May 22, 2009 Presentation to Annual Shareholders Meeting

Transcription

1 May 22, 2009 Presentation to Annual Shareholders Meeting

2 Forward looking statement Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include information concerning our future results, interest rates, loan and deposit growth, operations, new branch openings and business strategy. These statements often included words such as may, will, believe, expect, anticipate, predict, intend, plan, estimate, or continue or the negative thereof or other variations thereon or comparable terminology. As you consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward-looking statements. These factors include but are not limited to: the timing of regulatory approvals or consents for new branches or other contemplated actions; the availability of suitable and desirable locations for additional branches, the continuing strength of our existing business, which may be affected by various factors, including but not limited to interest rate fluctuations, level of delinquencies, defaults and prepayments, general economic conditions, and conditions specifically related to the financial and credit markets, competition, as well as and the risks and uncertainties discussed in the Company's annual report on Form 10-K for the year ended December 31, 2008 which was filed with the SEC on March 3, 2009, and the uncertainties set forth from time to time in the Company s other periodic reports, filings and public statements. You should keep in mind that any forward-looking statements made speak only as of the date on which they were made. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We do not intend to, update or revise any forward-looking statements after the date on which they are made. In light of all of the foregoing risks and uncertainties, you should keep in mind that any forward-looking statement made in this release may not reflect actual results. May

3 Summary NASDAQ: UWBK $2.3 Billion Assets 7.3 Million Shares Outstanding $9.66 per share* $70.1 Million Market Capitalization* Dividend Yield 2.48%* Holding company for two primary subsidiaries: United Western Bank Denver, CO Sterling Trust Company Waco, TX *As of May 12, 2009 May

4 Who we are United Western Bank One of three publicly traded banks headquartered in Colorado Largest federal savings bank in Colorado - $2.2 billion in assets Fourth largest publicly traded thrift in the western United States Traditional community bank target businesses first, consumers second Colorado focused (Front Range and select mountain markets) Sterling Trust Company Nondiscretionary trust company regulated by Texas Department of Banking Primarily custodian for self-directed IRAs and other qualified plan assets Second largest trust company of its kind in the U.S. Sale of majority of assets scheduled to close second quarter 2009 May

5 United Western Bank - Strategy Established community bank business plan in 2006 Redirected legacy company into community banking Transition balance sheet community banking vs. wholesale mortgage business Capitalize on dynamic Colorado banking environment and growing economy Recruit veteran bankers disenfranchised by banking consolidation Build exceptional local banking branches regional banking model May

6 United Western Bank our new independent brand UWB name launched in 2006 Brand awareness is growing Distribution expanding eight full service locations open First marketing efforts fourth quarter 2008 Branding in population center 82% of Colorado population in Front Range Front Range spans 75 miles north and 75 miles south of Denver New $2 billion community bank brand in a stable economy and banking market = growth potential May

7 Colorado Economy Colorado Bank Market Colorado metrics Unemployment rate 7.5% at March 31, 2009 compared to 8.5% nationally 1 Median home price $216,337 2 SFR foreclosures overstated! Median household income $71,000 compared to $64,000 nationally 3 National rankings Ranked fifth in CNBC s America s Top States for Business Ranked fifth for population growth in Ranked thirteenth in personal income 5 Colorado Convention Center ranked as the third-best convention facility in the nation 6 Colorado was the last state in the U.S. to allow branch banking 1991 Super-regionals polarize Colorado bank market 62% deposit market share in the Front Range from 0% in the last ten years Dominant community banks disappear bankers remain Bankers and bank customers want alternatives to super-regionals, few other choices Current economic environment fewer banks active in the market 1 Source: Colorado Department of Labor & Employment, April 17, Source: Home Insight, Denver, CO, May Source: Compass of Larimer County, Winter Source: CNBC, July Source: The Denver Post (March 25, 2009) 6 Source: Colorado Business Outlook 2009, University of Colorado Leeds School of Business May

8 Colorado s s Front Range Second largest megapolitan area in the Intermountain West (first is the Arizona Sun Corridor) 1 Average labor productivity 8% higher than national average in Higher than average per capita wages $54,994 median in Denver Metro area, 14.2% higher than national median 2 Highest proportion of residents with a high school diploma 1 Lower than average poverty levels Significant investment in multi-market transit system 1 Projected growth of nearly 70% - to 6.3 million residents by A Profile of Colorado s Front Range, Metropolitan Policy Program at Brookings, July Metro Denver Chamber of Commerce May

9 Colorado banks my banker is??? Western Savings Colorado National US Bank + Westar Affiliated Bank One JP Morgan Chase + Washington Mutual 2009: Divesting Branches 1 st Interstate + United + Norwest Wells Fargo + Wachovia + Golden West (World Savings) 2009: Divesting Branches May

10 United Western Bank Growing branch network Best locations breakeven target of 14 months Smaller distribution network 10-12, not 100, over time High visibility, branding opportunity Consistent construction theme regional banking office, not branch Eight full service locations open in the Front Range with a loan production office serving Aspen and the Roaring Fork Valley Future growth tied to market opportunity and availability of capital May

11 Growing branch network Centennial Fort Collins Longmont Downtown Tower South Denver May

12 United Western Bank Differentiation Private banking feel coupled with technology High touch regional leadership runs markets, makes local decisions, speed of execution key Invest in local communities banker and local advisory board leadership entrenched Average tenure of senior bankers = 20 years, in markets where they live Product & service offerings expanding Metavante core processor Remote deposit capture Sweep accounts Online banking CDARS Program Entrepreneurial spirit + local autonomy + new technology + independent culture = United Western Bank May

13 Sterling Trust Company Custodian, not asset manager Primarily self-directed IRAs, non-typical assets (real estate, precious metals, etc.) As of March 31, 2009, approx. 75,200 accounts 13.37% CAGR since December 31, 2002 As of March 31, 2009, $4.9 billion under custody 15.04% CAGR since December 31, 2002 Accounts maintain liquidity cash consolidated into United Western Bank $328 million of deposits at United Western Bank at March 31, 2009 Published deposit rate = 15 basis points at March 31, 2009 May

14 Sale of Sterling Trust Company Assets Equity Trust Company and an affiliate are acquiring certain assets of Sterling Trust in an asset purchase Sale of Sterling assets proceeds of (~) $61.2 million Estimated after-tax gain on sale of (~) $35.6 million Sterling s custodial deposits (~) $316 million at April 7, 2009 maintained at United Western Bank under agreement with buyer Sterling (to be renamed UW Trust Company ) will retain escrow and paying agent businesses, including its life settlement operations Target closing date second quarter 2009 (subject to regulatory approval and other conditions to close) Equity Trust Company (buyer) Second largest trust company of its kind (post-acquisition) Registered in good standing as a South Dakota trust company Family owned, long-time deposit customer of United Western Bank May

15 Historic Capital and Financial Strategy Change mix/shift balance sheet Wholesale to community banking Called expensive trust preferred securities ($30 million at 9.81%) Repurchased 474,100 shares Quarterly dividend of $0.06 per share Divested non-core assets (2006) De-leverage wholesale assets on balance sheet over time Bank s core capital ratio 8.06% and total risk-based ratio 10.45% at March 31, 2009 Post Sterling sale, expect to contribute a portion of the proceeds to increase the Bank s capital ratios May

16 Balance Sheet Transition: Runoff Wholesale Assets Balance Sheet Transition: ,500 $2,130 $2,162 $2,175 $2,189 $2,160 2,000 $2,087 $ 2,073 $ 2,079 $ 2,114 $2,152 $2,227 $2,277 $2,293 1,50 0 ` 1, , , Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q08 1Q09 Aver age Total Assets Avg Community Bank Loans Avg Residential Loans May

17 Net Interest Margin 5.00% Net Interest Margin Quarterly: Q to Q % 3.00% 3.92% 3.99% 3.88% 3.73%4.05% 3.38% 3.64% 3.48% 2.46% 2.72% 2.64%2.66% 2.92%3.11% 2.00% 1.00% 0.00% 4Q 06 3Q 06 2Q 06 1Q 06 4Q 05 1Q 08 4Q 07 3Q 07 2Q 07 1Q 07 1Q09 4Q08 3Q 08 2Q 08 May

18 First Quarter Results For the three months ended Mar 31 Dec 31 Period Change (Dollars in thousands except share information) Net income $ 3,276 $ 2,032 $ 1,244 Diluted EPS $ 0.45 $ 0.29 $ 0.16 ROAE % 7.85 % 4.61 ROAA 0.57 % 0.36 % 0.21 NIM 3.48 % 3.88 % (0.40) May

19 Loan Portfolio & Deposits in Transition March 31, 2008 to March 31, 2009: Community Bank Loans Grow 36% - from $821 million to $1.12 billion Deposits Increased 22% - from $1.43 billion to $1.74 billion Loan Composition at March 31, 2009 Deposit Composition at March 31, 2009 SBA purchased 5 % CRE 31 % Certificate accounts 10 % Consumer 5 % Wholesale Loans C&D 27 % Money market accounts 55 % NOW, DDA & Savings accounts 35 % Residential 21 % Commercial 8 % Multifamily 3 % Residential SBA purchased CRE C&D Multifamily Commercial SBA guaranteed Consumer NOW, DDA & Savings accounts Money market accounts Certificate accounts Community bank deposits attributable to new branches = $234 million at March 31, 2009 vs. $192 million at December 31, % increase May

20 Loan Portfolio Quarter Ended March 31, December 31, September 30, June 30, March 31, December 31, (Dollars in thousands) Community Bank Loans: Commercial real estate $ 464,641 $ 481,053 $ 460,864 $ 408,345 $ 339,431 $ 287,294 Construction and development 410, , , , , ,736 Commercial 118, , , , ,954 88,175 Multifamily 48,514 48,253 50,176 49,050 58,334 48,613 Guaranteed SBA originated 7,290 5,370 4,261 4,279 3,749 5,602 Consumer 73,396 49,400 44,445 23,024 5,054 3,825 Total Community Bank Loans 1,122,733 1,118,119 1,055, , , ,245 Wholesale loans: Residential mortgages 324, , , , , ,890 SBA purchased guaranteed portions 73,112 87,194 92,225 98, , ,084 Total loans $ 1,520,105 $ 1,541,104 $ 1,498,823 $ 1,399,784 $ 1,314,611 $ 1,265,219 May

21 Loans what we do Traditional community bank business credit focused Lend to people we know, in our Colorado back-yard Recourse or co-borrower structures Tangible collateral lender Sole banker for our clients avoid disputes with other banks We get our terms structure and pricing Q1/2009 asset quality better than most peers First to table / last look we win May

22 Loans what we don t t do No shared national credits no control / out of touch Have three credits where borrower outgrew us No levered cash flow finance / EVA No auto dealers / manufacturers / auto industry No floor plan (new or used) No dealer real estate No supplier, manufacturing, distributor, or wholesaler No material consumer auto loans or leases Some SBA industry related government guaranteed only No bulk consumer credit card No student loans No subprime auto, single-family residences, or other Immaterial legacy SFR loans $272,000 May

23 Characteristics of SFR Portfolio Over 8 years seasoned Average loan size $135,000 Rigorously underwritten when acquired Geographically diverse Average FICO scores over 700 when originated Reasonable loan-to-values and debt-to-income ratios at origination Estimate current loan-to-value to be in the 65% range Not active in the subprime market and no intention of future involvement Credit quality metrics track favorably when compared to national statistics May

24 Allowance for Credit Losses & Nonperforming Loans HFI For the Quarter Ended March 31, As of and for the Year Ended December 31, (Dollars in thousands) Loans held for Investment Performance Ratios and Data Allowance for credit losses $ 20,084 $ 16,183 $ 8,000 $ 6,231 $ 4,808 Nonperforming loans held for investment $ 23,799 $ 8,647 $ 4,251 $ 3,675 $ 9,601 Nonperforming loans held for investment /total loans held for investment 1.94 % 0.69 % 0.48 % 0.51 % 2.23 % Allowance for credit losses/ total loans held for investment 1.64 % 1.30 % 0.90 % 0.87 % 1.12 % Allowance for credit losses/nonperforming loans held for investment % % % % % Net chargeoffs to average residential loans HFI 0.00 % 0.30 % 0.30 % 0.40 % 0.90 % Net chargeoffs to average community bank loans HFI 0.11 % 0.04 % 0.09 % 0.30 % 1.20 % May

25 MBS Portfolio $520 million of Mortgage Backed Securities at March 31, 2009 At March 31, 2009, based on the carrying value and lowest rating assigned: 57% are agency securities or A rated and above Of which 50% of the 57% are AAA and AA rated 87% A collateral and 13% Alt-A collateral Based on the highest rating assigned, 90% of the portfolio is investment grade May

26 Progress in a difficult environment Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March NIM 3.48 % 3.88 % 3.99 % 3.92 % 4.05 % Asset yield 4.86 % 5.35 % 5.51 % 5.40 % 5.89 % Liability Cost 1.56 % 1.64 % 1.73 % 1.71 % 2.17 % Diluted EPS $ 0.45 $ 0.29 $ 0.21 $ 0.43 $ 0.46 ROAA* 0.57 % 0.36 % 0.27 % 0.57 % 0.64 % ROAE* % 7.85 % 5.62 % % % *Annualized Net income to shareholders since December 31, 2005 = $33.3 million May

27 A promising future growing value Experienced management Well-established infrastructure Strong employee base Attractive demographics Stable marketplace Solid relationship with regulators Compelling business model Proven execution to date May

28 May