The Office of Thrift Supervision has asked United Western Bank and its parent United Western Bancorp to shore up capital and reduce certain loan concentrations, the Denver-based thrift said Wednesday.
United Western had aimed to avoid the informal agreements, known as memorandums of understanding, by raising $80 million in a September stock offering.
“We don’t expect this to have any impact on our 2010 business plan, and we look forward to exiting these informal agreements as expeditiously as possible,” said Michael McCloskey, the bank’s chief operating officer.
United Western ranks as the state’s 10th-largest financial institution, with $1.9 billion in deposits and eight branches.
Regulators, who declined to comment, want United Western to raise its “risk-based” capital ratio, a measure of a bank’s ability to absorb future losses, to 12 percent. That ratio stood at 11.07 percent at the end of September.
United Western must also obtain approval to pay dividends or to borrow additional funds and must submit a plan to reduce “certain concentrations of assets and liabilities,” the bank said.
As of Sept. 30, the bank reported having 30.4 percent of its $1.2 billion loan portfolio concentrated in construction and development loans and 38.6 percent in commercial-real-estate loans.
The thrift reported $52.9 million in nonperforming loans as of Sept. 30, double where it started the year.
United Western, which has seen its shares fall 71 percent this year, doesn’t plan to ask investors for more funds, McCloskey said.
United Western, formerly known as Matrix Bancorp, shifted from a wholesale mortgage bank to a more diversified commercial lender in 2006. Because of its past, however, the bank holds about $364 million in residential-mortgage-backed securities that have fallen sharply in value.
“There are a number of banks out there that did buy private-label mortgage-backed securities and are having the same issues,” said Larry Martin, a consultant with Bank Strategies.
As more mortgage borrowers default, the credit ratings of those securities fall, forcing banks that own them to provide more capital or sell them off at big losses.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
