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 September 30, 2008.
  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
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company 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
    
    
    29Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    62Item 4
    
    Controls and Procedures
    
    
    62PART IIItem 1
    
    Legal Proceedings
    
    
    63Item 1A
    
    Risk Factors
    
    
    63Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    63Item 3
    
    Defaults Upon Senior Securities
    
    
    63Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    63Item 5
    
    Other Information
    
    
    63Item 6
    
    Exhibits
    
    
    64SIGNATURES
    
    
    68




---



##### 



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
  September 30,
    
    
    December 31,2008
    
    
    2007ASSETSNoninterest bearing cash
    
    $
    133,644
    
    
    $
    117,141Interest bearing cash
    
    
    133,942
    
    
    
    202,258Federal funds sold
    
    
    130,500
    
    
    
    26,028Cash and cash equivalents
    
    
    398,086
    
    
    
    345,427Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    150,000Investment and mortgage-backed securities available for sale, at fair value
    
    
    2,495,980
    
    
    
    2,188,355Investment and mortgage-backed securities held to maturity, at cost (fair value of $231,843 and $276,286 at September 30,
2008, and December 31, 2007, respectively)
    
    
    238,694
    
    
    
    271,485Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments
    
    
    148,070
    
    
    
    138,877Loans held for sale, net of valuation allowance
    
    
    654
    
    
    
    177,137Loans held in portfolio
    
    
    8,863,367
    
    
    
    7,832,150Allowance for loan losses
    
    
    (120,278
    )
    
    
    (80,584
    )Loans held in portfolio, net
    
    
    8,743,089
    
    
    
    7,751,566Accrued interest receivable
    
    
    68,427
    
    
    
    61,111Premises and equipment, net
    
    
    145,521
    
    
    
    144,630Goodwill
    
    
    432,040
    
    
    
    436,606Core deposit intangibles, net
    
    
    18,663
    
    
    
    22,526Mortgage servicing rights, net
    
    
    11,677
    
    
    
    12,783Other assets
    
    
    193,354
    
    
    
    103,063Total assets
    
    $
    13,044,255
    
    
    $
    11,803,566LIABILITIES AND STOCKHOLDERS EQUITYNoninterest bearing deposits
    
    $
    835,470
    
    
    $
    860,338Interest bearing deposits
    
    
    7,694,700
    
    
    
    6,920,902Total deposits
    
    
    8,530,170
    
    
    
    7,781,240Securities sold under agreements to repurchase
    
    
    700,000
    
    
    
    650,000Short-term borrowings and federal funds purchased
    
    
    550,398
    
    
    
    492,532Subordinated debentures
    
    
    406,459
    
    
    
    406,615Accrued interest payable
    
    
    31,561
    
    
    
    28,169Long-term borrowings
    
    
    1,547,668
    
    
    
    1,372,190Other liabilities
    
    
    130,276
    
    
    
    105,717Total liabilities
    
    
    11,896,532
    
    
    
    10,836,463Commitments and contingencies (Note 18)Preferred stock, $0.01 par value, 10,000,000 shares authorized, 132,335 shares issued and outstanding at September 30, 2008
    
    
    1
    
    
    
    Common stock, $0.01 par value, 180,000,000 shares authorized at September 30, 2008, and December 31, 2007; 111,092,733 and
104,397,988 shares issued and outstanding at September 30, 2008, and December 31, 2007, respectively
    
    
    1,105
    
    
    
    1,044Additional paid-in capital
    
    
    658,783
    
    
    
    427,474Retained earnings
    
    
    547,724
    
    
    
    554,568Accumulated other comprehensive loss
    
    
    (59,890
    )
    
    
    (15,983
    )Total stockholders equity
    
    
    1,147,723
    
    
    
    967,103Total liabilities and stockholders equity
    
    $
    13,044,255
    
    
    $
    11,803,566
  - 1 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest and dividend income:Loans
    
    $
    136,241
    
    
    $
    151,580
    
    
    $
    412,346
    
    
    $
    426,495Investment and mortgage-backed securities:Taxable
    
    
    29,783
    
    
    
    20,460
    
    
    
    90,391
    
    
    
    64,631Nontaxable
    
    
    5,276
    
    
    
    3,611
    
    
    
    17,298
    
    
    
    10,212FHLB Stock
    
    
    1,250
    
    
    
    917
    
    
    
    4,077
    
    
    
    2,714Federal funds sold and deposits with banks
    
    
    2,013
    
    
    
    2,842
    
    
    
    7,666
    
    
    
    8,526Securities purchased under agreements to resell
    
    
    999
    
    
    
    3,341
    
    
    
    4,964
    
    
    
    7,834Total interest and dividend income
    
    
    175,562
    
    
    
    182,751
    
    
    
    536,742
    
    
    
    520,412Interest expense:Deposits
    
    
    54,959
    
    
    
    72,195
    
    
    
    174,170
    
    
    
    206,702Securities sold under agreements to repurchase
    
    
    5,902
    
    
    
    3,631
    
    
    
    18,559
    
    
    
    10,312Short-term borrowings and federal funds purchased
    
    
    5,362
    
    
    
    3,324
    
    
    
    16,240
    
    
    
    12,993Subordinated debentures
    
    
    5,860
    
    
    
    6,138
    
    
    
    18,489
    
    
    
    15,942Long-term borrowings
    
    
    13,937
    
    
    
    13,539
    
    
    
    45,500
    
    
    
    37,973Total interest expense
    
    
    86,020
    
    
    
    98,827
    
    
    
    272,958
    
    
    
    283,922Net interest income
    
    
    89,542
    
    
    
    83,924
    
    
    
    263,784
    
    
    
    236,490Provision for loan losses
    
    
    43,221
    
    
    
    3,010
    
    
    
    110,853
    
    
    
    6,156Net interest income after provision for loan losses
    
    
    46,321
    
    
    
    80,914
    
    
    
    152,931
    
    
    
    230,334Noninterest income:Commercial banking fees
    
    
    5,404
    
    
    
    5,188
    
    
    
    15,479
    
    
    
    15,140Service charges on deposits
    
    
    2,203
    
    
    
    1,815
    
    
    
    6,449
    
    
    
    5,061Gain (loss) on sale of securities, net
    
    
    4,828
    
    
    
    702
    
    
    
    7,448
    
    
    
    3,780Gain on sale of SBA loans, net
    
    
    44
    
    
    
    855
    
    
    
    583
    
    
    
    2,265Gain on sale of multifamily and commercial real estate loans, net
    
    
    484
    
    
    
    1,532
    
    
    
    1,234
    
    
    
    4,954Lower of cost or market adjustment on loans held for sale
    
    
    
    
    
    
    (139
    )
    
    
    (1,428
    )
    
    
    (101
    )Impairment on available for sale securities
    
    
    (17,811
    )
    
    
    
    
    
    
    (32,478
    )
    
    
    Equity loss in other equity investments
    
    
    (1,122
    )
    
    
    (900
    )
    
    
    (3,487
    )
    
    
    (2,164
    )Other fees
    
    
    2,200
    
    
    
    1,769
    
    
    
    4,655
    
    
    
    4,257Total noninterest income (loss)
    
    
    (3,770
    )
    
    
    10,822
    
    
    
    (1,545
    )
    
    
    33,192Noninterest expense:Personnel
    
    
    29,164
    
    
    
    24,405
    
    
    
    86,862
    
    
    
    71,943Occupancy
    
    
    6,030
    
    
    
    5,510
    
    
    
    17,937
    
    
    
    15,535Data processing
    
    
    2,939
    
    
    
    2,009
    
    
    
    7,818
    
    
    
    6,647Furniture and equipment
    
    
    2,295
    
    
    
    2,139
    
    
    
    6,427
    
    
    
    6,530Professional fees and contracted services
    
    
    2,729
    
    
    
    1,944
    
    
    
    6,574
    
    
    
    5,615Deposit insurance
    
    
    1,250
    
    
    
    560
    
    
    
    3,616
    
    
    
    1,154Communication
    
    
    875
    
    
    
    796
    
    
    
    2,751
    
    
    
    2,298Core deposit intangible amortization
    
    
    1,382
    
    
    
    918
    
    
    
    3,862
    
    
    
    3,321Foreign currency translation (gain) loss
    
    
    (771
    )
    
    
    (73
    )
    
    
    (6,075
    )
    
    
    432Other general and administrative
    
    
    6,104
    
    
    
    5,370
    
    
    
    19,862
    
    
    
    16,817Total noninterest expense
    
    
    51,997
    
    
    
    43,578
    
    
    
    149,634
    
    
    
    130,292Income (loss) before income tax expense (benefit)
    
    
    (9,446
    )
    
    
    48,158
    
    
    
    1,752
    
    
    
    133,234Income tax expense (benefit)
    
    
    (8,953
    )
    
    
    17,337
    
    
    
    (7,678
    )
    
    
    47,168Net income (loss)
    
    $
    (493
    )
    
    $
    30,821
    
    
    $
    9,430
    
    
    $
    86,066Dividends on preferred stock
    
    
    (2,995
    )
    
    
    
    
    
    
    (2,995
    )
    
    
    Net income (loss) available to common stockholders
    
    $
    (3,488
    )
    
    $
    30,821
    
    
    $
    6,435
    
    
    $
    86,066Earnings per share:Basic
    
    $
    (0.03
    )
    
    $
    0.30
    
    
    $
    0.06
    
    
    $
    0.85Diluted
    
    $
    (0.03
    )
    
    $
    0.29
    
    
    $
    0.06
    
    
    $
    0.82
  - 2 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income
 AccumulatedOther
    
    
    TotalPreferred
    
    
    Common Stock
    
    
    Additional
    
    
    Retained
    
    
    Comprehensive
    
    
    Stockholders
    
    
    ComprehensiveStock
    
    
    Shares
    
    
    Amount
    
    
    Paid-In Capital
    
    
    Earnings
    
    
    Loss (1)
    
    
    Equity
    
    
    IncomeBalance at December 31, 2006
    
    $
    
    
    
    
    99,448,181
    
    
    $
    994
    
    
    $
    341,616
    
    
    $
    464,616
    
    
    $
    (21,155
    )
    
    $
    786,071Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86,066
    
    
    
    
    
    
    
    86,066
    
    
    $
    86,066Other comprehensive income, net of tax liability of $1,304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,986
    
    
    
    1,986
    
    
    
    1,986Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    88,052Stock options exercised, including related tax benefit
    
    
    
    
    
    
    761,101
    
    
    
    8
    
    
    
    8,075
    
    
    
    
    
    
    
    
    
    
    
    8,083Stock compensation charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,550
    
    
    
    
    
    
    
    
    
    
    
    2,550Cash dividend of $0.09 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,224
    )
    
    
    
    
    
    
    (9,224
    )Shares issued in connection with acquisition of CAB Holding, LLC
    
    
    
    
    
    
    3,711,580
    
    
    
    37
    
    
    
    66,109
    
    
    
    
    
    
    
    
    
    
    
    66,146Balance at September 30, 2007
    
    $
    
    
    
    
    103,920,862
    
    
    $
    1,039
    
    
    $
    418,350
    
    
    $
    541,458
    
    
    $
    (19,169
    )
    
    $
    941,678Balance at December 31, 2007
    
    $
    
    
    
    
    104,397,988
    
    
    $
    1,044
    
    
    $
    427,474
    
    
    $
    554,568
    
    
    $
    (15,983
    )
    
    $
    967,103Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,430
    
    
    
    
    
    
    
    9,430
    
    
    $
    9,430Other comprehensive loss, net of tax benefit of $27,038
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,907
    )
    
    
    (43,907
    )
    
    
    (43,907
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (34,477
    )Stock options exercised, including related tax benefit
    
    
    
    
    
    
    684,246
    
    
    
    7
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    3,007Stock compensation charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,746
    
    
    
    
    
    
    
    
    
    
    
    4,746Stock issue to China Minsheng Banking Corp., Ltd.
    
    
    
    
    
    
    5,381,220
    
    
    
    54
    
    
    
    93,285
    
    
    
    
    
    
    
    
    
    
    
    93,339Issuance of preferred stock
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    130,278
    
    
    
    
    
    
    
    
    
    
    
    130,279Conversion of preferred stock to common stock
    
    
    
    
    
    
    629,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash dividend of $0.12 per share of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,279
    )
    
    
    
    
    
    
    (13,279
    )Cash dividend of $22.19 per share of preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,995
    )
    
    
    
    
    
    
    (2,995
    )Balance at September 30, 2008
    
    $
    1
    
    
    
    111,092,733
    
    
    $
    1,105
    
    
    $
    658,783
    
    
    $
    547,724
    
    
    $
    (59,890
    )
    
    $
    1,147,723
 
 (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 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
 Nine Months Ended September 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    9,430
    
    
    $
    86,066Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    110,853
    
    
    
    6,156Amortization of net deferred loan fees
    
    
    (10,453
    )
    
    
    (9,293
    )Amortization of net securities premiums and discounts
    
    
    1,093
    
    
    
    1,613Federal Home Loan Bank stock dividend
    
    
    (3,912
    )
    
    
    (2,445
    )Amortization of intangibles
    
    
    6,401
    
    
    
    6,155Depreciation and amortization of premises and equipment
    
    
    8,285
    
    
    
    8,032Gain on sale of loans, securities, and other assets, net
    
    
    (8,327
    )
    
    
    (8,777
    )Impairment on available for sale securities
    
    
    32,478
    
    
    
    Lower of cost or market adjustment on loans held for sale
    
    
    1,428
    
    
    
    101Equity loss in other equity investments
    
    
    3,487
    
    
    
    2,130Stock compensation expense, net of tax benefit related to nonqualified stock option grants
    
    
    3,608
    
    
    
    2,549Excess tax benefit from stock option exercises
    
    
    (1,585
    )
    
    
    (1,233
    )Other, net
    
    
    9,883
    
    
    
    11Changes in operating assets and liabilities:Decrease in loans originated as held for sale
    
    
    25,190
    
    
    
    14,469Increase in accrued interest receivable
    
    
    (7,316
    )
    
    
    (8,023
    )(Increase) decrease in other assets
    
    
    (42,204
    )
    
    
    11,438Increase in accrued interest payable
    
    
    3,392
    
    
    
    3,810Increase (decrease) in other liabilities
    
    
    29,326
    
    
    
    (31,301
    )Net cash provided by operating activities
    
    
    171,057
    
    
    
    81,458Cash flows from investing activities:Net cash acquired from purchase of CAB Holding, LLC
    
    
    
    
    
    
    33,647Payment for purchase of Summit Bank Corporation, net of cash acquired
    
    
    
    
    
    
    (734
    )Purchase of securities purchased under agreements to resell
    
    
    
    
    
    
    (200,000
    )Proceeds from maturity of securities purchased under agreements to resell
    
    
    
    
    
    
    175,000Investment and mortgage-backed securities, available for sale:Principal payments and maturities
    
    
    143,281
    
    
    
    1,431,700Purchases
    
    
    (1,401,712
    )
    
    
    (1,537,665
    )Sales
    
    
    1,046,246
    
    
    
    639,321Called
    
    
    3,500
    
    
    
    92,943Investment and mortgage-backed securities, held to maturity:Principal payments and maturities
    
    
    5,484
    
    
    
    7,293Purchases
    
    
    
    
    
    
    Called
    
    
    27,545
    
    
    
    8,895Proceeds from redemption of Federal Home Loan Bank stock
    
    
    18,733
    
    
    
    10,483Purchase of Federal Home Loan Bank stock
    
    
    (21,716
    )
    
    
    (11,730
    )Proceeds from redemption of Federal Reserve Bank stock
    
    
    
    
    
    
    1,267Proceeds from sale of other equity investments
    
    
    187
    
    
    
    Funding of other equity investments
    
    
    (10,768
    )
    
    
    (7,679
    )Proceeds from the sale of loans originated in held in portfolio
    
    
    86,156
    
    
    
    311,145Proceeds from the sale of real estate owned
    
    
    4,967
    
    
    
    238Loans originated in held in portfolio funded and purchased, net of principal collections
    
    
    (1,255,268
    )
    
    
    (1,251,256
    )Purchases of premises and other equipment
    
    
    (9,665
    )
    
    
    (6,881
    )Other investing activities, net
    
    
    (400
    )
    
    
    1,076Net cash used in investing activities
    
    
    (1,363,430
    )
    
    
    (302,937
    )Cash flows from financing activities:Net (decrease) increase in demand deposits, NOW, money market and savings accounts
    
    
    (449,010
    )
    
    
    152,895Net increase in time deposits
    
    
    1,180,928
    
    
    
    112,066Net decrease in short-term borrowings
    
    
    (70,369
    )
    
    
    (477,301
    )Proceeds from securities sold under agreements to repurchase
    
    
    455,000
    
    
    
    349,267Payments of securities sold under agreements to repurchase
    
    
    (405,000
    )
    
    
    (250,867
    )Proceeds from issuance of subordinated debentures
    
    
    
    
    
    
    166,238Proceeds from long-term borrowings
    
    
    582,133
    
    
    
    386,712Principal payments of long-term borrowings
    
    
    (260,312
    )
    
    
    (159,262
    )Proceeds from issuance of preferred stock
    
    
    130,278
    
    
    
    Proceeds from stock option exercises
    
    
    1,423
    
    
    
    6,851Excess tax benefit from stock option exercises
    
    
    1,585
    
    
    
    1,233Proceeds from stock issued to China Minsheng Banking Corp., Ltd.
    
    
    93,339
    
    
    
    Payment of cash dividend on preferred stock
    
    
    (2,995
    )
    
    
    Payment of cash dividend on common stock
    
    
    (11,968
    )
    
    
    (9,091
    )Net cash provided by financing activities
    
    
    1,245,032
    
    
    
    278,741Net increase (decrease) in cash and cash equivalents
    
    
    52,659
    
    
    
    57,262Cash and cash equivalents at beginning of period
    
    
    345,427
    
    
    
    354,419Cash and cash equivalents at end of period
    
    $
    398,086
    
    
    $
    411,681
  - 4 -




---



##### 



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). 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, 2007.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, 2007, 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 nine month periods ended September 30, 2008, 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 nine month periods ended September 30, 2008, include
the results of operations of United Commercial Bank (China) Limited (UCB China) (formerly known
as Business Development Bank Ltd.), which was acquired on December 11, 2007, and The Chinese
American Bank (CAB), which was acquired on May 23, 2007.Use of Estimates and Valuations in Preparation of Financial StatementsThe preparation of financial statements in conformity with GAAP requires management to make various
estimates that affect reported amounts and disclosures in our financial statements. These estimates
are used in measuring the fair value of certain financial instruments, mortgage servicing rights,
accounting for goodwill and identifiable intangibles, establishing our provision for loan losses,
valuing equity-based compensation awards and assessing the realizability of deferred income taxes.
Such estimates are based on available information and on judgments by management of the Company. As
such, actual results could differ from these estimates.Where available, fair value is based on or derived from observable market prices or parameters.
Where observable prices or parameters are not available, valuations from outsourced service
providers are generally obtained to assist the Company. The valuations performed by the service
providers to assist the Company involve some level of estimation and judgment, the degree of which
is dependent on the price transparency of the financial instrument being valued and the financial
instruments complexity. In particular, the tranches on our collateralized mortgage-backed
securities arising from our commercial real estate loan securitization, certain collateralized debt
obligations and mortgage-related asset-backed securities, and certain other investments have no
direct observable prices, and as a result, the related valuations that are obtained from third
parties require significant estimation and judgment and are therefore subject to significant
subjectivity. Additionally, for these investments in which direct observable prices or inputs are
used in the valuation process but in cases where the observable prices or inputs are either not
current or are based on transactions in inactive or illiquid market conditions, such observable
prices or inputs might not be relevant and could require significant adjustment. In these cases,
the Company may use an internal cash flow model, which utilizes Level 3 inputs, including
assumptions about future cash flows and risk-adjusted discount rates, in order to determine fair
value of a particular investment security. Reliance on the estimation and judgment process
increases in adverse market conditions with decreased liquidity and because of the lack of trading
and the resulting
 - 5 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 lack of clear and observable prices or
parameters, such as those experienced during the second half of 2007 and the first nine months of
2008. If such conditions exist for the remainder of 2008, management of the Company would expect
continued reliance on these judgments.Fair ValuesEffective January 1, 2008, the Company determines the fair values of its financial instruments
based on the fair value hierarchy delineated in Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements(SFAS 157), which requires the Company to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
SFAS 157 describes three levels of inputs that may be used to measure fair value:Level 1: Quoted prices for identical financial assets or liabilities in active markets.Level 2: Quoted prices for similar financial assets or liabilities in active markets; quoted prices
for identical or similar financial assets or liabilities in markets that are not active; and
valuations derived by models in which the significant inputs and significant value drivers are
observable in active markets.Level 3: Valuations derived by models in which one or more significant inputs or significant value
drivers are unobservable. These unobservable assumptions reflect our own estimates of assumptions
that market participants would use in pricing the financial asset or liability.Effective October 10, 2008, the Company implemented FSP FAS 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active(see Note 2).For more information regarding the fair value of the Companys financial instruments see Note 21 
Fair Values of Financial Assets and Liabilities.Allowance for Loan LossesThe allowance for loan losses represents our estimate of the losses that are inherent in the loans
held in portfolio. UCB continuously monitors the quality of its loan portfolio and maintains an
allowance for loan losses sufficient to absorb losses inherent in the portfolio. Loans held for
sale are excluded from any of the information included in Note 9, Loans Held in Portfolio and
Allowance for Loan Losses as these loans are marked-to-market and reserving for loan losses is not
applicable.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. 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. 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.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
 - 6 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 allowance for loan losses. The reserve for unfunded commitments is
included in other liabilities on the Consolidated Balance Sheets.Foreign Currency TranslationAssets, liabilities and operations of foreign branches and subsidiaries are recorded based on the
functional currency of each entity. For our Hong Kong branch and our Chinese wholly owned
subsidiary, UCB China, the functional currency is the U.S. dollar. As such, the resulting
remeasurement currency gains and losses on foreign-denominated assets and liabilities are included
in net income.ReclassificationsCertain reclassifications have been made to prior periods consolidated financial statements to
conform to the September 30, 2008, presentation.2.
    
    Recent Accounting PronouncementsAccounting for Fair Value MeasurementsEffective January 1, 2008, the Company adopted Statement of Financial Accounting Standards SFAS
157. SFAS 157 defines fair value, establishes a framework for measuring fair value under GAAP and
expands disclosures about fair value measurements. Fair value is defined under SFAS 157 as the
exchange price that would be received for an asset or paid to transfer a liability (an exit price)
in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. SFAS 157 also establishes a fair value
hierarchy which requires the Company to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. In February 2008, the FASB decided that an entity
need not apply this standard to nonfinancial assets and liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis until 2009.
Accordingly, our adoption of this standard in 2008 was limited to financial assets and liabilities.
The adoption of SFAS 157 did not have a material impact on the Companys financial position or
results of operations.In conjunction with the adoption of SFAS 157, the Company adopted SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities(SFAS 159). SFAS 159 provides an
irrevocable option to elect fair value for the initial and subsequent measurement for certain
financial assets and financial liabilities, on a contract-by-contract basis, with changes in fair
value reported in results of operations. The Company did not elect the fair value option for any of
its financial assets or financial liabilities on the adoption date. As such, the adoption of SFAS
159 did not have a material impact on the Companys financial position or results of operations.On October 10, 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active. The FSP clarifies the application of FASB Statement
No. 157, Fair Value Measurements, in a market that is not active and provides an example to
illustrate key considerations in determining the fair value of a financial asset when the market
for that financial asset is not active. The FSP is effective immediately, and applies to prior
periods for which financial statements have not been issued. Therefore the Company is subject to
the provisions of the FSP effective September 30, 2008. Revisions resulting from a change in the
valuation technique or application shall be accounted for a change in accounting estimate.
The adoption of the FSP did not have a material impact on the
Companys financial position or results of operations.Disclosures about Derivative Instruments and Hedging ActivitiesSFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of
FASB No. 133(SFAS 161), was issued in March 2008. SFAS 161 requires qualitative disclosures
about objectives and strategies
 - 7 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 for using derivatives, quantitative disclosures about fair value
amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related
contingent features in derivative agreements. SFAS 161 is effective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008, with early application
encouraged. Because SFAS 161 impacts the Companys disclosure but not its accounting treatment for
derivative instruments, the Companys adoption of SFAS 161 will not impact its financial position
or results of operations.3.
    
    Investment AgreementOn October 7, 2007, UCBH and China Minsheng Banking Corp., Ltd., a Chinese joint stock commercial
bank (Minsheng), entered into an Investment Agreement (the Investment Agreement), pursuant to
which Minsheng will acquire 9.9% of the outstanding shares of UCBH common stock (calculated on a
post-closing basis) in two phases, with a mutual option to increase Minshengs ownership to 20.0%
(calculated on a post-closing basis).On March 5, 2008, UCBH and Minsheng completed the initial closing under the Investment Agreement
(the Initial Closing) and entered into a Voting Agreement (the Voting Agreement). UCBH sold
approximately 5.4 million newly issued shares of UCBH common stock, or 4.9% of the total
outstanding shares (calculated on a post-closing basis), at $17.79 per share, in exchange for $95.7
million in cash proceeds, $93.3 million after the payment of $2.4 million in closing costs. Under
the Voting Agreement, Minsheng agrees to vote the shares of UCBH it owns (the Shares) in favor of
persons nominated and recommended by the Board of Directors of UCBH (the Board) as directors of
the Board and against any person nominated for election as a director by any other person, except
for persons designated by Minsheng for nomination to the Board pursuant to an Investors Rights and
Standstill Agreement between UCBH and Minsheng (the Investors Rights Agreement). The Investors
Rights Agreement provides that following the Initial Closing, Minsheng may recommend one person to
be appointed to the Board in a newly created Board seat.On September 24, 2008, the Board of Directors of UCBH and of UCB each appointed Mr. Qingyuan Wan as
a new member of the Board of Directors of UCBH and UCB, respectively, effective as of September 25,
2008. Mr. Wan has been designated as a member of the Investment Committee and the Nominating
Committee of each of the Boards of UCBH and UCB. Mr. Wan was granted 24,000 stock options as an
Outside Director pursuant to UCBHs Amended and Restated 2006 Equity Incentive Plan. Mr. Wans
acceptance of the grant is subject to his review of applicable Chinese legal requirements.If Minshengs ownership of UCBH common stock is increased to 20.0% (calculated on a post-closing
basis) by mutual agreement subject to regulatory approval, Minsheng will have the right to
recommend a second person to be appointed in another newly created Board seat. Under the Voting
Agreement, Minsheng also agrees to vote the Shares as directed by the Board except under certain
circumstances enumerated in the Voting Agreement.The Voting Agreement will terminate on the earliest of (i) the date when Minsheng no longer owns
any Shares, (ii) the October 7, 2010, expiration of the standstill period as set forth in the
Investors Rights Agreement or (iii) the termination of the Investment Agreement by Minsheng as a
result of a material breach of the Investment Agreement by UCBH.Minsheng
currently owns approximately 4.9% of UCBHs outstanding common stock as a result of the initial
closing under the Investment Agreement, completed on March 5, 2008. The Investment Agreement
provides for the closing of a second phase of investment which will result in Minsheng owning an
aggregate of 9.9% of UCBHs outstanding common stock. Pursuant to the Investment Agreement, the purchase price for the shares issued by UCBH in the
second phase (the Second Phase Shares) would be the average closing price of UCBH common stock as
quoted on the NASDAQ Global Select Market for the 90 trading days preceding the fifth business day
prior to the second closing (the Second Phase Baseline Date), plus a 5% premium.
 - 8 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 In order to complete the second closing, Minsheng must obtain foreign exchange remittance approval
from Chinas State Administration of Foreign Exchange (SAFE). SAFE requires that Minshengs
foreign exchange approval application fix the total purchase price for the Second Phase Shares. On
September 22, 2008, US Pacific Time, UCBH and Minsheng entered into an amendment (the Amendment)
to the Investment Agreement, in order to accommodate the SAFE application requirement, which sets
August 30, 2008, as the Second Phase Baseline Date. UCBH will therefore issue Second Phase Shares
to Minsheng at a price based on the 90 day average closing price as of August 30, 2008, plus a 5%
premium as provided in the Investment Agreement. Based on recent average closing prices of UCBH
common stock, UCBH
management expects that the ultimate price per share of the Second Phase Shares will not be
materially different from the price that would have been calculated had the Second Phase Baseline
Date not been amended to be fixed as August 30, 2008. UCBH expects that the second closing will be
completed in the fourth quarter of 2008, through the issuance of new shares of UCBH common stock to
Minsheng.By June 30, 2009, conditioned upon mutual agreement and regulatory approvals, Minsheng may increase
its share ownership to 20.0% (calculated on a post-closing basis) through, at the discretion of
UCBH, a combination of the purchase of secondary shares and/or the issuance of primary shares.4.
    
    Cash and Due from BanksUCB is required to maintain cash reserves in a noninterest-bearing account at the Federal Reserve
Bank (FRB) of San Francisco. Through the FRB, the cash in this account in excess of UCBs average
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 September 30, 2008, and December 31, 2007, the reserve requirement was $2.0
million and $6.9 million, respectively.5.
    
    Securities Purchased Under Agreements to ResellInformation regarding outstanding securities purchased under agreements to resell (the Resell
Agreements) as of and for the nine months ended September 30, 2008, and as of and for the year
ended December 31, 2007, were as follows (dollars in thousands):
 September 30,
    
    December 31,2008
    
    2007Average balance outstanding
    
    $
    150,000
    
    
    $
    158,863Maximum amount outstanding at any month end period
    
    
    150,000
    
    
    
    200,000Balance outstanding at end of period
    
    
    150,000
    
    
    
    150,000Weighted average interest rate during the period
    
    
    4.41
    %
    
    
    6.70
    %Weighted average interest rate at end of period
    
    
    5.31
    %
    
    
    6.21
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    8.46
    
    
    
    9.17
 - 9 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 6. Investment and Mortgage-Backed 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:Agency preferred stock
    
    $
    1,251
    
    
    $
    
    
    
    $
    
    
    
    $
    1,251
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Collateralized debt
obligations
    
    
    26,069
    
    
    
    3,710
    
    
    
    (5,948
    )
    
    
    23,831
    
    
    
    7,975
    
    
    
    (1,476
    )
    
    
    8,963
    
    
    
    (4,472
    )
    
    
    16,938
    
    
    
    (5,948
    )U.S. Government
sponsored enterprises
notes
    
    
    677,797
    
    
    
    28
    
    
    
    (18,589
    )
    
    
    659,236
    
    
    
    649,208
    
    
    
    (18,589
    )
    
    
    
    
    
    
    
    
    
    
    649,208
    
    
    
    (18,589
    )Municipals
    
    
    278,587
    
    
    
    24
    
    
    
    (36,140
    )
    
    
    242,471
    
    
    
    218,610
    
    
    
    (31,777
    )
    
    
    20,977
    
    
    
    (4,363
    )
    
    
    239,587
    
    
    
    (36,140
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (1,703
    )
    
    
    8,297
    
    
    
    
    
    
    
    
    
    
    
    8,297
    
    
    
    (1,703
    )
    
    
    8,297
    
    
    
    (1,703
    )Total investment
securities available for
sale
    
    
    993,704
    
    
    
    3,762
    
    
    
    (62,380
    )
    
    
    935,086
    
    
    
    875,793
    
    
    
    (51,842
    )
    
    
    38,237
    
    
    
    (10,538
    )
    
    
    914,030
    
    
    
    (62,380
    )Mortgage-backed
securities available for
sale:FNMA
    
    
    485,919
    
    
    
    1,340
    
    
    
    (6,247
    )
    
    
    481,012
    
    
    
    325,602
    
    
    
    (4,363
    )
    
    
    66,224
    
    
    
    (1,884
    )
    
    
    391,826
    
    
    
    (6,247
    )GNMA
    
    
    440,458
    
    
    
    24
    
    
    
    (8,177
    )
    
    
    432,305
    
    
    
    378,077
    
    
    
    (7,626
    )
    
    
    16,917
    
    
    
    (551
    )
    
    
    394,994
    
    
    
    (8,177
    )FHLMC
    
    
    167,243
    
    
    
    
    
    
    
    (6,763
    )
    
    
    160,480
    
    
    
    82,520
    
    
    
    (3,305
    )
    
    
    77,957
    
    
    
    (3,458
    )
    
    
    160,477
    
    
    
    (6,763
    )CMBS
    
    
    340,173
    
    
    
    
    
    
    
    (12,077
    )
    
    
    328,096
    
    
    
    328,096
    
    
    
    (12,077
    )
    
    
    
    
    
    
    
    
    
    
    328,096
    
    
    
    (12,077
    )Other
    
    
    166,765
    
    
    
    102
    
    
    
    (7,866
    )
    
    
    159,001
    
    
    
    106,328
    
    
    
    (4,020
    )
    
    
    42,470
    
    
    
    (3,846
    )
    
    
    148,798
    
    
    
    (7,866
    )Total mortgage-backed
securities available for
sale
    
    
    1,600,558
    
    
    
    1,466
    
    
    
    (41,130
    )
    
    
    1,560,894
    
    
    
    1,220,623
    
    
    
    (31,391
    )
    
    
    203,568
    
    
    
    (9,739
    )
    
    
    1,424,191
    
    
    
    (41,130
    )Total investment and
mortgage-backed
securities available for
sale
    
    
    2,594,262
    
    
    
    5,228
    
    
    
    (103,510
    )
    
    
    2,495,980
    
    
    
    2,096,416
    
    
    
    (83,233
    )
    
    
    241,805
    
    
    
    (20,277
    )
    
    
    2,338,221
    
    
    
    (103,510
    )Investment securities
held to maturity:Municipal securities
    
    
    185,399
    
    
    
    1,500
    
    
    
    (7,256
    )
    
    
    179,643
    
    
    
    113,592
    
    
    
    (7,034
    )
    
    
    1,513
    
    
    
    (222
    )
    
    
    115,105
    
    
    
    (7,256
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    3,790
    
    
    
    
    
    
    
    (92
    )
    
    
    3,698
    
    
    
    
    
    
    
    
    
    
    
    3,698
    
    
    
    (92
    )
    
    
    3,698
    
    
    
    (92
    )GNMA
    
    
    49,183
    
    
    
    
    
    
    
    (995
    )
    
    
    48,188
    
    
    
    37,959
    
    
    
    (598
    )
    
    
    10,229
    
    
    
    (397
    )
    
    
    48,188
    
    
    
    (995
    )FHLMC
    
    
    322
    
    
    
    
    
    
    
    (8
    )
    
    
    314
    
    
    
    
    
    
    
    
    
    
    
    314
    
    
    
    (8
    )
    
    
    314
    
    
    
    (8
    )Total mortgage-backed
securities held to
maturity
    
    
    53,295
    
    
    
    
    
    
    
    (1,095
    )
    
    
    52,200
    
    
    
    37,959
    
    
    
    (598
    )
    
    
    14,241
    
    
    
    (497
    )
    
    
    52,200
    
    
    
    (1,095
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    238,694
    
    
    
    1,500
    
    
    
    (8,351
    )
    
    
    231,843
    
    
    
    151,551
    
    
    
    (7,632
    )
    
    
    15,754
    
    
    
    (719
    )
    
    
    167,305
    
    
    
    (8,351
    )Total securities
    
    $
    2,832,956
    
    
    $
    6,728
    
    
    $
    (111,861
    )
    
    $
    2,727,823
    
    
    $
    2,247,967
    
    
    $
    (90,865
    )
    
    $
    257,559
    
    
    $
    (20,996
    )
    
    $
    2,505,526
    
    
    $
    (111,861
    )
 As of September 30, 2008, the net unrealized loss on securities was $105.1 million. The net
unrealized loss on securities that are available for sale was $98.3 million. Net of a tax benefit
of $38.4 million, the unrealized $59.9 million loss is included in other comprehensive loss as a
reduction to stockholders equity. The $6.9 million net unrealized loss between the carrying value
and market value of securities that are held to maturity has not been recognized in the
Consolidated Balance Sheets. As more fully described in Note 7, from time to time the Company may
securitize commercial real estate loans (CMBS), as well as multifamily and single family loans through the Federal National
Mortgage Association (FNMA), to manage concentration risk and liquidity and retain such
investments.Additionally, certain securities that UCB holds have unrealized losses that extend for periods in
excess of twelve months. These securities are comprised primarily of collateralized debt
obligations, mortgage-backed securities and municipal securities.
 - 10 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Mortgage-backed securities consist primarily of securities guaranteed by FNMA, the Government
National Mortgage Association (GNMA) and the Federal Home Loan Mortgage Corporation (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
our mortgage-backed securities
resulted primarily from rising interest rates subsequent to purchase. The unrealized losses will
decline as interest rates fall to the purchased yield and as the securities approach contractual or
expected maturity.The municipal securities are issued by states and their political subdivisions in the U.S. These
securities predominantly have ratings of AAA, AA, or A. These securities either have bond insurance
or guarantees that originally supported investment grade ratings of AAA or AA. With the recent
Nationally Recognized Statistical Rating Organization (NRSRO) downgrades of monoline insurers, we
have seen the ratings of our municipal bonds decline, but in no case are the bonds rated below BBB.
Nevertheless, in managements opinion there have not been any material deteriorations of the
underlying municipal credit quality that would contribute to other than temporary impairment. The
unrealized losses on our municipal securities resulted primarily from the lack of market liquidity
in the third quarter, rising interest rates subsequent to purchase and to a lesser extent the
uncertainty surrounding the monoline insurers. We expect that the unrealized losses will decline as
interest rates fall to the purchased yield and as the securities approach contractual or expected
maturity.Other investment securities available for sale is comprised of one collateralized loan obligation.
Other mortgage-backed securities available for sale, with an amortized cost of $166.8 million and a
market value of $159.0 million, are comprised of private-label residential mortgage-backed
securities, collateralized debt obligations backed by trust preferred securities (TPS), and
interest-only strips from Small Business Administration (SBA) loans.Included in CMBS available for sale is the entire interest retained by UCB for the UCB
securitization of commercial real estate loans (CRE) during the fourth quarter of 2007. The
amortized cost basis and carrying value of the retained interest was $340.2 million and $328.1
million, respectively, at September 30, 2008. The carrying value at September 30, 2008, reflects a
$5.0 million impairment recorded in the second quarter of 2008 on the retained residual tranche of
this securitization. The write-down was primarily due the severity of depreciation during the
second quarter of 2008 and the unlikelihood of a near term recovery in fair value.Collateralized debt obligations (CDO) with an amortized cost basis of $26.1 million and carrying
value of $23.8 million at September 30, 2008, include securities backed by Real Estate Investment
Trust (REIT) TPS and bank TPS which are included in our available-for-sale securities. The
unrealized losses on these securities have occurred as a result of rising defaults and
delinquencies in the subprime residential mortgage markets, coupled with rating agency downgrades
of a large number of subprime residential mortgage-backed securities, which in turn led to
continued credit spread widening and ultimately resulted in declines in the valuations of these
types of securities and certain indices that serve as a reference point for determining the fair
value of such securities. The carrying value at September 30, 2008, reflects the cumulative $5.2
million other than temporary impairment charges that we recognized on two CDOs and which have been
reflected in our results of operations for the nine months ended September 30, 2008.FNMA and FHLMC preferred stock are U.S. government-sponsored enterprises (GSE) investment
securities with an amortized cost-basis and carrying value of $1.3 million at September 30, 2008.
At the end of the second quarter, the Company recognized a $4.4 million other than temporary
impairment charge on four of the GSE investment securities. The write-down in the second quarter
2008 was due to the severity and duration of the decline in the carrying values of the GSE
investment securities and the lack of positive near term prospects. At the end of the third
quarter, an additional $17.8 million of other than temporary impairment charge was recorded on the
GSE investment securities resulting from the conservatorship of both FNMA and FHLMC and the related
elimination of the payment of future dividends on these GSE investment securities.
 - 11 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 UCB expects to hold its available-for-sale debt securities until recovery of the carrying value,
which could be maturity. UCB has concluded that the decline in value on these available-for-sale
securities is temporary, as the decline in value has been driven predominantly by current market
conditions, the widening of credit spreads and decreased liquidity.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, 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:Agency preferred stock
    
    $
    23,466
    
    
    $
    
    
    
    $
    (3,317
    )
    
    $
    20,149
    
    
    $
    20,149
    
    
    $
    (3,317
    )
    
    $
    
    
    
    $
    
    
    
    $
    20,149
    
    
    $
    (3,317
    )Collateralized debt
obligations
    
    
    31,433
    
    
    
    
    
    
    
    (2,702
    )
    
    
    28,731
    
    
    
    12,364
    
    
    
    (2,163
    )
    
    
    7,960
    
    
    
    (539
    )
    
    
    20,324
    
    
    
    (2,702
    )U.S. Government
sponsored enterprises
notes
    
    
    446,916
    
    
    
    997
    
    
    
    (686
    )
    
    
    447,227
    
    
    
    174,453
    
    
    
    (498
    )
    
    
    51,804
    
    
    
    (188
    )
    
    
    226,257
    
    
    
    (686
    )Municipals
    
    
    246,632
    
    
    
    741
    
    
    
    (2,964
    )
    
    
    244,409
    
    
    
    160,048
    
    
    
    (2,964
    )
    
    
    
    
    
    
    
    
    
    
    160,048
    
    
    
    (2,964
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (1,050
    )
    
    
    8,950
    
    
    
    
    
    
    
    
    
    
    
    8,950
    
    
    
    (1,050
    )
    
    
    8,950
    
    
    
    (1,050
    )Total investment
securities available for
sale
    
    
    758,447
    
    
    
    1,738
    
    
    
    (10,719
    )
    
    
    749,466
    
    
    
    367,014
    
    
    
    (8,942
    )
    
    
    68,714
    
    
    
    (1,777
    )
    
    
    435,728
    
    
    
    (10,719
    )Mortgage-backed
securities available for
sale:FNMA
    
    
    559,979
    
    
    
    1,409
    
    
    
    (5,250
    )
    
    
    556,138
    
    
    
    13,288
    
    
    
    (30
    )
    
    
    291,258
    
    
    
    (5,220
    )
    
    
    304,546
    
    
    
    (5,250
    )GNMA
    
    
    77,478
    
    
    
    25
    
    
    
    (1,770
    )
    
    
    75,733
    
    
    
    3,505
    
    
    
    (84
    )
    
    
    71,735
    
    
    
    (1,686
    )
    
    
    75,240
    
    
    
    (1,770
    )FHLMC
    
    
    241,243
    
    
    
    102
    
    
    
    (5,471
    )
    
    
    235,874
    
    
    
    699
    
    
    
    (2
    )
    
    
    223,597
    
    
    
    (5,469
    )
    
    
    224,296
    
    
    
    (5,471
    )CMBS
    
    
    390,112
    
    
    
    835
    
    
    
    (5,499
    )
    
    
    385,448
    
    
    
    20,753
    
    
    
    (5,499
    )
    
    
    
    
    
    
    
    
    
    
    20,753
    
    
    
    (5,499
    )Other
    
    
    188,006
    
    
    
    148
    
    
    
    (2,458
    )
    
    
    185,696
    
    
    
    10,362
    
    
    
    (379
    )
    
    
    139,808
    
    
    
    (2,079
    )
    
    
    150,170
    
    
    
    (2,458
    )Total mortgage-backed
securities available for
sale
    
    
    1,456,818
    
    
    
    2,519
    
    
    
    (20,448
    )
    
    
    1,438,889
    
    
    
    48,607
    
    
    
    (5,994
    )
    
    
    726,398
    
    
    
    (14,454
    )
    
    
    775,005
    
    
    
    (20,448
    )Total investment and
mortgage-backed
securities available for
sale
    
    
    2,215,265
    
    
    
    4,257
    
    
    
    (31,167
    )
    
    
    2,188,355
    
    
    
    415,621
    
    
    
    (14,936
    )
    
    
    795,112
    
    
    
    (16,231
    )
    
    
    1,210,733
    
    
    
    (31,167
    )Investment securities
held to maturity:Municipal securities
    
    
    212,647
    
    
    
    6,016
    
    
    
    (32
    )
    
    
    218,631
    
    
    
    3,789
    
    
    
    (28
    )
    
    
    417
    
    
    
    (4
    )
    
    
    4,206
    
    
    
    (32
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,090
    
    
    
    
    
    
    
    (101
    )
    
    
    3,989
    
    
    
    
    
    
    
    
    
    
    
    3,989
    
    
    
    (101
    )
    
    
    3,989
    
    
    
    (101
    )GNMA
    
    
    54,326
    
    
    
    
    
    
    
    (1,071
    )
    
    
    53,255
    
    
    
    16,156
    
    
    
    (216
    )
    
    
    37,098
    
    
    
    (855
    )
    
    
    53,254
    
    
    
    (1,071
    )FHLMC
    
    
    422
    
    
    
    
    
    
    
    (11
    )
    
    
    411
    
    
    
    
    
    
    
    
    
    
    
    411
    
    
    
    (11
    )
    
    
    411
    
    
    
    (11
    )Total mortgage-backed
securities held to
maturity
    
    
    58,838
    
    
    
    
    
    
    
    (1,183
    )
    
    
    57,655
    
    
    
    16,156
    
    
    
    (216
    )
    
    
    41,498
    
    
    
    (967
    )
    
    
    57,654
    
    
    
    (1,183
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    271,485
    
    
    
    6,016
    
    
    
    (1,215
    )
    
    
    276,286
    
    
    
    19,945
    
    
    
    (244
    )
    
    
    41,915
    
    
    
    (971
    )
    
    
    61,860
    
    
    
    (1,215
    )Total securities
    
    $
    2,486,750
    
    
    $
    10,273
    
    
    $
    (32,382
    )
    
    $
    2,464,641
    
    
    $
    435,566
    
    
    $
    (15,180
    )
    
    $
    837,027
    
    
    $
    (17,202
    )
    
    $
    1,272,593
    
    
    $
    (32,382
    )
 As of December 31, 2007, the net unrealized loss on securities was $22.1 million. The net
unrealized loss on securities that are available for sale was $26.9 million. Net of a tax benefit
of $11.3 million, the unrealized $15.6 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, 2007.CDOs with an amortized cost basis of $31.4 million and carrying value of $28.7 million at December
31, 2007, include securities backed by REIT TPS and bank TPS and which are included in our
available-for-sale securities. The carrying value at December 31, 2007, reflects the $11.6 million
other than temporary impairment charge that we recognized on two CDOs and which has been reflected
in our 2007 results of operations.
 - 12 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 7.
    
    Securitization ActivitiesThe Company engages in securitization activities related to commercial real estate and multi-family
mortgage loans and consumer residential mortgage loans to manage concentration risk and liquidity.
The lack of market liquidity experienced during the first nine months of 2008 has limited the
Companys securitization activities. Special purpose entities (SPE) are typically used to
facilitate the commercial real estate securitization transactions. The Company typically retains
interests in the securitized financial assets as one or more tranches of the securitization. These
retained interests are included in the Companys Consolidated Balance Sheets in available-for-sale
investment securities and are reflected at fair value. Any resulting changes in fair value are
reflected in other comprehensive income, unless the change in fair value is considered other than
temporary.The entire interest retained by UCB for the UCB securitization of CRE during the fourth quarter of
2007 is included in other mortgage-backed securities available for sale. The amortized cost basis
and carrying value of the retained interest was $340.2 million and $328.1 million, respectively, at
September 30, 2008.During the nine months ended September 30, 2008, UCB securitized $201.1 million of multifamily and
residential mortgage loans with servicing rights retained through FNMA. No loans were securitized
during the nine months ended September 30, 2007.8.
    
    Loans Held for SaleThe components of loans held for sale as of September 30, 2008, and December 31, 2007, were as
follows (dollars in thousands):
 September 30,
    
    
    December 31,2008
    
    
    2007Commercial:Secured by real estate  nonresidential
    
    $
    654
    
    
    $
    175,474Business
    
    
    
    
    
    
    1,109Total commercial loans
    
    
    654
    
    
    
    176,583Consumer:Residential mortgage (one-to-four family)
    
    
    
    
    
    
    927Loans held for sale (1)
    
    
    654
    
    
    
    177,510Valuation allowance
    
    
    
    
    
    
    (373
    )Net loans held for sale
    
    $
    654
    
    
    $
    177,137
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees of $(3,000) and
$322,000 at September 30, 2008, and December 31, 2007, respectively. During the nine months ended September 30, 2008, $156.2 million of loans designated as Held for
Sale were transferred to Loans Held in Portfolio. The transfer was made due to the absence of
buyers in the current challenging financial markets environment. The loans were transferred to
Loans Held in Portfolio at the lower-of-cost or market.
 - 13 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 9.
    
    Loans Held in Portfolio and Allowance for Loan LossesThe components of loans held in portfolio as of September 30, 2008, and December 31, 2007, were as
follows (dollars in thousands):
 September 30,
    
    
    December 31,2008
    
    
    2007Commercial:Secured by real estate  nonresidential
    
    $
    2,638,119
    
    
    $
    2,317,501Secured by real estate  multifamily
    
    
    1,189,195
    
    
    
    1,186,177Construction
    
    
    1,943,729
    
    
    
    1,666,550Business
    
    
    2,515,760
    
    
    
    2,076,597Total commercial loans
    
    
    8,286,803
    
    
    
    7,246,825Consumer:Residential mortgage (one-to-four family)
    
    
    493,065
    
    
    
    518,674Other (1)
    
    
    83,499
    
    
    
    66,651Total consumer loans
    
    
    576,564
    
    
    
    585,325Loans held in portfolio (2)
    
    
    8,863,367
    
    
    
    7,832,150Allowance for loan losses
    
    
    (120,278
    )
    
    
    (80,584
    )Net loans held in portfolio
    
    $
    8,743,089
    
    
    $
    7,751,566
 
 (1)
    
    Amount includes deposit overdrafts of $2.7 million and $6.7 million
at September 30, 2008, and December 31, 2007, respectively.(2)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums
and discounts of $12.9 million and $17.9 million at September 30, 2008, and
December 31, 2007, respectively. 
 - 14 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 The activity in the allowance for loan losses and allowance for losses related to unfunded
commitments for the three and nine months ended September 30, 2008 and 2007, were as follows
(dollars in thousands):
 Three Months Ended September 30, 2008
    
    
    Three Months Ended September 30, 2007Allowance for
    
    
    
    
    
    
    
    
    
    
    Allowance forLosses -
    
    
    Total
    
    
    
    
    
    
    Losses -
    
    
    TotalAllowance for
    
    
    Unfunded
    
    
    Allowance for
    
    
    Allowance for
    
    
    Unfunded
    
    
    Allowance forLoan Losses
    
    
    Commitments(1)
    
    
    Losses
    
    
    Loan Losses
    
    
    Commitments(1)
    
    
    LossesBalance at beginning of period
    
    $
    109,132
    
    
    $
    5,337
    
    
    $
    114,469
    
    
    $
    67,739
    
    
    $
    4,968
    
    
    $
    72,707Provision for losses
    
    
    42,199
    
    
    
    1,022
    
    
    
    43,221
    
    
    
    3,094
    
    
    
    (84
    )
    
    
    3,010Loans charged off
    
    
    (31,641
    )
    
    
    
    
    
    
    (31,641
    )
    
    
    (3,100
    )
    
    
    
    
    
    
    (3,100
    )Recoveries of loans previously charged off
    
    
    588
    
    
    
    
    
    
    
    588
    
    
    
    807
    
    
    
    
    
    
    
    807Adjustment  acquired through business
combinations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    120,278
    
    
    $
    6,359
    
    
    $
    126,637
    
    
    $
    68,540
    
    
    $
    4,884
    
    
    $
    73,424
 Nine Months Ended September 30, 2008
    
    
    Nine Months Ended September 30, 2007Allowance for
    
    
    
    
    
    
    
    
    
    
    Allowance forLosses -
    
    
    Total
    
    
    
    
    
    
    Losses -
    
    
    TotalAllowance for
    
    
    Unfunded
    
    
    Allowance for
    
    
    Allowance for
    
    
    Unfunded
    
    
    Allowance forLoan Losses
    
    
    Commitments(1)
    
    
    Losses
    
    
    Loan Losses
    
    
    Commitments(1)
    
    
    LossesBalance at beginning of period
    
    $
    80,584
    
    
    $
    4,793
    
    
    $
    85,377
    
    
    $
    62,015
    
    
    $
    6,833
    
    
    $
    68,848Provision for losses
    
    
    109,287
    
    
    
    1,566
    
    
    
    110,853
    
    
    
    8,105
    
    
    
    (1,949
    )
    
    
    6,156Loans charged off
    
    
    (70,319
    )
    
    
    
    
    
    
    (70,319
    )
    
    
    (6,474
    )
    
    
    
    
    
    
    (6,474
    )Recoveries of loans previously charged off
    
    
    726
    
    
    
    
    
    
    
    726
    
    
    
    1,069
    
    
    
    
    
    
    
    1,069Adjustment  acquired through business
combinations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,825
    
    
    
    
    
    
    
    3,825Balance at end of period
    
    $
    120,278
    
    
    $
    6,359
    
    
    $
    126,637
    
    
    $
    68,540
    
    
    $
    4,884
    
    
    $
    73,424
 
 (1)
    
    Included in Other liabilities in the Consolidated Balance Sheets. The dislocation in the financial markets, which began in the fourth quarter of 2007, and which has
continued to negatively affect the economy and the financial services sectors in 2008, has resulted
in additional deterioration in the housing and land values, especially in certain California and
Nevada markets.The allowance for loan losses increased $39.7 million from $80.6 million at December 31, 2007, to
$120.3 million at September 30, 2008. The increase is due primarily to a $110.9 million provision
for loan losses recorded in the nine months ended September 30, 2008, of which $67.7 million was
recorded during the first and second quarters of 2008 and $43.2 million during the third quarter of
2008. The increased provision for loan losses during the first quarter of 2008 was primarily the
result of increases in classified residential construction loans and specific reserves on
residential construction loans geographically located in distressed areas that include Riverside
County, San Bernardino County, the Greater Sacramento area, Imperial County, the High Desert and
the Central Valley, all of which are in California and Nevada. The provision for loan losses during
the second quarter of 2008 reflects an increased assessment of loss severity, primarily on certain
residential construction problem loans previously identified during the first quarter of 2008. The
provision for the third quarter of 2008 is primarily due to further softening in the residential
construction markets in California. The construction loan provision was impacted by increases in
both specific reserves and by increases in loss factors applied. Also, $4.2 million of this quarters provision was associated with increased commercial lending reserves for one commercial loan. In addition, provision for loan
losses during the second and third quarters of 2008 was necessitated by the substantial level of
charge-offs. The increase in the loan loss provision for the nine months ended September 30, 2008,
was partially offset by net charge-offs of $69.6 million, of which $31.1 million of the net
charge-offs occurred during the third quarter of 2008.The reserve for unfunded commitments increased $1.6 million from December 31, 2007, to September
30, 2008, due to increased reserves for unfunded commitments related to criticized loans and growth
in the trade finance business.
 - 15 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 10.
    
    Goodwill and Goodwill ImpairmentAssets and liabilities of companies acquired in purchase transactions are recorded at fair value at
the date of acquisition. Goodwill represents the excess purchase price over the fair value of net
assets acquired, plus any identifiable intangibles. Goodwill is not amortized but is reviewed for
potential impairment on an annual basis, or when events and circumstances indicate a potential
impairment. The impairment test is performed in two phases at the reporting unit level. The first
step compares the fair value of the reporting unit with its carrying amount, including goodwill. If
the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is
not considered impaired. However, if the carrying amount of the reporting unit exceeds its fair
value, an additional step has to be performed. The additional step compares the implied fair value
of the reporting units goodwill with the carrying amount of such goodwill. An impairment loss is
recorded to the extent that the carrying value of the goodwill exceeds its implied fair value.In accordance with the Companys annual review policy, our annual goodwill impairment analysis is
conducted in September. In 2008 the Company performed the goodwill impairment testing at the end of each quarter, in accordance
with its written policy but also because its market capitalization has been less than its book
value of equity for each of the three consecutive quarters. The estimated fair values of the two reporting
units, Domestic Banking and Other (see Note 20  Segment Information) were calculated under the
step one process, based on discounted cash flow analyses and tangible book value multiples of
relevant, comparable peer companies. Based on the results of the step one procedures, it was
determined there is no goodwill impairment with the Other reporting unit. However, it was
determined that the goodwill in the Companys Domestic reporting unit needed to be subjected to the
step two implied fair value methodology. Based on the results of the step two evaluation,
management has determined that there is no goodwill impairment charge associated with the Domestic
reporting unit.While management has a plan to return the Companys business fundamentals to levels that support
the book value per common share, there is no assurance that the plan will be successful, or that
the market price of the common stock will increase to such levels in the foreseeable future.
Accordingly, the Company will continue to monitor goodwill for potential impairment until such time
whereby the market capitalization exceeds the book value of equity.During the nine months ended September 30, 2008, an adjustment of $1.1 million was recorded to
reflect the under-recognition of amortization in 2007 associated with a time deposit discount
arising from our acquisition of Summit Bank. The adjustment increased interest expense $1.1 million
and decreased goodwill by a like amount. The adjustment is the correction of an error that was
identified in 2007 and is deemed immaterial to the expected 2008 full year results of operations.
In the third quarter of 2008, an adjustment of $962,000 was recorded to increase goodwill arising
from the CAB acquisition and decrease other assets by the same amount. The adjustment was to record
the effect of the filing of CABs final tax returns.
 - 16 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 11.
    
    BorrowingsSecurities Sold Under Agreements to RepurchaseInformation regarding outstanding securities sold under agreements to repurchase (the Repurchase
Agreements) as of and for the nine months ended September 30, 2008, and as of and for the year
ended December 31, 2007, were as follows (dollars in thousands):
 September 30,
    
    December 31,2008
    
    2007Average balance outstanding
    
    $
    740,591
    
    
    $
    400,615Maximum amount outstanding at any month end period
    
    
    850,000
    
    
    
    650,000Balance outstanding at end of period
    
    
    700,000
    
    
    
    650,000Weighted average interest rate during the period
    
    
    3.84
    %
    
    
    4.21
    %Weighted average interest rate at end of period
    
    
    3.79
    %
    
    
    4.04
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    7.95
    
    
    
    8.63
 Long-Term and Short-Term BorrowingsInformation regarding outstanding long-term and short-term borrowings as of and for the nine months
ended September 30, 2008, and as of and for the year ended December 31, 2007, were as follows
(dollars in thousands):
 September 30,
    
    December 31,2008
    
    2007Short-term borrowings:Federal Home Loan Bank advances and other short-term borrowings:Average balance outstanding
    
    $
    656,986
    
    
    $
    299,713Maximum amount outstanding at any month end period
    
    
    806,815
    
    
    
    637,787Balance outstanding at end of period
    
    
    550,398
    
    
    
    414,532Weighted average interest rate during the period
    
    
    2.88
    %
    
    
    5.15
    %Weighted average interest rate at end of period
    
    
    2.91
    %
    
    
    4.05
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    0.26
    
    
    
    0.08Federal funds purchased:Balance outstanding at end of period
    
    $
    
    
    
    $
    78,000Long-term borrowings:Federal Home Loan Bank advances and other long-term borrowings:Average balance outstanding
    
    $
    1,379,505
    
    
    $
    1,113,881Maximum amount outstanding at any month end period
    
    
    1,547,668
    
    
    
    1,372,190Balance outstanding at end of period
    
    
    1,547,668
    
    
    
    1,372,190Weighted average interest rate during the period
    
    
    4.40
    %
    
    
    4.69
    %Weighted average interest rate at end of period
    
    
    4.11
    %
    
    
    4.57
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    4.62
    
    
    
    5.2
 UCB maintains a secured credit facility with the Federal Home Loan Banks of San Francisco, Atlanta,
Boston and Seattle (collectively referred to as the FHLB) against which UCB may take advances.
The terms of this credit facility requires UCB to maintain in safekeeping with the FHLB eligible
collateral of at least 100% of outstanding advances. Short-term and long-term borrowings with the
FHLB totaled $450.0 million and $1.47 billion at September 30, 2008, and $236.0 million and $1.33
billion at December 31, 2007, respectively. At September 30, 2008, the advances were secured with
$486.7 million of mortgage-backed securities and $3.98 billion of loans, and
 - 17 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 at December 31, 2007, $18.0 million of mortgage-backed securities and $4.15 billion of loans
secured the advances. At September 30, 2008, credit availability under this facility was
approximately $534.4 million.Subordinated DebenturesBalance outstanding for subordinated debentures as of September 30, 2008, and December 31, 2007,
were as follows (dollars in thousands):
 September 30,
    
    
    December 31,2008
    
    
    2007UCBH special purpose trusts
    
    $
    281,459
    
    
    $
    281,615Subordinated debentures
    
    
    125,000
    
    
    
    125,000Total subordinated debentures
    
    $
    406,459
    
    
    $
    406,615
 12.
    
    8.5% Non-Cumulative Perpetual Convertible Series B Preferred StockOn June 11, 2008, UCBH received proceeds of $135,000,000, less transaction costs of $4,700,000,
from the issuance of 135,000 shares of its 8.50% Non-Cumulative Perpetual Convertible Series B
Preferred Stock, par value $0.01 per share and with a liquidation preference of $1,000 per share
(the Series B Preferred Stock). The shares are subject to rights, preferences and privileges set
forth in UCBHs Certificate of Designations of 8.50% Non-Cumulative Perpetual Convertible Series B
Preferred Stock.The Series B Preferred Stock is not redeemable by UCBH or any holder or subject to any sinking fund
or similar provisions. Each Series B Preferred Stock share may be converted at any time, at the
option of the holder, into 236.1275 shares of UCBHs common stock, $0.01 par value (which reflects
an approximate initial conversion price of $4.24 per share of common stock), plus cash in lieu of
fractional shares, subject to anti-dilution adjustments.On or after June 15, 2013, if the closing price of UCBHs common stock exceeds 130% of the
then-applicable conversion price for 20 trading days (whether or not consecutive) during any period
of 30 consecutive trading days, UCBH may at its option cause some or all of the Series B Preferred
Stock to be automatically converted into common stock at the then prevailing conversion rate. UCBH
will provide notice of its election to cause conversion within five trading days of the end of the
30 consecutive trading day period.The shares of Series B Preferred Stock bear an 8.50% non-cumulative dividend payable quarterly,
when, as, and if declared by UCBHs Board of Directors or a duly authorized committee of UCBHs
Board, on March 15, June 15, September 15 and December 15 of each year, beginning on September 15,
2008.The Series B Preferred Stock will rank, as to payment of dividends and distributions of assets upon
UCBHs liquidation, dissolution, or winding up, senior to UCBHs Series A Participating Preferred
Stock (Series A Preferred) and common stock. Shares of Series A Preferred are subject to rights,
preferences and privileges set forth in the Companys Certificate of Designation, Preferences and
Rights of Series A Participating Preferred Stock and may be issued in accordance with the Rights
Agreement, dated as of January 28, 2003, between UCBH and Mellon Investor Services, LLC, as Rights
Agent, as amended on March 5, 2008. As of the filing of this Quarterly Report on Form 10-Q, no
shares of Series A Preferred have been issued.UCBHs Series B Preferred Stock is recorded as equity in accordance with SFAS No. 150, Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and Equity. See Note 13
for the effect of UCBHs Series B Preferred Stock on earnings per share.
 - 18 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 13.
    
    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 September 30, 2008 and 2007,
were 13,834,782 shares and 7,324,096 shares, respectively, and for the nine months ended September
30, 2008 and 2007, were 10,680,598 shares and 7,484,231 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 nine months ended September 30, 2008 and 2007, is as follows (dollars in thousands,
except shares and per share amounts):
 Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    AmountThree Months Ended September 30, 2008Net loss  basic
    
    $
    (493
    )
    
    
    110,480,074Preferred stock dividends
    
    
    (2,995
    )
    
    
    Net loss available to common stockholders
    
    
    (3,488
    )
    
    
    110,480,074
    
    
    $
    (0.03
    )Effect of stock options
    
    
    
    
    
    
    261,998Net loss  diluted(1)
    
    $
    (3,488
    )
    
    
    110,742,072
    
    
    $
    (0.03
    )Three Months Ended September 30, 2007Net income  basic
    
    $
    30,821
    
    
    
    103,834,048
    
    
    $
    0.30Effect of stock options
    
    
    
    
    
    
    2,926,270Net income  diluted
    
    $
    30,821
    
    
    
    106,760,318
    
    
    $
    0.29Nine Months Ended September 30, 2008Net income  basic
    
    $
    9,430
    
    
    
    109,027,140Preferred stock dividends
    
    
    (2,995
    )
    
    
    Net income
available to common stockholders
    
    
    6,435
    
    
    
    109,027,140
    
    
    $
    0.06Effect of stock options
    
    
    
    
    
    
    785,753Net income  diluted (1)
    
    $
    6,435
    
    
    
    109,812,893
    
    
    $
    0.06Nine Months Ended September 30, 2007Net income  basic
    
    $
    86,066
    
    
    
    101,709,167
    
    
    $
    0.85Effect of stock options
    
    
    
    
    
    
    3,097,833Net income  diluted
    
    $
    86,066
    
    
    
    104,807,000
    
    
    $
    0.82
 
 (1)
    
    For the three and nine months ended September 30, 2008, 32 million and 13
million average dilutive potential common shares associated with the convertible
Series B Preferred Stock, respectively, were excluded from the diluted share count
because the result would have been antidilutive under the if-converted method. 14.
    
    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
 - 19 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 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 option awards
provide for accelerated vesting if there is a change in control, as defined in the Plan. As of
September 30, 2008, the Company had 2,238,948 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. 123(R). Awards
granted after January 1, 2006, are valued at fair value in accordance with provisions of SFAS
123(R) 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. 123(R) and the results for prior periods have not been restated.
The Company estimated forfeiture rates based on its historical experience.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 September 30, 2008, and changes
during the three and nine months ended September 30, 2008, 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 September 30, 2008
    
    Nine Months Ended September 30, 2008Options
outstanding,
beginning of period
    
    
    14,449,270
    
    
    $
    13.58
    
    
    
    5.59
    
    
    $
    191
    
    
    
    13,895,938
    
    
    $
    13.18
    
    
    
    5.38
    
    
    $
    47,713Granted
    
    
    156,000
    
    
    
    4.14
    
    
    
    
    
    
    
    
    
    
    
    1,775,000
    
    
    
    12.01Exercised
    
    
    (3,212
    )
    
    
    6.35
    
    
    
    
    
    
    
    
    
    
    
    (684,246
    )
    
    
    2.11Expired
    
    
    (15,167
    )
    
    
    18.13
    
    
    
    
    
    
    
    
    
    
    
    (362,202
    )
    
    
    16.05Forfeited
    
    
    (44,498
    )
    
    
    14.99
    
    
    
    
    
    
    
    
    
    
    
    (82,097
    )
    
    
    15.63Options
outstanding, end of
period
    
    
    14,542,393
    
    
    $
    13.48
    
    
    
    5.38
    
    
    $
    4,026
    
    
    
    14,542,393
    
    
    $
    13.48
    
    
    
    5.38
    
    
    $
    4,026Shares exercisable,
end of period
    
    
    12,040,839
    
    
    $
    13.43
    
    
    
    4.63
    
    
    $
    3,653
    
    
    
    12,040,839
    
    
    $
    13.43
    
    
    
    4.63
    
    
    $
    3,653
 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that
would have been received by all the option holders had all option holders exercised their
respective options on September 30, 2008. The amount of aggregate intrinsic value will change based
on the fair market value of the Companys common stock.The aggregate intrinsic value of options exercised was $2.2 million during the three months ended
September 30, 2008 and 2007, and $4.6 million and $7.2 million during the nine months ended
September 30, 2008 and 2007, respectively. Cash received from option exercises for the nine months
ended September 30, 2008 and 2007, was
 - 20 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 $1.4 million and $6.9 million, respectively. The tax benefit realized for the tax deductions from
option exercises for the nine months ended September 30, 2008 and 2007, totaled $1.6 million and
$1.2 million, respectively.The range of exercise prices for options outstanding at September 30, 2008, is as follows:
 Weighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageOptions
    
    Exercise
    
    Remaining
    
    Options
    
    ExerciseExercise Price
    
    Outstanding
    
    Price
    
    Life
    
    Exercisable
    
    Price$1.88-$1.99
    
    
    516,664
    
    
    $
    1.88
    
    
    
    0.54
    
    
    
    516,664
    
    
    $
    1.88$2.00-$4.99
    
    
    251,824
    
    
    
    3.31
    
    
    
    5.79
    
    
    
    121,824
    
    
    
    2.91$5.00-$6.99
    
    
    3,462,962
    
    
    
    6.15
    
    
    
    2.69
    
    
    
    3,408,462
    
    
    
    6.15$7.00-$8.99
    
    
    352,108
    
    
    
    7.19
    
    
    
    4.91
    
    
    
    260,608
    
    
    
    7.21$9.00-$10.99
    
    
    518,334
    
    
    
    10.11
    
    
    
    4.10
    
    
    
    518,334
    
    
    
    10.11$11.00-$13.99
    
    
    1,720,133
    
    
    
    13.14
    
    
    
    8.67
    
    
    
    279,633
    
    
    
    12.47$14.00-$15.99
    
    
    312,164
    
    
    
    15.09
    
    
    
    5.72
    
    
    
    283,665
    
    
    
    15.03$16.00-$18.09
    
    
    1,965,770
    
    
    
    17.32
    
    
    
    7.32
    
    
    
    1,278,612
    
    
    
    17.27$18.10-$19.99
    
    
    4,890,634
    
    
    
    18.83
    
    
    
    5.88
    
    
    
    4,821,237
    
    
    
    18.84$20.00-$21.99
    
    
    551,800
    
    
    
    21.05
    
    
    
    6.31
    
    
    
    551,800
    
    
    
    21.05Total/Average
    
    
    14,542,393
    
    
    
    13.48
    
    
    
    5.38
    
    
    
    12,040,839
    
    
    
    13.43
 As of September 30, 2008, there was $9.1 million of total unrecognized compensation cost, net of
estimated forfeitures, related to nonvested options under the Plan. Such cost is expected to be
recognized over the next three years. The total fair value of options that vested during the three
months ended September 30, 2008 and 2007, was $492,000 and $229,000, respectively, and $3.5 million
and $2.3 million during the nine months ended September 30, 2008 and 2007, respectively.
 15.
    
    Income TaxesThe effective tax rate for the three months ended September 30, 2008, was 94.8% compared with 36.0% for the three months ended September 30, 2007. The effective tax rate for the nine months ended September 30, 2008, was (438.3)% compared with 35.4% for the nine months ended September 30, 2007. The effective tax rates for the three and nine months ended September 30, 2008, were both benefits and were both greater in absolute amounts because the impact of tax benefit items from tax-exempt income, low income housing tax credits, the fact that UCB China income is taxed at a lower rate in China, and California net interest deductions had a greater impact on the relatively lower pretax amounts for 2008 as compared to 2007. The income tax benefit for the three and nine months ended September 30, 2008, included the tax benefit from the impairment charges on the GSE investment securities.The Company recognizes the accrual of interest and any associated penalties related to unrecognized
tax benefits in income before income taxes in the Consolidated Statements of Operations. The amount
of interest and penalties for the nine months ended September 30, 2008 and 2007, was immaterial.The Company has established unrecognized tax benefits that the Company believes are adequate in
relation to the potential for additional assessments. Once established, the Company will adjust
unrecognized tax benefits only when additional information is available or when an event occurs
which necessitates a change. The Company believes that the resolution of tax matters will not have
a material effect on its financial position or results of operations. Nonetheless, a resolution
could have a material impact on such financial position or results of operations for a particular
future period and on the Companys effective income tax rate for the period in which such
resolution occurs.
 - 21 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 16.
    
    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 $1.1 million at September 30, 2008,
and December 31, 2007. 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.
    
    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 September 30, 2008, and December 31, 2007, were as follows
(dollars in thousands):
 September 30,
    
    
    December 31,2008
    
    
    2007Commitments to extend credit:Consumer (including residential mortgage)
    
    $
    136,178
    
    
    $
    101,978Commercial (excluding construction)
    
    
    1,589,808
    
    
    
    1,488,733Construction
    
    
    774,149
    
    
    
    1,101,515Letters of credit
    
    
    249,727
    
    
    
    183,792Foreign exchange contracts receivable
    
    
    (776,035
    )
    
    
    (806,310
    )Foreign exchange contracts payable
    
    
    776,035
    
    
    
    806,380Put options to buy
    
    
    435
    
    
    
    7,600Put options to sell
    
    
    (435
    )
    
    
    (7,600
    )Interest rate floor contract
    
    
    25,000
    
    
    
    25,000Unfunded CRA investment commitments
    
    
    3,604
    
    
    
    6,996Other
    
    
    1,369
    
    
    
    1,928Total
    
    $
    2,779,835
    
    
    $
    2,910,012
 18.
    
    Contingent LiabilitiesThe Company is subject to pending or threatened actions and proceedings arising in the normal
course of business. In the opinion of management, the ultimate disposition of all pending or
threatened actions and proceedings will not have a material adverse
effect on the Companys financial position or results
of operations.
 - 22 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 19.
    
    Supplemental Cash Flow InformationThe supplemental cash flow information for the nine months ended September 30, 2008 and 2007, was
as follows (dollars in thousands):
 2008
    
    2007Cash paid during the period for:Interest
    
    $
    269,565
    
    
    $
    281,399Income taxes
    
    
    2,197
    
    
    
    51,974Noncash investing and financing activities:Transfer of loans from held for sale to held in portfolio
    
    $
    156,243
    
    
    $
    56,719Transfer of loans to held for sale from held in portfolio
    
    
    40,268
    
    
    
    159,218Transfer of other real estate owned to other assets from loans held in portfolio
    
    
    26,983
    
    
    
    1,604Loan securitizations:Loans originated in held in portfolio sold
    
    
    201,140
    
    
    
    Mortgage-backed securities acquired
    
    
    (199,604
    )
    
    
    Mortgage servicing rights acquired
    
    
    (1,536
    )
    
    
    
 20.
    
    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, UCB China 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, Hong Kong and mainland China.
The determination of interest income earned by country is impracticable and is not disclosed.
 - 23 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 The following is segment information for the three and nine months ended September 30, 2008 and
2007 (dollars in thousands):
 UCBHDomestic
    
    
    
    
    
    Total
    
    Holdings,Banking
    
    Other
    
    Segments
    
    Inc.
    
    Intersegment
    
    ConsolidatedThree Months Ended September 30,
2008:Total interest and dividend income
    
    $
    165,512
    
    
    $
    19,070
    
    
    $
    184,582
    
    
    $
    176
    
    
    $
    (9,196
    )
    
    $
    175,562Net interest income (expense)
    
    
    87,809
    
    
    
    6,096
    
    
    
    93,905
    
    
    
    (4,363
    )
    
    
    
    
    
    
    89,542Net income (loss)
    
    
    1,403
    
    
    
    916
    
    
    
    2,319
    
    
    
    (493
    )
    
    
    (2,319
    )
    
    
    (493
    )Three Months Ended September 30,
2007:Total interest and dividend income
    
    $
    181,310
    
    
    $
    9,321
    
    
    $
    190,631
    
    
    $
    
    
    
    $
    (7,880
    )
    
    $
    182,751Net interest income (expense)
    
    
    86,511
    
    
    
    2,741
    
    
    
    89,252
    
    
    
    (5,384
    )
    
    
    56
    
    
    
    83,924Net income (loss)
    
    
    34,852
    
    
    
    564
    
    
    
    35,416
    
    
    
    30,765
    
    
    
    (35,360
    )
    
    
    30,821Nine Months Ended September 30,
2008:Total interest and dividend income
    
    $
    507,036
    
    
    $
    59,087
    
    
    $
    566,123
    
    
    $
    179
    
    
    $
    (29,560
    )
    
    $
    536,742Net interest income (expense)
    
    
    259,131
    
    
    
    18,716
    
    
    
    277,847
    
    
    
    (14,063
    )
    
    
    
    
    
    
    263,784Net income (loss)
    
    
    11,002
    
    
    
    8,675
    
    
    
    19,677
    
    
    
    9,430
    
    
    
    (19,677
    )
    
    
    9,430Nine Months Ended September 30,
2007:Total interest and dividend income
    
    $
    514,042
    
    
    $
    26,397
    
    
    $
    540,439
    
    
    $
    3
    
    
    $
    (20,030
    )
    
    $
    520,412Net interest income (expense)
    
    
    243,079
    
    
    
    8,449
    
    
    
    251,528
    
    
    
    (15,094
    )
    
    
    56
    
    
    
    236,490Net income (loss)
    
    
    97,064
    
    
    
    1,690
    
    
    
    98,754
    
    
    
    86,012
    
    
    
    (98,700
    )
    
    
    86,066
 21.
    
    Fair Values of Financial Assets and LiabilitiesFair value is defined under SFAS 157 as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most advantageous market for such
asset or liability, in an orderly transaction between market participants on the measurement date.
In determining fair value, the Company uses various methods including market, income and cost
approaches. Based on these approaches, the Company often utilizes certain assumptions that market
participants would use in pricing an asset or liability, including assumptions about risk and or
the risks inherent in the inputs to the valuation technique.SFAS 157 also establishes a fair value hierarchy which ranks the quality and reliability of the
information to be used to determine fair values. The Company has designed its methodologies to
maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value. The Company groups its assets and liabilities at fair value in three levels, based on
the markets in which the assets and liabilities are traded and the reliability of the assumptions
used to determine fair value. These levels are:Level 1: Quoted prices for identical financial assets or liabilities in active markets.Level 2: Quoted prices for similar financial assets or liabilities in active markets; quoted prices
for identical or similar financial assets or liabilities in markets that are not active; and
valuations derived by models in which the significant inputs and significant value drivers are
observable in active markets.Level 3: Valuations derived by models in which one or more significant inputs or significant value
drivers are unobservable. These unobservable assumptions reflect our own estimates of assumptions
that market participants would use in pricing the financial asset or liability.
 - 24 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Determination of Fair Value
       Agency Preferred and Exchange Traded Equity Securities
 Commercial Mortgage Backed Securities (CMBS) and Asset Backed Securities (ABS)
 - 25 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   U.S. Government and Agency Securities
 Municipal Bonds
 Loans Held for Sale
 Mortgage Servicing Rights (MSRs) Effective Date of FASB Statement No. 157
 Impaired Loans Accounting by Creditors for Impairment of a Loan
 Derivative Contracts
 - 26 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment and
mortgage-backed
securities available for
sale
    
    $
    2,495,980
    
    
    $
    1,251
    
    
    $
    2,124,416
    
    
    $
    370,313Mortgage servicing rights
    
    
    15,586
    
    
    
    
    
    
    
    
    
    
    
    15,586Net other financial
assets (1)
    
    
    142
    
    
    
    
    
    
    
    142
    
    
    
    Total
    
    $
    2,511,708
    
    
    $
    1,251
    
    
    $
    2,124,558
    
    
    $
    385,899Net other financial
liabilities
(1)
    
    $
    (923
    )
    
    $
    
    
    
    $
    (923
    )
    
    $
    
 
 (1)
    
    Derivatives are included in this category.  TotalUnrealizedGains (Losses)Realized Gains
    
    
    Included in
    
    
    Purchased, Sales,(Losses)
    
    
    Other
    
    
    Other
    
    
    Transfers InBeginning
    
    
    Included in
    
    
    Comprehensive
    
    
    Settlements and
    
    
    and/or (Out)Balance
    
    
    Income
    
    
    Income
    
    
    Issuances, Net
    
    
    of Level 3
    
    
    Ending BalanceThree Months Ended
September 30, 2008Investment
securities
available for sale
    
    $
    51,885
    
    
    $
    
    
    
    $
    4,944
    
    
    $
    (363
    )
    
    $
    313,847
    
    
    $
    370,313Mortgage servicing
rights
    
    
    15,636
    
    
    
    (113
    )
    
    
    
    
    
    
    63
    (1)
    
    
    
    
    
    
    15,586Total assets
    
    $
    67,521
    
    
    $
    (113
    )
    
    $
    4,944
    
    
    $
    (300
    )
    
    $
    313,847
    
    
    $
    385,899Nine Months Ended
September 30, 2008Investment
securities
available for sale
    
    $
    59,029
    
    
    $
    (10,260
    )
    
    $
    1,933
    
    
    $
    (2,385
    )
    
    $
    321,996
    
    
    $
    370,313Mortgage servicing
rights
    
    
    17,070
    
    
    
    (460
    )
    
    
    
    
    
    
    (1,024
    ) (1)
    
    
    
    
    
    
    15,586Total assets
    
    $
    76,099
    
    
    $
    (10,720
    )
    
    $
    1,933
    
    
    $
    (3,409
    )
    
    $
    321,996
    
    
    $
    385,899
 
 (1)
    
    Includes change in fair value.  - 27 -




---



##### 



UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 The Company measures certain financial assets at fair value on a nonrecurring basis. For financial
assets measured at fair value on a nonrecurring basis in the quarter ended September 30, 2008, that
were still held on the Consolidated Balance Sheet at September 30, 2008, the following table
presents the carrying value of those assets measured at fair value on a nonrecurring basis for
which impairment was recognized for the nine months ended September 30, 2008:
  TotalRealized
    
    FinancialGains
    
    StatementTotal
    
    Level 1
    
    Level 2
    
    Level 3
    
    (Losses)
    
    EffectLoans held for sale
    
    $
    654
    
    
    $
    
    
    
    $
    
    
    
    $
    654
    
    
    $
    (1,428
    )
    
    Income StatementImpaired loans
    
    
    388,794
    
    
    
    
    
    
    
    
    
    
    
    388,794
    
    
    
    (21,053
    )
    
    Income Statement
 22.
    
    Subsequent EventsOn October 23, 2008, UCBHs Board of Directors declared a dividend on UCBHs preferred and common
stock. A cash dividend of four cents ($0.04) per share on the outstanding shares of Common Stock
was declared payable January 12, 2009, to stockholders of record as of the close of business on
December 31, 2008. A cash dividend of $21.25 per share on its 8.50% Non-Cumulative Perpetual
Convertible Series B Preferred Stock was declared payable on December 15, 2008, to stockholders of
record as of the close of business on November 28, 2008.On October 24, 2008, the Company received preliminary approval for the sale of $298 million in
preferred stock to the U.S. Department of the Treasury (the Treasury) under the Treasurys
Capital Purchase Program.
 - 28 -




---



##### 



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 financial market conditions, either nationally, internationally or locally in
areas in which the Company conducts its operations;
    
    changes in political and economic conditions, including the economic effects of terrorist
attacks against the United States and related events;
    
    further expansion into China, as well as new Asia Pacific market areas;
    
    fluctuations and continued illiquidity and credit spread widening in the equity and
fixed-income markets;
    
    changes in interest rates and the resultant impact on our net interest margin;
    
    changes in foreign exchange rates and the resultant impact on earnings;
    
    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;
    
    recovery of unrealized losses from investments and mortgage-backed securities;
    
    deposit renewals and ability to attract and retain core deposits;
    
    the availability and cost 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;
    
    the potential effects of technological changes;
    
    legislation or regulatory changes, both domestically as well as internationally, which
adversely affect the Companys operations and businesses;
    
    the Companys ability to meet regulatory requirements; and
    
    changes in accounting principles generally accepted in the United States of America.
 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
 - 29 -




---



##### 



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
 Investment Agreement with China Minsheng Banking Corp., Ltd.
   - 30 -




---



##### 



8.5% Non-Cumulative Perpetual Convertible Series B Preferred Stock
   - 31 -




---



##### 



Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and Equity
 CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES
  Allowance for Loan Losses
      - 32 -




---



##### 



Impaired Loans
  - 33 -




---



##### 



Valuation of Financial Instruments
       Goodwill
 Goodwill and Other Intangible
Assets
 - 34 -




---



##### 



Segment Information
  Income Taxes
    - 35 -




---



##### 



Recent Accounting Pronouncements
 Accounting for Fair Value Measurements
 Fair Value Measurements
 The Fair Value
Option for Financial Assets and Financial Liabilities
 Fair Value Measurements
 Disclosures about Derivative Instruments and Hedging Activities
 Disclosures about Derivative Instruments and Hedging Activities  an amendment of
FASB No. 133
 - 36 -




---



##### 



RESULTS OF OPERATIONS
 Financial Highlights
 Three Months Ended September 30,
    
    
    Increase (Decrease)2008
    
    
    2007
    
    
    Amount
    
    
    %Operating Data:Total interest and dividend income
    
    $
    175,562
    
    
    $
    182,751
    
    
    $
    (7,189
    )
    
    
    (3.93
    )%Total interest expense
    
    
    86,020
    
    
    
    98,827
    
    
    
    (12,807
    )
    
    
    (12.96
    )Net interest income
    
    
    89,542
    
    
    
    83,924
    
    
    
    5,618
    
    
    
    6.70Provision for loan losses
    
    
    43,221
    
    
    
    3,010
    
    
    
    40,211
    
    
    
    1,335.82Net interest income after provision for loan losses
    
    
    46,321
    
    
    
    80,914
    
    
    
    (34,593
    )
    
    
    (42.75
    )Total noninterest income (loss)
    
    
    (3,770
    )
    
    
    10,822
    
    
    
    (14,592
    )
    
    
    (134.83
    )Total noninterest expense
    
    
    51,997
    
    
    
    43,578
    
    
    
    8,419
    
    
    
    19.32Income (loss) before income tax expense (benefit)
    
    
    (9,446
    )
    
    
    48,158
    
    
    
    (57,604
    )
    
    
    (119.61
    )Income tax expense (benefit)
    
    
    (8,953
    )
    
    
    17,337
    
    
    
    (26,290
    )
    
    
    (151.64
    )Net income (loss)
    
    
    (493
    )
    
    
    30,821
    
    
    
    (31,314
    )
    
    
    (101.60
    )Dividends on preferred stock
    
    
    (2,995
    )
    
    
    
    
    
    
    (2,995
    )
    
    
    Net income (loss) available to common stockholders
    
    $
    (3,488
    )
    
    $
    30,821
    
    
    $
    (34,309
    )
    
    
    (111.32
    )Per Share
Data:Basic earnings per share
    
    $
    (0.03
    )
    
    $
    0.30
    
    
    $
    (0.33
    )
    
    
    (110.52
    )%Diluted earnings per share
    
    
    (0.03
    )
    
    
    0.29
    
    
    
    (0.32
    )
    
    
    (110.86
    )Dividends declared per share
    
    
    0.04
    
    
    
    0.03
    
    
    
    0.01
    
    
    
    33.33Select Operating Ratios:Return on average assets
    
    
    (0.02
    )%
    
    
    1.15
    %
    
    
    (117)
    *
    
    
    (101.74
    )%Return on average equity
    
    
    (0.17
    )
    
    
    13.37
    
    
    
    (1,354
    )
    
    
    (101.27
    )Efficiency ratio (1)
    
    
    60.62
    
    
    
    45.99
    
    
    
    1,463
    
    
    
    31.81Noninterest expense to average assets
    
    
    1.61
    
    
    
    1.63
    
    
    
    (2
    )
    
    
    (1.23
    )Average equity to average assets
    
    
    9.02
    
    
    
    8.60
    
    
    
    42
    
    
    
    4.88Dividend payout ratio (2)
    
    NM
    
    
    10.34
    
    
    
    
    
    
    
    Net loan charge-offs to average loans held in portfolio(4)
    
    
    1.40
    
    
    
    0.12
    
    
    
    128
    
    
    
    1,066.67Interest rate spread (3)
    
    
    2.72
    
    
    
    2.96
    
    
    
    (24
    )
    
    
    (8.11
    )Net interest margin (3)
    
    
    3.05
    
    
    
    3.44
    
    
    
    (39
    )
    
    
    (11.34
    )
 Nine Months Ended September 30,
    
    
    Increase (Decrease)2008
    
    
    2007
    
    
    Amount
    
    
    %Operating Data:Total interest and dividend income
    
    $
    536,742
    
    
    $
    520,412
    
    
    $
    16,330
    
    
    
    3.14
    %Total interest expense
    
    
    272,958
    
    
    
    283,922
    
    
    
    (10,964
    )
    
    
    (3.86
    )Net interest income
    
    
    263,784
    
    
    
    236,490
    
    
    
    27,294
    
    
    
    11.54Provision for loan losses
    
    
    110,853
    
    
    
    6,156
    
    
    
    104,697
    
    
    
    1,700.67Net interest income after provision for loan losses
    
    
    152,931
    
    
    
    230,334
    
    
    
    (77,403
    )
    
    
    (33.60
    )Total noninterest income (loss)
    
    
    (1,545
    )
    
    
    33,192
    
    
    
    (34,737
    )
    
    
    (104.65
    )Total noninterest expense
    
    
    149,634
    
    
    
    130,292
    
    
    
    19,342
    
    
    
    14.84Income before income tax expense (benefit)
    
    
    1,752
    
    
    
    133,234
    
    
    
    (131,482
    )
    
    
    (98.69
    )Income tax expense (benefit)
    
    
    (7,678
    )
    
    
    47,168
    
    
    
    (54,846
    )
    
    
    (116.28
    )Net income
    
    
    9,430
    
    
    
    86,066
    
    
    
    (76,636
    )
    
    
    (89.04
    )Dividends on preferred stock
    
    
    (2,995
    )
    
    
    
    
    
    
    (2,995
    )
    
    
    Net income available to common stockholders
    
    $
    6,435
    
    
    $
    86,066
    
    
    $
    (79,631
    )
    
    
    (92.52
    )Per Share Data:Basic earnings per share
    
    $
    0.06
    
    
    $
    0.85
    
    
    $
    (0.79
    )
    
    
    (93.06
    )%Diluted earnings per share
    
    
    0.06
    
    
    
    0.82
    
    
    
    (0.76
    )
    
    
    (92.85
    )Dividends declared per share
    
    
    0.12
    
    
    
    0.09
    
    
    
    0.03
    
    
    
    33.33Select Operating Ratios:Return on average assets
    
    
    0.10
    %
    
    
    1.11
    %
    
    
    (101)
    *
    
    
    (90.99
    )%Return on average equity
    
    
    1.17
    
    
    
    13.30
    
    
    
    (1,213
    )
    
    
    (91.20
    )Efficiency ratio (1)
    
    
    57.06
    
    
    
    48.31
    
    
    
    875
    
    
    
    18.11Noninterest expense to average assets
    
    
    1.57
    
    
    
    1.69
    
    
    
    (12
    )
    
    
    (7.10
    )Average equity to average assets
    
    
    8.50
    
    
    
    8.38
    
    
    
    12
    
    
    
    1.43Dividend payout ratio (2)
    
    
    200.00
    
    
    
    10.98
    
    
    
    18,902
    
    
    
    1,721.49Net loan charge-offs to average loans held in portfolio(4)
    
    
    1.10
    
    
    
    0.10
    
    
    
    100
    
    
    
    1,000.00Interest rate spread (3)
    
    
    2.74
    
    
    
    2.86
    
    
    
    (12
    )
    
    
    (4.20
    )Net interest margin (3)
    
    
    3.09
    
    
    
    3.35
    
    
    
    (26
    )
    
    
    (7.76
    )
 - 37 -




---



##### 



September 30,
    
    December 31,
    
    Increase (Decrease)2008
    
    2007
    
    Amount
    
    %Financial Condition and Other Data:Loans held in portfolio, net
    
    $
    8,743,089
    
    
    $
    7,751,566
    
    
    $
    991,523
    
    
    
    12.79
    %Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    150,000
    
    
    
    
    
    
    
    Securities available for sale
    
    
    2,495,980
    
    
    
    2,188,355
    
    
    
    307,625
    
    
    
    14.06Securities held to maturity
    
    
    238,694
    
    
    
    271,485
    
    
    
    (32,791
    )
    
    
    (12.08
    )Total assets
    
    
    13,044,255
    
    
    
    11,803,566
    
    
    
    1,240,689
    
    
    
    10.51Deposits
    
    
    8,530,170
    
    
    
    7,781,240
    
    
    
    748,930
    
    
    
    9.62Securities sold under agreements to repurchase
    
    
    700,000
    
    
    
    650,000
    
    
    
    50,000
    
    
    
    7.69Subordinated debentures
    
    
    406,459
    
    
    
    406,615
    
    
    
    (156
    )
    
    
    (0.04
    )Short-term borrowings
    
    
    550,398
    
    
    
    414,532
    
    
    
    135,866
    
    
    
    32.78Federal funds purchased
    
    
    
    
    
    
    78,000
    
    
    
    (78,000
    )
    
    
    (100.00
    )Long-term borrowings
    
    
    1,547,668
    
    
    
    1,372,190
    
    
    
    175,478
    
    
    
    12.79Total liabilities
    
    
    11,896,532
    
    
    
    10,836,463
    
    
    
    1,060,069
    
    
    
    9.78Stockholders equity
    
    
    1,147,723
    
    
    
    967,103
    
    
    
    180,620
    
    
    
    18.68Nonperforming assets
    
    
    251,581
    
    
    
    57,029
    
    
    
    194,552
    
    
    
    341.15Ratio of stockholders equity to total assets
    
    
    8.80
    %
    
    
    8.19
    %
    
    
    61
    *
    
    
    7.45Asset Quality Data:Loan delinquency ratio %
    
    
    2.79
    %
    
    
    0.89
    %
    
    
    190
    *
    
    
    213.48
    %Nonperforming assets to total assets
    
    
    1.93
    
    
    
    0.48
    
    
    
    145
    
    
    
    302.08Nonperforming loans to loans held in portfolio
    
    
    2.62
    
    
    
    0.68
    
    
    
    194
    
    
    
    285.29Allowance for loan losses to loans held in portfolio
    
    
    1.36
    
    
    
    1.03
    
    
    
    33
    
    
    
    32.04Allowance for loan losses to nonperforming loans
    
    
    51.80
    
    
    
    151.52
    
    
    
    (9,972
    )
    
    
    (65.81
    )Total loan to deposit ratio
    
    
    103.91
    
    
    
    102.93
    
    
    
    98
    
    
    
    0.95Bank Regulatory Capital Ratios:United Commercial Bank and subsidiaries:Tier 1 risk-based capital
    
    
    9.36
    %
    
    
    8.55
    %
    
    
    81
    *
    
    
    9.47
    %Total risk-based capital
    
    
    11.82
    
    
    
    10.80
    
    
    
    102
    
    
    
    9.44Tier 1 leverage
    
    
    7.66
    
    
    
    7.42
    
    
    
    24
    
    
    
    3.23UCBH Holdings, Inc. and subsidiaries:Tier 1 risk-based capital
    
    
    10.05
    
    
    
    8.51
    
    
    
    154
    
    
    
    18.10Total risk-based capital
    
    
    12.51
    
    
    
    10.76
    
    
    
    175
    
    
    
    16.26Tier 1 leverage ratio
    
    
    8.25
    
    
    
    7.39
    
    
    
    86
    
    
    
    11.64
 
 (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 $8.1 million and $5.6 million for the
three months ended September 30, 2008 and 2007, respectively, and $26.6 million and $15.7
million for the nine months ended September 30, 2008 and 2007, respectively.(4)
    
    Calculated on an annualized basis.*
    
    Basis pointsNM
    
    Not meaningful Impact of Economic and Credit Market Conditions  Overview
    - 38 -




---



##### 



Three Months Ended September 30, 2008, Compared to Three Months Ended September 30, 2007
  - 39 -




---



##### 



Net Interest Income and Net Interest Margin
 2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Yields
    
    
    
    
    
    
    Interest
    
    
    YieldsAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Rates Paid
    
    
    Balance
    
    
    Expense
    
    
    Rates PaidNontaxable equivalent basis:Interest-earning assetsLoans (1)(2)
    
    $
    8,849,908
    
    
    $
    136,241
    
    
    
    6.12
    %
    
    $
    7,644,342
    
    
    $
    151,580
    
    
    
    7.93
    %Taxable securities (3)
    
    
    2,272,818
    
    
    
    29,783
    
    
    
    5.21
    
    
    
    1,617,076
    
    
    
    20,460
    
    
    
    5.06Tax exempt securities (3)
    
    
    468,325
    
    
    
    5,276
    
    
    
    4.48
    
    
    
    275,532
    
    
    
    3,611
    
    
    
    5.24FHLB Stock
    
    
    90,377
    
    
    
    1,250
    
    
    
    5.50
    
    
    
    71,995
    
    
    
    917
    
    
    
    5.09Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    999
    
    
    
    2.65
    
    
    
    184,239
    
    
    
    3,341
    
    
    
    7.25Other
    
    
    236,899
    
    
    
    2,013
    
    
    
    3.38
    
    
    
    193,961
    
    
    
    2,842
    
    
    
    5.86Total interest-earning assets
    
    
    12,068,327
    
    
    
    175,562
    
    
    
    5.79
    
    
    
    9,987,145
    
    
    
    182,751
    
    
    
    7.32Noninterest-earning assets
    
    
    823,289
    
    
    
    
    
    
    
    
    
    
    
    726,893
    
    
    
    Total assets
    
    
    12,891,616
    
    
    
    175,562
    
    
    
    
    
    
    $
    10,714,038
    
    
    $
    182,751Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,421,327
    
    
    $
    7,017
    
    
    
    1.96
    
    
    $
    1,561,262
    
    
    $
    13,640
    
    
    
    3.49Savings accounts
    
    
    649,740
    
    
    
    1,253
    
    
    
    0.77
    
    
    
    741,573
    
    
    
    1,750
    
    
    
    0.94Time deposits
    
    
    5,554,104
    
    
    
    46,689
    
    
    
    3.34
    
    
    
    4,492,421
    
    
    
    56,804
    
    
    
    5.06Total interest-bearing deposits
    
    
    7,625,171
    
    
    
    54,959
    
    
    
    2.87
    
    
    
    6,795,256
    
    
    
    72,194
    
    
    
    4.25Securities sold under agreements to repurchase
    
    
    700,000
    
    
    
    5,902
    
    
    
    3.35
    
    
    
    371,556
    
    
    
    3,631
    
    
    
    3.91Short-term borrowings and federal funds
purchased
    
    
    701,898
    
    
    
    5,362
    
    
    
    3.04
    
    
    
    257,645
    
    
    
    3,324
    
    
    
    5.16Long-term borrowings
    
    
    1,386,169
    
    
    
    13,937
    
    
    
    4.00
    
    
    
    1,151,958
    
    
    
    13,539
    
    
    
    4.70Subordinated debentures
    
    
    406,495
    
    
    
    5,860
    
    
    
    5.73
    
    
    
    334,123
    
    
    
    6,138
    
    
    
    7.35Total interest-bearing liabilities
    
    
    10,819,733
    
    
    
    86,020
    
    
    
    3.16
    
    
    
    8,910,538
    
    
    
    98,826
    
    
    
    4.44Noninterest-bearing deposits
    
    
    782,186
    
    
    
    
    
    
    
    
    
    
    
    810,440
    
    
    
    Other noninterest-bearing liabilities
    
    
    127,456
    
    
    
    
    
    
    
    
    
    
    
    71,259
    
    
    
    Stockholders equity
    
    
    1,162,241
    
    
    
    
    
    
    
    
    
    
    
    921,801
    
    
    
    Total liabilities and stockholders equity
    
    $
    12,891,616
    
    
    
    86,020
    
    
    
    
    
    
    $
    10,714,038
    
    
    $
    98,826Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,248,594
    
    
    
    89,542
    
    
    
    2.63
    %
    
    $
    1,076,607
    
    
    $
    83,925
    
    
    
    2.88
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    2.95
    %
    
    
    
    
    
    
    
    
    
    
    3.36
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.12x
    
    
    
    
    
    
    
    
    
    
    
    1.12xTax equivalent basis:Total interest-earning assets (6)
    
    $
    12,068,327
    
    
    $
    178,403
    
    
    
    5.88
    %
    
    $
    9,987,145
    
    
    $
    184,696
    
    
    
    7.40
    %Total interest-bearing liabilities
    
    
    10,819,733
    
    
    
    86,020
    
    
    
    3.16
    
    
    
    8,910,538
    
    
    
    98,826
    
    
    
    4.44Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,248,594
    
    
    $
    92,383
    
    
    
    2.72
    %
    
    $
    1,076,607
    
    
    $
    85,870
    
    
    
    2.96
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.05
    %
    
    
    
    
    
    
    
    
    
    
    3.44
    %Average cost of deposits:Total interest-bearing deposits
    
    $
    7,625,171
    
    
    $
    54,959
    
    
    
    2.87
    %
    
    $
    6,795,256
    
    
    $
    72,194
    
    
    
    4.25
    %Noninterest-bearing deposits
    
    
    782,186
    
    
    
    
    
    
    
    
    
    
    
    810,440
    
    
    
    Total deposits
    
    $
    8,407,357
    
    
    $
    54,959
    
    
    
    2.60
    %
    
    $
    7,605,696
    
    
    $
    72,194
    
    
    
    3.80
    %
 
 (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 $8.1 million and $5.6 million
for the three months ended September 30, 2008 and 2007, respectively. - 40 -




---



##### 



Provision for Loan Losses
 Noninterest Income
 Noninterest Expense
 Income
Tax Expense
 Nine Months Ended September 30, 2008, Compared to Nine Months Ended September 30, 2007
  - 41 -




---



##### 



Net Interest Income and Net Interest Margin
 - 42 -




---



##### 



Nine Months Ended September 30, 2008
    
    
    Nine Months Ended September 30, 2007Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Yields
    
    
    
    
    
    
    Interest
    
    
    YieldsAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Rates Paid
    
    
    Balance
    
    
    Expense
    
    
    Rates PaidNontaxable equivalent basis:Interest-earning assetsLoans (1)(2)
    
    $
    8,514,780
    
    
    $
    412,346
    
    
    
    6.47
    %
    
    $
    7,246,407
    
    
    $
    426,495
    
    
    
    7.85
    %Taxable securities (3)
    
    
    2,331,917
    
    
    
    90,391
    
    
    
    5.18
    
    
    
    1,708,250
    
    
    
    64,631
    
    
    
    5.04Tax exempt securities (3)
    
    
    478,296
    
    
    
    17,298
    
    
    
    4.83
    
    
    
    274,657
    
    
    
    10,212
    
    
    
    4.96FHLB Stock
    
    
    94,834
    
    
    
    4,077
    
    
    
    5.74
    
    
    
    71,281
    
    
    
    2,714
    
    
    
    5.08Securities purchased under agreements to resell
    
    
    150,000
    
    
    
    4,964
    
    
    
    4.42
    
    
    
    157,418
    
    
    
    7,834
    
    
    
    6.64Other
    
    
    251,353
    
    
    
    7,666
    
    
    
    4.07
    
    
    
    181,524
    
    
    
    8,526
    
    
    
    6.26Total interest-earning assets
    
    
    11,821,180
    
    
    
    536,742
    
    
    
    6.07
    
    
    
    9,639,537
    
    
    
    520,412
    
    
    
    7.20Noninterest-earning assets
    
    
    846,793
    
    
    
    
    
    
    
    
    
    
    
    658,425
    
    
    
    Total assets
    
    $
    12,667,973
    
    
    $
    536,742
    
    
    
    
    
    
    $
    10,297,962
    
    
    $
    520,412Interest-bearing liabilities:Deposits:NOW, checking and money market accounts
    
    $
    1,491,349
    
    
    $
    25,212
    
    
    
    2.26
    
    
    $
    1,517,049
    
    
    $
    38,994
    
    
    
    3.43Savings accounts
    
    
    701,382
    
    
    
    3,938
    
    
    
    0.75
    
    
    
    716,378
    
    
    
    5,484
    
    
    
    1.02Time deposits
    
    
    5,154,034
    
    
    
    145,020
    
    
    
    3.76
    
    
    
    4,347,191
    
    
    
    162,224
    
    
    
    4.98Total interest-bearing deposits
    
    
    7,346,765
    
    
    
    174,170
    
    
    
    3.17
    
    
    
    6,580,618
    
    
    
    206,702
    
    
    
    4.19Securities sold under agreements to repurchase
    
    
    740,839
    
    
    
    18,559
    
    
    
    3.35
    
    
    
    336,902
    
    
    
    10,312
    
    
    
    4.08Short-term borrowings and federal funds
purchased
    
    
    766,770
    
    
    
    16,240
    
    
    
    2.83
    
    
    
    314,047
    
    
    
    12,993
    
    
    
    5.52Long- term borrowings
    
    
    1,379,505
    
    
    
    45,500
    
    
    
    4.41
    
    
    
    1,078,786
    
    
    
    37,973
    
    
    
    4.69Subordinated debentures
    
    
    406,540
    
    
    $
    18,489
    
    
    
    6.07
    
    
    
    281,299
    
    
    
    15,942
    
    
    
    7.56Total interest-bearing liabilities
    
    
    10,640,419
    
    
    
    272,958
    
    
    
    3.43
    
    
    
    8,591,652
    
    
    
    283,922
    
    
    
    4.41Noninterest-bearing deposits
    
    
    810,111
    
    
    
    
    
    
    
    
    
    
    
    747,186
    
    
    
    Other noninterest-bearing liabilities
    
    
    140,266
    
    
    
    
    
    
    
    
    
    
    
    96,431
    
    
    
    Stockholders equity
    
    
    1,077,177
    
    
    
    
    
    
    
    
    
    
    
    862,693
    
    
    
    Total liabilities and stockholders equity
    
    $
    12,667,973
    
    
    $
    272,958
    
    
    
    
    
    
    $
    10,297,962
    
    
    $
    283,922Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,180,761
    
    
    $
    263,784
    
    
    
    2.64
    %
    
    $
    1,047,885
    
    
    $
    236,490
    
    
    
    2.79
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    2.98
    %
    
    
    
    
    
    
    
    
    
    
    3.27
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.11x
    
    
    
    
    
    
    
    
    
    
    
    1.12xTax equivalent basis:Total interest-earning assets (6)
    
    $
    11,821,180
    
    
    $
    546,056
    
    
    
    6.17
    %
    
    $
    9,639,537
    
    
    $
    525,911
    
    
    
    7.27
    %Total interest-bearing liabilities
    
    
    10,640,419
    
    
    
    272,958
    
    
    
    3.43
    
    
    
    8,591,652
    
    
    
    283,922
    
    
    
    4.41Net interest-earning assets/net interest
income/net interest rate spread (4)
    
    $
    1,180,761
    
    
    $
    273,098
    
    
    
    2.74
    %
    
    $
    1,047,885
    
    
    $
    241,989
    
    
    
    2.86
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    3.09
    %
    
    
    
    
    
    
    
    
    
    
    3.35
    %Average cost of deposits:Total interest-bearing deposits
    
    $
    7,346,765
    
    
    $
    174,170
    
    
    
    3.17
    %
    
    $
    6,580,618
    
    
    $
    206,702
    
    
    
    4.19
    %Noninterest-bearing deposits
    
    
    810,111
    
    
    
    
    
    
    
    
    
    
    
    747,186
    
    
    
    Total deposits
    
    $
    8,156,876
    
    
    $
    174,170
    
    
    
    2.85
    %
    
    $
    7,327,804
    
    
    $
    206,702
    
    
    
    3.76
    %
 
 (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 $26.6 million and $15.7 million
for the nine months ended September 30, 2008 and 2007, respectively.  - 43 -




---



##### 



Provision for Loan Losses
 Noninterest Income
 Noninterest Expense
 Income Tax Expense
 BALANCE SHEET ANALYSIS
 Investment Securities
  - 44 -




---



##### 



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:Agency preferred stock
    
    $
    1,251
    
    
    $
    
    
    
    $
    
    
    
    $
    1,251
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Collateralized debt
obligations
    
    
    26,069
    
    
    
    3,710
    
    
    
    (5,948
    )
    
    
    23,831
    
    
    
    7,975
    
    
    
    (1,476
    )
    
    
    8,963
    
    
    
    (4,472
    )
    
    
    16,938
    
    
    
    (5,948
    )U.S. Government
sponsored enterprises
notes
    
    
    677,797
    
    
    
    28
    
    
    
    (18,589
    )
    
    
    659,236
    
    
    
    649,208
    
    
    
    (18,589
    )
    
    
    
    
    
    
    
    
    
    
    649,208
    
    
    
    (18,589
    )Municipals
    
    
    278,587
    
    
    
    24
    
    
    
    (36,140
    )
    
    
    242,471
    
    
    
    218,610
    
    
    
    (31,777
    )
    
    
    20,977
    
    
    
    (4,363
    )
    
    
    239,587
    
    
    
    (36,140
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (1,703
    )
    
    
    8,297
    
    
    
    
    
    
    
    
    
    
    
    8,297
    
    
    
    (1,703
    )
    
    
    8,297
    
    
    
    (1,703
    )Total investment
securities available for
sale
    
    
    993,704
    
    
    
    3,762
    
    
    
    (62,380
    )
    
    
    935,086
    
    
    
    875,793
    
    
    
    (51,842
    )
    
    
    38,237
    
    
    
    (10,538
    )
    
    
    914,030
    
    
    
    (62,380
    )Mortgage-backed
securities available for
sale:FNMA
    
    
    485,919
    
    
    
    1,340
    
    
    
    (6,247
    )
    
    
    481,012
    
    
    
    325,602
    
    
    
    (4,363
    )
    
    
    66,224
    
    
    
    (1,884
    )
    
    
    391,826
    
    
    
    (6,247
    )GNMA
    
    
    440,458
    
    
    
    24
    
    
    
    (8,177
    )
    
    
    432,305
    
    
    
    378,077
    
    
    
    (7,626
    )
    
    
    16,917
    
    
    
    (551
    )
    
    
    394,994
    
    
    
    (8,177
    )FHLMC
    
    
    167,243
    
    
    
    
    
    
    
    (6,763
    )
    
    
    160,480
    
    
    
    82,520
    
    
    
    (3,305
    )
    
    
    77,957
    
    
    
    (3,458
    )
    
    
    160,477
    
    
    
    (6,763
    )CMBS
    
    
    340,173
    
    
    
    
    
    
    
    (12,077
    )
    
    
    328,096
    
    
    
    328,096
    
    
    
    (12,077
    )
    
    
    
    
    
    
    
    
    
    
    328,096
    
    
    
    (12,077
    )Other
    
    
    166,765
    
    
    
    102
    
    
    
    (7,866
    )
    
    
    159,001
    
    
    
    106,328
    
    
    
    (4,020
    )
    
    
    42,470
    
    
    
    (3,846
    )
    
    
    148,798
    
    
    
    (7,866
    )Total mortgage-backed
securities available for
sale
    
    
    1,600,558
    
    
    
    1,466
    
    
    
    (41,130
    )
    
    
    1,560,894
    
    
    
    1,220,623
    
    
    
    (31,391
    )
    
    
    203,568
    
    
    
    (9,739
    )
    
    
    1,424,191
    
    
    
    (41,130
    )Total investment and
mortgage-backed
securities available for
sale
    
    
    2,594,262
    
    
    
    5,228
    
    
    
    (103,510
    )
    
    
    2,495,980
    
    
    
    2,096,416
    
    
    
    (83,233
    )
    
    
    241,805
    
    
    
    (20,277
    )
    
    
    2,338,221
    
    
    
    (103,510
    )Investment securities
held to maturity:Municipal securities
    
    
    185,399
    
    
    
    1,500
    
    
    
    (7,256
    )
    
    
    179,643
    
    
    
    113,592
    
    
    
    (7,034
    )
    
    
    1,513
    
    
    
    (222
    )
    
    
    115,105
    
    
    
    (7,256
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    3,790
    
    
    
    
    
    
    
    (92
    )
    
    
    3,698
    
    
    
    
    
    
    
    
    
    
    
    3,698
    
    
    
    (92
    )
    
    
    3,698
    
    
    
    (92
    )GNMA
    
    
    49,183
    
    
    
    
    
    
    
    (995
    )
    
    
    48,188
    
    
    
    37,959
    
    
    
    (598
    )
    
    
    10,229
    
    
    
    (397
    )
    
    
    48,188
    
    
    
    (995
    )FHLMC
    
    
    322
    
    
    
    
    
    
    
    (8
    )
    
    
    314
    
    
    
    
    
    
    
    
    
    
    
    314
    
    
    
    (8
    )
    
    
    314
    
    
    
    (8
    )Total mortgage-backed
securities held to
maturity
    
    
    53,295
    
    
    
    
    
    
    
    (1,095
    )
    
    
    52,200
    
    
    
    37,959
    
    
    
    (598
    )
    
    
    14,241
    
    
    
    (497
    )
    
    
    52,200
    
    
    
    (1,095
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    238,694
    
    
    
    1,500
    
    
    
    (8,351
    )
    
    
    231,843
    
    
    
    151,551
    
    
    
    (7,632
    )
    
    
    15,754
    
    
    
    (719
    )
    
    
    167,305
    
    
    
    (8,351
    )Total securities
    
    $
    2,832,956
    
    
    $
    6,728
    
    
    $
    (111,861
    )
    
    $
    2,727,823
    
    
    $
    2,247,967
    
    
    $
    (90,865
    )
    
    $
    257,559
    
    
    $
    (20,996
    )
    
    $
    2,505,526
    
    
    $
    (111,861
    )
     - 45 -




---



##### 



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:Agency preferred stock
    
    $
    23,466
    
    
    $
    
    
    
    $
    (3,317
    )
    
    $
    20,149
    
    
    $
    20,149
    
    
    $
    (3,317
    )
    
    $
    
    
    
    $
    
    
    
    $
    20,149
    
    
    $
    (3,317
    )Collateralized debt
obligations
    
    
    31,433
    
    
    
    
    
    
    
    (2,702
    )
    
    
    28,731
    
    
    
    12,364
    
    
    
    (2,163
    )
    
    
    7,960
    
    
    
    (539
    )
    
    
    20,324
    
    
    
    (2,702
    )U.S. Government
sponsored enterprises
notes
    
    
    446,916
    
    
    
    997
    
    
    
    (686
    )
    
    
    447,227
    
    
    
    174,453
    
    
    
    (498
    )
    
    
    51,804
    
    
    
    (188
    )
    
    
    226,257
    
    
    
    (686
    )Municipals
    
    
    246,632
    
    
    
    741
    
    
    
    (2,964
    )
    
    
    244,409
    
    
    
    160,048
    
    
    
    (2,964
    )
    
    
    
    
    
    
    
    
    
    
    160,048
    
    
    
    (2,964
    )Other
    
    
    10,000
    
    
    
    
    
    
    
    (1,050
    )
    
    
    8,950
    
    
    
    
    
    
    
    
    
    
    
    8,950
    
    
    
    (1,050
    )
    
    
    8,950
    
    
    
    (1,050
    )Total investment
securities available for
sale
    
    
    758,447
    
    
    
    1,738
    
    
    
    (10,719
    )
    
    
    749,466
    
    
    
    367,014
    
    
    
    (8,942
    )
    
    
    68,714
    
    
    
    (1,777
    )
    
    
    435,728
    
    
    
    (10,719
    )Mortgage-backed
securities available for
sale:FNMA
    
    
    559,979
    
    
    
    1,409
    
    
    
    (5,250
    )
    
    
    556,138
    
    
    
    13,288
    
    
    
    (30
    )
    
    
    291,258
    
    
    
    (5,220
    )
    
    
    304,546
    
    
    
    (5,250
    )GNMA
    
    
    77,478
    
    
    
    25
    
    
    
    (1,770
    )
    
    
    75,733
    
    
    
    3,505
    
    
    
    (84
    )
    
    
    71,735
    
    
    
    (1,686
    )
    
    
    75,240
    
    
    
    (1,770
    )FHLMC
    
    
    241,243
    
    
    
    102
    
    
    
    (5,471
    )
    
    
    235,874
    
    
    
    699
    
    
    
    (2
    )
    
    
    223,597
    
    
    
    (5,469
    )
    
    
    224,296
    
    
    
    (5,471
    )CMBS
    
    
    390,112
    
    
    
    835
    
    
    
    (5,499
    )
    
    
    385,448
    
    
    
    20,753
    
    
    
    (5,499
    )
    
    
    
    
    
    
    
    
    
    
    20,753
    
    
    
    (5,499
    )Other
    
    
    188,006
    
    
    
    148
    
    
    
    (2,458
    )
    
    
    185,696
    
    
    
    10,362
    
    
    
    (379
    )
    
    
    139,808
    
    
    
    (2,079
    )
    
    
    150,170
    
    
    
    (2,458
    )Total mortgage-backed
securities available for
sale
    
    
    1,456,818
    
    
    
    2,519
    
    
    
    (20,448
    )
    
    
    1,438,889
    
    
    
    48,607
    
    
    
    (5,994
    )
    
    
    726,398
    
    
    
    (14,454
    )
    
    
    775,005
    
    
    
    (20,448
    )Total investment and
mortgage-backed
securities available for
sale
    
    
    2,215,265
    
    
    
    4,257
    
    
    
    (31,167
    )
    
    
    2,188,355
    
    
    
    415,621
    
    
    
    (14,936
    )
    
    
    795,112
    
    
    
    (16,231
    )
    
    
    1,210,733
    
    
    
    (31,167
    )Investment securities
held to maturity:Municipal securities
    
    
    212,647
    
    
    
    6,016
    
    
    
    (32
    )
    
    
    218,631
    
    
    
    3,789
    
    
    
    (28
    )
    
    
    417
    
    
    
    (4
    )
    
    
    4,206
    
    
    
    (32
    )Mortgage-backed
securities held to
maturity:FNMA
    
    
    4,090
    
    
    
    
    
    
    
    (101
    )
    
    
    3,989
    
    
    
    
    
    
    
    
    
    
    
    3,989
    
    
    
    (101
    )
    
    
    3,989
    
    
    
    (101
    )GNMA
    
    
    54,326
    
    
    
    
    
    
    
    (1,071
    )
    
    
    53,255
    
    
    
    16,156
    
    
    
    (216
    )
    
    
    37,098
    
    
    
    (855
    )
    
    
    53,254
    
    
    
    (1,071
    )FHLMC
    
    
    422
    
    
    
    
    
    
    
    (11
    )
    
    
    411
    
    
    
    
    
    
    
    
    
    
    
    411
    
    
    
    (11
    )
    
    
    411
    
    
    
    (11
    )Total mortgage-backed
securities held to
maturity
    
    
    58,838
    
    
    
    
    
    
    
    (1,183
    )
    
    
    57,655
    
    
    
    16,156
    
    
    
    (216
    )
    
    
    41,498
    
    
    
    (967
    )
    
    
    57,654
    
    
    
    (1,183
    )Total investment and
mortgage-backed
securities held to
maturity
    
    
    271,485
    
    
    
    6,016
    
    
    
    (1,215
    )
    
    
    276,286
    
    
    
    19,945
    
    
    
    (244
    )
    
    
    41,915
    
    
    
    (971
    )
    
    
    61,860
    
    
    
    (1,215
    )Total securities
    
    $
    2,486,750
    
    
    $
    10,273
    
    
    $
    (32,382
    )
    
    $
    2,464,641
    
    
    $
    435,566
    
    
    $
    (15,180
    )
    
    $
    837,027
    
    
    $
    (17,202
    )
    
    $
    1,272,593
    
    
    $
    (32,382
    )
 - 46 -




---



##### 



Loans
  September 30,
    
    
    December 31,2008
    
    
    2007Commercial:Secured by real estate  nonresidential
    
    $
    2,638,119
    
    
    $
    2,317,501Secured by real estate  multifamily
    
    
    1,189,195
    
    
    
    1,186,177Construction
    
    
    1,943,729
    
    
    
    1,666,550Business
    
    
    2,515,760
    
    
    
    2,076,597Total commercial
    
    
    8,286,803
    
    
    
    7,246,825Consumer:Residential mortgage (one-to-four family)
    
    
    493,065
    
    
    
    518,674Other
    
    
    83,499
    
    
    
    66,651Total consumer
    
    
    576,564
    
    
    
    585,325Loans held in portfolio (1)
    
    
    8,863,367
    
    
    
    7,832,150Allowance for loan losses
    
    
    (120,278
    )
    
    
    (80,584
    )Loans held in portfolio, net
    
    $
    8,743,089
    
    
    $
    7,751,566
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts
of $12.9 million and $17.9 million at September 30, 2008, and December 31, 2007, respectively. 
   - 47 -




---



##### 



September 30,
    
    
    December 31,2008
    
    
    2007Commercial:Secured by real estate  nonresidential
    
    $
    654
    
    
    $
    175,474Business
    
    
    
    
    
    
    1,109Total commercial
    
    
    654
    
    
    
    176,583Consumer:Residential mortgage (one-to-four family)
    
    
    
    
    
    
    927Loans held for sale (1)
    
    
    654
    
    
    
    177,510Valuation allowance
    
    
    
    
    
    
    (373
    )Net loans held for sale
    
    $
    654
    
    
    $
    177,137
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees of $(3,000) and $322,000 at
September 30, 2008, and December 31, 2007, respectively.  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Loans held for sale:Commercial:Secured by real estate  nonresidential
    
    $
    10,592
    
    
    $
    12,535
    
    
    $
    10,592
    
    
    $
    36,433Consumer:Residential mortgage (one-to-four family)
    
    
    
    
    
    
    278
    
    
    
    
    
    
    
    1,956Total loans held for sale commitments (1)
    
    
    10,592
    
    
    
    12,813
    
    
    
    10,592
    
    
    
    38,389Loans held in portfolio:Commercial:Secured by real estate  nonresidential
    
    
    292,249
    
    
    
    287,020
    
    
    
    709,702
    
    
    
    820,479Secured by real estate  multifamily
    
    
    31,429
    
    
    
    80,655
    
    
    
    270,721
    
    
    
    304,176Construction
    
    
    94,999
    
    
    
    276,102
    
    
    
    420,113
    
    
    
    955,765Business
    
    
    194,204
    
    
    
    258,712
    
    
    
    934,773
    
    
    
    826,273Total commercial loans
    
    
    612,881
    
    
    
    902,489
    
    
    
    2,335,309
    
    
    
    2,906,693Consumer:Residential mortgage (one-to-four family)
    
    
    28,323
    
    
    
    47,823
    
    
    
    124,887
    
    
    
    125,289Other
    
    
    15,607
    
    
    
    12,040
    
    
    
    44,105
    
    
    
    30,072Total consumer loans
    
    
    43,930
    
    
    
    59,863
    
    
    
    168,992
    
    
    
    155,361Total loans held in portfolio commitments (1)
    
    
    656,811
    
    
    
    962,352
    
    
    
    2,504,301
    
    
    
    3,062,054Total loan commitments (1)
    
    $
    667,403
    
    
    $
    975,165
    
    
    $
    2,514,893
    
    
    $
    3,100,443
 
 (1)
    
    Amounts do not reflect commitments related to loan participations. - 48 -




---



##### 



IntermediateAdjustable
    
    
    Fixed
    
    
    Fixed
    
    
    TotalCommercial:Secured by real estate  nonresidential
    
    $
    1,150,253
    
    
    $
    440,362
    
    
    $
    1,057,783
    
    
    $
    2,648,398Secured by real estate  multifamily
    
    
    392,067
    
    
    
    680,001
    
    
    
    114,690
    
    
    
    1,186,758Construction
    
    
    1,813,625
    
    
    
    
    
    
    
    134,523
    
    
    
    1,948,148Business
    
    
    2,313,713
    
    
    
    10,337
    
    
    
    191,908
    
    
    
    2,515,958Total commercial
    
    
    5,669,658
    
    
    
    1,130,700
    
    
    
    1,498,904
    
    
    
    8,299,262Consumer:Residential mortgage (one-to-four family)
    
    
    85,677
    
    
    
    215,703
    
    
    
    192,103
    
    
    
    493,483Other
    
    
    79,967
    
    
    
    
    
    
    
    3,568
    
    
    
    83,535Total consumer
    
    
    165,644
    
    
    
    215,703
    
    
    
    195,671
    
    
    
    577,018Gross loans held in portfolio (1)
    
    $
    5,835,302
    
    
    $
    1,346,403
    
    
    $
    1,694,575
    
    
    $
    8,876,280
 
 (1)
    
    Amounts do not reflect net deferred loan fees, purchase premiums and discounts of
$12.9 million at September 30, 2008.  Deposits
  September 30, 2008
    
    
    December 31, 2007Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageAmount
    
    
    Rate
    
    
    Amount
    
    
    RateNOW, checking and money market accounts
    
    $
    2,136,864
    
    
    
    1.19
    %
    
    $
    2,417,630
    
    
    
    1.91
    %Savings accounts
    
    
    818,421
    
    
    
    1.48
    
    
    
    986,664
    
    
    
    1.94Time deposits:Less than $100,000
    
    
    2,840,799
    
    
    
    3.42
    
    
    
    1,423,935
    
    
    
    4.48$100,000 or greater
    
    
    2,734,086
    
    
    
    3.23
    
    
    
    2,953,011
    
    
    
    4.60Total time deposits
    
    
    5,574,885
    
    
    
    3.33
    
    
    
    4,376,946
    
    
    
    4.56Total deposits
    
    $
    8,530,170
    
    
    
    2.61
    %
    
    $
    7,781,240
    
    
    
    3.40
    %
  - 49 -




---



##### 



Borrowings
  September 30,
    
    December 31,2008
    
    2007Securities sold under agreements to repurchase:Average balance outstanding
    
    $
    740,591
    
    
    $
    400,615Maximum amount outstanding at any month end period
    
    
    850,000
    
    
    
    650,000Balance outstanding at end of period
    
    
    700,000
    
    
    
    650,000Weighted average interest rate during the period
    
    
    3.84
    %
    
    
    4.21
    %Weighted average interest rate at end of period
    
    
    3.79
    %
    
    
    4.04
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    7.95
    
    
    
    8.63Short-term borrowings:FHLB advances and other short-term borrowings:Average balance outstanding
    
    $
    656,986
    
    
    $
    299,713Maximum amount outstanding at any month end period
    
    
    806,815
    
    
    
    637,787Balance outstanding at end of period
    
    
    550,398
    
    
    
    414,532Weighted average interest rate during the period
    
    
    2.88
    %
    
    
    5.15
    %Weighted average interest rate at end of period
    
    
    2.91
    %
    
    
    4.05
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    0.26
    
    
    
    0.08Federal funds purchased:Balance outstanding at end of period
    
    $
    
    
    
    $
    78,000Long-term borrowings:FHLB advances and other long-term borrowing:Average balance outstanding
    
    $
    1,379,505
    
    
    $
    1,113,881Maximum amount outstanding at any month end period
    
    
    1,547,668
    
    
    
    1,372,190Balance outstanding at end of period
    
    
    1,547,668
    
    
    
    1,372,190Weighted average interest rate during the period
    
    
    4.40
    %
    
    
    4.69
    %Weighted average interest rate at end of period
    
    
    4.11
    %
    
    
    4.57
    %Weighted average remaining term to maturity at end of period (in years)
    
    
    4.62
    
    
    
    5.2
 
 Subordinated Debentures
  - 50 -




---



##### 



RISK MANAGEMENT
   
    
    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;
    
    Portfolio Review Committee, which monitors, controls, and maintains UCBs credit risk
profile;
    
    Market Risk Management Committee, which reviews securities, loans and borrowings to assess
yield, and interest rate and market risk;
    
    Operational Risk Management Committee, which reviews those risks not covered by the Credit
Risk Management and Market Risk Management Committees; and
    
    Securities Committee, which reviews and analyze the investment activities and strategies of
UCB.
  Credit Risk Management
    - 51 -




---



##### 



September 30, 2008
    
    
    December 31, 2007Amount
    
    
    %
    
    
    Amount
    
    
    %Commercial:Secured by real estate  nonresidential
    
    $
    2,638,119
    
    
    
    29.76
    
    
    $
    2,317,501
    
    
    
    29.59Secured by real estate  multifamily
    
    
    1,189,195
    
    
    
    13.42
    
    
    
    1,186,177
    
    
    
    15.14Construction
    
    
    1,943,729
    
    
    
    21.93
    
    
    
    1,666,550
    
    
    
    21.28Business
    
    
    2,515,760
    
    
    
    28.38
    
    
    
    2,076,597
    
    
    
    26.51Total commercial
    
    
    8,286,803
    
    
    
    93.49
    
    
    
    7,246,825
    
    
    
    92.52Consumer:Residential mortgage (one-to-four family)
    
    
    493,065
    
    
    
    5.57
    
    
    
    518,674
    
    
    
    6.62Other
    
    
    83,499
    
    
    
    0.94
    
    
    
    66,651
    
    
    
    0.86Total consumer
    
    
    576,564
    
    
    
    6.51
    
    
    
    585,325
    
    
    
    7.48Loans held in portfolio (1)
    
    $
    8,863,367
    
    
    
    100.00
    
    
    $
    7,832,150
    
    
    
    100.00
 
 (1)
    
    Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts
of $12.9 million and $17.9 million at September 30, 2008, and December 31, 2007, respectively.     Nonperforming Assets
   - 52 -




---



##### 



September 30,
    
    
    December 31,2008
    
    
    2007Commercial loans:Secured by real estate  nonresidential
    
    $
    18,467
    
    
    $
    18,086Secured by real estate  multifamily
    
    
    6,938
    
    
    
    4,032Construction
    
    
    187,873
    
    
    
    15,799Business
    
    
    16,828
    
    
    
    14,713Total commercial loans
    
    
    230,106
    
    
    
    52,630Consumer loans:Residential mortgage (one-to-four family)
    
    
    1,306
    
    
    
    349Other
    
    
    792
    
    
    
    206Total consumer loans
    
    
    2,098
    
    
    
    555Total nonaccrual loans from loans held in portfolio
    
    
    232,204
    
    
    
    53,185Other real estate owned
    
    
    19,377
    
    
    
    3,844Total nonperforming assets (1)
    
    $
    251,581
    
    
    $
    57,029Nonperforming assets to total assets
    
    
    1.93
    %
    
    
    0.48
    %Nonaccrual loans to loans held in portfolio
    
    
    2.62
    
    
    
    0.68Nonperforming assets to loans held in portfolio and other real estate owned
    
    
    2.83
    
    
    
    0.73Loans held in portfolio
    
    $
    8,863,367
    
    
    $
    7,832,150Gross interest income recognized on impaired loans
    
    
    972
    
    
    
    139Gross interest income not recognized on nonaccrual loans
    
    
    12,417
    
    
    
    1,877Accruing loans contractually past due 90 days or more
    
    
    61,498
    
    
    
    33,381Loans classified as troubled debt restructurings and not included above
    
    
    8,314
    
    
    
    8,446
 
 (1)
    
    Nonperforming assets exclude loans held for sale and loans contractually past
due 90 days or more but still accruing.     - 53 -




---



##### 



Allowances for Credit Losses
 Allowance for Loan Losses
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Balance at beginning of period:Allowance for loan losses
    
    $
    109,132
    
    
    $
    67,739
    
    
    $
    80,584
    
    
    $
    62,015Allowance for losses  unfunded commitments
    
    
    5,337
    
    
    
    4,968
    
    
    
    4,793
    
    
    
    6,833Total allowance for losses at beginning of period
    
    
    114,469
    
    
    
    72,707
    
    
    
    85,377
    
    
    
    68,848Acquired allowance for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,825Provision for loan losses
    
    
    43,221
    
    
    
    3,010
    
    
    
    110,853
    
    
    
    6,156Charge-offs:Commercial:Secured by real estate  nonresidential
    
    
    (2,109
    )
    
    
    (50
    )
    
    
    (4,723
    )
    
    
    (66
    )Secured by real estate  multifamily
    
    
    (110
    )
    
    
    (59
    )
    
    
    (300
    )
    
    
    (59
    )Construction
    
    
    (27,415
    )
    
    
    
    
    
    
    (57,050
    )
    
    
    Business
    
    
    (1,985
    )
    
    
    (2,991
    )
    
    
    (7,944
    )
    
    
    (6,340
    )Total commercial
    
    
    (31,619
    )
    
    
    (3,100
    )
    
    
    (70,017
    )
    
    
    (6,465
    )Consumer:Other
    
    
    (22
    )
    
    
    
    
    
    
    (302
    )
    
    
    (9
    )Total charge-offs
    
    
    (31,641
    )
    
    
    (3,100
    )
    
    
    (70,319
    )
    
    
    (6,474
    )Recoveries:Commercial:Secured by real estate  nonresidential
    
    
    248
    
    
    
    943
    
    
    
    260
    
    
    
    954Construction
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    Business
    
    
    334
    
    
    
    (136
    )
    
    
    425
    
    
    
    112Total commercial
    
    
    582
    
    
    
    807
    
    
    
    686
    
    
    
    1,066Consumer:Other
    
    
    6
    
    
    
    
    
    
    
    40
    
    
    
    3Total recoveries
    
    
    588
    
    
    
    807
    
    
    
    726
    
    
    
    1,069Net charge-offs
    
    
    (31,053
    )
    
    
    (2,293
    )
    
    
    (69,593
    )
    
    
    (5,405
    )Total allowance for losses at end of period
    
    $
    126,637
    
    
    $
    73,424
    
    
    $
    126,637
    
    
    $
    73,424Allowance for loan losses
    
    $
    120,278
    
    
    $
    68,540
    
    
    $
    120,278
    
    
    $
    68,540Allowance for losses  unfunded commitments
    
    
    6,359
    
    
    
    4,884
    
    
    
    6,359
    
    
    
    4,884Total allowance for losses at end of period
    
    $
    126,637
    
    
    $
    73,424
    
    
    $
    126,637
    
    
    $
    73,424Allowance for loan losses to loans held in portfolio
    
    
    1.36
    %
    
    
    0.89
    %
    
    
    1.36
    %
    
    
    0.89
    %Net charge-offs to average loans held in portfolio(1)
    
    
    1.40
    
    
    
    0.12
    
    
    
    1.10
    
    
    
    0.10
 
 (1)
    
    Calculated on an annualized basis. - 54 -




---



##### 



Allowance for Unfunded Commitments
 Market Risk Management
     - 55 -




---



##### 



Accounting for Derivative Instruments and Hedging Activities
  Operational Risk Management
    - 56 -




---



##### 



Liquidity Risk
 Liquidity Management
        - 57 -




---



##### 



Name of Rating Agency
    
    Short-Term Debt
    
    Long-Term Debt
    
    Rating OutlookFitch
    
    F2
    
    BBB
    
    Negative
  Name of Rating Agency
    
    Short-Term Debt
    
    Long-Term Debt
    
    Rating OutlookFitch
    
    F2
    
    BBB
    
    NegativeMoodys
    
    P-2
    
    Baa2
    
    Negative
 CAPITAL MANAGEMENT
   - 58 -




---



##### 



September 30,
    
    December 31,2008
    
    2007United Commercial Bank:Tier 1 leverage
    
    
    7.66
    %
    
    
    7.42
    %Tier 1 risk-based capital
    
    
    9.36
    
    
    
    8.55Total risk-based capital
    
    
    11.82
    
    
    
    10.80UCBH Holdings, Inc. and subsidiaries:Tier 1 leverage
    
    
    8.25
    %
    
    
    7.39
    %Tier 1 risk-based capital
    
    
    10.05
    
    
    
    8.51Total risk-based capital
    
    
    12.51
    
    
    
    10.76
     - 59 -




---



##### 



- 60 -




---



##### 



- 61 -




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   - 62 -




---



##### 



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
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  - 63 -




---



##### 



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 and
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
 - 64 -




---



##### 



Index to Exhibits
 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
    
    
    4.8
    
    
    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
    
    10-Q
    
    000-24947
    
    
    4.13
    
    
    August 9, 2007
 - 65 -




---



##### 



Index to Exhibits
 Exhibit
    
    
    
    Incorporated by Reference
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith4.14
    
    Amendment No. 1 to Rights Agreement
dated March 5, 2008 by and between
UCBH Holdings, Inc. and Mellon
Investor Services LLC
    
    8-K
    
    000-24947
    
    
    4.1
    
    
    March 6, 20084.15
    
    Certificate of Designations of 8.50%
Non-Cumulative Perpetual Convertible
Series B Preferred Stock
    
    8-K
    
    000-24947
    
    
    3.1
    
    
    June 11, 200810.1
    
    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
    
    
    10.1
    
    
    May 1, 200810.3
    
    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 and certain other Executive Vice
Presidents of UCBH Holdings, Inc. or
United Commercial Bank
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    May 2, 200710.5
    
    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
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    August 15, 200710.8
    
    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
    
    
    10.2
    
    
    August 15, 200710.11
    
    Form of Indemnification Agreement of
United Commercial Bank.
    
    8-K
    
    000-24947
    
    
    10.3
    
    
    August 15, 2007
 - 66 -




---



##### 



Index to Exhibits
 Exhibit
    
    
    
    Incorporated by Reference
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith10.12
    
    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, 200710.13
    
    Investment Agreement dated October 7,
2007 by and between UCBH Holdings,
Inc. and China Minsheng Banking
Corp., Ltd.
    
    8-K
    
    000-24947
    
    
    10.1
    
    
    March 6, 200810.14
    
    Investors Rights and Standstill
Agreement dated October 7, 2007 by
and between UCBH Holdings, Inc. and
China Minsheng Banking Corp., Ltd.
    
    8-K
    
    000-24947
    
    
    10.2
    
    
    March 6, 200810.15
    
    Voting Agreement dated March 5, 2008
by and between UCBH Holdings, Inc.
and China Minsheng Banking Corp.,
Ltd.
    
    8-K
    
    000-24947
    
    
    10.3
    
    
    March 6, 200810.16
    
    Purchase Agreement, dated June 5,
2008, between UCBH Holdings, Inc. and
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated,
as representative of the underwriters
listed on Schedule A thereto,
relating to the purchase of UCBH
Holdings, Inc.s Series B Preferred
Stock
    
    8-K
    
    000-24947
    
    
    1.1
    
    
    June 11, 200810.17
    
    Letter Agreement dated September 22,
2008 between UCBH Holdings, Inc. and
China Minsheng Banking Corp., Ltd.
regarding the Investment Agreement
and Investors Rights and Standstill
Agreement
    
    
    
    
    
    
    
    
    
    
    

ü14.1
    
    Code of Conduct, as amended on August
14, 2004
    
    8-K
    
    000-24947
    
    
    14.1
    
    
    September 1, 200431.1
    
    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 Craig S. On
    
    
    
    
    
    
    
    
    
    
    

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 Craig S. On
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
 
 (1)
    
    Furnished herewith - 67 -




---



##### 



SIGNATURES
  UCBH HOLDINGS, INC.Date: November 10, 2008
    
    /s/ Thomas S. Wu

Thomas S. WuChairman, President andChief Executive Officer(Principal Executive Officer)Date: November 10, 2008
    
    /s/ Craig S. On

Craig S. OnExecutive Vice President andChief Financial Officer(Principal Financial and Accounting Officer)
 - 68 -