##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarterly period ended June 30, 2007.
 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
 o þ




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Table of Contents
 PagePART IItem 1 Financial Statements
    
    
    1Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    48Item 4 Controls and Procedures
    
    
    48PART IIItem 1 Legal Proceedings
    
    
    49Item 1A Risk Factors
    
    
    49Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 3 Defaults Upon Senior Securities
    
    
    49Item 4 Submission of Matters to a Vote of Security Holders
    
    
    50Item 5 Other Information
    
    
    50Item 6 Exhibits
    
    
    51SIGNATURES
    
    
    55EXHIBIT 4.13EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.0




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSNoninterest bearing cash
    
    $
    103,191
    
    
    $
    112,343Interest bearing cash
    
    
    152,807
    
    
    
    92,049Federal funds sold
    
    
    57,224
    
    
    
    150,027Cash and cash equivalents
    
    
    313,222
    
    
    
    354,419Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    175,000Investment and mortgage-backed securities available for sale, at fair value
    
    
    1,614,453
    
    
    
    2,149,456Investment and mortgage-backed securities held to maturity, at cost (fair value of
$285,031 and $295,446 at June 30, 2007, and December 31, 2006, respectively)
    
    
    284,937
    
    
    
    290,673Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments
    
    
    128,683
    
    
    
    110,775Loans held for sale, net
    
    
    98,921
    
    
    
    142,861Loans held in portfolio
    
    
    7,468,027
    
    
    
    6,635,660Allowance for loan losses
    
    
    (67,739
    )
    
    
    (62,015
    )Loans held in portfolio, net
    
    
    7,400,288
    
    
    
    6,573,645Accrued interest receivable
    
    
    54,626
    
    
    
    50,803Premises and equipment, net
    
    
    143,631
    
    
    
    115,610Goodwill
    
    
    287,404
    
    
    
    226,780Core deposit intangibles, net
    
    
    24,721
    
    
    
    28,325Mortgage servicing rights, net
    
    
    12,403
    
    
    
    13,273Other assets
    
    
    138,484
    
    
    
    114,794Total assets
    
    $
    10,651,773
    
    
    $
    10,346,414LIABILITIES AND STOCKHOLDERS EQUITYNoninterest bearing deposits
    
    $
    854,008
    
    
    $
    767,714Interest bearing deposits
    
    
    6,816,050
    
    
    
    6,435,131Total deposits
    
    
    7,670,058
    
    
    
    7,202,845Securities sold under agreements to repurchase
    
    
    299,688
    
    
    
    401,600Short-term borrowings
    
    
    118,209
    
    
    
    654,636Subordinated debentures
    
    
    331,693
    
    
    
    240,549Accrued interest payable
    
    
    25,461
    
    
    
    21,018Long-term borrowings
    
    
    1,181,142
    
    
    
    906,651Other liabilities
    
    
    122,429
    
    
    
    133,044Total liabilities
    
    
    9,748,680
    
    
    
    9,560,343Commitments 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 June 30, 2007, and
December 31, 2006; 103,744,238 and 99,448,181 shares issued and outstanding at June 30,
2007, and December 31, 2006, respectively
    
    
    1,037
    
    
    
    994Additional paid-in capital
    
    
    416,500
    
    
    
    341,616Retained earnings
    
    
    513,750
    
    
    
    464,616Accumulated other comprehensive loss
    
    
    (28,194
    )
    
    
    (21,155
    )Total stockholders equity
    
    
    903,093
    
    
    
    786,071Total liabilities and stockholders equity
    
    $
    10,651,773
    
    
    $
    10,346,414
  -1-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
 Three months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest and dividend income:Loans
    
    $
    143,264
    
    
    $
    111,636
    
    
    $
    274,915
    
    
    $
    217,174Investment and mortgage-backed securities:Taxable
    
    
    20,657
    
    
    
    14,918
    
    
    
    44,171
    
    
    
    28,675Nontaxable
    
    
    3,295
    
    
    
    2,684
    
    
    
    6,601
    
    
    
    5,376FHLB Stock
    
    
    875
    
    
    
    545
    
    
    
    1,797
    
    
    
    995Federal funds sold and deposits with banks
    
    
    3,395
    
    
    
    1,223
    
    
    
    5,684
    
    
    
    2,238Securities purchased under agreements to resell
    
    
    2,229
    
    
    
    
    
    
    
    4,493
    
    
    
    Total interest and dividend income
    
    
    173,715
    
    
    
    131,006
    
    
    
    337,661
    
    
    
    254,458Interest expense:Deposits
    
    
    68,514
    
    
    
    49,699
    
    
    
    134,508
    
    
    
    94,095Securities sold under agreements to repurchase
    
    
    3,420
    
    
    
    892
    
    
    
    6,681
    
    
    
    921Short-term borrowings and federal funds purchased
    
    
    4,477
    
    
    
    3,199
    
    
    
    9,669
    
    
    
    6,644Subordinated debentures
    
    
    5,250
    
    
    
    3,035
    
    
    
    9,803
    
    
    
    5,750Long-term borrowings
    
    
    13,319
    
    
    
    8,131
    
    
    
    24,435
    
    
    
    15,418Total interest expense
    
    
    94,980
    
    
    
    64,956
    
    
    
    185,096
    
    
    
    122,828Net interest income
    
    
    78,735
    
    
    
    66,050
    
    
    
    152,565
    
    
    
    131,630Provision for loan losses
    
    
    2,098
    
    
    
    1,249
    
    
    
    3,146
    
    
    
    1,556Net interest income after provision for loan losses
    
    
    76,637
    
    
    
    64,801
    
    
    
    149,419
    
    
    
    130,074Noninterest income:Commercial banking fees
    
    
    5,207
    
    
    
    3,416
    
    
    
    9,952
    
    
    
    7,511Service charges on deposits
    
    
    1,717
    
    
    
    912
    
    
    
    3,246
    
    
    
    1,652Gain (loss) on sale of securities, net
    
    
    2
    
    
    
    
    
    
    
    3,078
    
    
    
    (2
    )Gain on sale of SBA loans, net
    
    
    645
    
    
    
    1,021
    
    
    
    1,410
    
    
    
    1,602Gain on sale of multifamily and commercial real estate
loans, net
    
    
    2,027
    
    
    
    4,238
    
    
    
    3,421
    
    
    
    8,149Lower of cost or market adjustment on loans held for sale
    
    
    39
    
    
    
    247
    
    
    
    25
    
    
    
    150Equity loss in other equity investments
    
    
    (791
    )
    
    
    (50
    )
    
    
    (1,264
    )
    
    
    (508
    )Acquisition termination fee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Other fees
    
    
    1,078
    
    
    
    345
    
    
    
    2,501
    
    
    
    652Total noninterest income
    
    
    9,924
    
    
    
    10,129
    
    
    
    22,369
    
    
    
    24,206Noninterest expense:Personnel
    
    
    23,274
    
    
    
    20,738
    
    
    
    47,538
    
    
    
    46,472Occupancy
    
    
    5,177
    
    
    
    3,716
    
    
    
    10,025
    
    
    
    7,415Data processing
    
    
    2,358
    
    
    
    3,005
    
    
    
    4,638
    
    
    
    5,327Furniture and equipment
    
    
    2,226
    
    
    
    1,775
    
    
    
    4,392
    
    
    
    3,435Professional fees and contracted services
    
    
    1,343
    
    
    
    2,410
    
    
    
    3,672
    
    
    
    5,795Deposit insurance
    
    
    302
    
    
    
    195
    
    
    
    594
    
    
    
    406Communication
    
    
    801
    
    
    
    258
    
    
    
    1,502
    
    
    
    504Core deposit intangible amortization
    
    
    1,395
    
    
    
    467
    
    
    
    2,403
    
    
    
    1,022Gain on extinguishment of subordinated debentures and
borrowings
    
    
    
    
    
    
    (365
    )
    
    
    
    
    
    
    (360
    )Other general and administrative
    
    
    5,945
    
    
    
    4,932
    
    
    
    11,952
    
    
    
    9,863Total noninterest expense
    
    
    42,821
    
    
    
    37,131
    
    
    
    86,716
    
    
    
    79,879Income before income tax expense
    
    
    43,740
    
    
    
    37,799
    
    
    
    85,072
    
    
    
    74,401Income tax expense
    
    
    15,530
    
    
    
    12,393
    
    
    
    29,831
    
    
    
    25,576Net income
    
    $
    28,210
    
    
    $
    25,406
    
    
    $
    55,241
    
    
    $
    48,825Earnings per share:Basic
    
    $
    0.28
    
    
    $
    0.27
    
    
    $
    0.55
    
    
    $
    0.52Diluted
    
    $
    0.27
    
    
    $
    0.26
    
    
    $
    0.53
    
    
    $
    0.50
  -2-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Stockholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Loss(1)
    
    
    Equity
    
    
    Income (Loss)Balance at December
31, 2005
    
    
    94,037,878
    
    
    $
    940
    
    
    $
    247,340
    
    
    $
    375,220
    
    
    $
    (19,986
    )
    
    $
    603,514Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,825
    
    
    
    
    
    
    
    48,825
    
    
    $
    48,825Other comprehensive
income, net of tax
benefit of $9,151
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,666
    )
    
    
    (12,666
    )
    
    
    (12,666
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    36,159Stock options exercised,
including related tax
benefit
    
    
    441,359
    
    
    
    5
    
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    4,874Stock compensation charge
    
    
    
    
    
    
    
    
    
    
    863
    
    
    
    
    
    
    
    
    
    
    
    863Cash dividend of $0.060
per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,661
    )
    
    
    
    
    
    
    (5,661
    )Balance at June 30, 2006
    
    
    94,479,237
    
    
    $
    945
    
    
    $
    253,072
    
    
    $
    418,384
    
    
    $
    (32,652
    )
    
    $
    639,749Balance at December 31,
2006
    
    
    99,448,181
    
    
    $
    994
    
    
    $
    341,616
    
    
    $
    464,616
    
    
    $
    (21,155
    )
    
    $
    786,071Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,241
    
    
    
    
    
    
    
    55,241
    
    
    $
    55,241Other comprehensive
income, net of tax
benefit of $3,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,039
    )
    
    
    (7,039
    )
    
    
    (7,039
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    48,202Stock options exercised,
including related tax
benefit
    
    
    584,477
    
    
    
    6
    
    
    
    7,159
    
    
    
    
    
    
    
    
    
    
    
    7,165Stock compensation charge
    
    
    
    
    
    
    
    
    
    
    1,616
    
    
    
    
    
    
    
    
    
    
    
    1,616Cash dividend of $0.06
per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,107
    )
    
    
    
    
    
    
    (6,107
    )Shares issued in
connection with
acquisition of CAB
Holding, LLC
    
    
    3,711,580
    
    
    
    37
    
    
    
    66,109
    
    
    
    
    
    
    
    
    
    
    
    66,146Balance at June 30, 2007
    
    
    103,744,238
    
    
    $
    1,037
    
    
    $
    416,500
    
    
    $
    513,750
    
    
    $
    (28,194
    )
    
    $
    903,093
 
 (1)
    
    Accumulated Other Comprehensive Loss arises solely from net unrealized losses on
investment and mortgage-backed securities available for sale, presented net of tax.  -3-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
 Six Months Ended June 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    55,241
    
    
    $
    48,825Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    3,146
    
    
    
    1,556Amortization of net deferred loan fees, purchase premiums and discounts
    
    
    (5,790
    )
    
    
    (4,123
    )Amortization of net securities premiums and discounts
    
    
    (199
    )
    
    
    (32
    )Federal Home Loan Bank stock dividend
    
    
    (1,517
    )
    
    
    (989
    )Amortization of intangibles
    
    
    3,901
    
    
    
    2,341Depreciation and amortization of premises and equipment
    
    
    5,367
    
    
    
    4,363Gain on sale of loans originated in held in portfolio, securities, and other assets, net
    
    
    (5,460
    )
    
    
    (8,784
    )Lower of cost or market adjustment on loans held for sale
    
    
    (32
    )
    
    
    (150
    )Equity loss in other equity investments
    
    
    1,265
    
    
    
    368Stock compensation expense, net of tax benefit related to nonqualified stock option grants
    
    
    1,616
    
    
    
    745Excess tax benefit from stock option exercises
    
    
    (1,233
    )
    
    
    Loss on extinguishment of secured borrowings
    
    
    
    
    
    
    (360
    )Other, net
    
    
    843
    
    
    
    280Changes in operating assets and liabilities:Decrease in loans originated in held for sale
    
    
    10,366
    
    
    
    10,822Increase in accrued interest receivable
    
    
    (2,279
    )
    
    
    (3,555
    )Decrease (increase) in other assets
    
    
    3,658
    
    
    
    (12,924
    )Increase (decrease) in accrued interest payable
    
    
    1,287
    
    
    
    (402
    )Decrease in other liabilities
    
    
    (23,092
    )
    
    
    (2,491
    )Net cash provided by operating activities
    
    
    47,088
    
    
    
    35,490Cash flows from investing activities:Net cash acquired from purchase of CAB Holding, LLC
    
    
    33,647
    
    
    
    Payment of acquisition related expenditures
    
    
    (734
    )
    
    
    (377
    )Purchase of securities purchased under agreements to resell
    
    
    (150,000
    )
    
    
    Proceeds from maturity of securities purchased under agreements to resell
    
    
    175,000
    
    
    
    Investment and mortgage-backed securities, available for sale:Principal payments and maturities
    
    
    1,402,612
    
    
    
    59,436Purchases
    
    
    (1,500,892
    )
    
    
    (211,003
    )Sales
    
    
    612,345
    
    
    
    7,231Called
    
    
    77,213
    
    
    
    1,225Investment and mortgage-backed securities, held to maturity:Principal payments and maturities
    
    
    4,930
    
    
    
    8,078Called
    
    
    810
    
    
    
    Proceeds from redemption of Federal Home Loan Bank stock
    
    
    1,908
    
    
    
    5,769Purchase of Federal Home Loan Bank stock
    
    
    (6,268
    )
    
    
    (19,150
    )Proceeds from redemption of Federal Reserve Bank stock
    
    
    1,267
    
    
    
    Funding of other equity investments
    
    
    (5,270
    )
    
    
    (903
    )Proceeds from the sale of loans originated in held in portfolio
    
    
    211,559
    
    
    
    386,589Proceeds from the sale of real estate owned
    
    
    238
    
    
    
    Loans originated in held in portfolio funded and purchased, net of principal collections
    
    
    (825,794
    )
    
    
    (586,412
    )Purchases of premises and other equipment
    
    
    (3,354
    )
    
    
    (3,859
    )Other investing activities, net
    
    
    269
    
    
    
    258Net cash provided by (used in) investing activities
    
    
    29,486
    
    
    
    (353,118
    )Cash
flows from financing activities:Net increase in demand deposits, NOW, money market and savings accounts
    
    
    153,069
    
    
    
    45,316Net increase (decrease) in time deposits
    
    
    652
    
    
    
    (70,428
    )Net (decrease) increase in short-term borrowings
    
    
    (536,427
    )
    
    
    210,128Proceeds from securities sold under agreements to repurchase
    
    
    99,267
    
    
    
    150,000Payments of securities sold under agreements to repurchase
    
    
    (201,179
    )
    
    
    Proceeds from issuance of subordinated debentures
    
    
    91,238
    
    
    
    Proceeds from long-term borrowings
    
    
    302,983
    
    
    
    2,753Principal payments of long-term borrowings
    
    
    (28,559
    )
    
    
    (37,584
    )Proceeds from stock option exercises
    
    
    5,932
    
    
    
    3,359Excess tax benefit from stock option exercises
    
    
    1,233
    
    
    
    Payment of cash dividend on common stock
    
    
    (5,980
    )
    
    
    (5,178
    )Net cash (used in) provided by financing activities
    
    
    (117,771
    )
    
    
    298,366Net increase (decrease) in cash and cash equivalents
    
    
    (41,197
    )
    
    
    (19,262
    )Cash and cash equivalents at beginning of period
    
    
    354,419
    
    
    
    203,065Cash and cash equivalents at end of period
    
    $
    313,222
    
    
    $
    183,803
  -4-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 1.
    
    Basis of Presentation and Summary of Significant Accounting and Reporting PoliciesBasis of Presentation and Principles of ConsolidationThe unaudited interim consolidated financial statements include the accounts of UCBH Holdings, Inc.
(UCBH), the bank holding company of United Commercial Bank (UCB), and its consolidated
subsidiaries (collectively referred to as the Company, we, us and our). The consolidated
results exclude eleven special purpose trusts owned by UCBH, which were created for issuing
guaranteed preferred beneficial interests in UCBHs junior subordinated debentures. In accordance
with Financial Accounting Standards Board (the FASB) Interpretation No. (FIN) 46R,
Consolidation of Variable Interest Entities, an interpretation of ARB No. 51, these special purpose
trusts are excluded from the consolidated results as UCBH is not considered to be the primary
beneficiary of these trusts. 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 presentation of the financial condition and results of operations
for such periods. The unaudited consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and related notes included in the Companys
annual report on Form 10-K for the year ended December 31, 2006.The 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 promulgated by the Securities and Exchange Commission (the SEC).
Accordingly, the unaudited consolidated financial statements do not include all of the disclosures
required by GAAP for complete financial statements. The December 31, 2006, consolidated balance
sheet was derived from audited financial statements, but does not include all disclosures required
by GAAP. Results as of and for the three and six months ended June 30, 2007, are not necessarily
indicative of results that may be expected for any other interim period or the year as a whole.The results of operations for the three and six months ended June 30, 2007, include the results of
operations of Summit Bank Corporation, which was acquired on December 29, 2006, and The Chinese
American Bank, which was acquired on May 23, 2007.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.ReclassificationCertain reclassifications have been made to prior periods consolidated financial statements to
conform to the June 30, 2007, presentation.Allowance for Loan LossesThe allowance for loan losses represents our estimate of the losses that are inherent in the loans
held in portfolio. Similarly, loans held for sale are excluded from any of the information
included in Note 8, Loans Held in Portfolio and Allowance for Loan Losses. UCB continuously
monitors the quality of its loan portfolio and maintains an allowance for loan losses sufficient to
absorb losses inherent in the portfolio.
 -5-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 In determining the general allowance, UCB applies loss factors, differentiated by an internal
credit risk rating system, to its major loan portfolio categories (based primarily on loan type).
The loss factors are developed from actual historic losses, and reflect comparative analysis with
peer group loss rates and expected losses, which is in turn based on estimated probabilities of
default and loss given default. Additionally, loss factors incorporate qualitative adjustments
that reflect an assessment of internal and external influences on credit quality that have not yet
been reflected in the historical loss or risk-rating data. These influences may include elements
such as portfolio credit quality trends and changes in concentrations, growth, or credit
underwriting. UCBs qualitative adjustments also include an economic surcharge factor to adjust
loss factors in recognition of the impact various macro-economic factors have on portfolio
performance. The quantitative analysis also resulted in establishing a minimum loss factor for
each of the major loan portfolio categories to better reflect minimum inherent loss in all
portfolios including those with limited historic loss experience.UCB also estimates a reserve related to unfunded commitments and other off-balance sheet credit
exposure. In assessing the adequacy of this reserve, UCB uses an approach similar to the approach
used in the development of the allowance for loan losses. The reserve for unfunded commitments is
included in other liabilities on the statement of financial position.2.
    
    Recent Accounting PronouncementsFair Value Option for Financial Assets and Financial LiabilitiesIn February 2007, the Financial Accounting Standards Board (the FASB) issued SFAS No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB
Statement No. 115. SFAS No. 159 provides entities with an option to report selected financial
assets and liabilities at fair value. Unrealized gains and losses on items for which the fair
value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company will adopt SFAS No. 159 effective January 1,
2008. In connection therewith, the Company is in the process of evaluating the impact that
adopting SFAS No. 159 will have on its financial position and results of operations.Fair Value MeasurementsIn September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines
fair value, establishes a framework for measuring fair value and expands disclosures about fair
value measurements. SFAS No. 157 clarifies the principle that fair value should be based on the
assumptions market participants would use when pricing an asset or liability and establishes a fair
value hierarchy that prioritizes the information used to develop those assumptions. Under the
standard, fair value measurements would be separately disclosed by level within the fair value
hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years, with early adoption
permitted. The Company will adopt SFAS. No 157 effective January 1, 2008. In connection
therewith, the Company is in the process of evaluating the impact that adopting SFAS No. 157 will
have on its financial position and results of operations.Accounting for Uncertainty in Income TaxesIn July 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation
of FASB Statement No. 109. FIN 48 clarifies the accounting for income tax uncertainties that have
been recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting
for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or expected to be taken in
a tax return. FIN 48 requires that the Company recognize in the financial statements the impact of
a tax position, if that position is more likely than not of being sustained on audit, based on the
technical merits of the position. FIN 48 also provides additional guidance on
 -6-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 accounting for tax uncertainties, including derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. The provisions of FIN 48 are effective
for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in
accounting principle recorded as an adjustment to opening retained earnings. The Company adopted
the provisions of FIN 48 effective January 1, 2007. The impact of adopting FIN 48 resulted in a
cumulative effect adjustment with a $2.6 million decrease in goodwill, and an offsetting decrease
in current taxes payable. There were no cumulative effect adjustments to the Companys opening
retained earnings as of January 1, 2007. The Company accrued $426,000 in interest expense and no
liability for penalties as of June 30, 2007. Additionally, in connection with the adoption of FIN
48, the Company will continue to classify interest and penalties related to unrecognized tax
positions as components of interest expense.Accounting for Servicing of Financial AssetsIn March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an
amendment of FASB Statement No. 140. SFAS No. 156 permits entities to choose either to measure
loan servicing rights subsequent to initial valuation at fair value and report changes in fair
value in earnings or to amortize the servicing rights in proportion to and over the estimated net
servicing income or loss and assess the loan servicing rights for impairment or the need for an
increased obligation. SFAS No. 156 also clarifies when a servicer should separately recognize
servicing assets and liabilities, requires that all separately recognized assets and liabilities be
initially measured at fair value, if practicable, permits a one-time reclassification of available
for sales securities to trading securities by an entity with recognized servicing rights and
requires additional disclosures for all separately recognized servicing assets and liabilities.
SFAS No. 156 is effective as of the beginning of an entitys fiscal year that begins after
September 15, 2006. In accordance with SFAS No. 156, the Company has initially measured mortgage
servicing rights at fair value and will continue to subsequently amortize its mortgage servicing
rights based on estimated future net servicing income, with quarterly assessments for impairment.
The Company adopted the provisions of SFAS No. 156 effective January 1, 2007. The adoption did not
have a material impact on the Companys financial position or results of operations.Accounting for Certain Hybrid Financial InstrumentsIn February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments, an amendment of FASB Statements No. 133 and 140. SFAS No. 155 permits fair value
remeasurement for any hybrid financial instrument that contains an embedded derivative that
otherwise would require bifurcation; clarifies which interest-only strips and principal-only strips
are not subject to the requirements of SFAS No. 133; establishes a requirement to evaluate
interests in securitized financial assets to identify interests that are freestanding derivatives
or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;
clarifies that concentrations of credit risk in the form of subordination are not embedded
derivatives; and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a beneficial interest other
than another derivative financial instrument. The new standard is effective for all financial
instruments acquired or issued after the beginning of the Companys first fiscal year that begins
after September 15, 2006. The adoption of SFAS No. 155 did not have a material impact on the
Companys financial position or results of operations.3.
    
    Business CombinationsCAB Holding, LLCUCBH and CAB Holding, LLC (CAB), the holding company of The Chinese American Bank, a New York
state-chartered bank, entered into an Agreement and Plan of Merger dated as of January 10, 2007.
On May 23, 2007, UCBH completed its acquisition of CAB for a total consideration of approximately
$132.6 million consisting of 3,711,580 shares of UCBHs common stock valued at $66.1 million and
$66.5 million in cash, which includes direct
acquisition costs of $1.5 million. The results of CABs operations have been included in the
consolidated financial statements since that date.
 -7-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 The purchase price, including direct acquisition costs, has been allocated to the assets acquired
and liabilities assumed based on fair values at the acquisition date. The allocation of purchase
price at the date of acquisition was as follows (dollars in thousands):
 Cash and due from banks
    
    $
    21,372Federal funds sold
    
    
    78,700Investment and mortgage-backed securities available for sale
    
    
    64,882Federal Home Loan Bank stock, Federal Reserve Bank stock and
other equity investments
    
    
    1,128Loans held in portfolio, net
    
    
    167,838Premises and equipment
    
    
    31,701Goodwill
    
    
    63,565Core deposit intangibles
    
    
    6,600Other assets
    
    
    17,667Total assets acquired
    
    
    453,453Deposits
    
    
    311,669Other liabilities
    
    
    9,213Total liabilities assumed
    
    
    320,882Total allocation of purchase price
    
    $
    132,571
 The purchase price allocation reflected above is preliminary and subject to final determination of
valuation of the fair value of assets acquired and liabilities assumed.Business Development Bank Ltd.On March 26, 2007, UCB entered into two agreements to purchase the Business Development Bank Ltd.
(BDB), a wholly foreign owned enterprise established and existing under the laws of the Peoples
Republic of China, for a total consideration of $205.0 million in cash. The parties to the
agreements may terminate the transaction for various reasons prior to the consummation of the
acquisition. This acquisition will provide the Company with bank branches in Shanghai and Shantou,
China and representative offices in Beijing and Guangzhou, China, which will in turn accelerate the
implementation of the Companys Greater China expansion strategy. The transaction is subject to
both U.S. regulatory and China Banking Regulatory Commission approvals and is anticipated to close
in the fourth quarter of 2007. BDB had total assets of $217.2 million, total loans of $188.0
million and total deposits of $25.5 million as of December 31, 2006.4.
    
    Cash and Due from BanksUCB is required to maintain cash reserves in a noninterest-bearing account at the FRB of San
Francisco. Through the FRB, the cash in this account in excess of UCBs reserve requirement
(Federal Funds) is available for overnight and one day period sales to other institutions with
accounts at the FRB. UCB received interest on these sales at the prevailing federal funds rate.
At June 30, 2007, and December 31, 2006, the reserve requirement was $3.1 million and $7.6 million,
respectively.
 -8-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 5.
    
    Securities Purchased Under Agreements to ResellInformation regarding outstanding securities purchased under agreements to resell (the Resell
Agreements) as of and for the six months ended June 30, 2007, and as of and for the year ended
December 31, 2006, were as follows (dollars in thousands):
 June 30,
    
    December 31,2007
    
    2006Average balance outstanding
    
    $
    143,785
    
    
    
    62,740Maximum amount outstanding at any month end period
    
    
    175,000
    
    
    
    175,000Balance outstanding at end of period
    
    
    150,000
    
    
    
    175,000Weighted average interest rate during the period
    
    
    6.25
    %
    
    
    7.41
    %Weighted average interest rate at end of period
    
    
    5.98
    %
    
    
    7.37
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    9.7
    
    
    
    9.6
 In the first quarter of 2007, two Resell Agreements were terminated for $175.0 million. In
addition, in March 2007, UCB entered into two Resell Agreements for $150.0 million, and in June
2007, UCB entered into a Resell Agreement for $50.0 million.6.
    
    Investment and Mortgage-Backed SecuritiesAt the end of each month, UCB adjusts the carrying value of
its Available for Sale (AFS)
Investment Securities Portfolio to reflect the current fair value of each security. The Held to
Maturity (HTM) Investment Securities Portfolio is carried at amortized cost. At the time a security is
purchased, UCB classifies the security as either AFS or HTM. The securities are classified as HTM
if management has the positive intent and ability to hold such securities to maturity.
 -9-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 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 June 30, 2007, were as follows (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:Collateralized debt
obligations
    
    $
    33,500
    
    
    $
    
    
    
    $
    (477
    )
    
    $
    33,023
    
    
    $
    19,704
    
    
    $
    (296
    )
    
    $
    8,319
    
    
    $
    (181
    )
    
    $
    28,023
    
    
    $
    (477
    )U.S. Government
sponsored
enterprises notes
    
    
    621,604
    
    
    
    284
    
    
    
    (6,913
    )
    
    
    614,975
    
    
    
    457,953
    
    
    
    (2,529
    )
    
    
    107,022
    
    
    
    (4,384
    )
    
    
    564,975
    
    
    
    (6,913
    )Municipals
    
    
    52,338
    
    
    
    5
    
    
    
    (1,545
    )
    
    
    50,798
    
    
    
    49,935
    
    
    
    (1,545
    )
    
    
    
    
    
    
    
    
    
    
    49,935
    
    
    
    (1,545
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (150
    )
    
    
    9,850
    
    
    
    9,850
    
    
    
    (150
    )
    
    
    
    
    
    
    
    
    
    
    9,850
    
    
    
    (150
    )Total investment
securities available
for sale
    
    
    717,442
    
    
    
    289
    
    
    
    (9,085
    )
    
    
    708,646
    
    
    
    537,442
    
    
    
    (4,520
    )
    
    
    115,341
    
    
    
    (4,565
    )
    
    
    652,783
    
    
    
    (9,085
    )Mortgage-backed
securities available
for sale:FNMA
    
    
    407,005
    
    
    
    2
    
    
    
    (17,281
    )
    
    
    389,726
    
    
    
    132,802
    
    
    
    (4,976
    )
    
    
    256,514
    
    
    
    (12,305
    )
    
    
    389,316
    
    
    
    (17,281
    )GNMA
    
    
    79,874
    
    
    
    10
    
    
    
    (4,157
    )
    
    
    75,727
    
    
    
    
    
    
    
    
    
    
    
    75,241
    
    
    
    (4,157
    )
    
    
    75,241
    
    
    
    (4,157
    )FHLMC
    
    
    254,693
    
    
    
    
    
    
    
    (11,989
    )
    
    
    242,704
    
    
    
    4,793
    
    
    
    (56
    )
    
    
    237,907
    
    
    
    (11,933
    )
    
    
    242,700
    
    
    
    (11,989
    )Other
    
    
    202,284
    
    
    
    791
    
    
    
    (5,425
    )
    
    
    197,650
    
    
    
    26,001
    
    
    
    (289
    )
    
    
    158,648
    
    
    
    (5,136
    )
    
    
    184,649
    
    
    
    (5,425
    )Total mortgage-backed
securities available
for sale
    
    
    943,856
    
    
    
    803
    
    
    
    (38,852
    )
    
    
    905,807
    
    
    
    163,596
    
    
    
    (5,321
    )
    
    
    728,310
    
    
    
    (33,531
    )
    
    
    891,906
    
    
    
    (38,852
    )Total investment and
mortgage-backed
securities available
for sale
    
    
    1,661,298
    
    
    
    1,092
    
    
    
    (47,937
    )
    
    
    1,614,453
    
    
    
    701,038
    
    
    
    (9,841
    )
    
    
    843,651
    
    
    
    (38,096
    )
    
    
    1,544,689
    
    
    
    (47,937
    )Investment securities
held to maturity:Municipal securities
    
    
    221,880
    
    
    
    3,967
    
    
    
    (548
    )
    
    
    225,299
    
    
    
    36,674
    
    
    
    (536
    )
    
    
    410
    
    
    
    (12
    )
    
    
    37,084
    
    
    
    (548
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,184
    
    
    
    
    
    
    
    (239
    )
    
    
    3,945
    
    
    
    
    
    
    
    
    
    
    
    3,945
    
    
    
    (239
    )
    
    
    3,945
    
    
    
    (239
    )GNMA
    
    
    58,338
    
    
    
    
    
    
    
    (3,055
    )
    
    
    55,283
    
    
    
    
    
    
    
    
    
    
    
    55,283
    
    
    
    (3,055
    )
    
    
    55,283
    
    
    
    (3,055
    )FHLMC
    
    
    535
    
    
    
    
    
    
    
    (31
    )
    
    
    504
    
    
    
    
    
    
    
    
    
    
    
    504
    
    
    
    (31
    )
    
    
    504
    
    
    
    (31
    )Total mortgage-backed
securities held to
maturity
    
    
    63,057
    
    
    
    
    
    
    
    (3,325
    )
    
    
    59,732
    
    
    
    
    
    
    
    
    
    
    
    59,732
    
    
    
    (3,325
    )
    
    
    59,732
    
    
    
    (3,325
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    284,937
    
    
    
    3,967
    
    
    
    (3,873
    )
    
    
    285,031
    
    
    
    36,674
    
    
    
    (536
    )
    
    
    60,142
    
    
    
    (3,337
    )
    
    
    96,816
    
    
    
    (3,873
    )Total securities
    
    $
    1,946,235
    
    
    $
    5,059
    
    
    $
    (51,810
    )
    
    $
    1,899,484
    
    
    $
    737,712
    
    
    $
    (10,377
    )
    
    $
    903,793
    
    
    $
    (41,433
    )
    
    $
    1,641,505
    
    
    $
    (51,810
    )
 As of June 30, 2007, the net unrealized loss on securities was $46.8 million. The net
unrealized loss on securities that are available for sale was $46.8 million. Net of a tax benefit
of $18.6 million, the unrealized $28.2 million loss is included in other comprehensive loss as a
reduction to stockholders equity. The $94,000 net unrealized gain between the carrying value and
market value of securities that are held to maturity has not been recognized in the consolidated
financial statements for the three and six months ended June 30, 2007. Additionally, certain
securities that UCB holds have unrealized losses that extend for periods in excess of twelve
months. These securities are comprised primarily of U.S. Government sponsored enterprise notes,
mortgage-backed securities and municipal securities. Mortgage-backed securities consist primarily
of securities guaranteed by FNMA, GMNA and FHLMC, as well as certain collateralized mortgage
obligations. These securities are collateralized by residential mortgage loans and may be prepaid
at par prior to maturity. The unrealized losses on the mortgage-backed securities resulted from
rising interest rates subsequent to purchase. The unrealized losses will decline as interest rates
fall to the purchase yield and as the securities approach contractual or expected maturity.
 -10-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 
 The municipal securities are issued by states and their political subdivisions in the U.S. These
securities either have bond insurance or guarantees that provide investment grade ratings of AAA or
AA. There have been no
deteriorations of credit quality that would contribute to impairment. The unrealized losses will
decline as interest rates fall to the purchase yield and as the securities approach contractual or
expected maturity.Since UCB has the intent and ability to hold its available-for-sale securities until recovery of
the par amount, which could be maturity, UCB has concluded that the decline in value on these
securities is temporary.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 December 31, 2006, were as follows (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:Collateralized debt
obligations
    
    $
    38,445
    
    
    $
    5
    
    
    $
    (316
    )
    
    $
    38,134
    
    
    $
    14,888
    
    
    $
    (113
    )
    
    $
    8,296
    
    
    $
    (203
    )
    
    $
    23,184
    
    
    $
    (316
    )U.S. Government
sponsored
enterprises notes
    
    
    588,621
    
    
    
    120
    
    
    
    (5,701
    )
    
    
    583,040
    
    
    
    263,885
    
    
    
    (1,566
    )
    
    
    125,194
    
    
    
    (4,135
    )
    
    
    389,079
    
    
    
    (5,701
    )U.S. Government
sponsored
enterprises
discount notes
    
    
    249,024
    
    
    
    61
    
    
    
    
    
    
    
    249,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    U.S. Treasury Bills
    
    
    73,183
    
    
    
    17
    
    
    
    
    
    
    
    73,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipals
    
    
    58,325
    
    
    
    
    
    
    
    
    
    
    
    58,325
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial paper
    
    
    49,952
    
    
    
    
    
    
    
    
    
    
    
    49,952
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    10,000
    
    
    
    
    
    
    
    (125
    )
    
    
    9,875
    
    
    
    9,875
    
    
    
    (125
    )
    
    
    
    
    
    
    
    
    
    
    9,875
    
    
    
    (125
    )Total investment
securities available
for sale
    
    
    1,067,550
    
    
    
    203
    
    
    
    (6,142
    )
    
    
    1,061,611
    
    
    
    288,648
    
    
    
    (1,804
    )
    
    
    133,490
    
    
    
    (4,338
    )
    
    
    422,138
    
    
    
    (6,142
    )Mortgage-backed
securities available
for sale:FNMA
    
    
    515,711
    
    
    
    391
    
    
    
    (13,405
    )
    
    
    502,697
    
    
    
    148,236
    
    
    
    (3,025
    )
    
    
    284,506
    
    
    
    (10,380
    )
    
    
    432,742
    
    
    
    (13,405
    )GNMA
    
    
    87,866
    
    
    
    
    
    
    
    (3,261
    )
    
    
    84,605
    
    
    
    
    
    
    
    
    
    
    
    78,742
    
    
    
    (3,261
    )
    
    
    78,742
    
    
    
    (3,261
    )FHLMC
    
    
    313,991
    
    
    
    140
    
    
    
    (9,847
    )
    
    
    304,284
    
    
    
    7,424
    
    
    
    (32
    )
    
    
    255,779
    
    
    
    (9,815
    )
    
    
    263,203
    
    
    
    (9,847
    )Other
    
    
    200,832
    
    
    
    16
    
    
    
    (4,589
    )
    
    
    196,259
    
    
    
    
    
    
    
    
    
    
    
    171,423
    
    
    
    (4,589
    )
    
    
    171,423
    
    
    
    (4,589
    )Total mortgage-backed
securities available
for sale
    
    
    1,118,400
    
    
    
    547
    
    
    
    (31,102
    )
    
    
    1,087,845
    
    
    
    155,660
    
    
    
    (3,057
    )
    
    
    790,450
    
    
    
    (28,045
    )
    
    
    946,110
    
    
    
    (31,102
    )Total investment and
mortgage-backed
securities available
for sale
    
    
    2,185,950
    
    
    
    750
    
    
    
    (37,244
    )
    
    
    2,149,456
    
    
    
    444,308
    
    
    
    (4,861
    )
    
    
    923,940
    
    
    
    (32,383
    )
    
    
    1,368,248
    
    
    
    (37,244
    )Investment securities
held to maturity:Municipal securities
    
    
    222,638
    
    
    
    6,750
    
    
    
    (30
    )
    
    
    229,358
    
    
    
    4,531
    
    
    
    (24
    )
    
    
    416
    
    
    
    (6
    )
    
    
    4,947
    
    
    
    (30
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,372
    
    
    
    
    
    
    
    (172
    )
    
    
    4,200
    
    
    
    
    
    
    
    
    
    
    
    4,200
    
    
    
    (172
    )
    
    
    4,200
    
    
    
    (172
    )GNMA
    
    
    63,122
    
    
    
    
    
    
    
    (1,755
    )
    
    
    61,367
    
    
    
    
    
    
    
    
    
    
    
    61,367
    
    
    
    (1,755
    )
    
    
    61,367
    
    
    
    (1,755
    )FHLMC
    
    
    541
    
    
    
    
    
    
    
    (20
    )
    
    
    521
    
    
    
    
    
    
    
    
    
    
    
    521
    
    
    
    (20
    )
    
    
    521
    
    
    
    (20
    )Total mortgage-backed
securities held to
maturity
    
    
    68,035
    
    
    
    
    
    
    
    (1,947
    )
    
    
    66,088
    
    
    
    
    
    
    
    
    
    
    
    66,088
    
    
    
    (1,947
    )
    
    
    66,088
    
    
    
    (1,947
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    290,673
    
    
    
    6,750
    
    
    
    (1,977
    )
    
    
    295,446
    
    
    
    4,531
    
    
    
    (24
    )
    
    
    66,504
    
    
    
    (1,953
    )
    
    
    71,035
    
    
    
    (1,977
    )Total securities
    
    $
    2,476,623
    
    
    $
    7,500
    
    
    $
    (39,221
    )
    
    $
    2,444,902
    
    
    $
    448,839
    
    
    $
    (4,885
    )
    
    $
    990,444
    
    
    $
    (34,336
    )
    
    $
    1,439,283
    
    
    $
    (39,221
    )
 As of December 31, 2006, the net unrealized loss on securities was $31.7 million. The net
unrealized loss on securities that are available for sale was $36.5 million. Net of a tax benefit
of $15.3 million, the unrealized $21.2 million loss is included in other comprehensive loss as a
reduction to stockholders equity. The $4.8 million net unrealized gain between the carrying value
and market value of securities that are held to maturity has not been recognized in the
consolidated financial statements for the year ended December 31, 2006.
 -11-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 
 7.
    
    Loans Held for SaleThe components of loans held for sale as of June 30, 2007, and December 31, 2006, were as follows
(dollars in thousands):
 June 30,
    
    
    December 31,2007
    
    
    2006Commercial:Secured by real estate  nonresidential
    
    $
    97,436
    
    
    $
    141,348Business
    
    
    1,158
    
    
    
    1,203Total commercial loans
    
    
    98,594
    
    
    
    142,551Consumer:Residential mortgage (one to four family)
    
    
    327
    
    
    
    310Loans held for sale (1)
    
    $
    98,921
    
    
    $
    142,861
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees,
purchase premiums and discounts of $166,000 and $213,000 at June 30, 2007,
and December 31, 2006, respectively. 8.
    
    Loans Held in Portfolio and Allowance for Loan LossesThe components of loans held in portfolio as of June 30, 2007, and December 31, 2006, were as
follows (dollars in thousands):
 June 30,
    
    
    December 31,2007
    
    
    2006Commercial:Secured by real estate  nonresidential
    
    $
    2,637,383
    
    
    $
    2,341,572Secured by real estate  multifamily
    
    
    1,352,010
    
    
    
    1,275,594Construction
    
    
    1,334,514
    
    
    
    1,054,302Business
    
    
    1,612,700
    
    
    
    1,461,322Total commercial loans
    
    
    6,936,607
    
    
    
    6,132,790Consumer:Residential mortgage (one-to-four family)
    
    
    472,711
    
    
    
    448,895Other (1)
    
    
    58,709
    
    
    
    53,975Total consumer loans
    
    
    531,420
    
    
    
    502,870Loans held in portfolio (2)
    
    
    7,468,027
    
    
    
    6,635,660Allowance for loan losses
    
    
    (67,739
    )
    
    
    (62,015
    )Net loans held in portfolio
    
    $
    7,400,288
    
    
    $
    6,573,645
 
 (1)
    
    Amount includes deposit overdrafts of $3.8 million and $999,000 at June
30, 2007, and December 31, 2006, respectively.(2)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums
and discounts of $22.2 million and $25.8 million at June 30, 2007, and
December 31, 2006, respectively. -12-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 The activity in the allowance for loan losses and allowance for losses related to unfunded
commitments for the three and six months ended June 30, 2007 and 2006, were as follows (dollars in
thousands):
 Three Months Ended June 30, 2007
    
    
    Three Months Ended June 30, 2006Allowance for
    
    
    
    
    
    
    
    
    
    
    Allowance forLosses 
    
    
    Total
    
    
    
    
    
    
    Losses 
    
    
    TotalAllowance for
    
    
    Unfunded
    
    
    Allowance for
    
    
    Allowance for
    
    
    Unfunded
    
    
    Allowance forLoan Losses
    
    
    Commitments
    
    
    Losses
    
    
    Loan Losses
    
    
    Commitments
    
    
    LossesBalance at beginning of period
    
    $
    62,804
    
    
    $
    5,336
    
    
    $
    68,140
    
    
    $
    61,806
    
    
    $
    3,713
    
    
    $
    65,519Provision for losses
    
    
    2,466
    
    
    
    (368
    )
    
    
    2,098
    
    
    
    (262
    )
    
    
    1,511
    
    
    
    1,249Loans charged off
    
    
    (1,602
    )
    
    
    
    
    
    
    (1,602
    )
    
    
    (2,630
    )
    
    
    
    
    
    
    (2,630
    )Recoveries of loans previously charged off
    
    
    246
    
    
    
    
    
    
    
    246
    
    
    
    121
    
    
    
    
    
    
    
    121Adjustment  acquired through business
combinations
    
    
    3,825
    
    
    
    
    
    
    
    3,825
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    67,739
    
    
    $
    4,968
    
    
    $
    72,707
    
    
    $
    59,035
    
    
    $
    5,224
    
    
    $
    64,259
 Six Months Ended June 30, 2007
    
    
    Six Months Ended June 30, 2006Allowance for
    
    
    
    
    
    
    
    
    
    
    Allowance forLosses 
    
    
    Total
    
    
    
    
    
    
    Losses 
    
    
    TotalAllowance for
    
    
    Unfunded
    
    
    Allowance for
    
    
    Allowance for
    
    
    Unfunded
    
    
    Allowance forLoan Losses
    
    
    Commitments
    
    
    Losses
    
    
    Loan Losses
    
    
    Commitments
    
    
    LossesBalance at beginning of period
    
    $
    62,015
    
    
    $
    6,833
    
    
    $
    68,848
    
    
    $
    64,542
    
    
    $
    3,402
    
    
    $
    67,944Provision for losses
    
    
    5,011
    
    
    
    (1,865
    )
    
    
    3,146
    
    
    
    (266
    )
    
    
    1,822
    
    
    
    1,556Loans charged off
    
    
    (3,374
    )
    
    
    
    
    
    
    (3,374
    )
    
    
    (5,483
    )
    
    
    
    
    
    
    (5,483
    )Recoveries of loans previously charged off
    
    
    262
    
    
    
    
    
    
    
    262
    
    
    
    242
    
    
    
    
    
    
    
    242Adjustment  acquired through business
combinations
    
    
    3,825
    
    
    
    
    
    
    
    3,825
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    67,739
    
    
    $
    4,968
    
    
    $
    72,707
    
    
    $
    59,035
    
    
    $
    5,224
    
    
    $
    64,259
 During the six months ended June 30, 2007, the allowance for loan losses increased $5.7
million from the balance at December 31, 2006. The increase is due primarily to $3.8 million of
allowance for loan losses acquired in connection with the purchase of The Chinese American Bank, a
$7.6 million increase in specific valuation allowances associated with impaired loans, and an
increase of $2.8 million attributable to growth in the Companys loan portfolio. These increases
were offset by a $5.4 million reduction from changes in loss factors and a $3.1 million reduction
attributable to net loan charge-offs.
 The reserve for unfunded commitments, which is included in other liabilities on the balance sheet,
decreased $1.9 million from December 31, 2006. The decrease
was primarily a result of the change in the loss
factor of $3.5 million.
 -13-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 
 9.
    
    BorrowingsSecurities Sold Under Agreements to RepurchaseInformation regarding outstanding securities sold under agreements to repurchase (the Repurchase
Agreements) as of and for the six months ended June 30, 2007, and as of and for the year ended
December 31, 2006, were as follows (dollars in thousands):
 June 30,
    
    December 31,2007
    
    2006Average balance outstanding
    
    
    319,288
    
    
    $
    162,124Maximum amount outstanding at any month end period
    
    
    349,580
    
    
    
    401,600Balance outstanding at end of period
    
    
    299,688
    
    
    
    401,600Weighted average interest rate during the period
    
    
    3.86
    %
    
    
    3.56
    %Weighted average interest rate at end of period
    
    
    4.35
    %
    
    
    3.71
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    6.2
    
    
    
    6.1
  Long-Term and Short-Term Borrowings
  June 30,
    
    December 31,2007
    
    2006Short-term borrowings:Federal Home Loan Bank advances and other short-term borrowings:Average balance outstanding
    
    $
    341,732
    
    
    $
    224,234Maximum amount outstanding at any month end period
    
    
    637,787
    
    
    
    654,636Balance outstanding at end of period
    
    
    118,209
    
    
    
    654,636Weighted average interest rate during the period
    
    
    5.60
    %
    
    
    4.52
    %Weighted average interest rate at end of period
    
    
    4.43
    %
    
    
    5.21
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    
    
    
    
    Long-term borrowings:Federal Home Loan Bank advances:Average balance outstanding
    
    $
    1,041,593
    
    
    $
    683,978Maximum amount outstanding at any month end period
    
    
    1,181,142
    
    
    
    906,651Balance outstanding at end of period
    
    
    1,181,142
    
    
    
    906,651Weighted average interest rate during the period
    
    
    4.69
    %
    
    
    4.89
    %Weighted average interest rate at end of period
    
    
    4.61
    %
    
    
    4.72
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    6.13
    
    
    
    5.4
  -14-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 10.
    
    Earnings Per ShareThe antidilutive outstanding stock options of UCBH common stock that were excluded from the
computation of diluted earnings per share for the three months ended June 30, 2007 and 2006, were
5,755,967 shares and 6,618,712 shares, respectively, and for the six months ended June 30, 2007 and
2006, were 5,264,367 shares and 6,618,712 shares, respectively. The stock options of UCBH common
stock are considered antidilutive if assumed proceeds per share exceed the average market price of
UCBHs common stock during the relevant periods. Assumed proceeds include proceeds from the
exercise of stock options of UCBH common stock, as well as unearned compensation and certain
deferred tax benefits related to stock options.The reconciliation of the numerators and denominators of basic and diluted earnings per share for
the three and six months ended June 30, 2007 and 2006, is as follows (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 June 30, 2007
    
    
    Three Months Ended June 30, 2006Net income  basic
    
    $
    28,210
    
    
    
    101,517,209
    
    
    $
    0.28
    
    
    $
    25,406
    
    
    
    94,429,086
    
    
    $
    0.27Effect of stock options
    
    
    
    
    
    
    3,410,479
    
    
    
    
    
    
    
    
    
    
    
    3,619,680Net income  diluted
    
    $
    28,210
    
    
    
    104,927,688
    
    
    $
    0.27
    
    
    $
    25,406
    
    
    
    98,048,766
    
    
    $
    0.26
 Six Months Ended June 30, 2007
    
    
    Six Months Ended June 30, 2006Net income  basic
    
    $
    55,241
    
    
    
    100,629,147
    
    
    $
    0.55
    
    
    $
    48,825
    
    
    
    94,272,826
    
    
    $
    0.52Effect of stock options
    
    
    
    
    
    
    3,461,909
    
    
    
    
    
    
    
    
    
    
    
    3,699,307Net income  diluted
    
    $
    55,241
    
    
    
    104,091,056
    
    
    $
    0.53
    
    
    $
    48,825
    
    
    
    97,972,133
    
    
    $
    0.50
 11.
    
    Stock-Based CompensationThe Company has one stock option plan, the 2006 Equity Incentive Plan, as amended (the Plan).
The Plan was approved by its stockholders and provides for the granting of stock-based compensation
awards, including options, to eligible officers, employees and directors of the Company. Stock
option awards are approved by UCBHs Board of Directors and are granted at the fair market value of
UCBHs common stock on the date of the grant. The options vest over a period determined at the time
the options are granted, generally three years of continuous service, and have a maximum term of
ten years. Certain options awards provide for accelerated vesting if there is a change in control,
as defined in the Plan. As of June 30, 2007, the Company had 3,592,017 shares of common stock
reserved for the issuance of options under the Plan.The Company used the modified prospective method of adoption. Under this adoption method,
compensation expense recognized subsequent to adoption includes (a) compensation cost for all
share-based payments granted prior to but not yet vested as of January 1, 2006, based on the grant
date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b)
compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the
grant date fair value estimated in accordance with the provisions of SFAS No. 123R. Awards granted
after January 1, 2006 are valued at fair value in accordance
with provisions of SFAS No. 123R and
recognized on a straight-line basis over the service periods of each award. No share-based employee
compensation cost has been reflected in the Companys results of operations prior to the adoption
of SFAS No. 123R and the results for prior periods have not been restated. The Company estimated
forfeiture rates for the first six months of 2007 based on its historical experience.
 -15-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 In order to estimate the fair value of stock options, the Company used the Black-Scholes option
valuation model, which was developed for use in estimating the fair value of publicly traded
options which have no vesting restrictions and are fully transferable. Option valuation models
require the input of highly subjective assumptions and these assumptions can vary over time.Options outstanding under the Companys stock option plan as of June 30, 2007 and changes
during the three and six months ended June 30, 2007 were as follows (dollars in thousands, except
weighted average exercise price):
 Weighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    Average
    
    
    
    
    
    
    
    
    
    Weighted
    
    AverageAverage
    
    Remaining
    
    Aggregate
    
    
    
    
    
    Average
    
    Remaining
    
    AggregateNumber of
    
    Exercise
    
    Contractual
    
    Intrinsic
    
    Number of
    
    Exercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    Value
    
    Shares
    
    Price
    
    Term
    
    ValueThree Months Ended June 30, 2007
    
    Six Months Ended June 30, 2007Options
outstanding,
beginning of period
    
    
    14,795,039
    
    
    $
    12.94
    
    
    
    
    
    
    
    
    
    
    
    14,834,395
    
    
    $
    12.78Granted
    
    
    103,800
    
    
    
    18.35
    
    
    
    
    
    
    
    
    
    
    
    576,400
    
    
    
    17.74Exercised
    
    
    (132,520
    )
    
    
    4.64
    
    
    
    
    
    
    
    
    
    
    
    (584,477
    )
    
    
    10.15Canceled
    
    
    (154,800
    )
    
    
    21.92
    
    
    
    
    
    
    
    
    
    
    
    (194,200
    )
    
    
    21.64Forfeited
    
    
    (84,199
    )
    
    
    17.96
    
    
    
    
    
    
    
    
    
    
    
    (104,798
    )
    
    
    17.85Options
outstanding, end of
period
    
    
    14,527,320
    
    
    $
    12.93
    
    
    
    5.68
    
    
    $
    79,138
    
    
    
    14,527,320
    
    
    $
    12.93
    
    
    
    5.68
    
    
    $
    81,113Shares exercisable
end of period
    
    
    13,189,423
    
    
    $
    12.45
    
    
    
    5.33
    
    
    $
    81,990
    
    
    
    13,189,423
    
    
    $
    12.45
    
    
    
    5.33
    
    
    $
    83,034
   -16-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
  Weighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageOptions
    
    Exercise
    
    Remaining
    
    Options
    
    ExerciseExercise Price
    
    Outstanding
    
    Price
    
    Life
    
    Exercisable
    
    Price$1.88-$1.99
    
    
    1,396,734
    
    
    $
    1.88
    
    
    
    1.54
    
    
    
    1,396,734
    
    
    $
    1.88$2.00-$5.99
    
    
    121,824
    
    
    
    2.91
    
    
    
    2.75
    
    
    
    121,824
    
    
    
    2.91$6.00-$6.99
    
    
    3,722,106
    
    
    
    6.15
    
    
    
    3.82
    
    
    
    3,722,106
    
    
    
    6.15$7.00-$8.99
    
    
    264,158
    
    
    
    7.21
    
    
    
    4.51
    
    
    
    264,158
    
    
    
    7.21$9.00-$10.99
    
    
    523,666
    
    
    
    10.12
    
    
    
    5.31
    
    
    
    523,666
    
    
    
    10.12$11.00-$12.99
    
    
    298,433
    
    
    
    12.38
    
    
    
    5.82
    
    
    
    298,433
    
    
    
    12.38$13.00-$15.99
    
    
    490,164
    
    
    
    15.00
    
    
    
    6.58
    
    
    
    401,664
    
    
    
    14.82$16.00-$17.99
    
    
    1,861,501
    
    
    
    17.36
    
    
    
    8.45
    
    
    
    851,868
    
    
    
    17.15$18.00-$19.99
    
    
    5,286,934
    
    
    
    18.83
    
    
    
    6.99
    
    
    
    5,047,170
    
    
    
    18.84$20.00-$21.99
    
    
    561,800
    
    
    
    21.04
    
    
    
    7.49
    
    
    
    561,800
    
    
    
    21.04Total/Average
    
    
    14,527,320
    
    
    
    12.93
    
    
    
    5.68
    
    
    
    13,189,423
    
    
    
    12.45
 As of June 30, 2007, there was $12.3 million of total unrecognized compensation cost, net of
estimated forfeitures, related to nonvested options under the Plan. Such cost is expected to be
recognized in less than three years. The total fair value of options that vested was $693,000 and
$2.0 million during the three and six months ended June 30, 2007, respectively. No options vested
during the three and six months ended June 30, 2006.12.
    
    Income Tax ExpenseThe Company adopted the provisions of FIN 48 on January 1, 2007. The impact of adopting FIN 48 was
a cumulative effect adjustment with a $2.6 million decrease in goodwill, and an offsetting decrease
in current taxes payable. There were no cumulative effect adjustments to the Companys opening
retained earnings as of January 1, 2007. The Company accrued $426,000 in interest expense and no
liability for penalties as of June 30, 2007. Additionally, in connection with the adoption of FIN
48, the Company will continue to classify interest and penalties related to unrecognized tax
positions as components of interest expense.The fiscal years 2003 through 2005 remain open for Internal Revenue Service audit purposes, the
years 2002 through 2005 remain open for California Franchise Tax Board purposes and the years 2003
through 2005 remain open for New York State, New York City and Massachusetts purposes. The 2006
federal and state income tax returns have not yet been filed.13.
    
    Related Party TransactionsSeveral members of the Board of Directors and executive officers of the Company have deposits with
UCB 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 $4.1 million and $6.7 million at June
30, 2007, and December 31, 2006, respectively. Additionally, UCB has adopted a policy that
prohibits loans or extensions of credit to members of the Board of Directors and affiliated persons
of the Company, and their related interests.
 -17-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 14.
    
    Derivative Financial Instruments and Financial Instruments with Off-Balance-Sheet RiskThe contractual or notional amounts of derivative financial instruments and financial instruments
with off-balance-sheet risk as of June 30, 2007, and December 31, 2006, were as follows (dollars in
thousands):
 June 30,
    
    
    December 31,2007
    
    
    2006Commitments to extend credit:Consumer (including residential mortgage)
    
    $
    86,286
    
    
    $
    88,648Commercial (excluding construction)
    
    
    1,285,117
    
    
    
    1,150,599Construction
    
    
    1,091,521
    
    
    
    889,294Letters of credit
    
    
    160,911
    
    
    
    140,684Foreign exchange contracts receivable
    
    
    (730,256
    )
    
    
    (385,301
    )Foreign exchange contracts payable
    
    
    732,377
    
    
    
    220,515Put options to buy
    
    
    10,132
    
    
    
    5,329Put options to sell
    
    
    (10,132
    )
    
    
    (5,329
    )Interest rate swap contract
    
    
    
    
    
    
    25,000Interest rate floor contract
    
    
    25,000
    
    
    
    25,000Unfunded CRA investment commitments
    
    
    6,718
    
    
    
    3,623Total
    
    $
    2,657,674
    
    
    $
    2,158,062
 15.
    
    Contingent LiabilitiesThe Company is subject to pending or threatened actions and proceedings arising in the normal
course of business. The Company has recorded accruals for losses related to those matters that it
considers to be probable and that can be reasonably estimated. Although the ultimate amount of
liability that may result from those matters for which the Company has recorded accruals is not
ascertainable in advance, the Company believes that any amounts exceeding the Companys recorded
accruals should not materially affect the Companys financial position or results of operations.16.
    
    Supplemental Cash Flow InformationThe supplemental cash flow information for the six months ended June 30, 2007 and 2006, was as
follows (dollars in thousands):
 2007
    
    2006Cash paid during the period for:Interest
    
    $
    180,874
    
    
    $
    123,230Income taxes
    
    
    34,426
    
    
    
    33,260Noncash investing and financing activities:Stock warrants acquired with issuance of commercial loans
    
    $
    
    
    
    $
    (129
    )Income tax benefit from stock options exercised
    
    
    
    
    
    
    1,515Transfer of loans from held for sale to held in portfolio
    
    
    44,779
    
    
    
    62,095Transfer of loans to held for sale from held in portfolio
    
    
    44,413
    
    
    
    379,748Transfer of other real estate owned to other assets from loans held in portfolio
    
    
    419
    
    
    
    
 -18-




---



##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)
 17.
    
    Segment InformationThe Company designates the internal organization that is used by management for making operating
decisions and assessing performance as the source of its 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, UCB
Investment Services, Inc. and UCB Asset Management, Inc. The UCBH Holdings, Inc. column consists
of UCBH, which reflects the holding company activities. The intersegment column consists of the
UCBH and UCB elimination units, which reflects the elimination of intersegment transactions.
Substantially all interest income was earned in the United States and in Hong Kong, China.The following is segment information for the three and six months ended June 30, 2007 and 2006
(dollars in thousands):
 UCBHDomestic
    
    
    
    
    
    Total
    
    Holdings,Banking
    
    Other
    
    Segments
    
    Inc.
    
    Intersegment
    
    ConsolidatedThree months ended June 30, 2007:Total interest and dividend income
    
    $
    174,127
    
    
    $
    8,642
    
    
    $
    182,769
    
    
    $
    1
    
    
    $
    (9,055
    )
    
    $
    173,715Net interest income (expense)
    
    
    81,145
    
    
    
    2,717
    
    
    
    83,862
    
    
    
    (5,127
    )
    
    
    
    
    
    
    78,735Net income (loss)
    
    
    32,310
    
    
    
    174
    
    
    
    32,484
    
    
    
    28,216
    
    
    
    (32,490
    )
    
    
    28,210Three months ended June 30, 2006:Total interest and dividend income
    
    $
    127,084
    
    
    $
    6,244
    
    
    $
    133,328
    
    
    $
    
    
    
    $
    (2,322
    )
    
    $
    131,006Net interest income (expense)
    
    
    67,341
    
    
    
    1,769
    
    
    
    69,110
    
    
    
    (3,060
    )
    
    
    
    
    
    
    66,050Net income (loss)
    
    
    28,975
    
    
    
    (407
    )
    
    
    28,568
    
    
    
    25,409
    
    
    
    (28,571
    )
    
    
    25,406Six months ended June 30, 2007:Total interest and dividend income
    
    $
    332,732
    
    
    $
    17,076
    
    
    $
    349,808
    
    
    $
    3
    
    
    $
    (12,150
    )
    
    $
    337,661Net interest income (expense)
    
    
    156,568
    
    
    
    5,707
    
    
    
    162,275
    
    
    
    (9,710
    )
    
    
    
    
    
    
    152,565Net income (loss)
    
    
    62,212
    
    
    
    1,122
    
    
    
    63,334
    
    
    
    55,247
    
    
    
    (63,340
    )
    
    
    55,241Six months ended June 30, 2006:Total interest and dividend income
    
    $
    247,582
    
    
    $
    10,694
    
    
    $
    258,276
    
    
    $
    
    
    
    $
    (3,818
    )
    
    $
    254,458Net interest income (expense)
    
    
    134,371
    
    
    
    3,051
    
    
    
    137,422
    
    
    
    (5,792
    )
    
    
    
    
    
    
    131,630Net income (loss)
    
    
    55,106
    
    
    
    (1,893
    )
    
    
    53,213
    
    
    
    48,825
    
    
    
    (53,213
    )
    
    
    48,825
 18.
    
    Subsequent EventsOn April 26, 2007, UCBHs Board of Directors declared a quarterly cash dividend of $0.030 per share
of common
stock. The dividend will be paid on July 12, 2007, to stockholders of record as of June 30, 2007. Also, on
Thursday, July 26, 2007, UCBHs Board of Directors declared a quarterly cash dividend of $0.030 per share of
common stock. The dividend will be paid on October 12, 2007, to stockholders of record as of September 30,
2007.
 -19-




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD LOOKING STATEMENTS
 This document, including information included or incorporated by reference in this document,
contains certain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future
events and include, among other things:
 
    
    statements with respect to UCBH Holdings, Inc. and its
consolidated subsidiaries (collectively, the Company) beliefs,
plans, objectives, goals, guidelines, expectations, anticipations,
and future financial condition, results of operations and
performance; and
 
    
    statements preceded or identified by words, such as expects,
anticipates, intends, plans, believes, seeks,
estimates, will, should, could, projects and may,
might or words of similar import.
 These forward-looking statements are based upon managements current beliefs and expectations and
are not guarantees of future performance, nor should they be relied upon as representing
managements views as of any subsequent date. These forward-looking statements are also inherently
subject to significant business, economic and competitive uncertainties, risks and contingencies,
many of which are difficult to predict and generally beyond managements control. In addition,
these forward-looking statements are subject to assumptions with respect to future business
strategies and decisions that are subject to change and actual results, performance or achievements
may be materially different from the anticipated results, performance or achievements discussed,
expressed or implied by these forward-looking statements. Factors that might cause such
differences include, but are not limited to the following:
 
    
    the Companys ability to successfully execute its business plans and achieve its objectives;
 
    
    changes in political and economic conditions, including the economic effects of terrorist attacks against the United
States and related events;
 
    
    changes in financial market conditions, either nationally, internationally or locally in areas in which the Company
conducts its operations;
 
    
    expansion into new market areas;
 
    
    fluctuations in the equity and fixed-income markets;
 
    
    changes in interest rates and the effects on the Companys net interest margin;
 
    
    loan growth rates;
 
    
    asset and liability sensitivity of our balance sheet;
 
    
    acquisitions and integration of acquired businesses;
 
    
    deterioration in asset or credit quality;
 
    
    increases in the levels of losses, customer bankruptcies, claims and assessments;
 
    
    deposit renewals and ability to attract and retain core deposits;
 
    
    tax rates and the related estimated tax credits;
 
    
    changes in the availability of capital;
 
    
    continuing consolidation in the financial services industry;
 
    
    new litigation or changes in existing litigation;
 
    
    success in gaining regulatory approvals, when required;
 
    
    changes in consumer spending and savings habits;
 
    
    increased competitive challenges and expanding product and pricing pressures among financial institutions, whether
banks, investment banks, insurance companies or others, in the Companys markets;
 
    
    technological changes;
 
    
    demographic changes;
 
    
    legislation or regulatory changes which adversely affect the Companys operations and businesses;
 
    
    the Companys ability to meet regulatory requirements; and
 
    
    critical accounting policies and estimates and the impact of changes in accounting principles generally accepted in the
United States of America.
 -20-




---



##### Table of Contents



You are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date of this document or the date of any document incorporated by reference in this
document. All subsequent written and oral forward-looking statements concerning matters addressed
in this document and attributable to the Company or any person acting on the Companys behalf are
expressly qualified in their entirety by the cautionary statements contained or referred to in this
section. Except to the extent required by applicable law or regulation, the Company undertakes no
obligation to update these forward-looking statements to reflect events, developments or
circumstances after the date of this document or to reflect the occurrence of future events.
 MANAGEMENT OVERVIEW
    CORPORATE DEVELOPMENTS
 Acquisition of CAB Holding, LLC.
 -21-




---



##### Table of Contents



Cash and due from banks
    
    $
    21,372Federal funds sold
    
    
    78,700Investment and mortgage-backed securities available for sale
    
    
    64,882Federal Home Loan Bank stock, Federal Reserve Bank stock and
other equity investments
    
    
    1,128Loans held in portfolio, net
    
    
    167,838Premises and equipment
    
    
    31,701Goodwill
    
    
    63,565Core deposit intangibles
    
    
    6,600Other assets
    
    
    17,667Total assets acquired
    
    
    453,453Deposits
    
    
    311,669Other liabilities
    
    
    9,213Total liabilities assumed
    
    
    320,882Total allocation of purchase price
    
    $
    132,571
  Acquisition of Business Development Bank Ltd.
 CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES
  Allowance for Loan Losses
    -22-




---



##### Table of Contents



-23-




---



##### Table of Contents



Income Taxes
     Recent Accounting Pronouncements
 Fair Value Option for Financial Assets and Financial Liabilities
 The
Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB
Statement No. 115
 Fair Value Measurements
 Fair Value Measurements
 Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in Income Taxes, an interpretation
of FASB Statement No. 109 Accounting
for Income Taxe
 -24-




---



##### Table of Contents



Accounting for Servicing of Financial Assets
 Accounting for Servicing of Financial Assets, an
amendment of FASB Statement No. 140
 Accounting for Certain Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments, an amendment of FASB Statements No. 133 and 140
 -25-




---



##### Table of Contents



RESULTS OF OPERATIONS
 Financial Highlights
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,Increase (Decrease)
    
    
    
    
    
    
    
    
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    %
    
    
    2007
    
    
    2006
    
    
    Amount
    
    
    %Operating Data:Total interest and dividend income
    
    $
    173,715
    
    
    $
    131,006
    
    
    $
    42,709
    
    
    
    32.60
    %
    
    $
    337,661
    
    
    $
    254,458
    
    
    $
    83,203
    
    
    
    32.70
    %Total interest expense
    
    
    94,980
    
    
    
    64,956
    
    
    
    30,024
    
    
    
    46.22
    
    
    
    185,096
    
    
    
    122,828
    
    
    
    62,268
    
    
    
    50.70Net interest income
    
    
    78,735
    
    
    
    66,050
    
    
    
    12,685
    
    
    
    19.21
    
    
    
    152,565
    
    
    
    131,630
    
    
    
    20,935
    
    
    
    15.90Provision for loan losses
    
    
    2,098
    
    
    
    1,249
    
    
    
    849
    
    
    
    67.97
    
    
    
    3,146
    
    
    
    1,556
    
    
    
    1,590
    
    
    
    102.19Net interest income after provision
for loan losses
    
    
    76,637
    
    
    
    64,801
    
    
    
    11,836
    
    
    
    18.27
    
    
    
    149,419
    
    
    
    130,074
    
    
    
    19,345
    
    
    
    14.87Total noninterest income
    
    
    9,924
    
    
    
    10,129
    
    
    
    (205
    )
    
    
    (2.02
    )
    
    
    22,369
    
    
    
    24,206
    
    
    
    (1,837
    )
    
    
    (7.59
    )Total noninterest expense
    
    
    42,821
    
    
    
    37,131
    
    
    
    5,690
    
    
    
    15.32
    
    
    
    86,716
    
    
    
    79,879
    
    
    
    6,837
    
    
    
    8.56Income before income tax expense
    
    
    43,740
    
    
    
    37,799
    
    
    
    5,941
    
    
    
    15.72
    
    
    
    85,072
    
    
    
    74,401
    
    
    
    10,671
    
    
    
    14.34Income tax expense
    
    
    15,530
    
    
    
    12,393
    
    
    
    3,137
    
    
    
    25.31
    
    
    
    29,831
    
    
    
    25,576
    
    
    
    4,255
    
    
    
    16.64Net income
    
    $
    28,210
    
    
    $
    25,406
    
    
    $
    2,804
    
    
    
    11.04
    
    
    $
    55,241
    
    
    $
    48,825
    
    
    $
    6,416
    
    
    
    13.14Per Share Data:Basic earnings per share
    
    $
    0.28
    
    
    $
    0.27
    
    
    $
    0.01
    
    
    
    3.70
    %
    
    $
    0.55
    
    
    $
    0.52
    
    
    $
    0.03
    
    
    
    5.77
    %Diluted earnings per share
    
    
    0.27
    
    
    
    0.26
    
    
    
    0.01
    
    
    
    3.85
    
    
    
    0.53
    
    
    
    0.50
    
    
    
    0.03
    
    
    
    6.00Dividends declared per share
    
    
    0.030
    
    
    
    0.030
    
    
    
    
    
    
    
    
    
    
    
    0.060
    
    
    
    0.060
    
    
    
    
    
    
    
    Select Operating Ratios:Return on average assets
    
    
    1.10
    %
    
    
    1.25
    %
    
    
    (15)
    *
    
    
    (12.00
    )%
    
    
    1.10
    %
    
    
    1.22
    %
    
    
    (12)
    *
    
    
    (9.84
    )%Return on average equity
    
    
    12.90
    
    
    
    16.20
    
    
    
    (330
    )
    
    
    (20.37
    )
    
    
    13.11
    
    
    
    15.79
    
    
    
    (268
    )
    
    
    (16.97
    )Efficiency ratio (1)
    
    
    48.30
    
    
    
    48.74
    
    
    
    (44
    )
    
    
    (0.90
    )
    
    
    49.57
    
    
    
    51.26
    
    
    
    (169
    )
    
    
    (3.30
    )Noninterest expense to average assets
    
    
    1.67
    
    
    
    1.83
    
    
    
    (16
    )
    
    
    (8.74
    )
    
    
    1.72
    
    
    
    1.99
    
    
    
    (27
    )
    
    
    (13.57
    )Average equity to average assets
    
    
    8.53
    
    
    
    7.74
    
    
    
    79
    
    
    
    10.21
    
    
    
    8.36
    
    
    
    7.71
    
    
    
    65
    
    
    
    8.43Dividend payout ratio (2)
    
    
    11.11
    
    
    
    11.54
    
    
    
    (43
    )
    
    
    (3.73
    )
    
    
    11.32
    
    
    
    12.00
    
    
    
    (68
    )
    
    
    (5.67
    )Net loan charge-offs to average
loans held in portfolio
    
    
    0.08
    
    
    
    0.17
    
    
    
    (9
    )
    
    
    (52.94
    )
    
    
    0.09
    
    
    
    0.17
    
    
    
    (8
    )
    
    
    (47.06
    )Interest rate spread (3)
    
    
    2.87
    
    
    
    3.06
    
    
    
    (19
    )
    
    
    (6.21
    )
    
    
    2.82
    
    
    
    3.10
    
    
    
    (28
    )
    
    
    (9.03
    )Net interest margin (3)
    
    
    3.35
    
    
    
    3.50
    
    
    
    (15
    )
    
    
    (4.29
    )
    
    
    3.30
    
    
    
    3.52
    
    
    
    (22
    )
    
    
    (6.25
    )
 June 30,
    
    
    December 31,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    %Financial Condition and Other Data:Loans held in portfolio, net
    
    $
    7,400,288
    
    
    $
    6,573,645
    
    
    $
    826,643
    
    
    
    12.58
    %Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    175,000
    
    
    
    (25,000
    )
    
    
    (14.29
    )Securities available for sale
    
    
    1,614,453
    
    
    
    2,149,456
    
    
    
    (535,003
    )
    
    
    (24.89
    )Securities held to maturity
    
    
    284,937
    
    
    
    290,673
    
    
    
    (5,736
    )
    
    
    (1.97
    )Total assets
    
    
    10,651,773
    
    
    
    10,346,414
    
    
    
    305,359
    
    
    
    2.95Deposits
    
    
    7,670,058
    
    
    
    7,202,845
    
    
    
    467,213
    
    
    
    6.49Securities sold under agreements to repurchase
    
    
    299,688
    
    
    
    401,600
    
    
    
    (101,912
    )
    
    
    (25.38
    )Subordinated debentures
    
    
    331,693
    
    
    
    240,549
    
    
    
    91,144
    
    
    
    37.89Short-term borrowings
    
    
    118,209
    
    
    
    654,636
    
    
    
    (536,427
    )
    
    
    (81.94
    )Long-term borrowings
    
    
    1,181,142
    
    
    
    906,651
    
    
    
    274,491
    
    
    
    30.28Total liabilities
    
    
    9,748,680
    
    
    
    9,560,343
    
    
    
    188,337
    
    
    
    1.97Stockholders equity (4)
    
    
    903,093
    
    
    
    786,071
    
    
    
    117,022
    
    
    
    14.89Nonperforming assets
    
    
    34,253
    
    
    
    15,198
    
    
    
    (19,055
    )
    
    
    (125.38
    )Ratio of stockholders equity to total assets
    
    
    8.48
    %
    
    
    7.60
    %
    
    
    88
    *
    
    
    11.58Asset Quality Data:Loan delinquency ratio
    
    
    0.80
    %
    
    
    0.84
    %
    
    
    4
    *
    
    
    4.76
    %Nonperforming assets to total assets
    
    
    0.32
    
    
    
    0.15
    
    
    
    17
    
    
    
    113.33Nonperforming loans to loans held in portfolio
    
    
    0.42
    
    
    
    0.19
    
    
    
    23
    
    
    
    121.05Allowance for loan losses to loans held in
portfolio
    
    
    0.91
    
    
    
    0.93
    
    
    
    (2
    )
    
    
    (2.15
    )Allowance for loan losses to nonperforming
loans
    
    
    214.30
    
    
    
    503.73
    
    
    
    (28,943
    )
    
    
    (57.46
    )Total loan to deposit ratio
    
    
    98.66
    
    
    
    94.11
    
    
    
    455
    
    
    
    4.83Regulatory Capital Ratios:United Commercial Bank and subsidiaries:Tier 1 risk-based capital
    
    
    9.84
    %
    
    
    9.67
    %
    
    
    17
    *
    
    
    1.76
    %Total risk-based capital
    
    
    11.25
    
    
    
    10.53
    
    
    
    72
    
    
    
    6.84Tier 1 leverage
    
    
    8.67
    
    
    
    9.30
    
    
    
    (63
    )
    
    
    (6.77
    )UCBH Holdings, Inc. and subsidiaries:Tier 1 risk-based capital
    
    
    10.17
    
    
    
    9.86
    
    
    
    31
    
    
    
    3.14Total risk-based capital
    
    
    11.57
    
    
    
    10.72
    
    
    
    85
    
    
    
    7.93Tier 1 leverage ratio
    
    
    8.96
    
    
    
    9.50
    
    
    
    (54
    )
    
    
    (5.68
    )
 
 (1)
    
    Represents noninterest expense divided by the total of our net interest income
before provision for loan losses and our noninterest income.(2)
    
    Dividends declared per share as a percentage of diluted earnings per share.(3)
    
    Calculated on a tax equivalent basis. Interest income from tax-exempt investment
securities calculated on a tax equivalent basis was $1.8 million and $1.4 million for the
three months ended June 30, 2007 and 2006, respectively.(4)
    
    In conjunction with the acquisition of Summit Bank Corporation on December 29, 2006,
UCBH issued 4.8 million shares of common stock.*
    
    Basis point -26-




---



##### Table of Contents



Three Months Ended June 30, 2007, Compared to Three Months Ended June 30, 2006
  -27-




---



##### Table of Contents



Net Interest Income and Net Interest Margin
 Three Months Ended June 30, 2007
    
    
    Three Months Ended June 30, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Yields
    
    
    
    
    
    
    Interest
    
    
    YieldsAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Rates Paid
    
    
    Balance
    
    
    Expense
    
    
    Rates PaidNontaxable equivalent basis:Interest-earning assets
Loans (1)(2)
    
    $
    7,246,834
    
    
    $
    143,263
    
    
    
    7.91
    %
    
    $
    6,111,151
    
    
    $
    111,636
    
    
    
    7.31
    %Taxable securities (3)
    
    
    1,653,088
    
    
    
    20,657
    
    
    
    5.00
    
    
    
    1,236,884
    
    
    
    14,918
    
    
    
    4.82Tax exempt securities (3)
    
    
    273,753
    
    
    
    3,295
    
    
    
    4.81
    
    
    
    224,973
    
    
    
    2,684
    
    
    
    4.77FHLB Stock
    
    
    73,007
    
    
    
    875
    
    
    
    4.79
    
    
    
    47,940
    
    
    
    545
    
    
    
    4.55Securities purchased under agreements to resell
    
    
    162,088
    
    
    
    2,229
    
    
    
    5.50
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    196,115
    
    
    
    3,395
    
    
    
    6.92
    
    
    
    100,149
    
    
    
    1,223
    
    
    
    4.88Total interest-earning assets
    
    
    9,604,885
    
    
    
    173,714
    
    
    
    7.23
    
    
    
    7,721,097
    
    
    
    131,006
    
    
    
    6.79Noninterest-earning assets
    
    
    646,552
    
    
    
    
    
    
    
    
    
    
    
    378,590
    
    
    
    Total assets
    
    $
    10,251,437
    
    
    $
    173,714
    
    
    
    
    
    
    $
    8,099,687
    
    
    $
    131,006Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,510,434
    
    
    $
    12,877
    
    
    
    3.41
    
    
    $
    1,301,889
    
    
    $
    9,919
    
    
    
    3.05Savings accounts
    
    
    715,012
    
    
    
    2,008
    
    
    
    1.12
    
    
    
    696,545
    
    
    
    2,113
    
    
    
    1.21Time deposits
    
    
    4,315,402
    
    
    
    53,629
    
    
    
    4.97
    
    
    
    3,651,787
    
    
    
    37,667
    
    
    
    4.13Total interest-bearing deposits
    
    
    6,540,848
    
    
    
    68,514
    
    
    
    4.19
    
    
    
    5,650,221
    
    
    
    49,699
    
    
    
    3.52Securities sold under agreements to repurchase
    
    
    319,616
    
    
    
    3,420
    
    
    
    4.28
    
    
    
    86,264
    
    
    
    892
    
    
    
    4.14Short-term borrowings and federal funds
purchased
    
    
    284,648
    
    
    
    4,477
    
    
    
    6.30
    
    
    
    257,077
    
    
    
    3,199
    
    
    
    4.98Long- term borrowings
    
    
    1,138,303
    
    
    
    13,318
    
    
    
    4.68
    
    
    
    685,733
    
    
    
    8,131
    
    
    
    4.74Subordinated debentures
    
    
    268,197
    
    
    
    5,251
    
    
    
    7.83
    
    
    
    150,520
    
    
    
    3,035
    
    
    
    8.07Total interest-bearing liabilities
    
    
    8,551,612
    
    
    
    94,980
    
    
    
    4.44
    
    
    
    6,829,815
    
    
    
    64,956
    
    
    
    3.80Noninterest-bearing deposits
    
    
    734,189
    
    
    
    
    
    
    
    
    
    
    
    530,621
    
    
    
    Other noninterest-bearing liabilities
    
    
    91,113
    
    
    
    
    
    
    
    
    
    
    
    111,959
    
    
    
    Stockholders equity
    
    
    874,523
    
    
    
    
    
    
    
    
    
    
    
    627,292
    
    
    
    Total liabilities and stockholders equity
    
    $
    10,251,437
    
    
    $
    94,980
    
    
    
    
    
    
    $
    8,099,687
    
    
    $
    64,956Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,053,273
    
    
    $
    78,734
    
    
    
    2.79
    %
    
    $
    891,282
    
    
    $
    66,050
    
    
    
    2.99
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.28
    %
    
    
    
    
    
    
    
    
    
    
    3.42
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.12
    x
    
    
    
    
    
    
    
    
    
    
    1.13
    xTax equivalent basis:Total interest-earning assets (6)
    
    $
    9,604,885
    
    
    $
    175,487
    
    
    
    7.31
    %
    
    $
    7,721,097
    
    
    $
    132,451
    
    
    
    6.86
    %Total interest-bearing liabilities
    
    
    8,551,612
    
    
    
    94,980
    
    
    
    4.44
    
    
    
    6,829,815
    
    
    
    64,956
    
    
    
    3.80Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,053,273
    
    
    $
    80,507
    
    
    
    2.87
    %
    
    $
    891,282
    
    
    $
    67,495
    
    
    
    3.06
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.35
    %
    
    
    
    
    
    
    
    
    
    
    3.50
    %Average cost of deposits:Total interest-bearing deposits
    
    $
    6,540,848
    
    
    $
    68,514
    
    
    
    4.19
    %
    
    $
    5,650,221
    
    
    $
    49,699
    
    
    
    3.52
    %Noninterest-bearing deposits
    
    
    734,189
    
    
    
    
    
    
    
    
    
    
    
    530,621
    
    
    
    Total deposits
    
    $
    7,275,037
    
    
    $
    68,514
    
    
    
    3.77
    %
    
    $
    6,180,842
    
    
    $
    49,699
    
    
    
    3.22
    %
 
 (1)
    
    Nonaccrual loans are included in the table for computation purposes; however,
interest for such loans is recognized on a cash basis.(2)
    
    Average loans include loans held for sale.(3)
    
    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.(4)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income divided by average
interest-earning assets.(6)
    
    Interest income from nontaxable securities has been adjusted to a tax equivalent
basis using a statutory Federal income tax rate of 35.0%. Interest income from nontaxable
investment securities calculated on a tax equivalent basis was $1.8 million and $1.4 million
for the three months ended June 30, 2007 and 2006, respectively. -28-




---



##### Table of Contents



Provision
for Loan Losses
 Noninterest Income
 Noninterest Expense
 Income Tax Expense
 -29-




---



##### Table of Contents



Six Months Ended June 30, 2007, Compared to Six Months Ended June 30, 2006
  -30-




---



##### Table of Contents



Net Interest Income and Net Interest Margin
 Six Months Ended June 30, 2007
    
    
    Six Months Ended June 30, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Yields
    
    
    
    
    
    
    Interest
    
    
    YieldsAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Rates Paid
    
    
    Balance
    
    
    Expense
    
    
    Rates PaidNontaxable equivalent basis:Interest-earning assetsLoans (1)(2)
    
    $
    7,044,144
    
    
    $
    274,915
    
    
    
    7.81
    %
    
    $
    6,074,549
    
    
    $
    217,174
    
    
    
    7.15
    %Taxable securities (3)
    
    
    1,754,593
    
    
    
    44,171
    
    
    
    5.03
    
    
    
    1,208,183
    
    
    
    28,675
    
    
    
    4.75Tax exempt securities (3)
    
    
    274,212
    
    
    
    6,601
    
    
    
    4.81
    
    
    
    225,275
    
    
    
    5,376
    
    
    
    4.77FHLB Stock
    
    
    70,917
    
    
    
    1,797
    
    
    
    5.07
    
    
    
    46,216
    
    
    
    995
    
    
    
    4.31Securities purchased under agreements to resell
    
    
    143,785
    
    
    
    4,493
    
    
    
    6.25
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    175,202
    
    
    
    5,684
    
    
    
    6.49
    
    
    
    98,493
    
    
    
    2,238
    
    
    
    4.54Total interest-earning assets
    
    
    9,462,853
    
    
    
    337,661
    
    
    
    7.14
    
    
    
    7,652,716
    
    
    
    254,458
    
    
    
    6.65Noninterest-earning assets
    
    
    623,624
    
    
    
    
    
    
    
    
    
    
    
    368,557
    
    
    
    Total assets
    
    $
    10,086,477
    
    
    $
    337,661
    
    
    
    
    
    
    $
    8,021,273
    
    
    $
    254,458Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,494,576
    
    
    $
    25,354
    
    
    
    3.39
    
    
    $
    1,257,330
    
    
    $
    17,693
    
    
    
    2.81Savings accounts
    
    
    703,571
    
    
    
    3,734
    
    
    
    1.06
    
    
    
    737,635
    
    
    
    4,391
    
    
    
    1.19Time deposits
    
    
    4,273,372
    
    
    
    105,420
    
    
    
    4.93
    
    
    
    3,636,978
    
    
    
    72,011
    
    
    
    3.96Total interest-bearing deposits
    
    
    6,471,519
    
    
    
    134,508
    
    
    
    4.16
    
    
    
    5,631,943
    
    
    
    94,095
    
    
    
    3.34Securities sold under agreements to repurchase
    
    
    319,288
    
    
    
    6,681
    
    
    
    4.18
    
    
    
    44,751
    
    
    
    921
    
    
    
    4.12Short-term borrowings and federal funds purchased
    
    
    342,716
    
    
    
    9,669
    
    
    
    5.64
    
    
    
    308,432
    
    
    
    6,644
    
    
    
    4.31Long- term borrowings
    
    
    1,041,593
    
    
    
    24,434
    
    
    
    4.69
    
    
    
    633,205
    
    
    
    15,418
    
    
    
    4.87Subordinated debentures
    
    
    254,449
    
    
    
    9,804
    
    
    
    7.71
    
    
    
    148,298
    
    
    
    5,750
    
    
    
    7.75Total interest-bearing liabilities
    
    
    8,429,565
    
    
    
    185,096
    
    
    
    4.39
    
    
    
    6,766,629
    
    
    
    122,828
    
    
    
    3.63Noninterest-bearing deposits
    
    
    715,035
    
    
    
    
    
    
    
    
    
    
    
    521,086
    
    
    
    Other noninterest-bearing liabilities
    
    
    99,084
    
    
    
    
    
    
    
    
    
    
    
    114,992
    
    
    
    Stockholders equity
    
    
    842,793
    
    
    
    
    
    
    
    
    
    
    
    618,566
    
    
    
    Total liabilities and stockholders equity
    
    $
    10,086,477
    
    
    $
    185,096
    
    
    
    
    
    
    $
    8,021,273
    
    
    $
    122,828Net interest-earning assets/net interest income/net interest
rate spread (4)
    
    $
    1,033,288
    
    
    $
    152,565
    
    
    
    2.75
    %
    
    $
    886,087
    
    
    $
    131,630
    
    
    
    3.02
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.22
    %
    
    
    
    
    
    
    
    
    
    
    3.44
    %Ratio of interest-earning assets to interest-bearing liabilities
    
    
    1.12
    x
    
    
    
    
    
    
    
    
    
    
    1.13
    xTax equivalent basis:Total interest-earning assets (6)
    
    $
    9,462,853
    
    
    $
    341,215
    
    
    
    7.21
    %
    
    $
    7,652,716
    
    
    $
    257,353
    
    
    
    6.73
    %Total interest-bearing liabilities
    
    
    8,429,565
    
    
    
    185,096
    
    
    
    4.39
    
    
    
    6,766,629
    
    
    
    122,828
    
    
    
    3.63Net interest-earning assets/net interest income/net interest
rate spread (4)
    
    $
    1,033,288
    
    
    $
    156,119
    
    
    
    2.82
    %
    
    $
    886,087
    
    
    $
    134,525
    
    
    
    3.10
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.30
    %
    
    
    
    
    
    
    
    
    
    
    3.52
    %Average cost of deposits:Total interest-bearing deposits
    
    $
    6,471,519
    
    
    $
    134,508
    
    
    
    4.16
    %
    
    $
    5,631,943
    
    
    $
    94,095
    
    
    
    3.34
    %Noninterest-bearing deposits
    
    
    715,035
    
    
    
    
    
    
    
    
    
    
    
    521,086
    
    
    
    Total deposits
    
    $
    7,186,554
    
    
    $
    134,508
    
    
    
    3.74
    %
    
    $
    6,153,029
    
    
    $
    94,095
    
    
    
    3.06
    %
 
 (1)
    
    Nonaccrual loans are included in the table for computation purposes; however,
interest for such loans is recognized on a cash basis.(2)
    
    Average loans include loans held for sale.(3)
    
    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.(4)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income divided by average
interest-earning assets.(6)
    
    Interest income from nontaxable securities has been adjusted to a tax equivalent
basis using a statutory federal income tax rate of 35.0%. Interest income from nontaxable
investment securities calculated on a tax equivalent basis was $3.6 million and $2.9 million
for the six months ended June 30, 2007 and 2006, respectively. -31-




---



##### Table of Contents



Provision for Loan Losses
 Noninterest Income
  Noninterest Expense
  -32-




---



##### Table of Contents



Income Tax Expense
 BALANCE SHEET ANALYSIS
 Investment Securities
   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:Collateralized debt
obligations
    
    $
    33,500
    
    
    $
    
    
    
    $
    (477
    )
    
    $
    33,023
    
    
    $
    19,704
    
    
    $
    (296
    )
    
    $
    8,319
    
    
    $
    (181
    )
    
    $
    28,023
    
    
    $
    (477
    )U.S. Government
sponsored
enterprises notes
    
    
    621,604
    
    
    
    284
    
    
    
    (6,913
    )
    
    
    614,975
    
    
    
    457,953
    
    
    
    (2,529
    )
    
    
    107,022
    
    
    
    (4,384
    )
    
    
    564,975
    
    
    
    (6,913
    )Municipals
    
    
    52,338
    
    
    
    5
    
    
    
    (1,545
    )
    
    
    50,798
    
    
    
    49,935
    
    
    
    (1,545
    )
    
    
    
    
    
    
    
    
    
    
    49,935
    
    
    
    (1,545
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (150
    )
    
    
    9,850
    
    
    
    9,850
    
    
    
    (150
    )
    
    
    
    
    
    
    
    
    
    
    9,850
    
    
    
    (150
    )Total investment
securities available
for sale
    
    
    717,442
    
    
    
    289
    
    
    
    (9,085
    )
    
    
    708,646
    
    
    
    537,442
    
    
    
    (4,520
    )
    
    
    115,341
    
    
    
    (4,565
    )
    
    
    652,783
    
    
    
    (9,085
    )Mortgage-backed
securities available
for sale:FNMA
    
    
    407,005
    
    
    
    2
    
    
    
    (17,281
    )
    
    
    389,726
    
    
    
    132,802
    
    
    
    (4,976
    )
    
    
    256,514
    
    
    
    (12,305
    )
    
    
    389,316
    
    
    
    (17,281
    )GNMA
    
    
    79,874
    
    
    
    10
    
    
    
    (4,157
    )
    
    
    75,727
    
    
    
    
    
    
    
    
    
    
    
    75,241
    
    
    
    (4,157
    )
    
    
    75,241
    
    
    
    (4,157
    )FHLMC
    
    
    254,693
    
    
    
    
    
    
    
    (11,989
    )
    
    
    242,704
    
    
    
    4,793
    
    
    
    (56
    )
    
    
    237,907
    
    
    
    (11,933
    )
    
    
    242,700
    
    
    
    (11,989
    )Other
    
    
    202,284
    
    
    
    791
    
    
    
    (5,425
    )
    
    
    197,650
    
    
    
    26,001
    
    
    
    (289
    )
    
    
    158,648
    
    
    
    (5,136
    )
    
    
    184,649
    
    
    
    (5,425
    )Total mortgage-backed
securities available
for sale
    
    
    943,856
    
    
    
    803
    
    
    
    (38,852
    )
    
    
    905,807
    
    
    
    163,596
    
    
    
    (5,321
    )
    
    
    728,310
    
    
    
    (33,531
    )
    
    
    891,906
    
    
    
    (38,852
    )Total investment and
mortgage-backed
securities available
for sale
    
    
    1,661,298
    
    
    
    1,092
    
    
    
    (47,937
    )
    
    
    1,614,453
    
    
    
    701,038
    
    
    
    (9,841
    )
    
    
    843,651
    
    
    
    (38,096
    )
    
    
    1,544,689
    
    
    
    (47,937
    )Investment securities
held to maturity:Municipal securities
    
    
    221,880
    
    
    
    3,967
    
    
    
    (548
    )
    
    
    225,299
    
    
    
    36,674
    
    
    
    (536
    )
    
    
    410
    
    
    
    (12
    )
    
    
    37,084
    
    
    
    (548
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,184
    
    
    
    
    
    
    
    (239
    )
    
    
    3,945
    
    
    
    
    
    
    
    
    
    
    
    3,945
    
    
    
    (239
    )
    
    
    3,945
    
    
    
    (239
    )GNMA
    
    
    58,338
    
    
    
    
    
    
    
    (3,055
    )
    
    
    55,283
    
    
    
    
    
    
    
    
    
    
    
    55,283
    
    
    
    (3,055
    )
    
    
    55,283
    
    
    
    (3,055
    )FHLMC
    
    
    535
    
    
    
    
    
    
    
    (31
    )
    
    
    504
    
    
    
    
    
    
    
    
    
    
    
    504
    
    
    
    (31
    )
    
    
    504
    
    
    
    (31
    )Total mortgage-backed
securities held to
maturity
    
    
    63,057
    
    
    
    
    
    
    
    (3,325
    )
    
    
    59,732
    
    
    
    
    
    
    
    
    
    
    
    59,732
    
    
    
    (3,325
    )
    
    
    59,732
    
    
    
    (3,325
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    284,937
    
    
    
    3,967
    
    
    
    (3,873
    )
    
    
    285,031
    
    
    
    36,674
    
    
    
    (536
    )
    
    
    60,142
    
    
    
    (3,337
    )
    
    
    96,816
    
    
    
    (3,873
    )Total securities
    
    $
    1,946,235
    
    
    $
    5,059
    
    
    $
    (51,810
    )
    
    $
    1,899,484
    
    
    $
    737,712
    
    
    $
    (10,377
    )
    
    $
    903,793
    
    
    $
    (41,433
    )
    
    $
    1,641,505
    
    
    $
    (51,810
    )
   -33-




---



##### Table of Contents



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:Collateralized debt
obligations
    
    $
    38,445
    
    
    $
    5
    
    
    $
    (316
    )
    
    $
    38,134
    
    
    $
    14,888
    
    
    $
    (113
    )
    
    $
    8,296
    
    
    $
    (203
    )
    
    $
    23,184
    
    
    $
    (316
    )U.S. Government
sponsored
enterprises notes
    
    
    588,621
    
    
    
    120
    
    
    
    (5,701
    )
    
    
    583,040
    
    
    
    263,885
    
    
    
    (1,566
    )
    
    
    125,194
    
    
    
    (4,135
    )
    
    
    389,079
    
    
    
    (5,701
    )U.S. Government
sponsored
enterprises
discount notes
    
    
    249,024
    
    
    
    61
    
    
    
    
    
    
    
    249,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    U.S. Treasury Bills
    
    
    73,183
    
    
    
    17
    
    
    
    
    
    
    
    73,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipals
    
    
    58,325
    
    
    
    
    
    
    
    
    
    
    
    58,325
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial paper
    
    
    49,952
    
    
    
    
    
    
    
    
    
    
    
    49,952
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    10,000
    
    
    
    
    
    
    
    (125
    )
    
    
    9,875
    
    
    
    9,875
    
    
    
    (125
    )
    
    
    
    
    
    
    
    
    
    
    9,875
    
    
    
    (125
    )Total investment
securities available
for sale
    
    
    1,067,550
    
    
    
    203
    
    
    
    (6,142
    )
    
    
    1,061,611
    
    
    
    288,648
    
    
    
    (1,804
    )
    
    
    133,490
    
    
    
    (4,338
    )
    
    
    422,138
    
    
    
    (6,142
    )Mortgage-backed
securities available
for sale:FNMA
    
    
    515,711
    
    
    
    391
    
    
    
    (13,405
    )
    
    
    502,697
    
    
    
    148,236
    
    
    
    (3,025
    )
    
    
    284,506
    
    
    
    (10,380
    )
    
    
    432,742
    
    
    
    (13,405
    )GNMA
    
    
    87,866
    
    
    
    
    
    
    
    (3,261
    )
    
    
    84,605
    
    
    
    
    
    
    
    
    
    
    
    78,742
    
    
    
    (3,261
    )
    
    
    78,742
    
    
    
    (3,261
    )FHLMC
    
    
    313,991
    
    
    
    140
    
    
    
    (9,847
    )
    
    
    304,284
    
    
    
    7,424
    
    
    
    (32
    )
    
    
    255,779
    
    
    
    (9,815
    )
    
    
    263,203
    
    
    
    (9,847
    )Other
    
    
    200,832
    
    
    
    16
    
    
    
    (4,589
    )
    
    
    196,259
    
    
    
    
    
    
    
    
    
    
    
    171,423
    
    
    
    (4,589
    )
    
    
    171,423
    
    
    
    (4,589
    )Total mortgage-backed
securities available
for sale
    
    
    1,118,400
    
    
    
    547
    
    
    
    (31,102
    )
    
    
    1,087,845
    
    
    
    155,660
    
    
    
    (3,057
    )
    
    
    790,450
    
    
    
    (28,045
    )
    
    
    946,110
    
    
    
    (31,102
    )Total investment and
mortgage-backed
securities available
for sale
    
    
    2,185,950
    
    
    
    750
    
    
    
    (37,244
    )
    
    
    2,149,456
    
    
    
    444,308
    
    
    
    (4,861
    )
    
    
    923,940
    
    
    
    (32,383
    )
    
    
    1,368,248
    
    
    
    (37,244
    )Investment securities
held to maturity:Municipal securities
    
    
    222,638
    
    
    
    6,750
    
    
    
    (30
    )
    
    
    229,358
    
    
    
    4,531
    
    
    
    (24
    )
    
    
    416
    
    
    
    (6
    )
    
    
    4,947
    
    
    
    (30
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,372
    
    
    
    
    
    
    
    (172
    )
    
    
    4,200
    
    
    
    
    
    
    
    
    
    
    
    4,200
    
    
    
    (172
    )
    
    
    4,200
    
    
    
    (172
    )GNMA
    
    
    63,122
    
    
    
    
    
    
    
    (1,755
    )
    
    
    61,367
    
    
    
    
    
    
    
    
    
    
    
    61,367
    
    
    
    (1,755
    )
    
    
    61,367
    
    
    
    (1,755
    )FHLMC
    
    
    541
    
    
    
    
    
    
    
    (20
    )
    
    
    521
    
    
    
    
    
    
    
    
    
    
    
    521
    
    
    
    (20
    )
    
    
    521
    
    
    
    (20
    )Total mortgage-backed
securities held to
maturity
    
    
    68,035
    
    
    
    
    
    
    
    (1,947
    )
    
    
    66,088
    
    
    
    
    
    
    
    
    
    
    
    66,088
    
    
    
    (1,947
    )
    
    
    66,088
    
    
    
    (1,947
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    290,673
    
    
    
    6,750
    
    
    
    (1,977
    )
    
    
    295,446
    
    
    
    4,531
    
    
    
    (24
    )
    
    
    66,504
    
    
    
    (1,953
    )
    
    
    71,035
    
    
    
    (1,977
    )Total securities
    
    $
    2,476,623
    
    
    $
    7,500
    
    
    $
    (39,221
    )
    
    $
    2,444,902
    
    
    $
    448,839
    
    
    $
    (4,885
    )
    
    $
    990,444
    
    
    $
    (34,336
    )
    
    $
    1,439,283
    
    
    $
    (39,221
    )
 -34-




---



##### Table of Contents



Loans
  June 30,
    
    
    December 31,2007
    
    
    2006Commercial:Secured by real estate  nonresidential
    
    $
    2,637,383
    
    
    $
    2,341,572Secured by real estate  multifamily
    
    
    1,352,010
    
    
    
    1,275,594Construction
    
    
    1,334,514
    
    
    
    1,054,302Business
    
    
    1,612,700
    
    
    
    1,461,322Total commercial
    
    
    6,936,607
    
    
    
    6,132,790Consumer:Residential mortgage (one-to-four family)
    
    
    472,711
    
    
    
    448,895Other
    
    
    58,709
    
    
    
    53,975Total consumer
    
    
    531,420
    
    
    
    502,870Loans held in portfolio (1)
    
    
    7,468,027
    
    
    
    6,635,660Allowance for loan losses
    
    
    (67,739
    )
    
    
    (62,015
    )Loans held in portfolio, net
    
    $
    7,400,288
    
    
    $
    6,573,645
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums and
discounts of $22.2 million and $25.8 million at June 30, 2007, and December 31, 2006,
respectively. 
 -35-




---



##### Table of Contents



June 30,
    
    
    December 31,2007
    
    
    2006Commercial:Secured by real estate  nonresidential
    
    $
    97,436
    
    
    $
    141,348Business
    
    
    1,158
    
    
    
    1,203Total commercial
    
    
    98,594
    
    
    
    142,551Consumer:Residential mortgage (one-to-four family)
    
    
    327
    
    
    
    310Loans held for sale (1)
    
    $
    98,921
    
    
    $
    142,861
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees of $166,000 and $213,000 at
June 30, 2007, and December 31, 2006, respectively.  -36-




---



##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Loans held for sale:Commercial:Secured by real estate  nonresidential
    
    $
    7,567
    
    
    $
    10,600
    
    
    $
    23,898
    
    
    $
    32,925Secured by real estate  multifamily
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total commercial loans
    
    
    7,567
    
    
    
    10,600
    
    
    
    23,898
    
    
    
    32,925Consumer:Residential mortgage (one-to-four family)
    
    
    488
    
    
    
    1,251
    
    
    
    1,678
    
    
    
    1,251Total loans held for sale commitments (1)
    
    
    8,055
    
    
    
    11,851
    
    
    
    25,576
    
    
    
    34,176Loans held in portfolio:Commercial:Secured by real estate  nonresidential
    
    
    263,341
    
    
    
    186,971
    
    
    
    533,459
    
    
    
    372,052Secured by real estate  multifamily
    
    
    105,608
    
    
    
    49,114
    
    
    
    223,521
    
    
    
    134,236Construction
    
    
    395,006
    
    
    
    306,967
    
    
    
    679,663
    
    
    
    485,858Business
    
    
    278,884
    
    
    
    332,246
    
    
    
    567,561
    
    
    
    562,765Total commercial loans
    
    
    1,042,839
    
    
    
    875,298
    
    
    
    2,004,204
    
    
    
    1,554,911Consumer:Residential mortgage (one-to-four family)
    
    
    46,765
    
    
    
    27,495
    
    
    
    77,466
    
    
    
    46,360Other
    
    
    11,519
    
    
    
    9,289
    
    
    
    18,032
    
    
    
    16,545Total consumer loans
    
    
    58,284
    
    
    
    36,784
    
    
    
    95,498
    
    
    
    62,905Total loans held in portfolio commitments (1)
    
    
    1,101,123
    
    
    
    912,082
    
    
    
    2,099,702
    
    
    
    1,617,816Total loan commitments (1)
    
    $
    1,109,178
    
    
    $
    923,933
    
    
    $
    2,125,278
    
    
    $
    1,651,992
 
 (1)
    
    Amounts do not reflect commitments related to loan participations. -37-




---



##### Table of Contents



IntermediateAdjustable
    
    
    Fixed
    
    
    Fixed
    
    
    TotalCommercial:Secured by real estate  nonresidential
    
    $
    1,036,117
    
    
    $
    1,138,749
    
    
    $
    480,438
    
    
    $
    2,655,304Secured by real estate  multifamily
    
    
    364,161
    
    
    
    129,429
    
    
    
    855,460
    
    
    
    1,349,050Construction
    
    
    1,230,030
    
    
    
    111,041
    
    
    
    
    
    
    
    1,341,071Business
    
    
    1,486,391
    
    
    
    123,486
    
    
    
    3,222
    
    
    
    1,613,099Total commercial
    
    
    4,116,699
    
    
    
    1,502,705
    
    
    
    1,339,120
    
    
    
    6,958,524Consumer:Residential mortgage (one-to-four family)
    
    
    62,769
    
    
    
    195,709
    
    
    
    214,514
    
    
    
    472,992Other
    
    
    54,644
    
    
    
    4,071
    
    
    
    
    
    
    
    58,715Total consumer
    
    
    117,413
    
    
    
    199,780
    
    
    
    214,514
    
    
    
    531,707Gross loans held in portfolio (1)
    
    $
    4,234,112
    
    
    $
    1,702,485
    
    
    $
    1,553,634
    
    
    $
    7,490,231
 
 (1)
    
    Amounts do not reflect net deferred loan fees, purchase premiums and
discounts of $22.2 million at June 30, 2007.  Deposits
  June 30, 2007
    
    
    December 31, 2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageAmount
    
    
    Rate
    
    
    Amount
    
    
    RateNOW, checking and money market accounts
    
    $
    2,426,380
    
    
    
    2.16
    %
    
    $
    2,194,176
    
    
    
    2.18
    %Savings accounts
    
    
    1,006,782
    
    
    
    1.99
    
    
    
    942,672
    
    
    
    2.14Time deposits:Less than $100,000
    
    
    1,505,939
    
    
    
    4.57
    
    
    
    1,410,162
    
    
    
    4.60$100,000 or greater
    
    
    2,730,957
    
    
    
    4.96
    
    
    
    2,655,835
    
    
    
    4.91Total time deposits
    
    
    4,236,896
    
    
    
    4.85
    
    
    
    4,065,997
    
    
    
    4.80Total deposits
    
    $
    7,670,058
    
    
    
    3.62
    %
    
    $
    7,202,845
    
    
    
    3.66
    %
  -38-




---



##### Table of Contents



Borrowings
  June 30,
    
    December 31,2007
    
    2006Securities sold under agreements to repurchase:Average balance outstanding
    
    $
    319,288
    
    
    $
    162,124Maximum amount outstanding at any month end period
    
    
    349,580
    
    
    
    401,600Balance outstanding at end of period
    
    
    299,688
    
    
    
    401,600Weighted average interest rate during the period
    
    
    3.86
    %
    
    
    3.56
    %Weighted average interest rate at end of period
    
    
    4.35
    %
    
    
    3.71
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    6.2
    
    
    
    6.1Short-term borrowings:FHLB advances and other short-term borrowings:Average balance outstanding
    
    $
    341,732
    
    
    $
    224,234Maximum amount outstanding at any month end period
    
    
    637,787
    
    
    
    654,636Balance outstanding at end of period
    
    
    118,209
    
    
    
    654,636Weighted average interest rate during the period
    
    
    5.60
    %
    
    
    4.52
    %Weighted average interest rate at end of period
    
    
    4.43
    %
    
    
    5.21
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    
    
    
    
    Long-term borrowings:FHLB advances:Average balance outstanding
    
    $
    1,041,593
    
    
    $
    683,978Maximum amount outstanding at any month end period
    
    
    1,181,142
    
    
    
    906,651Balance outstanding at end of period
    
    
    1,181,142
    
    
    
    906,651Weighted average interest rate during the period
    
    
    4.69
    %
    
    
    4.89
    %Weighted average interest rate at end of period
    
    
    4.61
    %
    
    
    4.72
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    6.13
    
    
    
    5.4
 
 Subordinated Debentures
  -39-




---



##### Table of Contents



Junior Subordinated Debentures
   RISK ELEMENTS
   
    
    Enterprise Risk Management Committee, which reviews credit, operational, market and liquidity risk;
 
    
    Credit Risk Management Committee, which reviews credit policies, products and problem assets risk;
 
    
    Market Risk Management Committee, which reviews securities, loans and borrowings to assess yield, and interest rate and
market risk; and
 
    
    Operational Risk Management Committee, which reviews those risks not covered by the Credit Risk Management and Market
Risk Management Committees.
  Credit Risk Management
   -40-




---



##### Table of Contents



June 30, 2007
    
    
    December 31, 2006Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial:Secured by real estate  nonresidential
    
    $
    2,637,383
    
    
    
    35.32
    
    
    $
    2,341,572
    
    
    
    35.29Secured by real estate  multifamily
    
    
    1,352,010
    
    
    
    18.10
    
    
    
    1,275,594
    
    
    
    19.22Construction
    
    
    1,334,514
    
    
    
    17.87
    
    
    
    1,054,302
    
    
    
    15.89Business
    
    
    1,612,700
    
    
    
    21.59
    
    
    
    1,461,322
    
    
    
    22.02Total commercial
    
    
    6,936,607
    
    
    
    92.88
    
    
    
    6,132,790
    
    
    
    92.42Consumer:Residential mortgage (one-to-four family)
    
    
    472,711
    
    
    
    6.33
    
    
    
    448,895
    
    
    
    6.76Other
    
    
    58,709
    
    
    
    0.79
    
    
    
    53,975
    
    
    
    0.82Total consumer
    
    
    531,420
    
    
    
    7.12
    
    
    
    502,870
    
    
    
    7.58Loans held in portfolio (1)
    
    $
    7,468,027
    
    
    
    100.00
    
    
    $
    6,635,660
    
    
    
    100.00
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums
and discounts of $22.2 million and $25.8 million at June 30, 2007, and December 31, 2006,
respectively.   Nonperforming Assets
  -41-




---



##### Table of Contents



June 30,
    
    
    December 31,2007
    
    
    2006Commercial loans:Secured by real estate  nonresidential
    
    $
    11,377
    
    
    $
    5,604Secured by real estate  multifamily
    
    
    898
    
    
    
    Construction
    
    
    9,221
    
    
    
    Business
    
    
    9,755
    
    
    
    6,339Total commercial loans
    
    
    31,251
    
    
    
    11,943Consumer loans:Residential mortgage (one-to-four family)
    
    
    359
    
    
    
    368Other
    
    
    
    
    
    
    Total consumer loans
    
    
    359
    
    
    
    368Total nonaccrual loans from loans held in portfolio
    
    
    31,610
    
    
    
    12,311Other real estate owned
    
    
    2,643
    
    
    
    2,887Total nonperforming assets
    
    $
    34,253
    
    
    $
    15,198Nonperforming assets to total assets
    
    
    0.32
    %
    
    
    0.15
    %Nonaccrual loans to loans held in portfolio
    
    
    0.42
    
    
    
    0.19Nonperforming assets to loans held in portfolio and other real estate owned
    
    
    0.46
    
    
    
    0.23Loans held in portfolio
    
    $
    7,468,027
    
    
    $
    6,635,660Gross interest income recognized on impaired loans
    
    
    110
    
    
    
    80Gross interest income not recognized on nonaccrual loans
    
    
    1,577
    
    
    
    676Accruing loans contractually past due 90 days or more
    
    
    6,002
    
    
    
    4,339Loans classified as troubled debt restructurings and not included above
    
    
    8,531
    
    
    
    8,614
     -42-




---



##### Table of Contents



Allowances for Credit Losses
 Allowance for Loan Losses
      -43-




---



##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Balance at beginning of period:Allowance for loan losses
    
    $
    62,804
    
    
    $
    61,806
    
    
    $
    62,015
    
    
    $
    64,542Allowance for losses  unfunded commitments
    
    
    5,336
    
    
    
    3,713
    
    
    
    6,833
    
    
    
    3,402Total allowance for losses at beginning of period
    
    
    68,140
    
    
    
    65,519
    
    
    
    68,848
    
    
    
    67,944Acquired allowance for loan losses
    
    
    3,825
    
    
    
    
    
    
    
    3,825
    
    
    
    Provision for loan losses
    
    
    2,098
    
    
    
    1,249
    
    
    
    3,146
    
    
    
    1,556Charge-offs:Commercial:Secured by real estate  nonresidential
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )
    
    
    (452
    )Business
    
    
    (1,577
    )
    
    
    (2,630
    )
    
    
    (3,349
    )
    
    
    (4,981
    )Total commercial
    
    
    (1,593
    )
    
    
    (2,630
    )
    
    
    (3,365
    )
    
    
    (5,433
    )Consumer:Other
    
    
    (9
    )
    
    
    
    
    
    
    (9
    )
    
    
    (50
    )Total charge-offs
    
    
    (1,602
    )
    
    
    (2,630
    )
    
    
    (3,374
    )
    
    
    (5,483
    )Recoveries:Commercial:Secured by real estate  nonresidential
    
    
    10
    
    
    
    47
    
    
    
    12
    
    
    
    128Business
    
    
    235
    
    
    
    70
    
    
    
    247
    
    
    
    100Total commercial
    
    
    245
    
    
    
    117
    
    
    
    259
    
    
    
    228Consumer:Other
    
    
    1
    
    
    
    4
    
    
    
    3
    
    
    
    14Total recoveries
    
    
    246
    
    
    
    121
    
    
    
    262
    
    
    
    242Net charge-offs
    
    
    (1,356
    )
    
    
    (2,509
    )
    
    
    (3,112
    )
    
    
    (5,241
    )Total allowance for losses at end of period
    
    
    72,707
    
    
    
    64,259
    
    
    
    72,707
    
    
    
    64,259Allowance for loan losses
    
    
    67,739
    
    
    
    59,035
    
    
    
    67,739
    
    
    
    59,035Allowance for losses  unfunded commitments
    
    
    4,968
    
    
    
    5,224
    
    
    
    4,968
    
    
    
    5,224Total allowance for losses at end of period
    
    $
    72,707
    
    
    $
    64,259
    
    
    $
    72,707
    
    
    $
    64,259Allowance for loan losses to loans held in portfolio
    
    
    0.91
    %
    
    
    0.99
    %
    
    
    0.91
    %
    
    
    0.99
    %Net charge-offs to average loans held in portfolio
    
    
    0.08
    
    
    
    0.17
    
    
    
    0.09
    
    
    
    0.17
     -44-




---



##### Table of Contents



Allowance for Unfunded Commitments
 Market Risk Management
       -45-




---



##### Table of Contents



Operational Risk Management
    Liquidity Risk
 Liquidity Management
    -46-




---



##### Table of Contents



CAPITAL MANAGEMENT
    -47-




---



##### Table of Contents



June 30,
    
    December 31,2007
    
    2006United Commercial Bank:Tier 1 leverage
    
    
    8.67
    %
    
    
    9.30
    %Tier 1 risk-based capital
    
    
    9.84
    
    
    
    9.67Total risk-based capital
    
    
    11.25
    
    
    
    10.53UCBH Holdings, Inc. and subsidiaries:Tier 1 leverage
    
    
    8.96
    %
    
    
    9.50
    %Tier 1 risk-based capital
    
    
    10.17
    
    
    
    9.86Total risk-based capital
    
    
    11.57
    
    
    
    10.72
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
  -48-




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 Item 3. Defaults Upon Senior Securities
  -49-




---



##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  Votes
    
    
    Votes
    
    
    Votes
    
    
    BrokersDescription of Proposal
    
    For
    
    
    Against
    
    
    Abstained
    
    
    Non-Votes1. Election of
Directors:Pin Pin Chau
    
    
    90,959,451
    
    
    
    1,201,241
    
    
    
    2,211
    
    
    
    Dr. Godwin Wong
    
    
    90,746,021
    
    
    
    1,058,770
    
    
    
    358,113
    
    
    
    Thomas S. Wu
    
    
    89,735,679
    
    
    
    2,070,085
    
    
    
    357,137
    
    
    
    2. Approval of the
amendments to the UCBH
Holdings, Inc. Amended and
Restated 2006 Equity
Incentive Plan (formerly
known as the UCBH Holdings,
Inc. 1998 Stock Option plan)
    
    
    59,223,317
    
    
    
    23,794,057
    
    
    
    472,909
    
    
    
    8,672,7213. Approval of the
stockholder proposal
relating to the
declassification of the
Board of Directors of UCBH
Holdings, Inc. of terms of
its Board of Directors to
require that all Directors
stand for election annually
    
    
    74,577,276
    
    
    
    8,428,985
    
    
    
    484,022
    
    
    
    8,672,7214. Ratification of the
selection of the independent
registered public accounting
firm
    
    
    91,743,430
    
    
    
    139,175
    
    
    
    280,299
    
    
    
    
 
 Item 5. Other Information
  -50-




---



##### 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
    
    10-Q
    
    000-24947
    
    
    2.2
    
    
    November 9, 20052.3
    
    Agreement and Plan of Merger by and
among UCBH Holdings, Inc. (Buyer),
United Commercial Bank, a wholly
owned subsidiary of Buyer, and Great
Eastern Bank dated October 13, 2005
    
    S-4
    
    000-24947
    
    
    2.1
    
    
    December 12, 20052.4
    
    Agreement and Plan of Merger by and
among UCBH Holdings, Inc. (Buyer),
UCB Merger, LLC, a wholly owned
subsidiary of Buyer, and Summit Bank
Corporation dated September 18, 2006
    
    10-Q
    
    000-24947
    
    
    2.4
    
    
    November 14, 20062.5
    
    Agreement and Plan of Merger by and
among UCBH Holdings, Inc. (Buyer),
UCB Merger II, LLC, a wholly owned
subsidiary of Buyer, CAB Holding,
LLC, CAB International Holding
Limited, and Dr. Paul Shi H. Huang
dated January 10, 2007
    
    10-Q
    
    000-24947
    
    
    2.5
    
    
    May 10, 20072.6
    
    Sale and Purchase Agreement among
United Commercial Bank, Charoen
Pokphand Group Co., Ltd., M. Thai
Group Limited and DEG  Deutsche
Investitions und
Entwicklungsgesellschaft mbH dated
March 26, 2007
    
    10-Q
    
    000-24947
    
    
    2.6
    
    
    May 10, 20072.7
    
    Agreement for Transfer of Equity
Interest in Business Development
Bank Limited by and among
Kasikornbank Public Co., Ltd.,
Charoen Pokphand Group Company
Limited and United Commercial Bank
dated March 26, 2007
    
    10-Q
    
    000-24947
    
    
    2.7
    
    
    May 10, 20073.1
    
    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
    
    8-K
    
    000-24947
    
    
    3.1
    
    
    March 29, 2007
 -51-




---



##### Table of Contents



Exhibit
    
    
    
    Incorporated by Reference


    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith3.3
    
    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
    
    S-4
    
    333-58335
    
    
    4.1
    
    
    July 1, 19984.2
    
    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
    
    10-Q
    
    000-24947
    
    
    2.2
    
    
    November 9, 20054.9
    
    Indenture between UCBH Holdings,
Inc. and Wilmington Trust Company,
as trustee, dated December 15, 2006
    
    10-K
    
    000-24947
    
    
    4.9
    
    
    March 1, 20074.10
    
    Junior subordinated indenture
between UCBH Holdings, Inc. and
Wilmington Trust Company, as
trustee, dated December 28, 2006
    
    10-K
    
    000-24947
    
    
    4.10
    
    
    March 1, 20074.11
    
    Junior Subordinated Indenture
between Summit Bank Corporation and
The Bank of New York, as trustee,
dated September 30, 2003
    
    10-K
    
    000-24947
    
    
    4.11
    
    
    March 1, 20074.12
    
    Registration Rights, Lockup and
Standstill Agreement by and among
UCBH Holdings, Inc., CAB
International Holding Limited and
Dr. Paul Shi H. Huang
    
    10-Q
    
    000-24947
    
    
    4.12
    
    
    May 10, 20074.13
    
    Floating Rate Junior Subordinated
Debentures between United Commercial
Bank and Wilmington Trust Company,
as Trustee, dated June 21, 2007.
    
    
    
    
    
    
    
    
    
    
    

ü
 -52-




---



##### Table of Contents



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
    
    Form of Change in Control Agreement
among UCBH Holdings, Inc., United
Commercial Bank and certain Senior
Vice Presidents of UCBH Holdings,
Inc. or United Commercial Bank
    
    10-Q
    
    000-24947
    
    
    10.1
    
    
    April 27, 200610.8
    
    UCBH Holdings, Inc. Amended and
Restated 2006 Equity Incentive Plan,
(formerly known as UCBH Holdings,
Inc. 2006 Equity Incentive Plan)
    
    S-8
    
    333-143774
    
    
    4.2
    
    
    June 15, 200710.9
    
    UCBH Holdings, Inc. Senior Executive
Annual Incentive Plan
    
    10-Q
    
    000-24947
    
    
    10.9
    
    
    August 9, 200610.10
    
    Form of Indemnification Agreement of
UCBH Holdings, Inc.
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    May 17, 200710.11
    
    Form of Indemnification Agreement of
United Commercial Bank.
    
    8-K
    
    000-24947
    
    
    10.2
    
    
    May 17, 200710.12
    
    Post Retirement Compensation
Agreement between Pin Pin Chau,
Chief Executive Officer of Summit
Bank Corporation, and Summit Bank
Corporation dated December 20, 2004
    
    10-K
    
    000-24947
    
    
    10.12
    
    
    March 1, 2007
 -53-




---



##### Table of Contents



Exhibit
    
    
    
    Incorporated by Reference

    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith14.1
    
    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 1, 200731.1
    
    Certificate pursuant to Rule
13a-14(a) of the Securities Exchange
Act of 1934, as amended, signed and
dated by Thomas S. Wu.
    
    
    
    
    
    
    
    
    
    
    

ü31.2
    
    Certificate pursuant to Rule
13a-14(a) of the Securities Exchange
Act of 1934, as amended, signed and
dated by Dennis Wu.
    
    
    
    
    
    
    
    
    
    
    

ü32.0
    
    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.
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
 
 (1)
    
    Furnished herewith -54-




---



##### Table of Contents



SIGNATURES
  UCBH HOLDINGS, INC.Date:  August 9, 2007
    /s/ Thomas S. WuThomas S. WuChairman, President and
Chief Executive Officer
(Principal Executive Officer) Date:  August 9, 2007
    /s/ Dennis WuDennis WuDirector, Executive Vice President and
Chief Financial Officer

(Principal Financial and Accounting Officer) -55-