##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark
One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarterly period ended September 30, 2005.
 OR
 o
    
    Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the transition period from  to .
 Commission File Number: 000-24947
 UCBH HOLDINGS, INC.
  Delaware
    
    94-3072450(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)555 Montgomery Street, San Francisco, California
    
    94111(Address of principal executive offices)
    
    (Zip Code)
 (415) 315-2800
 þ o
 þ o
 o þ




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UCBH HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    1Notes to Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    49Item 4. Controls and Procedures
    
    
    49PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    50Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    50Item 3. Defaults Upon Senior Securities
    
    
    50Item 4. Submission of Matters to a Vote of Security Holders
    
    
    50Item 5. Other Information
    
    
    50Item 6. Exhibits
    
    
    51SIGNATURESEXHIBIT INDEXEXHIBIT 2.2EXHIBIT 4.8EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.0




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 UCBH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2005
    
    
    2004ASSETSCash and due from banks
    
    $
    126,397
    
    
    $
    73,864Federal funds sold
    
    
    
    
    
    
    134,500Investment and mortgage-backed securities available for sale, at fair value
    
    
    1,096,317
    
    
    
    1,169,140Investment and mortgage-backed securities held to maturity, at cost (fair
value of $320,133 and $331,969 at September 30, 2005, and December 31,
2004, respectively)
    
    
    314,763
    
    
    
    325,202Federal Home Loan Bank stock and other equity investments
    
    
    76,724
    
    
    
    56,867Loans held for sale
    
    
    301,303
    
    
    
    326,007Loans held in portfolio
    
    
    5,239,481
    
    
    
    4,050,741Allowance for loan losses
    
    
    (57,501
    )
    
    
    (56,472
    )Net loans held in portfolio
    
    
    5,181,980
    
    
    
    3,994,269Accrued interest receivable
    
    
    33,865
    
    
    
    24,507Premises and equipment, net
    
    
    90,954
    
    
    
    92,643Goodwill
    
    
    68,301
    
    
    
    68,301Core deposit intangibles, net
    
    
    8,937
    
    
    
    9,829Mortgage servicing rights, net
    
    
    10,177
    
    
    
    7,747Other assets
    
    
    33,065
    
    
    
    32,805Total assets
    
    $
    7,342,783
    
    
    $
    6,315,681LIABILITIES AND STOCKHOLDERS EQUITYNoninterest-bearing deposits
    
    $
    484,625
    
    
    $
    428,602Interest-bearing deposits
    
    
    5,510,977
    
    
    
    4,787,260Total deposits
    
    
    5,995,602
    
    
    
    5,215,862Short-term borrowings
    
    
    216,314
    
    
    
    72,310Subordinated debentures
    
    
    146,000
    
    
    
    136,000Accrued interest payable
    
    
    8,340
    
    
    
    6,110Long-term borrowings
    
    
    349,609
    
    
    
    334,952Other liabilities
    
    
    79,321
    
    
    
    66,435Total liabilities
    
    
    6,795,186
    
    
    
    5,831,669Commitments and contingencies (Note 15)Preferred stock, $0.01 par value, 10,000,000 shares authorized, none
issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 180,000,000 shares authorized at September
30, 2005, and December 31, 2004; 91,885,431 and 91,131,824 shares issued
and outstanding at September 30, 2005, and December 31, 2004, respectively
    
    
    919
    
    
    
    456Additional paid-in capital
    
    
    210,248
    
    
    
    203,432Accumulated other comprehensive loss
    
    
    (16,008
    )
    
    
    (6,498
    )Retained earnings
    
    
    352,438
    
    
    
    286,622Total stockholders equity
    
    
    547,597
    
    
    
    484,012Total liabilities and stockholders equity
    
    $
    7,342,783
    
    
    $
    6,315,681
  1




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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest and dividend income:Loans
    
    $
    87,684
    
    
    $
    57,156
    
    
    $
    233,544
    
    
    $
    162,597Funds sold and due from banks
    
    
    226
    
    
    
    115
    
    
    
    1,225
    
    
    
    223Investment and mortgage-backed securities:Taxable
    
    
    13,444
    
    
    
    16,825
    
    
    
    42,245
    
    
    
    48,723Nontaxable
    
    
    2,692
    
    
    
    2,454
    
    
    
    7,927
    
    
    
    6,957Total interest and dividend income
    
    
    104,046
    
    
    
    76,550
    
    
    
    284,941
    
    
    
    218,500Interest expense:Deposits
    
    
    33,410
    
    
    
    17,162
    
    
    
    82,077
    
    
    
    47,565Short-term borrowings
    
    
    4,062
    
    
    
    540
    
    
    
    7,031
    
    
    
    1,785Subordinated debentures
    
    
    1,967
    
    
    
    2,075
    
    
    
    6,714
    
    
    
    5,985Long-term borrowings
    
    
    4,491
    
    
    
    3,976
    
    
    
    13,991
    
    
    
    10,913Total interest expense
    
    
    43,930
    
    
    
    23,753
    
    
    
    109,813
    
    
    
    66,248Net interest income
    
    
    60,116
    
    
    
    52,797
    
    
    
    175,128
    
    
    
    152,252Provision for (recovery of) loan losses
    
    
    (105
    )
    
    
    1,644
    
    
    
    2,860
    
    
    
    4,827Net interest income after provision for (recovery of)
loan losses
    
    
    60,221
    
    
    
    51,153
    
    
    
    172,268
    
    
    
    147,425Noninterest income:Commercial banking fees
    
    
    2,743
    
    
    
    2,454
    
    
    
    7,584
    
    
    
    6,426Service charges on deposits
    
    
    758
    
    
    
    633
    
    
    
    2,273
    
    
    
    1,963Gain (loss) on sale of securities, net
    
    
    
    
    
    
    2,566
    
    
    
    (5
    )
    
    
    9,059Gain on sale of SBA loans, net
    
    
    715
    
    
    
    1,116
    
    
    
    2,638
    
    
    
    2,997Gain on sale of multifamily real estate and other loans, net
    
    
    1,314
    
    
    
    2,951
    
    
    
    7,749
    
    
    
    2,951Unrealized loss on loans held for sale
    
    
    (773
    )
    
    
    
    
    
    
    (773
    )
    
    
    Equity loss in other equity investments
    
    
    (510
    )
    
    
    (158
    )
    
    
    (1,780
    )
    
    
    (1,647
    )Other fees
    
    
    316
    
    
    
    246
    
    
    
    591
    
    
    
    300Total noninterest income
    
    
    4,563
    
    
    
    9,808
    
    
    
    18,277
    
    
    
    22,049Noninterest expense:Personnel
    
    
    12,895
    
    
    
    13,533
    
    
    
    42,744
    
    
    
    38,144Occupancy
    
    
    3,006
    
    
    
    2,326
    
    
    
    8,914
    
    
    
    6,050Data processing
    
    
    1,698
    
    
    
    1,657
    
    
    
    5,084
    
    
    
    4,351Furniture and equipment
    
    
    1,535
    
    
    
    1,854
    
    
    
    4,631
    
    
    
    4,723Professional fees and contracted services
    
    
    2,436
    
    
    
    1,856
    
    
    
    7,727
    
    
    
    4,980Deposit insurance
    
    
    182
    
    
    
    187
    
    
    
    559
    
    
    
    589Communication
    
    
    211
    
    
    
    319
    
    
    
    706
    
    
    
    934Core deposit intangible amortization
    
    
    205
    
    
    
    285
    
    
    
    747
    
    
    
    1,000Loss on extinguishment of subordinated debentures and
secured borrowings
    
    
    89
    
    
    
    
    
    
    
    1,285
    
    
    
    Other general and administrative
    
    
    3,714
    
    
    
    3,964
    
    
    
    11,215
    
    
    
    10,976Total noninterest expense
    
    
    25,971
    
    
    
    25,981
    
    
    
    83,612
    
    
    
    71,747Income before income tax expense
    
    
    38,813
    
    
    
    34,980
    
    
    
    106,933
    
    
    
    97,727Income tax expense
    
    
    13,290
    
    
    
    13,207
    
    
    
    34,240
    
    
    
    35,867Net income
    
    $
    25,523
    
    
    $
    21,773
    
    
    $
    72,693
    
    
    $
    61,860Basic earnings per share
    
    $
    0.28
    
    
    $
    0.24
    
    
    $
    0.79
    
    
    $
    0.68Diluted earnings per share
    
    $
    0.27
    
    
    $
    0.23
    
    
    $
    0.76
    
    
    $
    0.65Dividends declared per share
    
    $
    0.03
    
    
    $
    0.02
    
    
    $
    0.08
    
    
    $
    0.06
  2




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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND
COMPREHENSIVE INCOME (LOSS)
 Additional
    
    
    Accumulated Other
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Retained
    
    
    Stockholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Earnings
    
    
    Equity
    
    
    IncomeBalance at December 31, 2003
    
    
    90,076,756
    
    
    $
    450
    
    
    $
    208,990
    
    
    $
    (3,245
    )
    
    $
    208,271
    
    
    $
    414,466Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,860
    
    
    
    61,860
    
    
    $
    61,860Other comprehensive loss, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,359
    )
    
    
    
    
    
    
    (1,359
    )
    
    
    (1,359
    )Comprehensive income (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    60,501Stock options exercised, including
related tax benefit
    
    
    634,022
    
    
    
    4
    
    
    
    5,965
    
    
    
    
    
    
    
    
    
    
    
    5,969Cash dividend $0.06 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,433
    )
    
    
    (5,433
    )Balance at September 30, 2004
    
    
    90,710,778
    
    
    $
    454
    
    
    $
    214,955
    
    
    $
    (4,604
    )
    
    $
    264,698
    
    
    $
    475,503Balance at December 31, 2004
    
    
    91,131,824
    
    
    $
    456
    
    
    $
    203,432
    
    
    $
    (6,498
    )
    
    $
    286,622
    
    
    $
    484,012Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,693
    
    
    
    72,693
    
    
    $
    72,693Other comprehensive loss, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,510
    )
    
    
    
    
    
    
    (9,510
    )
    
    
    (9,510
    )Comprehensive income (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    63,183Stock options exercised, including
related tax benefit
    
    
    753,607
    
    
    
    6
    
    
    
    7,273
    
    
    
    
    
    
    
    
    
    
    
    7,279Cash dividend $0.08 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,877
    )
    
    
    (6,877
    )Stock split
    
    
    
    
    
    
    457
    
    
    
    (457
    )
    
    
    
    
    
    
    
    
    
    
    Balance at September 30, 2005
    
    
    91,885,431
    
    
    $
    919
    
    
    $
    210,248
    
    
    $
    (16,008
    )
    
    $
    352,438
    
    
    $
    547,597
 
 (1)
    
    Accumulated Other Comprehensive Income (Loss) arises solely from net
unrealized gains (losses) on investment and mortgage-backed securities available for sale,
presented net of tax.  3




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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended September 30,2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    72,693
    
    
    $
    61,860Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    2,860
    
    
    
    4,827Amortization of net deferred loan fees
    
    
    (4,511
    )
    
    
    (3,700
    )First Continental Bank purchase price adjustment
    
    
    
    
    
    
    2,345Amortization of intangibles
    
    
    2,453
    
    
    
    1,830Depreciation and amortization of premises and equipment
    
    
    6,004
    
    
    
    5,030Gain on sale of loans held in portfolio, securities, and other assets, net
    
    
    (1,267
    )
    
    
    (14,558
    )Unrealized loss on loans held for sale
    
    
    773
    
    
    
    Equity loss in other equity investments
    
    
    1,780
    
    
    
    1,647Loss on extinguishment of subordinated debentures and secured borrowings
    
    
    1,285
    
    
    
    Other, net
    
    
    (575
    )
    
    
    801Changes in operating assets and liabilities:Decrease in loans held for sale
    
    
    35,952
    
    
    
    Increase in accrued interest receivable
    
    
    (9,358
    )
    
    
    (2,761
    )Decrease (increase) in other assets
    
    
    5,318
    
    
    
    (2,404
    )Increase (decrease) in accrued interest payable
    
    
    2,230
    
    
    
    (945
    )Increase in other liabilities
    
    
    16,189
    
    
    
    33,310Net cash provided by (used in) operating activities
    
    
    131,826
    
    
    
    87,282Cash flows from investing activities:Investment and mortgage-backed securities, available for sale:Principal payments and maturities
    
    
    381,782
    
    
    
    222,852Purchases
    
    
    (438,581
    )
    
    
    (751,205
    )Sales
    
    
    91,380
    
    
    
    615,868Called
    
    
    22,000
    
    
    
    68,136Investment and mortgage-backed securities, held to maturity:Principal payments and maturities
    
    
    20,183
    
    
    
    20,328Purchases
    
    
    (9,893
    )
    
    
    (59,238
    )Purchase of Federal Home Loan Bank stock
    
    
    (15,783
    )
    
    
    Funding of other equity investments
    
    
    (6,764
    )
    
    
    (3,332
    )Loans held in portfolio originated and purchased, net of principal collections
    
    
    (1,231,610
    )
    
    
    (785,559
    )Proceeds from the sale of loans held in portfolio
    
    
    57,025
    
    
    
    211,734Purchases of premises and other equipment
    
    
    (4,669
    )
    
    
    (8,774
    )Capitalization of loan servicing rights
    
    
    (4,136
    )
    
    
    (3,783
    )Other investing activities, net
    
    
    450
    
    
    
    (49
    )Net cash used in investing activities
    
    
    (1,138,616
    )
    
    
    (473,022
    )Cash flows from financing activities:Net increase in demand deposits, NOW, money market and savings accounts
    
    
    143,886
    
    
    
    368,105Net increase in time deposits
    
    
    635,854
    
    
    
    167,927Net increase (decrease) in short-term borrowings
    
    
    94,745
    
    
    
    (166,107
    )Proceeds from long-term borrowings
    
    
    60,000
    
    
    
    70,000Principal payments of long-term borrowings
    
    
    (16,824
    )
    
    
    Proceeds from issuance of subordinated debentures
    
    
    40,000
    
    
    
    Redemption of subordinated debentures
    
    
    (30,000
    )
    
    
    Proceeds from stock option exercises
    
    
    3,565
    
    
    
    3,396Payment of cash dividend on common stock
    
    
    (6,403
    )
    
    
    (4,970
    )Net cash provided by financing activities
    
    
    924,823
    
    
    
    438,351Net decrease in cash and cash equivalents
    
    
    (81,967
    )
    
    
    52,611Cash and cash equivalents at beginning of period
    
    
    208,364
    
    
    
    76,786Cash and cash equivalents at end of period
    
    $
    126,397
    
    
    $
    129,397
  4




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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    Basis of Presentation and Summary of Significant Accounting and Reporting PoliciesOrganizationUCBH Holdings, Inc. (UCBH) is a bank holding company organized under the laws of Delaware that
conducts its business through its principal subsidiary, United Commercial Bank (the Bank; UCBH,
the Bank and the Banks wholly owned subsidiaries are collectively referred to as the Company), a
California state-chartered commercial bank. Additionally, UCBH owns all of the common stock of
seven special purpose trusts created for the purpose of issuing guaranteed preferred beneficial
interests in UCBHs junior subordinated debentures. The Bank offers a full range of commercial and
consumer banking products through its retail branches and other banking offices in California and
New York, and internationally through its full-service branch in Hong Kong. The Bank also has
representative offices in Shenzhen, China and Taipei, Taiwan. The Bank through its wholly owned
subsidiary, California Canton International Bank (Cayman) Ltd., is licensed to conduct banking
business under a Category B Bank & Trust license granted by the Government of the Cayman Islands.
The Bank also engages in the offer and sale of variable life and annuity products, mutual funds
and certain equity securities to the clients of its registered representatives through its wholly
owned subsidiary, UCB Investment Services, Inc. (UCBIS). UCBIS is a registered broker-dealer
with the Securities and Exchange Commission (the SEC) and a member of the National Association of
Securities Dealers (NASD) and the Securities Investor Protection Corporation (SIPC).Basis of Presentation and Principles of ConsolidationThe unaudited consolidated financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP) for interim
financial statements and the instructions to Form 10-Q pursuant to Rule 10-01, Interim Financial
Statements, of Regulation S-X from the Rules and Regulations of the SEC. Accordingly, the
unaudited consolidated financial statements do not include all of the disclosures required by GAAP
for complete financial statements. The unaudited consolidated financial statements include the
accounts of the Company. All significant intercompany transactions and balances have been
eliminated in consolidation. In the opinion of management, the unaudited consolidated financial
statements contain all adjustments consisting only of a normal and recurring nature, which are
considered necessary for a fair statement of the financial condition and results of operations of
such periods. The unaudited consolidated financial statements should be read in conjunction with
the audited consolidated financial statements and notes included in the Companys annual report on
Form 10-K for the year ended December 31, 2004.The consolidated results exclude the special purpose trusts referred to above. These trusts are
excluded pursuant to Financial Accounting Standards Board (the FASB) Interpretation (FIN) No.
46R, Consolidation of Variable Interest Entities, issued in December of 2003, as UCBH is not deemed
to be the primary beneficiary of these trusts.On January 27, 2005, UCBH declared a two-for-one stock split in the form of a stock dividend
payable to the shareholders of record as of March 31, 2005, and distributed the stock dividend on
April 12, 2005. Accordingly, basic and diluted earnings per share on the consolidated statements
of income for the three and nine months ended September 30, 2004, have been adjusted to reflect the
impact of the stock split. Additionally, the number of issued and outstanding shares of UCBHs
common stock on the consolidated balance sheet at December 31, 2004, and the statement of changes
in stockholders equity and comprehensive income (loss) have also been adjusted to take into
account the stock split.Use of Estimates in Preparation of Financial StatementsThe preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimated results.
 5




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ReclassificationCertain reclassifications have been made to prior years consolidated financial statements to
conform to the current periods presentation.Transfer and Servicing of Financial AssetsFrom time to time, the Bank sells commercial real estate, construction, multifamily real estate,
U.S. Small Business Administration (SBA) and residential mortgage loans to provide funds for
additional lending. The Bank retains the servicing rights on substantially all loans sold. A sale
is recognized only when consideration is received and control of the related loans is transferred
to the buyer. A gain or loss is recognized at the time of sale by comparing the net sales proceeds
to the carrying value of the loans and by calculating the value of mortgage servicing rights and
retained interests, based on their relative fair values.Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk consist
primarily of loans, investments and customer deposits. At September 30, 2005, the Bank had 96.3%
of its loans held in portfolio located in California. Additionally, the Bank had
67.6% of its loans held in portfolio in commercial nonresidential and multifamily real estate
loans. No borrower or obligor accounted for more than 2.0% of loans. At September 30, 2005,
mortgage-backed securities were 71.5% of the Banks investment portfolio. At September 30, 2005,
the Bank had 54.6% and 36.8% of its customer deposits located in Northern and Southern California,
respectively. One state government entity contributed 6.68% of total deposits at September 30,
2005. No other customer accounted for more than 2.0% of deposits.Accounting for Stock-Based CompensationThe Company has elected to continue accounting for employee stock-based compensation using the
intrinsic value method in accordance with Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, as allowed by Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting
for Stock-Based Compensation-Transition and Disclosure. Under APB Opinion No. 25, the Company
records no stock-based employee compensation cost provided the stock options are granted with an
exercise price equal to or greater than the market value of the underlying common stock on the date
of grant.
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The following is the impact on net income and earnings per share had compensation cost for the
Companys stock-based compensation arrangements for employees been determined based on the fair
value at grant date of the awards for the three and nine months ended September 30, 2005 and 2004,
consistent with the provisions of SFAS No. 123 (dollars in thousands, except per share data):
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income:As reported
    
    $
    25,523
    
    
    $
    21,773
    
    
    $
    72,693
    
    
    $
    61,860Deduct: Total stock-based
employee compensation
expense determined under
fair value based method of
all awards, net of related
tax effects
    
    
    (2,316
    )
    
    
    (1,952
    )
    
    
    (6,729
    )
    
    
    (4,704
    )Pro forma net income
    
    $
    23,207
    
    
    $
    19,821
    
    
    $
    65,964
    
    
    $
    57,156Basic earnings per share:As reported
    
    $
    0.28
    
    
    $
    0.24
    
    
    $
    0.79
    
    
    $
    0.68Pro forma
    
    $
    0.25
    
    
    $
    0.22
    
    
    $
    0.72
    
    
    $
    0.63Diluted earnings per share:As reported
    
    $
    0.27
    
    
    $
    0.23
    
    
    $
    0.76
    
    
    $
    0.65Pro forma
    
    $
    0.24
    
    
    $
    0.21
    
    
    $
    0.69
    
    
    $
    0.60
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Dividend yield
    
    
    0.63
    %
    
    
    0.45
    %
    
    
    0.58
    %
    
    
    0.43
    %Volatility
    
    
    27.37
    %
    
    
    17.00
    %
    
    
    28.78
    %
    
    
    22.36
    %Risk-free interest rate
    
    
    4.22
    %
    
    
    4.47
    %
    
    
    4.16
    %
    
    
    4.29
    %Expected lives (years).
    
    
    7.32
    
    
    
    7.72
    
    
    
    7.51
    
    
    
    7.54
 2.
    
    Recent Accounting PronouncementsAccounting Changes and Error CorrectionOn June 7, 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections  a
replacement of APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes
in Interim Financial Statements. SFAS No. 154 changes the requirements for the accounting for and
the reporting of a change in accounting principle. Previously, most voluntary changes in
accounting principles were required to be recognized by way of a cumulative effect adjustment
within net income during the period of change. SFAS No. 154 requires retrospective application to
prior periods financial statements, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. SFAS No. 154 is effective for
accounting changes made in fiscal years beginning after December 15, 2005; however, SFAS No. 154
does not change the transition provisions of any existing accounting pronouncements. The Company
does not believe the adoption of SFAS No. 154 will have a material effect on its consolidated
financial position, results of operations or cash flows.
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Accounting for Stock-Based CompensationOn December 16, 2004, the FASB issued SFAS No. 123R, Share-Based Payment. SFAS No. 123R is a
revision of SFAS No. 123. SFAS No. 123R eliminates the ability to account for share-based
compensation transactions using the intrinsic value method as prescribed under APB Opinion No. 25
and requires that such transactions be accounted for using a fair value-based method. SFAS No.
123R covers a wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights and employee share
purchase plans. SFAS No. 123R had been scheduled to be effective for the interim and annual
periods beginning after June 15, 2005. However, in April 2005, the Securities and Exchange
Commission amended Rule 4-01(a) of Regulation S-X to delay the date for compliance with SFAS No.
123R, so that each registrant that is not a small business issuer will be required to prepare
financial statements in accordance with SFAS No. 123R beginning with the first interim or annual
reporting period of the registrants first fiscal year beginning on or after June 15, 2005. For
the Company, SFAS No. 123R will become effective as of January 1, 2006.SFAS No. 123R may be adopted using one of two methods: (1) A modified prospective method in which
compensation cost is recognized beginning with the effective date (a) based on the requirements of
SFAS No. 123R for all share-based payments granted after the effective date and (b) based on the
requirements of SFAS No. 123 for all awards granted to employees prior to the effective date of
SFAS No. 123R that remain unvested on the effective date; or (2) A modified retrospective method
which includes the requirements of the modified prospective method described above, but also
permits entities to restate financial statements based on the amounts previously recognized under
SFAS No. 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b)
prior interim periods of the year of adoption. The Company has not yet concluded on the method of
adoption allowed by SFAS No. 123 that it will use and is currently evaluating the impact of this
accounting guidance on its financial position and its results of operations. However, the adoption
of SFAS No. 123R may have a material impact on the Companys financial position and results of
operations.Accounting for Certain Loans or Debt Securities Acquired in a TransferIn December 2003, the American Institute of Certified Public Accountants (the AICPA) issued
Statement of Position (SOP) 03-3, which addresses accounting for loans or debt securities
acquired in a transfer and the resulting differences between contractual cash flows and cash flows
expected to be collected. SOP 03-3 limits the yield that may be accreted into income to the excess
of the investors estimate of undiscounted expected principal, interest, and other cash flows over
the investors initial investment in the loan. SOP 03-3 requires that the excess of contractual
cash flows over the cash flows expected to be collected not be recognized as an adjustment of
yield, loss accrual or valuation allowance. In addition, SOP 03-3 prohibits carrying over or
creating valuation allowances in the initial accounting of all loans acquired in a transfer that
are within the scope of SOP 03-3. The prohibition of the valuation allowance carryover applies to
the purchase of individual loans, pools of loans and loans acquired in a purchase business
combination. SOP 03-3 does not apply to loans originated by the Bank.SOP 03-3 is effective for loans acquired in fiscal years beginning after December 15, 2004. For
loans acquired in fiscal years beginning on or before December 15, 2004, decreases in cash flows
expected to be collected should be applied prospectively. The adoption of SOP 03-3 did not have a
material impact on the financial condition or operating results of the Company.
 3.
    
    Business CombinationsPacifica Bancorp, Inc.UCBH and Pacifica Bancorp, Inc. (Pacifica), the holding company of Pacifica Bank, a Washington
state-chartered bank, entered into an Agreement and Plan of Merger dated as of May 23, 2005. The
acquisition of Pacifica was consummated on October 31, 2005.
Please refer to Note 20 of the Consolidated Financial Statements.
This acquisition strengthens the Companys capabilities to facilitate trade flows across the
Pacific Rim and will allow it to further grow its commercial banking business both in the domestic
U.S. markets and in the Greater China Region.
 8




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##### Table of Contents



Asian American Bank & Trust Company
  4.
    
    Cash and Due From BanksThe following are the components of interest-bearing and noninterest-bearing cash and due from
banks at September 30, 2005, and December 31, 2004 (dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Interest-bearing
    
    $
    27,320
    
    
    $
    16,556Noninterest-bearing
    
    
    99,077
    
    
    
    57,308Total cash and due from banks
    
    $
    126,397
    
    
    $
    73,864
  
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##### Table of Contents



5.
    
    Investment and Mortgage-Backed SecuritiesThe following are the amortized cost and approximate market value of investment and mortgage-backed
securities classified as available for sale and held to maturity, along with the portions of the
portfolio with unrealized loss positions at September 30, 2005 (dollars in thousands):
 Gross
    
    
    Gross
    
    
    
    
    
    
    Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Market
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Value
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesInvestment securities
available for sale:Trust preferred securities
    
    $
    33,442
    
    
    $
    
    
    
    $
    (280
    )
    
    $
    33,162
    
    
    $
    8,820
    
    
    $
    (122
    )
    
    $
    4,342
    
    
    $
    (158
    )
    
    $
    13,162
    
    
    $
    (280
    )Federal agency notes
    
    
    137,430
    
    
    
    
    
    
    
    (3,518
    )
    
    
    133,912
    
    
    
    36,281
    
    
    
    (209
    )
    
    
    97,631
    
    
    
    (3,309
    )
    
    
    133,912
    
    
    
    (3,518
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total investment securities
available for sale
    
    
    180,872
    
    
    
    
    
    
    
    (3,798
    )
    
    
    177,074
    
    
    
    45,101
    
    
    
    (331
    )
    
    
    101,973
    
    
    
    (3,467
    )
    
    
    147,074
    
    
    
    (3,798
    )Mortgage-backed securities
available for sale:FNMA
    
    
    357,335
    
    
    
    12
    
    
    
    (8,760
    )
    
    
    348,587
    
    
    
    199,721
    
    
    
    (3,268
    )
    
    
    147,759
    
    
    
    (5,492
    )
    
    
    347,480
    
    
    
    (8,760
    )GNMA
    
    
    89,831
    
    
    
    
    
    
    
    (2,851
    )
    
    
    86,980
    
    
    
    37,537
    
    
    
    (841
    )
    
    
    49,443
    
    
    
    (2,010
    )
    
    
    86,980
    
    
    
    (2,851
    )FHLMC
    
    
    297,827
    
    
    
    32
    
    
    
    (8,417
    )
    
    
    289,442
    
    
    
    180,858
    
    
    
    (3,889
    )
    
    
    98,518
    
    
    
    (4,528
    )
    
    
    279,376
    
    
    
    (8,417
    )Other
    
    
    198,074
    
    
    
    
    
    
    
    (3,840
    )
    
    
    194,234
    
    
    
    152,499
    
    
    
    (2,671
    )
    
    
    41,735
    
    
    
    (1,169
    )
    
    
    194,234
    
    
    
    (3,840
    )Total mortgage-backed
securities available for
sale
    
    
    943,067
    
    
    
    44
    
    
    
    (23,868
    )
    
    
    919,243
    
    
    
    570,615
    
    
    
    (10,669
    )
    
    
    337,455
    
    
    
    (13,199
    )
    
    
    908,070
    
    
    
    (23,868
    )Total investment and
mortgage-backed securities
available for sale
    
    
    1,123,939
    
    
    
    44
    
    
    
    (27,666
    )
    
    
    1,096,317
    
    
    
    615,716
    
    
    
    (11,000
    )
    
    
    439,428
    
    
    
    (16,666
    )
    
    
    1,055,144
    
    
    
    (27,666
    )Investment securities held
to maturity:Municipal securities
    
    
    225,551
    
    
    
    6,941
    
    
    
    (464
    )
    
    
    232,028
    
    
    
    23,418
    
    
    
    (351
    )
    
    
    3,322
    
    
    
    (113
    )
    
    
    26,740
    
    
    
    (464
    )Mortgage-backed securities
held to maturity:FNMA
    
    
    5,478
    
    
    
    
    
    
    
    (159
    )
    
    
    5,319
    
    
    
    
    
    
    
    
    
    
    
    5,319
    
    
    
    (159
    )
    
    
    5,319
    
    
    
    (159
    )GNMA
    
    
    82,905
    
    
    
    23
    
    
    
    (949
    )
    
    
    81,979
    
    
    
    64,125
    
    
    
    (563
    )
    
    
    9,868
    
    
    
    (386
    )
    
    
    73,993
    
    
    
    (949
    )FHLMC
    
    
    829
    
    
    
    
    
    
    
    (22
    )
    
    
    807
    
    
    
    
    
    
    
    
    
    
    
    807
    
    
    
    (22
    )
    
    
    807
    
    
    
    (22
    )Total mortgage-backed
securities held to maturity
    
    
    89,212
    
    
    
    23
    
    
    
    (1,130
    )
    
    
    88,105
    
    
    
    64,125
    
    
    
    (563
    )
    
    
    15,994
    
    
    
    (567
    )
    
    
    80,119
    
    
    
    (1,130
    )Total investment and
mortgage-backed securities
held to maturity
    
    
    314,763
    
    
    
    6,964
    
    
    
    (1,594
    )
    
    
    320,133
    
    
    
    87,543
    
    
    
    (914
    )
    
    
    19,316
    
    
    
    (680
    )
    
    
    106,859
    
    
    
    (1,594
    )Total securities
    
    $
    1,438,702
    
    
    $
    7,008
    
    
    $
    (29,260
    )
    
    $
    1,416,450
    
    
    $
    703,259
    
    
    $
    (11,914
    )
    
    $
    458,744
    
    
    $
    (17,346
    )
    
    $
    1,162,003
    
    
    $
    (29,260
    )
  10




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Gross
    
    
    Gross
    
    
    
    
    
    
    Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Market
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Value
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesInvestment securities
available for sale:Trust preferred securities
    
    $
    18,441
    
    
    $
    28
    
    
    $
    (250
    )
    
    $
    18,219
    
    
    $
    3,960
    
    
    $
    (40
    )
    
    $
    9,290
    
    
    $
    (210
    )
    
    $
    13,250
    
    
    $
    (250
    )Federal agency notes
    
    
    232,594
    
    
    
    87
    
    
    
    (2,635
    )
    
    
    230,046
    
    
    
    152,451
    
    
    
    (478
    )
    
    
    64,818
    
    
    
    (2,157
    )
    
    
    217,269
    
    
    
    (2,635
    )Total investment securities
available for sale
    
    
    251,035
    
    
    
    115
    
    
    
    (2,885
    )
    
    
    248,265
    
    
    
    156,411
    
    
    
    (518
    )
    
    
    74,108
    
    
    
    (2,367
    )
    
    
    230,519
    
    
    
    (2,885
    )Mortgage-backed securities
available for sale:FNMA
    
    
    366,307
    
    
    
    866
    
    
    
    (4,076
    )
    
    
    363,097
    
    
    
    210,437
    
    
    
    (1,957
    )
    
    
    65,572
    
    
    
    (2,119
    )
    
    
    276,009
    
    
    
    (4,076
    )GNMA
    
    
    106,501
    
    
    
    79
    
    
    
    (1,508
    )
    
    
    105,072
    
    
    
    65,670
    
    
    
    (1,173
    )
    
    
    12,971
    
    
    
    (335
    )
    
    
    78,641
    
    
    
    (1,508
    )FHLMC
    
    
    288,789
    
    
    
    495
    
    
    
    (3,319
    )
    
    
    285,965
    
    
    
    108,720
    
    
    
    (1,131
    )
    
    
    68,595
    
    
    
    (2,188
    )
    
    
    177,315
    
    
    
    (3,319
    )Other
    
    
    167,719
    
    
    
    81
    
    
    
    (1,059
    )
    
    
    166,741
    
    
    
    145,856
    
    
    
    (1,059
    )
    
    
    
    
    
    
    
    
    
    
    145,856
    
    
    
    (1,059
    )Total mortgage-backed
securities available for
sale
    
    
    929,316
    
    
    
    1,521
    
    
    
    (9,962
    )
    
    
    920,875
    
    
    
    530,683
    
    
    
    (5,320
    )
    
    
    147,138
    
    
    
    (4,642
    )
    
    
    677,821
    
    
    
    (9,962
    )Total investment and
mortgage-backed securities
available for sale
    
    
    1,180,351
    
    
    
    1,636
    
    
    
    (12,847
    )
    
    
    1,169,140
    
    
    
    687,094
    
    
    
    (5,838
    )
    
    
    221,246
    
    
    
    (7,009
    )
    
    
    908,340
    
    
    
    (12,847
    )Investment securities held
to maturity:Municipal securities
    
    
    215,594
    
    
    
    7,415
    
    
    
    (712
    )
    
    
    222,297
    
    
    
    10,457
    
    
    
    (75
    )
    
    
    19,765
    
    
    
    (637
    )
    
    
    30,222
    
    
    
    (712
    )Mortgage-backed securities
held to maturity:FNMA
    
    
    5,765
    
    
    
    
    
    
    
    (76
    )
    
    
    5,689
    
    
    
    5,689
    
    
    
    (76
    )
    
    
    
    
    
    
    
    
    
    
    5,689
    
    
    
    (76
    )GNMA
    
    
    102,439
    
    
    
    489
    
    
    
    (333
    )
    
    
    102,595
    
    
    
    8,396
    
    
    
    (18
    )
    
    
    12,075
    
    
    
    (315
    )
    
    
    20,471
    
    
    
    (333
    )FHLMC
    
    
    1,404
    
    
    
    
    
    
    
    (16
    )
    
    
    1,388
    
    
    
    1,388
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    1,388
    
    
    
    (16
    )Total mortgage-backed
securities held to maturity
    
    
    109,608
    
    
    
    489
    
    
    
    (425
    )
    
    
    109,672
    
    
    
    15,473
    
    
    
    (110
    )
    
    
    12,075
    
    
    
    (315
    )
    
    
    27,548
    
    
    
    (425
    )Total investment and
mortgage-backed securities
held to maturity
    
    
    325,202
    
    
    
    7,904
    
    
    
    (1,137
    )
    
    
    331,969
    
    
    
    25,930
    
    
    
    (185
    )
    
    
    31,840
    
    
    
    (952
    )
    
    
    57,770
    
    
    
    (1,137
    )Total securities
    
    $
    1,505,553
    
    
    $
    9,540
    
    
    $
    (13,984
    )
    
    $
    1,501,109
    
    
    $
    713,024
    
    
    $
    (6,023
    )
    
    $
    253,086
    
    
    $
    (7,961
    )
    
    $
    966,110
    
    
    $
    (13,984
    )
  6.
    
    Loans Held for SaleThe following are the components of loans held for sale at September 30, 2005, and December 31,
2004 (dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Commercial:Secured by real estate  nonresidential
    
    $
    299,919
    
    
    $
    26,882Secured by real estate  multifamily
    
    
    
    
    
    
    295,253Business
    
    
    2,046
    
    
    
    3,337Total commercial loans
    
    
    301,965
    
    
    
    325,472Gross loans held for sale
    
    
    301,965
    
    
    
    325,472Net deferred loan costs (fees)
    
    
    (662
    )
    
    
    535Loans held for sale, at lower of cost or market value
    
    $
    301,303
    
    
    $
    326,007
 11




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##### Table of Contents



7.
    
    Loans Held in PortfolioThe following are the components of loans held in portfolio at September 30, 2005, and December 31,
2004 (dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Commercial:Secured by real estate  nonresidential
    
    $
    2,168,827
    
    
    $
    1,951,020Secured by real estate  multifamily
    
    
    1,372,765
    
    
    
    865,483Construction
    
    
    375,990
    
    
    
    291,080Business
    
    
    713,046
    
    
    
    468,220Total commercial loans
    
    
    4,630,628
    
    
    
    3,575,803Consumer:Residential mortgage (one to four family)
    
    
    561,676
    
    
    
    434,323Other
    
    
    50,970
    
    
    
    47,926Total consumer loans
    
    
    612,646
    
    
    
    482,249Gross loans held in portfolio
    
    
    5,243,274
    
    
    
    4,058,052Net deferred loan fees
    
    
    (3,793
    )
    
    
    (7,311
    )Loans held in portfolio
    
    
    5,239,481
    
    
    
    4,050,741Allowance for loan losses
    
    
    (57,501
    )
    
    
    (56,472
    )Net loans held in portfolio
    
    $
    5,181,980
    
    
    $
    3,994,269
 12




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance at beginning of period:Allowance for loan losses
    
    $
    58,508
    
    
    $
    59,469
    
    
    $
    56,472
    
    
    $
    58,126Allowance for losses  unfunded commitments
    
    
    4,807
    
    
    
    3,143
    
    
    
    3,940
    
    
    
    2,737Total allowances for losses at beginning of
period
    
    
    63,315
    
    
    
    62,612
    
    
    
    60,412
    
    
    
    60,863Provision for (recovery of) losses
    
    
    (105
    )
    
    
    1,644
    
    
    
    2,860
    
    
    
    4,827Loans charged off
    
    
    (98
    )
    
    
    (1,365
    )
    
    
    (235
    )
    
    
    (2,876
    )Recoveries of loans previously charged off
    
    
    38
    
    
    
    36
    
    
    
    113
    
    
    
    113Total allowances for losses at end of period
    
    
    63,150
    
    
    
    62,927
    
    
    
    63,150
    
    
    
    62,927Allowance for loan losses
    
    
    57,501
    
    
    
    59,347
    
    
    
    57,501
    
    
    
    59,347Allowance for losses  unfunded commitments
    
    
    5,649
    
    
    
    3,580
    
    
    
    5,649
    
    
    
    3,580Total allowances for losses at end of period
    
    $
    63,150
    
    
    $
    62,927
    
    
    $
    63,150
    
    
    $
    62,927
 8.
    
    GoodwillThe following is the carrying amount for goodwill as of September 30, 2005, and December 31, 2004
(dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Goodwill
    
    $
    68,301
    
    
    $
    68,301
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    68,301
    
    
    $
    85,092
    
    
    $
    68,301
    
    
    $
    87,437Addition/Capitalization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase price adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,345
    )Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Write-downs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    68,301
    
    
    $
    85,092
    
    
    $
    68,301
    
    
    $
    85,092
 9.
    
    Core Deposit IntangiblesThe following is the gross carrying amount and the associated accumulated amortization for core
deposit intangibles as of September 30, 2005, and December 31, 2004 (dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Core deposit intangibles, gross
    
    $
    12,955
    
    
    $
    13,100Accumulated amortization
    
    
    (4,018
    )
    
    
    (3,271
    )Core deposit intangibles, net
    
    $
    8,937
    
    
    $
    9,829
 13




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##### Table of Contents



Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    9,287
    
    
    $
    10,396
    
    
    $
    9,829
    
    
    $
    11,111Addition/Capitalization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization
    
    
    (205
    )
    
    
    (285
    )
    
    
    (747
    )
    
    
    (1,000
    )Write-downs
    
    
    (145
    )
    
    
    
    
    
    
    (145
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    8,937
    
    
    $
    10,111
    
    
    $
    8,937
    
    
    $
    10,111
 10.
    
    Mortgage Servicing RightsThe following is the gross carrying amount and the associated accumulated amortization for mortgage
servicing rights as of September 30, 2005, and December 31, 2004 (dollars in thousands):
 September 30,
    
    
    December 31,2005
    
    
    2004Mortgage servicing rights, gross
    
    $
    13,285
    
    
    $
    9,149Accumulated amortization
    
    
    (3,108
    )
    
    
    (1,402
    )Mortgage servicing rights, net
    
    $
    10,177
    
    
    $
    7,747
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    10,190
    
    
    $
    6,072
    
    
    $
    7,747
    
    
    $
    4,006Addition/Capitalization
    
    
    517
    
    
    
    1,100
    
    
    
    4,136
    
    
    
    3,783Purchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization
    
    
    (530
    )
    
    
    (213
    )
    
    
    (1,706
    )
    
    
    (830
    )Write-downs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    10,177
    
    
    $
    6,959
    
    
    $
    10,177
    
    
    $
    6,959
   14




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##### Table of Contents



11.
    
    DepositsThe Bank had interest-bearing deposits in foreign banking offices of $481.4 million and $328.6
million at September 30, 2005, and December 31, 2004, respectively.12.
    
    BorrowingsThe Bank recorded certain loan sale transactions as secured borrowings as of June 30, 2005, since
these transactions did not qualify for sales treatment under SFAS No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities. The short-term and long-term
secured borrowings amounted to $5.4 million and $45.1 million, respectively, at June 30, 2005.
Subsequently in August 2005, a portion of the loan sales agreements was amended to permit loan
sales transactions. As a result, $29.6 million of secured borrowings qualified for sales
treatment, resulting in a gain on sale of loans of $233,000. Additionally in September 2005, the
Bank exercised its option to repurchase the remaining $20.8 million of loans related to the secured
borrowings from the loan participants, which resulted in a loss on extinguishment from secured
borrowings of $89,000.13.
    
    Subordinated DebenturesPursuant to an Indenture dated as of April 17, 1998, (the Indenture), between UCBH and Wilmington
Trust Company (Wilmington), as Trustee, UCBH on June 27, 2005, redeemed the entire $30,928,000
aggregate principal amount of the 9.375% junior subordinated debentures due May 1, 2028 (the
Debentures), issued by UCBH under the Indenture. The redemption price consisted of the
$30,928,000 aggregate principal amount plus aggregate unpaid interest of $451,000. The redemption
of the Debentures resulted in a loss of $1.2 million from the write-off of the unamortized
Debentures issuance costs and other legal costs for the nine months ended September 30, 2005.On September 22, 2005, UCBH issued $41.2 million in junior subordinated debentures to a newly
formed Delaware trust subsidiary, UCBH Capital Trust V. The junior subordinated debentures bear
interest at a fixed rate of 5.82% until November 23, 2010, after which date the rate will
automatically convert to a floating rate equal to the three month London Interbank Offered Rate
plus 1.38% and will adjust quarterly until maturity. The junior subordinated debentures will
mature on November 23, 2035, but may be redeemed by UCBH at its option in whole or in part at
anytime on or after November 23, 2010. Additionally, UCBH may redeem the junior subordinated
debentures at its option in whole at anytime upon certain events.14.
    
    Earnings Per ShareOn January 27, 2005, UCBH declared a two-for-one stock split in the form of a stock dividend to
shareholders of record as of March 31, 2005, and distributed the stock dividend on April 12, 2005.
Accordingly, basic and diluted earnings per share on the consolidated statements of income for the
three and nine months ended September 30, 2004, have been adjusted to reflect the impact of the
stock split. Additionally, the number of issued and outstanding shares of UCBHs common stock on
the consolidated balance sheet at December 31, 2004, takes into account the stock split.
 15




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The antidilutive outstanding stock options for 5,931,644 and 2,740,800 shares of UCBH common stock
for the three and nine months ended September 30, 2005, respectively, and for 93,000 shares of UCBH
common stock for the three and nine months ended September 30, 2004, were excluded from the
computation of diluted earnings per share as a result of the stock options exercise price being
greater than the average market price of the UCBH common stock for the period. The following is a
reconciliation of the numerators and denominators of the basic and diluted earnings per share for
the three and nine months ended September 30, 2005 and 2004 (dollars in thousands, except shares
and per share amounts):
 Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountThree Months Ended September 30, 2005
    
    
    Three Months Ended September 30, 2004Net income  basic
    
    $
    25,523
    
    
    
    91,799,715
    
    
    $
    0.28
    
    
    $
    21,773
    
    
    
    90,587,184
    
    
    $
    0.24Effect of stock options
    
    
    
    
    
    
    3,618,940
    
    
    
    
    
    
    
    
    
    
    
    4,579,022Net income  diluted
    
    $
    25,523
    
    
    
    95,418,655
    
    
    $
    0.27
    
    
    $
    21,773
    
    
    
    95,166,206
    
    
    $
    0.23Nine Months Ended September 30, 2005
    
    
    Nine Months Ended September 30, 2004Net income  basic
    
    $
    72,693
    
    
    
    91,552,743
    
    
    $
    0.79
    
    
    $
    61,860
    
    
    
    90,379,938
    
    
    $
    0.68Effect of stock options
    
    
    
    
    
    
    3,909,009
    
    
    
    
    
    
    
    
    
    
    
    4,648,600Net income  diluted
    
    $
    72,693
    
    
    
    95,461,752
    
    
    $
    0.76
    
    
    $
    61,860
    
    
    
    95,028,538
    
    
    $
    0.65
 15.
    
    Derivative Financial Instruments and Financial Instruments with Off-Balance-Sheet RiskThe Bank is a party to derivative financial instruments and financial instruments with
off-balance-sheet risk in the normal course of business to meet the financing needs of its
customers and to reduce its own exposure to fluctuations in interest rates. The Bank does not hold
or issue financial instruments for trading purposes. Financial instruments in the normal course of
business include commitments to extend and purchase credit, forward commitments to sell loans,
letters of credit, foreign exchange contracts and interest-rate caps. Those instruments involve,
to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in
the statement of financial position. The contract or notional amounts of those instruments reflect
the extent of involvement the Bank has in particular classes of financial instruments.The Banks exposure to credit loss in the event of nonperformance by the other party to the
financial instrument for commitments to extend credit is represented by the contractual or notional
amount of those instruments. The Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments. For interest-rate swap and
cap transactions and forward commitments to sell loans, the contract or notional amounts do not
represent exposure to credit loss. The Bank controls the credit risk of its interest-rate swap and
cap agreements, foreign exchange contracts, and forward commitments to sell loans through credit
approvals, limits and monitoring procedures. The Bank does not require collateral or other
security to support interest-rate swap transactions with credit risk.
 16




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##### Table of Contents



The following are the contractual or notional amounts of derivative financial instruments and
financial instruments with off-balance-sheet risk as of September 30, 2005, and December 31, 2004
(dollars in thousands):
 September 30,
    
    December 31,2005
    
    2004Financial instruments whose contract
amounts represent credit risk:Commitments to extend credit:Consumer (including residential mortgage)
    
    $
    83,952
    
    
    $
    75,558Commercial (excluding construction)
    
    
    617,662
    
    
    
    451,946Construction
    
    
    428,207
    
    
    
    260,441Letters of credit
    
    
    89,348
    
    
    
    44,752Unfunded loans held for sale commitments
    
    
    
    
    
    
    Foreign exchange contracts receivable
    
    
    (245,406
    )
    
    
    (176,644
    )Foreign exchange contracts payable
    
    
    245,498
    
    
    
    175,954Put options to buy
    
    
    15,239
    
    
    
    18,683Put options to sell
    
    
    (15,239
    )
    
    
    (18,683
    )Unfunded CRA investment commitments
    
    
    5,243
    
    
    
    8,331
 Commitments
      17




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##### Table of Contents



16.
    
    Supplemental Cash Flow InformationThe following is the supplemental cash flow information for the nine months ended September 30,
2005 and 2004 (dollars in thousands):
 Nine Months Ended September 30,2005
    
    2004Cash paid during the period for:Interest
    
    $
    107,582
    
    
    $
    80,205Income taxes
    
    
    26,692
    
    
    
    21,911Noncash investing and financing activities:Loans securitized
    
    $
    
    
    
    $
    147,134Income tax benefit from stock options exercised
    
    
    3,714
    
    
    
    2,573Transfer of multifamily real estate loans from held for sale to held in portfolio
    
    
    (235,939
    )
    
    
    Transfer of commercial real estate loans to held for sale from held in portfolio
    
    
    265,098
    
    
    
    
 17.
    
    Segment InformationIn accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, the Company designates the internal organization that is used by management for making
operating decisions and assessing performance as the source of the Companys reportable segments.
The Company has determined that its reportable segments are those that are based on the Companys
method of internal reporting. The Company has determined that it has two reportable segments,
Domestic Banking and Other. Other segment consists of the Companys Hong Kong operations,
UCBIS and UCBH. The intersegment column consists of the UCBH elimination unit, which reflects the
elimination of intersegment transactions. The Hong Kong operations commenced operations in the
last half of 2003 and UCBIS commenced operations during the first quarter of 2004. The following
is segment information for the three and nine months ended September 30, 2005 and 2004 (dollars in
thousands):
 Domestic
    
    
    
    
    
    TotalBanking
    
    Other
    
    Segments
    
    Intersegment
    
    ConsolidatedThree months ended September 30, 2005:Total interest income
    
    $
    102,158
    
    
    $
    1,888
    
    
    $
    104,046
    
    
    $
    
    
    
    $
    104,046Net interest income
    
    
    59,490
    
    
    
    626
    
    
    
    60,116
    
    
    
    
    
    
    
    60,116Net income
    
    
    25,047
    
    
    
    28,522
    
    
    
    53,569
    
    
    
    (28,046
    )
    
    
    25,523Three months ended September 30, 2004:Total interest income
    
    
    75,872
    
    
    
    678
    
    
    
    76,550
    
    
    
    
    
    
    
    76,550Net interest income (expense)
    
    
    54,884
    
    
    
    (2,087
    )
    
    
    52,797
    
    
    
    
    
    
    
    52,797Net income (loss)
    
    
    25,013
    
    
    
    20,570
    
    
    
    45,583
    
    
    
    (23,810
    )
    
    
    21,773Nine months ended September 30, 2005:Total interest income
    
    
    280,621
    
    
    
    4,320
    
    
    
    284,941
    
    
    
    
    
    
    
    284,941Net interest income (expense)
    
    
    178,262
    
    
    
    (3,134
    )
    
    
    175,128
    
    
    
    
    
    
    
    175,128Net income (loss)
    
    
    80,441
    
    
    
    73,374
    
    
    
    153,815
    
    
    
    (81,122
    )
    
    
    72,693Nine months ended September 30, 2004:Total interest income
    
    
    216,441
    
    
    
    2,059
    
    
    
    218,500
    
    
    
    
    
    
    
    218,500Net interest income (expense)
    
    
    157,705
    
    
    
    (5,453
    )
    
    
    152,252
    
    
    
    
    
    
    
    152,252Net income (loss)
    
    
    70,669
    
    
    
    58,702
    
    
    
    129,371
    
    
    
    (67,511
    )
    
    
    61,860
 18




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##### Table of Contents



18.
    
    Federal and State Taxes on IncomeOn October 22, 2004, the President of the United States of America signed into law the American
Jobs Creation Act of 2004 (AJCA). The AJCA would allow the Company to repatriate foreign
earnings at an effective tax rate of 5.25% upon satisfaction of certain conditions. Such
repatriations must occur in either an enterprises last year that began before the enactment date,
or the first tax year that begins during the one-year period beginning on the date of enactment.During the three months ended June 30, 2005, the Company elected to repatriate approximately $26
million in previously unremitted foreign earnings. As a result, the Company recorded a current
taxes payable on such previously unremitted foreign earnings of approximately $703,000 in the
second quarter of 2005. In addition, the Company has recorded a tax benefit of approximately $3.9
million as a result of the reversal of the deferred tax liability related to unremitted earnings of
its foreign subsidiary.FASB Staff Position (FSP) 109-2, Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the AJCA, indicates that the lack of clarification of certain
provisions within the AJCA and the timing of the enactment necessitate a practical exception to the
SFAS No. 109, Accounting for Income Taxes, requirement to reflect in the period of enactment the
effect of the new tax law. Accordingly, an enterprise is allowed time beyond the financial
reporting period of enactment to evaluate the effect of the AJCA on its plan for reinvestment or
repatriation of foreign earnings. FSP 109-2 requires that the provisions of SFAS No. 109 be
applied as an enterprise decides on its plan for reinvestment or repatriation of its unremitted
foreign earnings.19.
    
    Related Party TransactionsSeveral members of the Board of Directors and executive officers of the Company have deposits with
the Bank that are made in the ordinary course of business with the same terms and conditions,
including interest rates, as those prevailing at the same time for comparable transactions with
other customers. The total deposits for these related parties were $12.7 million at September 30,
2005, and $38.1 million at December 31, 2004. Additionally, the Bank has adopted a restrictive
policy that prohibits loans or extensions of credit to Directors and affiliated persons of the
Company, and their related interests.20.
    
    Subsequent EventsOn October 20, 2005, UCBHs Board of Directors declared a quarterly cash dividend of $0.025 per
share of common stock. The dividend will be paid on January 12, 2006, to stockholders of record as
of December 31, 2005.On October 31, 2005, UCBH completed its acquisition of Pacifica for a total consideration of
approximately $41.0 million consisting of 1,241,194 million shares of UCBHs common stock and $19.4
million in cash, which includes $2.9 million related to the cash-out of the outstanding stock
options of Pacifica.UCBH and Great Eastern Bank (GEB), a New York state-chartered banking corporation, entered into
an Agreement and Plan of Merger dated as of October 13, 2005. Under the terms of the agreement,
the value of the transaction is approximately $103.6 million (based on an average price prior to
announcement of $17.66 per share). Consideration for the acquisition will consist of approximately
$51.8 million in cash and the issuance of 2,936,013 shares of UCBH common stock valued at
approximately $51.8 million (based on an average price prior to announcement of $17.66 per share),
subject to certain adjustments detailed in the definitive agreement. Under certain circumstances,
the total consideration may be adjusted based upon the appraised value of certain GEB assets and
the number of shares of UCBH common stock may be adjusted in the event of a substantial change in
the market value of UCBH common stock. The transaction may be terminated or renegotiated for
various reasons prior to the consummation of the merger, including but not limited to a substantial
change in the market value of the UCBH common stock in relation to the market value of a defined
group of specified financial institutions as a whole, unless UCBH agrees to increase the amount of
total consideration paid in connection with the merger. Similarly, UCBH may terminate the
transaction for various reasons prior to the consummation of the merger. If either GEB or UCBH
terminates the transaction upon certain conditions, such party shall pay a break-up fee to the
other. In that regard, by a press release dated October 21, 2005, Cathay General Bancorp indicated its willingness to
enter into a transaction with GEB. On November 9, 2005, GEB
issued a press release indicating that the Board of
 19




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##### Table of Contents



Directors of GEB has concluded that the Cathay General
Bancorp proposal is not materially superior to the terms of GEB's agreement
with UCBH and that GEB intends to continue to go forward with its
planned merger with the Bank. The transaction, which
is subject to approval by two-thirds of the GEBs stockholders and
various regulatory authorities, is anticipated to close in the first quarter of 2006. This
proposed acquisition provides UCB with the platform, the critical mass of customer relationships
and personnel, and the branches from which UCB will significantly accelerate its strategy of
expanding in this important market, particularly in the dynamic commercial banking segment of New
York. GEB had assets of $309.9 million and deposits of $278.0 million as of June 30, 2005.
 20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This quarterly report on Form 10-Q may include forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon
specific assumptions that may or may not prove correct. Forward-looking statements are also
subject to known and unknown risks, uncertainties and other factors relating to UCBH Holdings, Inc.
and subsidiaries (the Company) operations and business environment, all of which are difficult to
predict, and many of which are beyond the control of the Company. The factors include, among
others:
 
    
    Economic and business conditions in the areas and markets in which the Company operates, particularly those affecting
loans secured by real estate;
    
    Deterioration or improvement in the ability of borrowers to pay their debt;
    
    Market fluctuations, such as those affecting interest and foreign exchange rates, and the value of securities in which
United Commercial Bank (the Bank) invests;
    
    Competition from other financial institutions, whether banks, investment banks, insurance companies or others;
    
    The ability of the Company and the Bank to assimilate acquisitions and enter new markets and lines of business, and to
open new branches successfully;
    
    Changes in business strategies;
    
    Changes in tax law and governmental regulation of financial institutions;
    
    Demographic changes; and
    
    Other risks and uncertainties, including those discussed in the documents the Company files with the Securities and
Exchange Commission (the SEC).
 The foregoing may cause the actual results and performance of the Company to be materially
different from the results and performance indicated or suggested by the forward-looking
statements. Further description of the risks and uncertainties are included in detail in the
Companys most recent Annual Report on Form 10-K for the year ended December 31, 2004, as filed
with the SEC.
 The following discussion and analysis are intended to provide details of the results of operations
of the Company for the three and nine months ended September 30, 2005 and 2004, and financial
position at September 30, 2005, and December 31, 2004. The following discussion should be read in
conjunction with the information set forth in the Companys consolidated financial statements and
notes thereto and other financial data included in this report.
 21




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##### Table of Contents



FINANCIAL HIGHLIGHTS
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,Increase (Decrease)
    
    
    
    
    
    
    
    
    
    
    Increase (Decrease)2005
    
    
    2004
    
    
    Amount
    
    
    %
    
    
    2005
    
    
    2004
    
    
    Amount
    
    
    %Operating Data:Interest & dividend income:Loans
    
    $
    87,684
    
    
    $
    57,156
    
    
    $
    30,528
    
    
    
    53.41
    %
    
    $
    233,544
    
    
    $
    162,597
    
    
    $
    70,947
    
    
    
    43.63
    %Funds sold and due from bank
    
    
    226
    
    
    
    115
    
    
    
    111
    
    
    
    96.52
    
    
    
    1,225
    
    
    
    223
    
    
    
    1,002
    
    
    
    449.33Investment & mortgage-backed securities:Taxable
    
    
    13,444
    
    
    
    16,825
    
    
    
    (3,381
    )
    
    
    (20.10
    )
    
    
    42,245
    
    
    
    48,723
    
    
    
    (6,478
    )
    
    
    (13.30
    )Nontaxable
    
    
    2,692
    
    
    
    2,454
    
    
    
    238
    
    
    
    9.70
    
    
    
    7,927
    
    
    
    6,957
    
    
    
    970
    
    
    
    13.94Total interest & dividend income
    
    
    104,046
    
    
    
    76,550
    
    
    
    27,496
    
    
    
    35.92
    
    
    
    284,941
    
    
    
    218,500
    
    
    
    66,441
    
    
    
    30.41Interest expense:Deposits
    
    
    33,410
    
    
    
    17,162
    
    
    
    16,248
    
    
    
    94.67
    
    
    
    82,077
    
    
    
    47,565
    
    
    
    34,512
    
    
    
    72.56Short-term borrowings
    
    
    4,062
    
    
    
    540
    
    
    
    3,522
    
    
    
    652.22
    
    
    
    7,031
    
    
    
    1,785
    
    
    
    5,246
    
    
    
    293.89Subordinated debentures
    
    
    1,967
    
    
    
    2,075
    
    
    
    (108
    )
    
    
    (5.20
    )
    
    
    6,714
    
    
    
    5,985
    
    
    
    729
    
    
    
    12.18Long-term borrowings
    
    
    4,491
    
    
    
    3,976
    
    
    
    515
    
    
    
    12.95
    
    
    
    13,991
    
    
    
    10,913
    
    
    
    3,078
    
    
    
    28.20Total interest expense
    
    
    43,930
    
    
    
    23,753
    
    
    
    20,177
    
    
    
    84.95
    
    
    
    109,813
    
    
    
    66,248
    
    
    
    43,565
    
    
    
    65.76Net interest income
    
    
    60,116
    
    
    
    52,797
    
    
    
    7,319
    
    
    
    13.86
    
    
    
    175,128
    
    
    
    152,252
    
    
    
    22,876
    
    
    
    15.03Provision for (recovery of) loan losses
    
    
    (105
    )
    
    
    1,644
    
    
    
    (1,749
    )
    
    
    (106.39
    )
    
    
    2,860
    
    
    
    4,827
    
    
    
    (1,967
    )
    
    
    (40.75
    )Net interest income after provision for
loan losses
    
    
    60,221
    
    
    
    51,153
    
    
    
    9,068
    
    
    
    17.73
    
    
    
    172,268
    
    
    
    147,425
    
    
    
    24,843
    
    
    
    16.85Noninterest income:Commercial banking fees
    
    
    2,743
    
    
    
    2,454
    
    
    
    289
    
    
    
    11.78
    
    
    
    7,584
    
    
    
    6,426
    
    
    
    1,158
    
    
    
    18.02Service charges on deposits
    
    
    758
    
    
    
    633
    
    
    
    125
    
    
    
    19.75
    
    
    
    2,273
    
    
    
    1,963
    
    
    
    310
    
    
    
    15.79Gain (loss) on sale of securities, net
    
    
    
    
    
    
    2,566
    
    
    
    (2,566
    )
    
    
    (100.00
    )
    
    
    (5
    )
    
    
    9,059
    
    
    
    (9,064
    )
    
    
    (100.06
    )Gain on sale of SBA loans, net
    
    
    715
    
    
    
    1,116
    
    
    
    (401
    )
    
    
    (35.93
    )
    
    
    2,638
    
    
    
    2,997
    
    
    
    (359
    )
    
    
    (11.98
    )Gain on sale of multifamily real estate
& other loans, net
    
    
    1,314
    
    
    
    2,951
    
    
    
    (1,637
    )
    
    
    (55.47
    )
    
    
    7,749
    
    
    
    2,951
    
    
    
    4,798
    
    
    
    162.59Unrealized loss on loans held for sale
    
    
    (773
    )
    
    
    
    
    
    
    (773
    )
    
    
    
    
    
    
    (773
    )
    
    
    
    
    
    
    (773
    )
    
    
    Equity loss in other equity investments
    
    
    (510
    )
    
    
    (158
    )
    
    
    (352
    )
    
    
    (222.78
    )
    
    
    (1,780
    )
    
    
    (1,647
    )
    
    
    (133
    )
    
    
    (8.08
    )Other fees
    
    
    316
    
    
    
    246
    
    
    
    70
    
    
    
    28.46
    
    
    
    591
    
    
    
    300
    
    
    
    291
    
    
    
    97.00Total noninterest income
    
    
    4,563
    
    
    
    9,808
    
    
    
    (5,245
    )
    
    
    (53.48
    )
    
    
    18,277
    
    
    
    22,049
    
    
    
    (3,772
    )
    
    
    (17.11
    )Noninterest expense:Personnel
    
    
    12,895
    
    
    
    13,533
    
    
    
    (638
    )
    
    
    (4.71
    )
    
    
    42,744
    
    
    
    38,144
    
    
    
    4,600
    
    
    
    12.06Occupancy
    
    
    3,006
    
    
    
    2,326
    
    
    
    680
    
    
    
    29.23
    
    
    
    8,914
    
    
    
    6,050
    
    
    
    2,864
    
    
    
    47.34Data processing
    
    
    1,698
    
    
    
    1,657
    
    
    
    41
    
    
    
    2.47
    
    
    
    5,084
    
    
    
    4,351
    
    
    
    733
    
    
    
    16.85Furniture & equipment
    
    
    1,535
    
    
    
    1,854
    
    
    
    (319
    )
    
    
    (17.21
    )
    
    
    4,631
    
    
    
    4,723
    
    
    
    (92
    )
    
    
    (1.95
    )Professional fees & contracted services
    
    
    2,436
    
    
    
    1,856
    
    
    
    580
    
    
    
    31.25
    
    
    
    7,727
    
    
    
    4,980
    
    
    
    2,747
    
    
    
    55.16Deposit insurance
    
    
    182
    
    
    
    187
    
    
    
    (5
    )
    
    
    (2.67
    )
    
    
    559
    
    
    
    589
    
    
    
    (30
    )
    
    
    (5.09
    )Communication
    
    
    211
    
    
    
    319
    
    
    
    (108
    )
    
    
    (33.86
    )
    
    
    706
    
    
    
    934
    
    
    
    (228
    )
    
    
    (24.41
    )Core deposit intangible amortization
    
    
    205
    
    
    
    285
    
    
    
    (80
    )
    
    
    (28.07
    )
    
    
    747
    
    
    
    1,000
    
    
    
    (253
    )
    
    
    (25.30
    )Loss on extinguishment of subordinated
debentures & secured borrowings
    
    
    89
    
    
    
    
    
    
    
    89
    
    
    
    
    
    
    
    1,285
    
    
    
    
    
    
    
    1,285
    
    
    
    Other general & administrative
    
    
    3,714
    
    
    
    3,964
    
    
    
    (250
    )
    
    
    (6.31
    )
    
    
    11,215
    
    
    
    10,976
    
    
    
    239
    
    
    
    2.18Total noninterest expense
    
    
    25,971
    
    
    
    25,981
    
    
    
    (10
    )
    
    
    (0.04
    )
    
    
    83,612
    
    
    
    71,747
    
    
    
    11,865
    
    
    
    16.54Income before income tax expense
    
    
    38,813
    
    
    
    34,980
    
    
    
    3,833
    
    
    
    10.96
    
    
    
    106,933
    
    
    
    97,727
    
    
    
    9,206
    
    
    
    9.42Income tax expense
    
    
    13,290
    
    
    
    13,207
    
    
    
    83
    
    
    
    0.63
    
    
    
    34,240
    
    
    
    35,867
    
    
    
    (1,627
    )
    
    
    (4.54
    )Net income
    
    $
    25,523
    
    
    $
    21,773
    
    
    $
    3,750
    
    
    
    17.22
    
    
    $
    72,693
    
    
    $
    61,860
    
    
    $
    10,833
    
    
    
    17.51Per Share Data:Basic earnings per share (1)
    
    $
    0.28
    
    
    $
    0.24
    
    
    $
    0.04
    
    
    
    16.67
    %
    
    $
    0.79
    
    
    $
    0.68
    
    
    $
    0.11
    
    
    
    16.18
    %Diluted earnings per share (1)
    
    
    0.27
    
    
    
    0.23
    
    
    
    0.04
    
    
    
    17.39
    
    
    
    0.76
    
    
    
    0.65
    
    
    
    0.11
    
    
    
    16.92Dividends declared per share (1)
    
    
    0.03
    
    
    
    0.02
    
    
    
    0.01
    
    
    
    50.00
    
    
    
    0.08
    
    
    
    0.06
    
    
    
    0.02
    
    
    
    33.33Operating Ratios and Other Data:Return on average assets
    
    
    1.43
    %
    
    
    1.43
    %
    
    
    bp*
    
    
    
    %
    
    
    1.44
    %
    
    
    1.41
    %
    
    3
    bp*
    
    
    2.13
    %Return on average equity
    
    
    18.97
    
    
    
    18.97
    
    
    
    
    
    
    
    
    
    
    
    18.85
    
    
    
    18.65
    
    
    
    20
    
    
    
    1.07Efficiency ratio (2)
    
    
    40.15
    
    
    
    41.50
    
    
    
    (135
    )
    
    
    (3.25
    )
    
    
    43.23
    
    
    
    41.16
    
    
    
    207
    
    
    
    5.03Noninterest expense to average assets
    
    
    1.46
    
    
    
    1.70
    
    
    
    (24
    )
    
    
    (14.12
    )
    
    
    1.65
    
    
    
    1.64
    
    
    
    1
    
    
    
    0.61Average equity to average assets
    
    
    7.56
    
    
    
    7.52
    
    
    
    4
    
    
    
    0.53
    
    
    
    7.63
    
    
    
    7.56
    
    
    
    7
    
    
    
    0.93Dividend payout ratio (3)
    
    
    9.26
    
    
    
    8.70
    
    
    
    56
    
    
    
    6.44
    
    
    
    9.87
    
    
    
    9.23
    
    
    
    64
    
    
    
    6.93Net loan charge-offs to average loans
    
    
    
    
    
    
    0.13
    
    
    
    (13
    )
    
    
    (100.00
    )
    
    
    
    
    
    
    0.09
    
    
    
    (9
    )
    
    
    (100.00
    )Interest rate spread (4)
    
    
    3.23
    
    
    
    3.50
    
    
    
    (27
    )
    
    
    (7.71
    )
    
    
    3.36
    
    
    
    3.50
    
    
    
    (14
    )
    
    
    (4.00
    )Net interest margin (4)
    
    
    3.58
    
    
    
    3.70
    
    
    
    (12
    )
    
    
    (3.24
    )
    
    
    3.68
    
    
    
    3.70
    
    
    
    (2
    )
    
    
    (0.54
    )
 22




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##### Table of Contents



September 30,
    
    
    December 31,
    
    
    Increase (Decrease)2005
    
    
    2004
    
    
    Amount
    
    
    %Asset Quality Data:Loan delinquency ratio
    
    
    0.93
    %
    
    
    0.90
    %
    
    3
    bp*
    
    
    3.33
    %Nonperforming assets to total assets
    
    
    0.16
    
    
    
    0.20
    
    
    
    (4
    )
    
    
    (20.00
    )Nonperforming loans to total loans
    
    
    0.22
    
    
    
    0.29
    
    
    
    (7
    )
    
    
    (24.14
    )Allowance for loan losses to
nonperforming loans
    
    
    476.16
    
    
    
    449.12
    
    
    
    2,704
    
    
    
    6.02Allowance for loan losses to loans
held in portfolio
    
    
    1.10
    
    
    
    1.39
    
    
    
    29
    
    
    
    (20.86
    )Total loan to deposit ratio
    
    
    92.41
    
    
    
    83.91
    
    
    
    850
    
    
    
    10.13Bank Regulatory Capital Ratios:United Commercial Bank:Total risk-based capital
    
    
    11.04
    %
    
    
    12.67
    %
    
    (163
    )bp*
    
    
    (12.87
    )%Tier 1 risk-based capital
    
    
    9.95
    
    
    
    11.42
    
    
    
    (147
    )
    
    
    (12.87
    )Tier 1 leverage ratio (5)
    
    
    8.14
    
    
    
    8.49
    
    
    
    (35
    )
    
    
    (4.12
    )UCBH Holdings, Inc. & Subsidiaries:Total risk-based capital
    
    
    12.04
    
    
    
    13.23
    
    
    
    (119
    )
    
    
    (8.99
    )Tier 1 risk-based capital
    
    
    10.95
    
    
    
    11.98
    
    
    
    (103
    )
    
    
    (8.60
    )Tier 1 leverage ratio (5)
    
    
    8.96
    
    
    
    8.92
    
    
    
    4
    
    
    
    0.45
 
 (1)
    
    The Company completed a two-for-one stock split distributed on April 12, 2005.
Accordingly, for the three months and nine months ended September 30, 2004, basic earnings per
share, diluted earnings per share and dividends per share have been adjusted to reflect the
effect of the stock split.(2)
    
    Represents noninterest expense divided by the total of our net interest income
before provision for loan losses and our noninterest income.(3)
    
    Dividends declared per share as a percentage of diluted earnings per share.(4)
    
    Calculated on a tax equivalent basis. Interest income from nontaxable investment
securities calculated on a tax equivalent basis was $4.0 million and $3.8 million for the
three months ended September 30, 2005 and 2004, respectively, and $11.8 million and $10.9
million for the nine months ended September 30, 2005 and 2004.(5)
    
    Represents Tier 1 capital to total average assets.*
    
    Basis point. SUMMARY RESULTS
     23




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24




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##### Table of Contents



CORPORATE DEVELOPMENTS
 Merger Agreement with Pacifica Bancorp, Inc
 Merger Agreement with Asian American Bank & Trust Company
 Merger Agreement with Great Eastern Bank
 Appointment of Director
 25




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##### Table of Contents



Appointment of Chief Operating Officer
 Appointment of Chief Credit Officer
 CRITICAL ACCOUNTING POLICIES
   Allowance for Loan Losses . Accounting for Contingencies Accounting by Creditors for
Impairment of a Loan
   26




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##### Table of Contents



Fair Value of Certain Assets .
 Available-for-Sale Securities.
 Goodwill and Other Intangible Assets.
  27




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##### Table of Contents



Income Taxes .
  Alternative Methods of Accounting . Accounting for Stock-Based
Compensation Accounting for Stock-Based Compensation-Transition and
Disclosure
 RESULTS OF OPERATIONS
 General .
   28




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##### Table of Contents



Three Months Ended September 30, 2005, Compared to Three Months Ended September 30, 2004
  Net Interest Income and Net Interest Margin.
 29




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##### Table of Contents



Three Months Ended September 30,2005
    
    
    2004Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    Income/
    
    
    Average
    
    
    Average
    
    
    Income/
    
    
    AverageBalance
    
    
    Expense
    
    
    Yield/Cost
    
    
    Balance
    
    
    Expense
    
    
    Yield/CostInterest-earning assetsLoans (1)(5)
    
    $
    5,349,239
    
    
    $
    87,684
    
    
    
    6.56
    %
    
    $
    4,163,631
    
    
    $
    57,156
    
    
    
    5.49
    %Taxable securities (6)
    
    
    1,269,252
    
    
    
    13,444
    
    
    
    4.24
    
    
    
    1,464,951
    
    
    
    16,825
    
    
    
    4.59Nontaxable securities (6)
    
    
    225,537
    
    
    
    2,692
    
    
    
    4.77
    
    
    
    204,254
    
    
    
    2,454
    
    
    
    4.81Other
    
    
    19,439
    
    
    
    226
    
    
    
    4.65
    
    
    
    31,989
    
    
    
    115
    
    
    
    1.44Total interest-earning assets
    
    
    6,863,467
    
    
    
    104,046
    
    
    
    6.06
    
    
    
    5,864,825
    
    
    
    76,550
    
    
    
    5.22Noninterest-earning assets
    
    
    258,604
    
    
    
    
    
    
    
    
    
    
    
    244,561
    
    
    
    Total assets
    
    $
    7,122,071
    
    
    $
    104,046
    
    
    
    5.84
    %
    
    $
    6,109,386
    
    
    $
    76,550
    
    
    
    5.01
    %Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,149,827
    
    
    $
    5,778
    
    
    
    2.01
    %
    
    $
    877,903
    
    
    $
    2,565
    
    
    
    1.17
    %Savings accounts
    
    
    783,867
    
    
    
    2,183
    
    
    
    1.11
    
    
    
    947,579
    
    
    
    2,299
    
    
    
    0.97Time deposits
    
    
    3,196,213
    
    
    
    25,449
    
    
    
    3.18
    
    
    
    2,720,571
    
    
    
    12,298
    
    
    
    1.81Total interest-bearing deposits
    
    
    5,129,907
    
    
    
    33,410
    
    
    
    2.61
    
    
    
    4,546,053
    
    
    
    17,162
    
    
    
    1.51Borrowings
    
    
    796,742
    
    
    
    8,553
    
    
    
    4.29
    
    
    
    538,704
    
    
    
    4,516
    
    
    
    3.35Subordinated debentures
    
    
    110,034
    
    
    
    1,967
    
    
    
    7.15
    
    
    
    136,000
    
    
    
    2,075
    
    
    
    6.10Total interest-bearing liabilities
    
    
    6,036,683
    
    
    
    43,930
    
    
    
    2.91
    
    
    
    5,220,757
    
    
    
    23,753
    
    
    
    1.82Noninterest-bearing deposits
    
    
    451,726
    
    
    
    
    
    
    
    
    
    
    
    386,591
    
    
    
    Other noninterest-bearing liabilities
    
    
    95,447
    
    
    
    
    
    
    
    
    
    
    
    42,851
    
    
    
    Stockholders equity
    
    
    538,215
    
    
    
    
    
    
    
    
    
    
    
    459,187
    
    
    
    Total liabilities and stockholders equity
    
    $
    7,122,071
    
    
    $
    43,930
    
    
    
    2.47
    %
    
    $
    6,109,386
    
    
    $
    23,753
    
    
    
    1.56
    %Net interest income/net interest rate
spread (2)(4)
    
    
    
    
    
    $
    60,116
    
    
    
    3.15
    %
    
    
    
    
    
    $
    52,797
    
    
    
    3.40
    %Net interest-earning assets/net interest
margin (3)(4)
    
    $
    826,784
    
    
    
    
    
    
    
    3.50
    %
    
    $
    644,068
    
    
    
    
    
    
    
    3.60
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.14
    x
    
    
    
    
    
    
    
    
    
    
    1.12
    x
 
 (1)
    
    Nonaccrual loans are included in the table for computation purposes; however,
interest for such loans is recognized on a cash basis.(2)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.(3)
    
    Net interest margin represents net interest income divided by average
interest-earning assets.(4)
    
    Net interest rate spread and net interest margin are calculated on a nontax
equivalent basis.(5)
    
    Average loans include loans held for sale.(6)
    
    Average yield on investment securities is computed using historical cost balances;
the yield information does not give effect to changes in fair value that are reflected as a
component of stockholders equity.   30




---



##### Table of Contents



Allowance and Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 31




---



##### Table of Contents



Income Tax Expense.
 Nine Months Ended September 30, 2005, Compared to Nine Months Ended September 30, 2004
  Net Interest Income and Net Interest Margin.
 32




---



##### Table of Contents



Nine Months Ended September 30,2005
    
    
    2004Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    Income/
    
    
    Average
    
    
    Average
    
    
    Income/
    
    
    AverageBalance
    
    
    Expense
    
    
    Yield/Cost
    
    
    Balance
    
    
    Expense
    
    
    Yield/CostInterest-earning assetsLoans (1)(5)
    
    $
    4,930,204
    
    
    $
    233,544
    
    
    
    6.32
    %
    
    $
    3,980,799
    
    
    $
    162,597
    
    
    
    5.45
    %Taxable securities (6)
    
    
    1,296,226
    
    
    
    42,245
    
    
    
    4.35
    
    
    
    1,443,162
    
    
    
    48,723
    
    
    
    4.50Nontaxable securities (6)
    
    
    221,063
    
    
    
    7,927
    
    
    
    4.78
    
    
    
    193,771
    
    
    
    6,957
    
    
    
    4.79Other
    
    
    46,603
    
    
    
    1,225
    
    
    
    3.50
    
    
    
    15,151
    
    
    
    223
    
    
    
    1.96Total interest-earning assets
    
    
    6,494,096
    
    
    
    284,941
    
    
    
    5.85
    
    
    
    5,632,883
    
    
    
    218,500
    
    
    
    5.17Noninterest-earning assets
    
    
    245,959
    
    
    
    
    
    
    
    
    
    
    
    214,932
    
    
    
    Total assets
    
    $
    6,740,055
    
    
    $
    284,941
    
    
    
    5.64
    %
    
    $
    5,847,815
    
    
    $
    218,500
    
    
    
    4.98
    %Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,057,833
    
    
    $
    13,625
    
    
    
    1.72
    %
    
    $
    797,965
    
    
    $
    6,272
    
    
    
    1.05
    %Savings accounts
    
    
    856,576
    
    
    
    6,906
    
    
    
    1.07
    
    
    
    905,092
    
    
    
    5,873
    
    
    
    0.87Time deposits
    
    
    3,035,668
    
    
    
    61,546
    
    
    
    2.70
    
    
    
    2,669,104
    
    
    
    35,420
    
    
    
    1.77Total interest-bearing deposits
    
    
    4,950,077
    
    
    
    82,077
    
    
    
    2.21
    
    
    
    4,372,161
    
    
    
    47,565
    
    
    
    1.45Borrowings
    
    
    629,654
    
    
    
    21,022
    
    
    
    4.45
    
    
    
    486,205
    
    
    
    12,698
    
    
    
    3.48Subordinated debentures
    
    
    127,150
    
    
    
    6,714
    
    
    
    7.04
    
    
    
    136,000
    
    
    
    5,985
    
    
    
    5.87Total interest-bearing liabilities
    
    
    5,706,881
    
    
    
    109,813
    
    
    
    2.57
    
    
    
    4,994,366
    
    
    
    66,248
    
    
    
    1.77Noninterest-bearing deposits
    
    
    432,622
    
    
    
    
    
    
    
    
    
    
    
    363,102
    
    
    
    Other noninterest-bearing liabilities
    
    
    86,278
    
    
    
    
    
    
    
    
    
    
    
    48,141
    
    
    
    Stockholders equity
    
    
    514,274
    
    
    
    
    
    
    
    
    
    
    
    442,206
    
    
    
    Total liabilities and stockholders equity
    
    $
    6,740,055
    
    
    $
    109,813
    
    
    
    2.17
    %
    
    $
    5,847,815
    
    
    $
    66,248
    
    
    
    1.51
    %Net interest income/net interest rate
spread (2)(4)
    
    
    
    
    
    $
    175,128
    
    
    
    3.28
    %
    
    
    
    
    
    $
    152,252
    
    
    
    3.40
    %Net interest-earning assets/net interest
margin (3)(4)
    
    $
    787,215
    
    
    
    
    
    
    
    3.60
    %
    
    $
    638,517
    
    
    
    
    
    
    
    3.60
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.14
    x
    
    
    
    
    
    
    
    
    
    
    1.13
    x
 
 (1)
    
    Nonaccrual loans are included in the table for computation purposes; however,
interest for such loans is recognized on a cash basis.(2)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.(3)
    
    Net interest margin represents net interest income divided by average
interest-earning assets.(4)
    
    Net interest rate spread and net interest margin are calculated on a nontax
equivalent basis.(5)
    
    Average loans include loans held for sale.(6)
    
    Average yield on investment securities is computed using historical cost balances;
the yield information does not give effect to changes in fair value that are reflected as a
component of stockholders equity.   33




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##### Table of Contents



Allowance and Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 34




---



##### Table of Contents



Income Tax Expense.
  FINANCIAL POSITION
     35




---



##### Table of Contents



Loans
  September 30, 2005
    
    
    December 31, 2004Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial:Secured by real estate  nonresidential
    
    $
    2,168,827
    
    
    
    41.37
    %
    
    $
    1,951,020
    
    
    
    48.08
    %Secured by real estate  multifamily
    
    
    1,372,765
    
    
    
    26.18
    
    
    
    865,483
    
    
    
    21.33Construction
    
    
    375,990
    
    
    
    7.17
    
    
    
    291,080
    
    
    
    7.17Business
    
    
    713,046
    
    
    
    13.60
    
    
    
    468,220
    
    
    
    11.54Total commercial
    
    
    4,630,628
    
    
    
    88.32
    
    
    
    3,575,803
    
    
    
    88.12Consumer:Residential mortgage (one to four family)
    
    
    561,676
    
    
    
    10.71
    
    
    
    434,323
    
    
    
    10.70Other
    
    
    50,970
    
    
    
    0.97
    
    
    
    47,926
    
    
    
    1.18Total consumer
    
    
    612,646
    
    
    
    11.68
    
    
    
    482,249
    
    
    
    11.88Gross loans held in portfolio
    
    
    5,243,274
    
    
    
    100.00
    %
    
    
    4,058,052
    
    
    
    100.00
    %Net deferred loan origination (fees) costs
    
    
    (3,793
    )
    
    
    
    
    
    
    (7,311
    )Loans held in portfolio
    
    
    5,239,481
    
    
    
    
    
    
    
    4,050,741Allowance for loan losses
    
    
    (57,501
    )
    
    
    
    
    
    
    (56,472
    )Net loans held in portfolio
    
    $
    5,181,980
    
    
    
    
    
    
    $
    3,994,269
   September 30, 2005
    
    
    December 31, 2004Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial:Secured by real estate  nonresidential
    
    $
    299,919
    
    
    
    99.32
    %
    
    $
    26,882
    
    
    
    8.26
    %Secured by real estate  multifamily
    
    
    
    
    
    
    
    
    
    
    295,253
    
    
    
    90.72Business
    
    
    2,046
    
    
    
    0.68
    
    
    
    3,337
    
    
    
    1.02Total commercial
    
    
    301,965
    
    
    
    100.00
    
    
    
    325,472
    
    
    
    100.00Gross loans held for sale
    
    
    301,965
    
    
    
    100.00
    %
    
    
    325,472
    
    
    
    100.00
    %Net deferred loan origination (fees) costs
    
    
    (662
    )
    
    
    
    
    
    
    535Loans held for sale
    
    $
    301,303
    
    
    
    
    
    
    $
    326,007
  36




---



##### Table of Contents



September 30, 2005
    
    
    December 31, 2004Amount
    
    
    %
    
    
    Amount
    
    
    %Adjustable-rate loans
    
    $
    2,703,401
    
    
    
    51.56
    %
    
    $
    2,603,889
    
    
    
    64.17
    %Intermediate fixed-rated loans
    
    
    1,569,867
    
    
    
    29.94
    
    
    
    881,744
    
    
    
    21.73Fixed-rate loans
    
    
    970,006
    
    
    
    18.50
    
    
    
    572,419
    
    
    
    14.10Gross loans held in portfolio.
    
    $
    5,243,274
    
    
    
    100.00
    %
    
    $
    4,058,052
    
    
    
    100.00
    %
  37




---



##### Table of Contents



Nine Months Ended September 30,2005
    
    
    2004Commercial:Secured by real estate  nonresidential
    
    $
    909,155
    
    
    $
    496,658Secured by real estate  multifamily
    
    
    901,392
    
    
    
    562,633Construction
    
    
    488,692
    
    
    
    318,843Business
    
    
    536,734
    
    
    
    320,965Total commercial loans
    
    
    2,835,973
    
    
    
    1,699,099Consumer:Residential mortgage (one to four family)
    
    
    153,529
    
    
    
    190,243Home equity and other
    
    
    30,730
    
    
    
    31,013Total consumer loans
    
    
    184,259
    
    
    
    221,256Total new loan commitments
    
    $
    3,020,232
    
    
    $
    1,920,355
 Internal Loan Securitizations.
    Risk Elements.
 38




---



##### Table of Contents



September 30,
    
    
    December 31,2005
    
    
    2004Commercial loans:Secured by real estate  nonresidential
    
    $
    10,170
    
    
    $
    8,085Construction
    
    
    
    
    
    
    4,353Business
    
    
    1,906
    
    
    
    136Total nonaccrual loans
    
    
    12,076
    
    
    
    12,574Total nonperforming assets
    
    $
    12,076
    
    
    $
    12,574Nonperforming assets to total assets
    
    
    0.16
    %
    
    
    0.20
    %Nonaccrual loans to total loans
    
    
    0.22
    %
    
    
    0.29
    %Nonperforming assets to total loans and OREO
    
    
    0.22
    %
    
    
    0.29
    %Total loans
    
    $
    5,540,784
    
    
    $
    4,376,748Gross income not recognized on nonaccrual loans
    
    
    635
    
    
    
    699Accruing loans contractually past due 90 days or more
    
    
    8,054
    
    
    
    3,101Loans classified as troubled debt restructurings and not included above
    
    
    10,866
    
    
    
    11,329
     
    
    Special Mention: loans that should not yet be adversely
classified, but have credit deficiencies or potential weaknesses
that warrant the Banks attention.
    
    Substandard: loans with one or more well-defined weaknesses,
which have the distinct possibility that the Bank will sustain
some loss if the weaknesses are not corrected.
    
    Doubtful: loans with the weaknesses of a substandard loan plus
such weaknesses, which make collection or liquidation in full
questionable, based on current information, and have a high
probability of loss.
    
    Loss: loans considered uncollectible.
 39




---



##### Table of Contents



Nine Months Ended September 30,2005
    
    
    2004Balance at beginning of year:Allowance for loan losses
    
    $
    56,472
    
    
    $
    58,126Allowance for losses  unfunded commitments
    
    
    3,940
    
    
    
    2,737Total allowance for losses at beginning of year
    
    
    60,412
    
    
    
    60,863Provision for loan losses
    
    
    2,860
    
    
    
    4,827Charge-offs:Commercial:Secured by real estate  nonresidential
    
    
    
    
    
    
    416Business
    
    
    209
    
    
    
    2,429Total commercial
    
    
    209
    
    
    
    2,845Consumer:Other
    
    
    26
    
    
    
    31Total consumer
    
    
    26
    
    
    
    31Total charge-offs
    
    
    235
    
    
    
    2,876Recoveries:Commercial:Business
    
    
    61
    
    
    
    91Total commercial
    
    
    61
    
    
    
    91Consumer:Residential mortgage (one to four family)
    
    
    33
    
    
    
    Other
    
    
    19
    
    
    
    22Total consumer
    
    
    52
    
    
    
    22Total recoveries
    
    
    113
    
    
    
    113Total allowance for losses at end of period
    
    $
    63,150
    
    
    $
    62,927Allowance for loan losses
    
    $
    57,501
    
    
    $
    59,347Allowance for losses  unfunded commitments
    
    
    5,649
    
    
    
    3,580Total allowance for losses at end of period
    
    $
    63,150
    
    
    $
    62,927
 Securities
    40




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##### Table of Contents



September 30, 2005
    
    
    December 31, 2004Amortized
    
    
    Market
    
    
    Amortized
    
    
    MarketCost
    
    
    Value
    
    
    Cost
    
    
    ValueInvestment securities available for sale:Trust Preferred Securities
    
    $
    33,442
    
    
    $
    33,162
    
    
    $
    18,441
    
    
    $
    18,219Federal Agency Notes
    
    
    137,430
    
    
    
    133,912
    
    
    
    232,594
    
    
    
    230,046Other
    
    
    10,000
    
    
    
    10,000
    
    
    
    
    
    
    
    Total investment securities available for sale
    
    
    180,872
    
    
    
    177,074
    
    
    
    251,035
    
    
    
    248,265Mortgage-backed securities available for sale:FNMA
    
    
    357,335
    
    
    
    348,587
    
    
    
    366,307
    
    
    
    363,097GNMA
    
    
    89,831
    
    
    
    86,980
    
    
    
    106,501
    
    
    
    105,072FHLMC
    
    
    297,827
    
    
    
    289,442
    
    
    
    288,789
    
    
    
    285,965Other
    
    
    198,074
    
    
    
    194,234
    
    
    
    167,719
    
    
    
    166,741Total mortgage-backed securities available for sale
    
    
    943,067
    
    
    
    919,243
    
    
    
    929,316
    
    
    
    920,875Total investment and mortgage-backed securities
available for sale
    
    $
    1,123,939
    
    
    $
    1,096,317
    
    
    $
    1,180,351
    
    
    $
    1,169,140Investment securities held to maturity:Municipals
    
    $
    225,551
    
    
    $
    232,028
    
    
    $
    215,594
    
    
    $
    222,297Mortgage-backed securities held to maturity:FNMA
    
    
    5,478
    
    
    
    5,319
    
    
    
    5,765
    
    
    
    5,689GNMA
    
    
    82,905
    
    
    
    81,979
    
    
    
    102,439
    
    
    
    102,595FHLMC
    
    
    829
    
    
    
    807
    
    
    
    1,404
    
    
    
    1,388Total mortgage-backed securities held to maturity
    
    
    89,212
    
    
    
    88,105
    
    
    
    109,608
    
    
    
    109,672Total investment and mortgage-backed securities
held to maturity
    
    $
    314,763
    
    
    $
    320,133
    
    
    $
    325,202
    
    
    $
    331,969Total investment and mortgage-backed securities
    
    $
    1,438,702
    
    
    $
    1,416,450
    
    
    $
    1,505,553
    
    
    $
    1,501,109
  41




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##### Table of Contents



Deposits
    September 30, 2005
    
    
    December 31, 2004Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageAmount
    
    
    Rate
    
    
    Amount
    
    
    RateNOW, checking and money market accounts
    
    $
    1,685,166
    
    
    
    1.52
    %
    
    $
    1,427,366
    
    
    
    0.96
    %Savings accounts
    
    
    886,575
    
    
    
    1.47
    
    
    
    1,000,489
    
    
    
    1.03Time deposits:Less than $100,000
    
    
    1,218,313
    
    
    
    2.45
    
    
    
    918,650
    
    
    
    1.79$100,000 or greater
    
    
    2,205,548
    
    
    
    3.85
    
    
    
    1,869,357
    
    
    
    2.26Total time deposits
    
    
    3,423,861
    
    
    
    3.35
    
    
    
    2,788,007
    
    
    
    2.11Total deposits
    
    $
    5,995,602
    
    
    
    2.56
    %
    
    $
    5,215,862
    
    
    
    1.59
    %
 Other Borrowings
   42




---



##### Table of Contents



At or for theNine Months Ended September 30,2005
    
    
    2004Short-term borrowings:FHLB advances and other short-term borrowings:Average balance outstanding
    
    $
    271,111
    
    
    $
    188,252Maximum amount outstanding at any month end period
    
    
    566,169
    
    
    
    255,992Balance outstanding at end of period
    
    
    216,314
    
    
    
    74,027Weighted average interest rate during the period
    
    
    3.43
    %
    
    
    1.26
    %Weighted average interest rate at end of period
    
    
    3.84
    %
    
    
    1.54
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    
    
    
    
    Long-term borrowings:FHLB advances:Average balance outstanding
    
    $
    354,486
    
    
    $
    287,328Maximum amount outstanding at any month end period
    
    
    374,611
    
    
    
    335,104Balance outstanding at end of period
    
    
    349,609
    
    
    
    335,066Weighted average interest rate during the period
    
    
    5.26
    %
    
    
    5.06
    %Weighted average interest rate at end of period
    
    
    4.95
    %
    
    
    4.88
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    3
    
    
    
    3
 Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities
 Subordinated Debentures of the Company (TPS)
    43




---



##### Table of Contents



Capital
 Regulatory Capital.
  Stockholders Equity.
 Liquidity.
    44




---



##### Table of Contents



Capital Resources.
 RISK MANAGEMENT
 Overview.
   
    
    Enterprise Risk Management Committee provides oversight of the risks management program in the organization.
 
    
    Credit Risk Management Committee reviews credit policies, products and problem assets risk.
 
    
    Market Risk Management Committee reviews securities, loans and borrowings to assess yield, market and interest rate
risk.
 
    
    Operational Risk Management Committee reviews those risks not covered by the Credit Risk Management and the Market Risk
Management Committees.
 45




---



##### Table of Contents



Liquidity Risk Management
     Credit Risk Management
    46




---



##### Table of Contents



Market Risk Management
 Market Risk and Net Portfolio Value.
       47




---



##### Table of Contents



Change in Interest Rates in Basis Points:
    
    Amount
    
    
    $ Change
    
    
    % ChangeSeptember 30, 2005:200
    
    $
    599,847
    
    
    $
    (210,966
    )
    
    
    (26.02
    )%100
    
    
    711,390
    
    
    
    (99,423
    )
    
    
    (12.26
    )0
    
    
    810,813
    
    
    
    
    
    
    
    (100)
    
    
    869,531
    
    
    
    58,717
    
    
    
    7.24(200)
    
    
    878,381
    
    
    
    67,568
    
    
    
    8.33December 31, 2004:200
    
    $
    662,958
    
    
    $
    (97,361
    )
    
    
    (12.81
    )%100
    
    
    716,363
    
    
    
    (43,956
    )
    
    
    (5.78
    )0
    
    
    760,319
    
    
    
    
    
    
    
    (100)
    
    
    783,618
    
    
    
    23,298
    
    
    
    3.06(200)
    
    
    744,158
    
    
    
    (16,162
    )
    
    
    (2.13
    )
  Operational Risk Management
     48




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
          49




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  50




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##### Table of Contents



Item 6. Exhibits
 Index
to Exhibits
 Exhibit
    
    
    
    Incorporated by Reference
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith2.1
    
    Agreement and Plan of Merger by and
among UCBH Holdings, Inc. (Buyer), UCBH Merger Sub, Inc., a wholly owned subsidiary of Buyer, and Pacifica Bancorp,
Inc., dated
May 23, 2005
    
    10-Q
    
    000-24947
    
    
    2.1
    
    
    August 9,20052.2
    
    Agreement and Plan of Merger by and
among UCBH Holdings, Inc. (Buyer), United Commercial Bank, a wholly owned subsidiary of Buyer, and Asian American Bank
& Trust Company, dated August 2, 2005
    
    
    
    
    
    
    
    
    
    
    
    P3.1
    
    Second Amended and Restated
Certificate of Incorporation of UCBH
Holdings, Inc.
    
    10-Q
    
    000-24947
    
    
    3.1
    
    
    May 10, 20043.2
    
    Amended and Restated Bylaws of UCBH
Holdings, Inc., as amended and
restated
    
    10-Q
    
    000-24947
    
    
    3.2
    
    
    May 10, 20043.3
    
    Certificate of Designation,
Preferences and Rights of Series A
Participating Preferred Stock (filed
as Exhibit A to Exhibit 4.7 hereto)
    
    8-K
    
    000-24947
    
    
    1
    
    
    January 29, 20034.0
    
    Form of Stock Certificate of UCBH
Holdings, Inc.
    
    S-1
    
    333-58325
    
    
    4.0
    
    
    July 1, 19984.1
    
    Indenture of UCBH Holdings, Inc.,
dated April 17, 1998, between UCBH
Holdings, Inc. and Wilmington Trust
Company, as trustee
    
    8-K
    
    000-24947
    
    
    4.1
    
    
    May 27,20054.2
    
    Form of Certificate of Series B
Junior Subordinated Debenture
    
    S-4
    
    333-58335
    
    
    4.2
    
    
    July 1, 19984.3
    
    Certificate of Trust of UCBH Trust Co.
    
    S-4
    
    333-58335
    
    
    4.3
    
    
    July 1, 19984.4
    
    Amended and Restated Declaration of
Trust of UCBH Trust Co.
    
    S-4
    
    333-58335
    
    
    4.4
    
    
    July 1, 19984.5
    
    Form of Series B Capital Security
Certificate for UCBH Trust Co.
    
    S-4
    
    333-58335
    
    
    4.5
    
    
    July 1, 19984.6
    
    Form of Series B Guarantee of the
Company relating to the Series B
Capital Securities
    
    S-4
    
    333-58335
    
    
    4.6
    
    
    July 1, 19984.7
    
    Rights Agreement dated as of January
28, 2003
    
    8-K
    
    000-24947
    
    
    1
    
    
    January 29, 20034.8
    
    Indenture of UCBH Holdings, Inc.,
dated September 22, 2005, between
UCBH Holdings, Inc. and Wilmington
Trust Company, as trustee
    
    
    
    
    
    
    
    
    
    
    
    P
 51




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##### Table of Contents



Index
to Exhibits
 Exhibit
    
    
    
    Incorporated by Reference
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith10.1
    
    Employment Agreement between UCBH
Holdings, Inc., United Commercial
Bank and Thomas S. Wu
    
    10-Q
    
    000-24947
    
    
    10.1
    
    
    November 9, 200410.2
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and Jonathan H.
Downing
    
    8-K
    
    000-24947
    
    
    10.2
    
    
    June 13, 200510.3
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and Sylvia Loh as
well as certain other Executive Vice
Presidents of UCBH Holdings, Inc. or
United Commercial Bank
    
    10-Q
    
    000-24947
    
    
    10.3
    
    
    November 9, 200410.4
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and Ka Wah (Tony)
Tsui as well as certain other Senior
Vice Presidents of UCBH Holdings,
Inc. or United Commercial Bank
    
    10-Q
    
    000-24947
    
    
    10.4
    
    
    November 9, 200410.5
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and Daniel Gautsch
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    June 8, 200510.6
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and Dennis Wu
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    June 13, 200510.7
    
    Amended UCBH Holdings, Inc. 1998
Stock Option Plan
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    May 25, 200510.8
    
    Executive Deferred Compensation Plan
    
    10-K
    
    000-24947
    
    
    10.6
    
    
    March 17, 200510.9
    
    Director Deferred Compensation Plan
    
    10-K
    
    000-24947
    
    
    10.7
    
    
    March 17, 200510.10
    
    Form of Indemnification Agreement of
UCBH Holdings, Inc.
    
    8-K
    
    000-24947
    
    
    10.3
    
    
    June 13, 200510.11
    
    Form of Indemnification Agreement of
United Commercial Bank.
    
    8-K
    
    000-24947
    
    
    10.4
    
    
    June 13, 200514.1
    
    Code of Conduct, as amended on August
14, 2004.
    
    8-K
    
    000-24947
    
    
    14.1
    
    
    September 1, 200421.0
    
    Subsidiaries of UCBH Holdings, Inc.
    
    10-K
    
    000-24947
    
    
    21.0
    
    
    March 17, 200531.1
    
    Certificate pursuant to Rule
13a-14(a) of the Securities Exchange
Act, as amended, signed and dated by
Thomas S. Wu.
    
    
    
    
    
    
    
    
    
    
    
    P31.2
    
    Certificate pursuant to Rule
13a-14(a) of the Securities Exchange
Act, as amended, signed and dated by
Dennis Wu.
    
    
    
    
    
    
    
    
    
    
    
    P
 52




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##### Table of Contents



Index
to Exhibits
 Exhibit
    
    
    
    Incorporated by Reference
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith32.0
    
    Certificate pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act
of 2002, signed and dated by Thomas
S. Wu and Dennis Wu.
    
    
    
    
    
    
    
    
    
    
    
    P
 53




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##### Table of Contents



SIGNATURES
  UCBH HOLDINGS, INC.Date: November 9, 2005
    
    /s/ Thomas S. WuThomas S. WuChairman, President andChief Executive Officer(Principal Executive Officer)Date: November 9, 2005
    
    /s/ Dennis WuDennis WuDirector, Executive Vice President andChief Financial Officer(Principal Financial Officer)