10 06120/16 75.0%
31 First Commercial
1 9 ~ 3 8 Commercial Real Estate HFI 10/30/10 08130116 75.0%
30-Days
73.429 0
0
~
. ~
(iO-Days
0 0
0
90-Days - Still Accrui
0 0
0
Non-Accrual 107 United Western Bank 3,703,968 Construction HFl 08115110 08/31/10 0.0",1,
Non-Accrual 725 United Western Bank 3,085,000 308,500 Commercial Real Estate HFI 12105/08 08131133 0.0%
Non-Accrual 91 United Western Bank 1,421,075 Construction HFJ 08131/10 08131110 0.0%
Non-Accrual 148 United Western Bank 1,336,673 o Commercial Real Estate HFS 07/05/10 01/05129 O.O"A.
Non-Accrual 148 United Western Bank 716,965 Commercial Real Estate HFS 07/05/10 03/06131 0.0%
Non-Accrual 86 SBA 222,171 Commercial Real Estate HFI 09/05/10 06103/32 75.0%
Non-Accrual 178 SBA 174,511 66.025 Commercial Real Estate HFI 06/05/10 10/01131 75.0%
Non-Accrual 107 United Western Bank 166,784 Commercial Real Estate HFS 08/15/10 08131/10 0.0%
I-'
Non-Accrual 209 A1F 55,121 Commercial Real Estate HFI 05/05(10 11105/19 75.0% 45.329
CO
Non-Accrual 44 Pacific Southwest 32,027 Commercial Real Estate HFI 10117110 12117/12 75.0% 32,027
CO Non-Accrual 10,914,295 374.525 77.356
CO
SBA ORIGINATED - COMMERCIAL
30-Days 0 0 0
6O-Days 0 0 0
90-DllY5 - StiU Accruing 0 0 I)
Non-Accrual 139 SBA 63,574 Commercial HFI 07/14110 06114/12 75.0%
Non-Accrual 117 SBA 57.172 Commercial HFI 08105110 12117/16 75.0%
Non-AcCI1llll 298 SBA 17,581 Commercial HFI 02105/10 11105117 75.0%
Non-Accrual -17 First Commercial 620 Commercial HP! 12117/10 02114114 80.0% 620
Non--AcCl'uIIJ 138.948 0 620
Page 44 of 66
United Western. Bank - Consolidated
Past Due - SBA Loans & SBA Investment Loans
November30,2010
Days. SBA Grty SSA
Non-Accrual Past Loan # BOlTOwer Affluisllion UWB Balance .lmpalrmenis Collateral Class Next Due Maturity % Guaranty
. SBA GUARANTEES PURCHASED COMMERCIAL REAL ESTATE
39 232,453 Commercial Real Estate HFI 10124110 04115121 100.0% 232,453
31 168
1
637 CODIIIIClCial Reill Bstate HFI 10126110 09/15123 100.0% 168.637
3D-Days 401,089 0 40l.O8
86 453
1
605 Commercial Real Bstate HFI 09/07110 09/15126 100.0% 453.605
6O-Days 453.605 0 453,605 - .
9O-Da)'s - StlD Accruin 0 0 0
110 7851045 Conunescial Reill Estate HFI 06115/10 10115130 100.0% 785,045
Non-AeerDllI 785,045 0 785.045
SBA GUARANTEES PURCHASED - COMMERCIAL
3D-Days
0 0
0

OJ
6O-Days
0 0
0
OJ
\.0
9O-Days - Still Accrnlng
0 0
0
Non-Aeerual
0 0
I)
Pogo 4S of 6Ii
.......
(X)
1.0
o
United Western Bank oConsolidated
Past Due - Single-Family Loans
November 30, 2010
SINGLE FAMILY PORTFOLIO DELINQUENCY Ba1llllce Impairments
Guaranteed
\ UNITED WESTERN BANK
30-DAY CONVENTIONAL
Held For Investment
Held For Sale
60-DAY CONVENTIONAL
Held For Investment
Held For Sale
!)O-DAY CONVENTIONAL (NON-ACCRUAL)
Held For Investment
Held For Sale
30-DAY FHA & VA
Held For Investment
Held For Sale
Harbor (New A m e r i ~
6O-DAY FHA & VA
8 Loans
24 Loans
1 Loans
19 Loans
11 Loans
57 Loans
o Loans
55 Loans
o Loans
347,013
2,084,971
2,431,984
19,470
2,520,151
2.539,620
3,457,165
10
z
392,858
13,850,024
o
3,064,970
o
3,064,970
0
0
0
0
0
0
0
0
0
o
o
o
o
0
0
0
0
0
0
0
0
0
o
2,733,838
o
2,733,838
Held For Investment 0 Loans 0 0 0
Held For Sale 21 Loans 1,361,783 0 1,180,860
Harbor (New America) 1 Loans 88,958 0 88,958
1,4S0,741 0 1,269,818
90-DAYFHA&VA
Held For Investment 0 Loans 0 0 0
Held For Sale 66 Loans 4,773,620 0 4,105,696
Harbor (New America) 6 Loans 248,487 0 248,487
5,022,107 0 4.)54,184
Page 46 of 66
I-'
00
c.o
I-'
United Western Bank - Consolidated
Past Due- Single-Family Loans
SINGLE FAMILY POR.TFOLIO DELINQUENCY Balance impairments
MATRIX FINANCIAL SERVICES .
CONVENTIONAL & USDA
30-Day Conventional o Loans 0 0
6O-Day Conventional 1 Loans 47.873 0
90-Day Conventional (Non-AccnW) 6 Loans 183,622 0

30-Day FHA & VA 1 Loans 46,187 0
6O-DayFHA&VA 10 Loans 596,740 0
90-DayFHA&VA 3 Loans 97.772 0
REBOOKED GNMA
30-Day FHA &. VA
6 Loans 378,915 0
60-Day FHA &. VA
4 Loans 196,.207 0
90-Day FHA &. VA
80 Loans 5,038,536 0
November 30,2010
Guaranteed
0
0
0
46,187
491,821
33,113
343,507
196,207
4,706,519
Page 47 of6Ci
1-1
00
\.0
N
United Western Bank - Consolidated
Asset Quality Portfolio SUIIlIl1lIly
-- ---_ .. _------
Total Loan PortfoUo Sep-Ol) Dee-D9 Mar-l0 Junl0 Sep-l0
Total Loan PortfoUo
S 1,475,606,078 S 1,407,115;706 $, 1,375,279,713
S 1,338814,638 $ 1,281,019314
Watch 34,816,416 70,266,393 72,694,662 109,137,200 90,989,849
% Watch 236% 4.99% 5.19% 8.15% 1.10%
Special Mention 36,207,667 42,270,270 47,042,920 63,394,395 59,784'!)93
% Spceiol Mention 2.45% 3.00% 3.42% 4.74% 4.66%
Substandard 120,495,066 134,749,780 157,929,249 155,400,631 164,248,798
Impainnent (871,473) (189,018) (5,912,615) (4,088,941 ) (4,327..541)
% Substandard 8.11% 9oS6% 11.05% 11.30% 12.41%
Doubtful 3,416,090 5,197,858 7,099,080 7,310,212 8,619,520
Impainnent (5,291) (17,358) (2,144,060) (984,433) (2.886,390)
% Doubtful 0.23% 0.37% 036% 0.47% 0.45%
Total Criticized & Classified 159,242,059 182,011,532 204,014,574 221,031,863 225.439,380
% Criticized & Classified 10.79% 12.94% 14.83% 16.51% 17.58%
Total Classified 123,034,392 139,741,262 156,971,654 157,637,468 165,654,387
%Clussified 8.34% 9.93% llAI% 11.17% 12.92%
Non-Accrual 39,48J,832 54,241,748 68,793,605 70,061,364 62,168,732
% Non-Accrual 2.68% 3.85% 5.00% 5.23% 4.85%
Past Due 90+ Days & Non-Accrual 46,685,776 64,108,719 83,226,483 78,525,268 71,862,580
% Past Due &. Non-Accrual 3.16% 4.S6% 6.OS% 5.87% . 5.61%
ACLSummary
General Valuation Allowance 28,490,236 35,432,000 35,698,326 40,586,625 45,095,099
Specific Valuation Allowance 876,764 1,238,000 8,056,674 5,073,375 7,213,931
TotalACL 29,367,000 36,670,000 43,755,000 45,660,000 52,309,029
ACL I Gross Loans 1.99% 2.61% 3.18% 3.41% 4.08%
ACL I Criticized & Classified 18.44% 20.15% 21.45% 20.66% 23.20%
ACL I Classified 23.87% 26.24% 21.87"10 28.91% 31.58%
ACL I Non-Accrual 74.38% 61.60"10 63.60% 65.17% 84.14%
ACL I Past Due 90+ Days & Non-Accrual 62.90"10 57.20"10 52.57% 58.15% 72.79%
YTD Charge OftS (10,816,000) (18,429,000) (7,476,000) (10,721,000) (28,003.000)
YTD Recoveries 92,000 115,000 34,000 116,000 190,000
YTD Net Charge Off (10,724,000) (18.3]4,000) (7,442,000) (10,605,000) (27,813,000)
TID Provision Expense 20,540,000 35,618,000 14,785,000 20,345,000 40,227,000
UWB REO Portfolio $ 5,479,774 S 4,294,834 $ 4,892,109 $ 4,198,982 S 3 , 3 1 0 ~ 3
Single Family 2,008,715 1,947,802 2,545,077 1,851,950 1,962,421
Non-Residential Commercial Real Estate 1,241,138 1,008,638 1,008,638 1,008,638 37,510
Land 2,229,921 1,338,394 1,338,394 1,338,394 1,310,463
DeC Boldings REO Portfolio S 7,654,681 ,$ 12,172,411 $ 16,698,322 $ 9,744,178 S 20,413,133
Single Family 757,975 0 0 0 0
Construction Residential 6,896,706 8,930,462 9,183,534 3,089,925 3.927,125
Non--Residential Commercial Real Estate 0 0 4,644,730 3,829,400 6,309,265
Multi-Family 0 1,359,813 1,175,000 0 0
Land 0 1,882,135 1,695,058 2,824,853 10,176,743
MFSe Holdings REO PortfoHo S 190,232 S 332,478 $ 166,203 $ 7.76,877 S 132,214
Totnls rcllcct outslanding loan b)lals only and do not include unlimdcd commillllcnis or other assets
November 30, 2010
Oct-l0 Nov-l0
$ 1,278,!)43,861 $ 1,253,970,319
91,375,734 87,607,358
7.14% 6.99%
61,790,286 56,619,929
4.83% 4.52%
159,650,306 163,212,183
(4,275,302) (4.893.726)
12.15% 12.63%
7,819,906 13.093,228
(2.751,810) (5,479.065)
0.40".4 0.61%
222,233,385 222,552,549
17.38%
17.75""
160,443,099 165,932,620
12.54% 13.23%
75,317,282 91,128,670
5.89% 7.27%
89,041,247 103,223,132
6.96% 8.23%
44,056,767 42,725,166
7,027,113 10,372,791
51,083.879 53,097,957
3.99% 4.23%
22.99% 23.86%
31.84% 32.00%
67.82% 58.21%
57.37"10 51.44% i
(28,650,000) (30,368.000)1
239,000 248,000 I
(28,411,000) (30,120,000)
40,316,000 44,059,000
$ 3,635,010 $ 3,535,471
2,385,599 2,286,060
37,510 37,5JO
1,211,901 1,211,901
S 21,981,968 S 25,341,372
0 0
3,927,125 7,286,529
7,878,099 7,878,099
0 0
10,176,743 10,176,743
$ 65,275 $ 124,8Z3
Pagll48 of66
I-'
00
1..0
W
United Western Bank - Consolidated
Asset Quality Portfolio Summllly
Total Loan PortfoHo
and Devek;"ineltt,' '
Guaranteed Portion of Loans (unsold)
Watch
% Watch
Special Mention
% Special Mention
Substandard
Impairment
% Substandard
Doubtful
Impairment
%DOIIb1ful
Total Criticized & C1assifted
% Crilicized & Classifred
Total Classified
% Classified

% Non-Accrual
Past Due 90+ Days & Non-Accrual
% Post Due & Non-Accrual
Sep-09
'" .,', '$;',375669;562
0
10,494,563
2.79%
22,258,282
5.92%
72,451,963
(391,898)
19.18%
2,428,263
(}
0.65%
96,746,610
25,75%
74,488,327
19.83%
16.238,999
4.32%
16,238,999
4.32%
12,691,671
3.70% 6.64%
13,887,842 13,887,842
4.05% 4.94%
85,677,033 90,289,782
0 (4.088,610)
24.96% 30.63%
2,443,779 4,288,118
(}
(2,144,060)
0.7l% 0.76%
102,008,654 102,233,071
29.72% 36.33%
88,120,812 88,345,229
25.67% 31.40%
21,778,651 37,125,808
6.35% 13.19%
22,191,071 37,125,808
6.47% 13.19%
November 30,2010
Jun-lO Sil -10 Oet-IO Nov-iO
."$:',14'itoSS'46Z:S" ," '1'9s)nlo61f :;: $ .', ,177.989 t08
0 (}
0 (}
28,903,629 22,352,384 22,395,310 29,861,612
11.61% 11.42% 11.43%
16.78%
14,808,670 16,756,790 16,830,504 15,223,069
5.95"10 8.56% 8.s9% 8.SS%
81,675,622 60,157,770 59,508,589 52,219,340
{3,115,921) (3.213,298) (3,161,OS9) (2,749.5161
31.54% 29.08% 28.76% 27.79%
2,428,168 0 0 5,454,509
(984,433) 0 (}
(2..727,255]
0.58% O.OO",{, 0.00% 1.53%
94,812,107 73,701,262 73,178,034 67,420,148
38.07% 37.64% 37.35% 3'7.88%
80,003,436 56,944,472 56,347,530 52,197,079
32.12% 29.08% 28.76% 29.33%
34,426,815 19,048,353 31,072,801 34,425,111
13.82% 9.73% 15.86% 19.34%
34.426,815 . 19,048,353 32,722,236 34,425,111
13.82% 9.73% 16.70"1. 19.34%
CQ ... ,: '; s ')59.0: .i4'3S;:S, '63:KiOS;801,':S:tiI4jifi3. "(<<f,$,,:6.36;'659'75&$, " '635 ,,$ "636. 88406
Guaranteed Portion of Loans (unsold) 10,756,019 6,182,886 9,578,773 8,695,721 8,922,742 8,922,742 13,606,553
Watch 9,927,822 30,899,825 25,837,803 48,785,814 42,945,377 42,961,013 42,545,637
%Walcb 1.64% 5.23% 4.0!l% 7.81% 6.75% 6.76% 6.68%
Special Mention 11,308,327 21,002,654 21,179,009 38,249,892 24,499,919 25,687,089 18,257,668
% SpcejPl McnliOll 1.81% 3.SS,*, 3.36% 6.12% 3.85% 4.04% 2.87%
Substandard 23,941,120 28,088,744 45,985,432 45,615,753 71,918,220 68,530,175 17,201,629
Impairment (290,557) 0 (1,634,987) (683,420) (694,225)' (694,225) 0,724,192)
% Subslandrud 3.92% 4.15% 1.03% 1.19% 11.19% 10.68% 11.85%
Doubtful 982,536 0 0 2,100,000 5,697,184 4,903,834 4,903,834
Impairment 0 0 0 0 (2,886,390) (2,751,810) (2,751.810)
% Doubtfill 0.16% 0.00% 0.00% 0.34% 0.44% 0.34% 0.34%
Total Criticized & Classified 35,94],426 49,091,398 65,529,454 85,282,225 98,534,708 95,675,061 95,887,128
% Criticized & Classified 5.95% 8.31% 10.38% 13.65% 15.48% 15.06% 15.06%
Total Classified 24,633,099 28,088,744 44,350,445 47,032,333 74,034,789 69,987,972 77,629,459
% Classified 4.08% 4.75% 7.03% 1.53% ]1.63% 11.01% 12.19%
Non-Accrual 7,583,137 15,411,294 14,952,266 18,260,503 21,509,728 22,101,599 35,173,077
% Non-AecrunI 1.26% 2.61% 2.31% 2.92% 3.38% 3.48% 5.52%
Past Due 90+ Days & Non-Accmal 7,583,137 15,411,294 19,670,030 18,260,503 22,009,728 22,590,839 35,173,077
% Past Due & Non-Accrual 1.26% 2.61% 3.12% 2.92% 3.46% 3.S6% 5.52%
Toln1s rencct oulsUlUc:ling loan totals only and do noL include unfunded commilmcnts or other assels
Page 49 of66
United Western Bank - Consolidated November 30. iOlo
Asset Quality Portfolio Summary
,Total Loan Portfolo
.. ' . ' '>' .:...:' - ':- " ,," ":.j'
Guaranteed Portion of LoaDs (1IIIIOId.)
Watch 2,977,604 2,952,977 9.124,103
% Watch 7.21% 8.03% 23.45% 19.20% 13.'19% 13.82% 13.81%
Special Mention 2,084,690 2,955,451 2.940,720 4,235,231 9,545.835 10']00,466 4.094.668
% Special Mimdoll ' 5.09% 8.04% 7.56%
'.40%
21.84% 23.6S% 9.41%
Substandard 5.660,903 6,322,092 6,321,288 6,318,510 5,341,808 4,478,487 10.678,481
Impairment 0 0 0 0 (231,000) (231,000) (231.000)
%SuIIS1IIIIdatd 13.83% 17.10% 16.24% 14.03% 11.70% 9.75% 24.01%
Doubtful 0 0 0 0 0 0 0
Impairment 0 0 0 0 0 0 0
%Doubtibl 0.00% 0.00% 0.110% 0.00% 0.00% 0.00% 0.00%
Total Criticized" Classified
7,745,594' 9,277,543 9,262;008 10.553,741 14,656.643 14,547,953 14,542,149
% Crillcizcd" Classiflc:d
18;92% 25.24% 23.80% 23.43% 33.54% 33.41% 33.44%
Total Classified 5.660,903 6,322,092 6,321,288 6,318,510 5,110;808 4,247,487 10,447,481
% Clas&lftad
13.83% 17.20% 16.24% 14.03% 11.70% 9.75% 24.02%
Non-Accrual
1,510,903 0 0 0 2,079,000 3,54S,119 3,545,119
.% NIIII-kcnud
3.69% 0.00% 0.lIO% 0.00% 4.76% 8.14% B.I5%
Past Due 90+ Days " Non-Acc.rual
1,510,903 1,468,885 0
o . 2,079,000 3,545,119 3,545,119
1---1
I % Pnt Due" Non-Aecn&al
3.69% 4.00% 0.00% 0.00% 4.76% 8.14% B.I5%
Q)
1.0
:::.
IGuaranteed Portion of Loans (UDSOId)
-, ........ .--- _.)1 .. - ..... --
-ratch
0
. 0 0 0 0 0 0
% Watch
0.00% 0.00% 0.00% 0.00% 0.00% D.OO% 0.00%
Special Mention
0 0 0 0 0 0 0
% SpadalMcntiOll
0.00% 0.00% 0.00% 0.00% .0.00% 0.00% 0.00%
SubstaDdiml
13,392,896 13,722,796 12,500,713 13,265,479 ]4,489,363 14,199,458 14,033,645
Impairment
0 0 0 0 0 0 0
% SulJalaDdanl
437% 4.62% 4.22% 4.51% 5.24% 5.19% 5.16%
Doubtful
0 0 0 0 0 0 0
Impairment
0 0 0 0 0 0 0
% Daublftll
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Criticized &: Classified
13.392,896 13,722,796 12,500,713 13,265,479 J4,489,363 14,199,458 14,033,645
% Crilicizcd ol Ctasaifaad
4.37% 4.62% 4.22'K 4.58% 5.24% 5.19% :1.16%
Total Classified
13,392,896 13,722,796 12,500,713 13,265.479 14,489,363 14,199,458 14,033,645
%Clusiliad
4.37% 4.62% 4.22% 4.58% 5.24% 5.19% 5.16%
INon-Acc.rual
13,392,896 13,722,796 12,500,713 13,265.479 14.489,363 14.199,458 14,033,645
% Non-AacnIal
4.37% 4.62%
4.22% . 4.58% 5.24% 5.19% 5.16%
Past Due 90+ Days &: Non-Accrual
20,596,840 21.708,461 22,215,825 21,729,384 23,683,211 23,794,336 24,192,060
% Past Duc ol Noa-Accrual
6.72% 7.31% 1.49% 1.51% 8.56% 8.70% 8.90%
Past Due 90+ Days " Non-Accrua1-11DgIIIIf8III1I
13,884,364 14,610,348 13,932,317 14,257,045 15,525,3S8 15,137,4J8 IS,098,244
% Past Due ol Non-AccnIaI- U111tUl11B1lCead
4.53% 4.92% 4.70% 4.'3% 5.61% 5.53% 5.55%
Talllls rafIect ou&slalldillg loaD tahIls oal1 and do not include uafimdad COIIIIIIiImcn&s or alhCll' 8IICIs
Paac SOof66

(X)

VI
United Western Baak - Consolidated
Asset Quality Portfolio Summary
Total Lean PortfoHo Sep-09 DeCo09 Mar-lO
November 30, 2010
Jun-IO Sep-lO 9et-lO Nov-IO
CoDiJiiercfal: .... '. .... . ... "... : ... -. , ':. :., :::" .. S ,S,,: .. >$ '. 15U90.6U: . S . 153.197.469
Guaranteed Portion ofLoaus (1IIISOId) 3,823,752 2,050,923 2,566,868 I,OSO,008 5,042,637 5,042,637 7,293,960
Watch 1l,416,428 23,721,920 19,030,193 22,791,318 19,667,170 20,002,510 9, 193,OS7
7.17% 15.39% 12.70% 14.64% 12.47% 12.59% 5.97%
Special Mention 556,368 4,424,323 9,035,350 5,830,635 8,982,449 8,972;1.27 19,044,524
% Special Mention 0.35% 2.87% 6.03% 3.74% 5.70% 5.65% 12.37%
Substandard 5,048,184 939,117 2,832,034 8,525,266 12,061,305 12,659,805 8,805,296
Impainnent (189,018) (189,018) (189,018) ,(289,600) (189,018) (189,018) (189,018)
% Sublll8lldDrd 3.05% 0.49% 1.76% S.l9% 7.53% 7.85% 5.60%
Doubtful 5,291 2,754,078 2,810,963 2,782,044 2,922,336 2,916,072 2,734,885
Jmpainnent (5,291) (17,358) 0 0 0 0 0
%DoubIIUI 0.00% 1.78% 1.8&% 1.'19% 1.85% 1.84% 1.'1&%
Total Criticized It Classified 5,415,534 7,911,142 14,489,329 16,848,344 23,777P72. 24,359,087 30,395,686
% Crilicind &: Clmitied 3.40% 5.13% 9,61% 10.81% 15.08% 15.33% lU5%
Total Classified
4,859,166 5,453,979 11,017,709 14,794,623 15,386,859 11,351,163
% CIusIfiecl
3.0m .2.26% 3.64% 7.os% 9.3&% U8% 7.38%
Non-Accrual
755,897 3,329,008 4,214,819 4,108,567 4,761,956 4,124,513 3,677,925
%Nan-Amual 0.47% 2.16% 2.81% ' 2.64% 3.02% 2.60% 2.39%
. Past Due 90+ Days It Non-Accrual 755,897 3,329,008 4,214,819 4,108,567 4,761,956 6,114,925 5,613,973,
% Pall Due &: Non-Accrual
0.47% 2.16% 2.81% 2.64% 3.01% 3.85% 3.65%
ColISIimet .. ..
'$' '" lS ....t80.62'-: '.:"J .:: ," S :". : -:Z'iS'iO:Ot: .' 'jS., ... '$ .": ;J '" 04j!.uZ'N !

Guaranteed Portion of Loans (lIDlIOId)
0 0
' 0
0 0 0 0
Watch
0 0 9,804 9,690 0 0 0
% Walch
0.00% 0.lIO% 0.04% 0.114% 0.00% 0.00% 0.00%
Special Meation
0 0 0 269,967 0 0 0
" SpacIal Mclltion
0.00% 0.00% 0.00% 1.00% 0.00% 0.00% 0.00%
Substandard
0 0 0 0 280,333 273,792 273,792
ImpaiIment
0 0 0 0 0 0 0
% SubSlllDdard
0.00% 0.00% 0.00% 0.00% 1.06% 1.05% 1.05%
Doubtful
0 0 0 0 0 0 O
Jmpainneilt
0 0 0 0 0 0 0
%DoubltUJ
0.00% 0.00"- 0.00% 0.00% 0.00% 0.00% 0.00"-
Total criticized It Classified
0, 0 0 269,967 280,333 273,792 273,792
% CriliciRd & Cfauified
0.00% 0.00% 0.lIO% 1.00% 1.D6% !.OS% 1.115%
'ocal Classified
0 0 0 0 280,333 2.73,792 273,792.
% Classified
0.00% 0.00"- 0.00"- 0.00% 1.06% 1.05% I.om
Non-Accrual
0 0 0 0 280,333 273,792 273,792
%NOII-Accrual
0.00% 0.00% 0.011% 0.00% 1.06% 1.05% I.Om
Past Days It Non-Accrual

0 0 0 280,333 273,792 273,792
% Past Due &: NoD-Accrua1
0.00% 0.00% 0.00% 0.00% 1.06% 1.05% 1.05%
Totals refJeot OUIIUIIIdiIIgloan totals 0Dly IIIId do DOl iDclude commitmenls or other ISSCIS
PapSlof66
United Western Bank - Consolidated
November 30.2010
SFR 1-4 Loan Portfolio
Iial Portfolio
Conventional
# of Loans
% orrota! 0ut5llll1ding $
Gov't Insured
# of Loans
% oiTota! Outstanding $
.- ,,-
.1
13.12%
Total Outstanding $ ofall SPR
.. 272.441,510 - .
__ 0
# of Loans
2,347
255,244,630 " mi:l 250,521,870
2,246
2,113" '--1
2,085
SFR Properties in REO

2,198,947. . 2,157,617 2,094,635 if.f.: 2,410,883
# of Loans
19 22
21 21
Average Note Rate
Weighted Average
Average Remaining Term
Weighted Average
Days
Conventional

...
MI7.",.

2,563,615
# of Loans S6 . 51 . 4S .
37
% ofTolII! Outstanding S 2.29% 2.58% 1.56%
1.02%
Gov'1 Insured
,
3,348,242 . . 3,414,994 . 3,512,395 : ., . 3,490,071
I-l
# of Loans 49 S4 57 62
00
% onolll! Outstanding $ __ .' .Jif_ 1.03%. . 1.19% 1.29"'{' 1.31% 1.39%
\D
Q)
I Conventional

,.348 ... ,.

1,251,573 ; . 2,698,348
#efLoans 14 6 10 9 20
% ofTollll Outstanding S 0.41% 0.30% 0.39% . 0.49% 1.08%
Gov't Insured 1,783,057 . 3,189,994 2,284,414 .' 2,351,570 2,243,688
#ofLoans 25 49 37 39 36
% ofTolol OUlSlal1ding $ 0.55% 1.11% 0.84% 0.92% 0.90%
90+ Days
Conventional (Non-Accrual)

11.,.' .....

'''.''''.
14,033,645
. .
# of Loans
.,
72 80
70 .
74
% of 1'0l1li Outstanding S
.
3.43% . 4.65% 4.59% 5.68% 5.60"/6
Gov't Insured 6,276.759 7,180.083 9,393,788 . 10,061,084
# of Loans
: 8" .
107 114 144 154
% ofTolIII Outstanding $ 1.92% 2.49% . 3.45% . .
4.02%
ltal Delinquency
Conventional 20,]72,326 21,676,680 17,808.893 19,295,608
# of Loans 142 137 125 131
% orrolal Outstanding $ 6.19% 753% 6.54% 7.33% 7.70%
Gov't Insured 11.408.057 13.785,071 15,190,597 15,794.843
# of Leans 181 217 238 252
% ofTata! Outstanding $ 350% 4.79"'{' 5.58% 6.300A
All Loans 31,580,384 35,461,751 32,999,491 35,090,451
# of Loona 323 354 363 383
% ofTolll1 Outstanding S 9.68% 12.31% 12.1I% 14.01%
PageS2of66
1-1
<Xl
\.0
.......
United Western Bank - Consolidated
SFR 1-4 Loan Portfolio - Top 10 SWIlDlBIY
November 30. 2010
DelInquent Loan Statistics:
Non-Accrual 74 14,033,645.44
90+ days (Accruing) 158 10,178,004.75
60-days 19 2,650,474.77
3O-days
36
Total 287 29.425,873.86
Non-AcCl1JllI & 9D-day 232 24,212,550.19
wlo Guaranteed Loans 74 13,990,699.93
LargerLoans ($2SOm+) 29 12,086,529.48
Larze Loan Reflam:e Amount 250,000.00
Top 10 Loan Balances in S (dellaqueutlDIIDlIlJ&hlillrted)
BOlTOWl'lI' Balance State SeMcer



















8,959,998.96 3.58% of.w ponfollo
5,755,822.94 2.3% of_I portlblio
---_. ___ n_I ____ I_._ ... MII __ ___ .. ___________ n _________ "'!""',tt_ ...... _. ____ n_ ...... -.. ........ __ ............................ _--.........._ ...................... ......--..
Top 18 CoaventioDBI !l0+ (NOD-Accrual) LoaD BaIaaees: Top III ComeDtioaal 60-Days Put Due:
Top 10 Past Due:
Bonower Balance State Servicer Bon wer Balance State Servicer BOI1'Ower Balance State Servicer











5,730,301.86 2.29% oflOIBI porIfalio 2,372,608.59 0.95% oflolll portlblio 1,949.108.55 0.78% of total ponfollo
.. _ .... __ __ _ ........ __ .. _ ___ .. _____ .. _ ..... 11_ ........ _______ ........................... __ ............ n ................ ___ ............. _.
Top 18 Government Insured!llH- Days Past Due:
Borrower BalanCe Slate Servicer



1.460,571.86 0.58% of.w port1'bIIo
Top 10 Government Insured 6G-Days Past Dae: Top 10 GoverameDt Insured 3o-Days Past Due:
. BQll'OWer Balance State Servicer Borrower Balance Slate Service:






992,144.57 0.4%oflOlalporttbJio .1,018,713.51 0.41% oflOlal porUbIio
..
,. ___ 10__ ___ 11_____ _______ ____ _________ ,. 111' np- _ ............... ___ ._ ....
Page 53 of66
Redacted per 12 U.S.C. 3401 et seq.
.......
00
1..0
00
United Western Bank - Consolidated
November 30.2010
SFR 1-4 Loan Portfolio Geographic Information
Entire SBO Residential Loan Portfolio:
Total States!Districts Represented:
48
Total Loans 2,085 250.521,870.08 Top 10 Del1nqneney in Total $
Top 10 Delinquency as a % of State Loan Portfolio:
Largest Concentrations:
Largest Concentrations (balances):
Largest Concentrations (lIS B. % ofslnle loon portfolio):
California 359 81,328,195.22 34.9% Missouri 81 4,182,685.73 41.2% Virgin Islands I 55.556.98 100.0%
Georgia 153 20,635,424.96 8.2% New Mexico 49 3,889,186.63 35.2% Nevada 5 195,636.46 69.6%
minois 99 17,368,462.01 6.9% Georgia 31 3,669,941.35 17.8% Arkansas 2 53.141.91 54.3%
Florida 116 13,163,900.60 5.3% Michigan 28 2,136,556.55 46.8% North Carolina 5 506,585.59 47.2%
Texas 240 11.633,414.88 4.6% Florida 22 2,621,463.34 20.0% Missouri 81 4,182,685.73 47.2%
New Mexico 170 11.061,546.27 4.4% nIinois 18 2,305,652.21 13.3% Michigan 28 2,136,556.55 46.8%
Arizona 58 8,908,068.68 3.6% Arizona 16 2,236,074.32 25.1% New Mexico 49 3.889,186.63 35.2%
Virginia 39 8,870,671.63 3.5% California 6 1,813,601.99 2.1% Connecticut 4 705,765.25 32.6%
MISSOuri 113 8,863,320.78 3.5% Texas 35 1,680,913.05 14.4% New Jersey 9 1,356.361.21 31.0%
Colorado 33 7,222,776.74 2.9% Colorado 3 1,416,486.51 19.6% Ohio 13 1,021,614.17 29.8%
1,440 195,055,781.77 77.9% 289 26,558.561.68 197 14,703,090.48
-----.._ .. _ ._ .. _'.-_ ... - .. --._-._,,_ ...-.. - ...... __ ._._ . ...-_ .._ .._.-.._-._ .....__ .._ .._ .._ ..__ .. _.-.._._,,_ ..__ .._"_._ .._ .._ .._ . _._-" ...... , ... ,_ ............_._ ..._IOftt. ___ ._""'I_"'". .... _n ....' __ H_._" ........ n_ ..........
CODventional90+ (Non-Accrual) Loan Concentrations:
Total StatesIDistricts Represented: 23
Total Loans 74 14,033,645;44
Largest Concentrations (>5% ofNon-Atcrualloans):
. Florida 8 2,031,898.71
California 4 1,712,955.77
Colorado 3 1,416,486.51
Georgia 8 1.226,627.69
New Jersey 7 1,136,337.73
Illinois 4 ),041,745.99
Arizona 3 ] .035,386.62
Virginia 2 936,361.26
39 10.537,800.28
Government Insnred 90+Days Loan Concentrations:
Total StatesIDistricts Represented: 22
Total Loans 154 10,061,083.86
Largest Concentrations (>5% of Government 90+ loans):
New Mexico 32 2,608,473.16
Missouri 34 1,766,130.06
Michigan 19 1,471,720.14
Arizona 12 1,125,638.83
Georgia 9 726,195.09
Illinois 8 532,382.34
Texas 11 527,424.76
14.5%
12.2%
10.1%
8.7%
8.1%
7.4%
7.4%
6.7%
75.1%
2S.9"'{'
11.6%
14.6%
11.2%
7.2%
5.3%
S.2%
125 8,757,964.38 87.0%
Conventional6o..Days Past Due Loan Concentrations:
Total StateslDistricts Represented: 15
Total Loans 19 2,650,474.77
Largest Concentrations (>5% of conventiol18l6O-day loans):
Michigan I 418,241.11 15.8%
Connecticut 2 390,270.19 14.7%
Ohio 3 323,342.27 12.2%
Indiana 1 303,785.03 11.5%
Maryland 1 259,015.95 9.8%
Alabama 1 225,576.26 8.5%
Newlersey 1 200,846.29 7.6%
Virginia 1 150,227.07 5.7%
Georgia 1 148,428.14 5.6%
12 2,419,732.37 91.3%
Government 60-Days Past Due Loan Concentrations:
Total States!Districts Represented: 12
Total Loans 37 2,291,561.32
Largest Concentrations (>5% ofOovemment 6O-day loans):
Missouri 17 862,911.64 32.6%
New Mexico 7 571.641.51 21.6%
Georgia 2 245,940.06 9.3%
Ohio 2 150,142.76 5.7%
28 1,830,635.97 79.9%
Conventlonal30-Days Past Due Loan Concentrations:
Total States!Districts Represented: 20
Total Loans 36 2.562,848.90
Largest Concentrations (>5% of coovelltional3O-day loans):
Georgia 5 798,148.79 31.1%
Illinois 1 473,079.58 18.5",1,
North Carolina 1 289,506.13 1l.3%
Texas 8 242,089.27 9.4%
IS 1,802,823.77 70.3%
Government 30-Days Past Due Loan Concentrations:
Total StateslDistricts Represented: 14
Total Loans 62 3,490,071.41
Largest Concentrations (>5% ofGovemment 30-day loans):
Missouri 24 1,308,975.10
New Mexico 8 557.801.14
Georgia 6 524,601.58
Texas 7 316,072.50
Michigan 3 190.070.87
37.5%
16.0%
15.0%
9.1%
5.4%
48 2,897,521. 79 83.0%
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Page S4 of 66
United Western Bank- Consolidated
November 30,2010
Non-Accrual Loans - Detail
Top 10 Non-Accrual Loans
Borrower Loan LOlln Officer UWB Balonee ImEalrment Guaranteed Portfolio Class
Mitch Bennett $ 12,561,022 $ Land HFI
Michael Saun $ 5,765,001 $ 1,008,875 $ Land HPI
Gerry Gilmore $ 5,475,385 $ Residential Real Estate HPJ
Anthony Codori $ 5,454,509 $ 2,727,255 $ Construction - Commercia' HFI
Gerry Gilmore $ 4,915,769 $ Commercial Real Estate HFI
United Western Bank $ 3,703,968 $ Commercial Real Estate HPI
Gerry Gilmore $ 3,678,939 $ 735,788 $ Land HFI
Gerry Gilmore $ 3,500,000 $ Commercial Real Estate HFI
United Western Bank $ 3,085,000 $ 30g,500 S Commercial Real Estate HFI
Ge!!I Gilmore S 3,000,000 $ 600,000 $ Construction - Multi-Famil HFI
$ 51,139,593 S 5,380,418 $
Community Bank POl'trolia
Borrower Loan Loan Oftlcer UWBBalanee Iml!airment Matur!!! CoUateraJ Class Next Due
Mitch Bennett S 12,561,022 07131/10 Land HFI 07131110
Michael Saun S 5,765,001 $ 1,008,875 06l01l10 Land HFl 06/01110
......
Gerry Gilmore S 5,475,385 "06130/10 Residential Real Estate HFI OmOliO
00 Anthony Codori $ 5,454.509 $ 2,727.255 09130112 Construl;tion - Commercia' HFI 12115/09
~
Gerry Gilmore $ 4,915,769 01105113 Commercial Real Estate HFI 08105110
~
Gerry Gilmore S 3,678.939 $ 735,788 07115/11 Land HFI 07fl5fll
Gerry Gilmore S 3,500,000 05129110 Commercial Real Estate HFl 05129110
Gerry Gilmore $ 3,000,000 $ 600,000 10128/11 Constroction - Multi-Famil HFI 11128/10
Gerry Gilmore $ 2,738,796 01105/13 Commercial Real Estate HFI 0810S/IO
Mitch Bennett $ 2,684,835 $ 456,422 09/05/10 Commercial Real Estate HFI 09/05/10
Gerry Gilmore S 2,495,293 05129110 Commercial Real Estate HFI OS/29110
Michael Saun $ 2,455,000 $ 417,350 07101111 Commercial Real Estate HFI 12101110
Michael Saun $ 2,310,000 $ 231,000 07101116 Multi-Family HFJ 05/01/10
Mitch Bennett $ 1,553,834 $ 939,010 10/01112 Commercial Real Estate HPI 10/01112
Mitch Bennett S 1,467,325 $ 220,099 09/05/10 Commereial Real Estate HFI 01/05/10
Michael Saun S 1,466,119 04/01111 Multi-Family HPS 07101110
Gerry Gilmore $ 1,320,000 07125109 Construction - Residential HFI 01125109
Mitch Bennett :II 1,298,079 09105'10 Commercial HFI 08r05/iO
Gerry Gilmore :II 1,250,000 $ 625,000 12131111 Commercial Real Estate HFl 12131/11
Michael Saun :II 1,195,000 $ 143,400 09/01109 Construction - Residential HFI 08/01/09
lohn Merehant S 892,582 03126/11 Commercial HFl 12126/10
Gerry Gilmore :II 724,999 S 126,875 10128/11 Construction - Multi-Famil HFI 10128/11
Mitch Bennett :II 636,569 $ 50,000 09105/10 Residential Real Estate HFI 09/05110
TimOstic $ 592.500 07129/10 Residential Real Estate HFI 06105/10
Michael Saun $ 582,402 $ 99,602 07/01111 Commercial Real Estate HFI 12101110
Mitch Beunett $ 429,895 09105110 Commercial HFI 08105/10
Gerry Gilmore $ 264.102 11105110 Consumer HFI 11105/10
Page SS of66