##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K

|           |  |                                                                                              
|---------- |  | ---------------------------------------------------------------------------------------------
|(Mark One)
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934.
|           |  | For the fiscal year ended December 31,
    2005.                                             
|           |  | OR                                                                                           
|o          |  | TRANSITION REPORT UNDER SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934.  
|           |  | For the transition period
    from                    to            .                        

Commission File Number: 000-24947

UCBH Holdings, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                                                 |  |                                         
|------------------------------------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                                                         |  | 94-3072450                              
|(State or other jurisdiction of
    incorporation or organization)                               |  | (I.R.S. Employer
    Identification No.)
|                                                                                                
|555 Montgomery Street,
    San Francisco, California(Address of principal executive
    offices) |  | 94111(Zip Code)                         

Registrants telephone number, including
area code:


(415) 315-2800


Securities registered pursuant to
Section 12(b) of the Act:

None


Securities registered pursuant to
Section 12(g) of the Act:

Common Stock, Par Value $0.01 Per
Share


Preferred Stock Purchase Rights


Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the
Securities
Act.     Yes þ          No o

Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or
Section 15(d) of the
Act.     Yes o          No þ

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.          Yes þ          No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of the registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to
this
Form 10-K.      þ

Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of accelerated filer
and large accelerated filer in Rule 12b-2 of the
Exchange Act.



|                          |                     |                        
|------------------------- | ------------------- | -----------------------
|Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o

Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No
þ

The aggregate market value of the common stock
held by non-affiliates of the registrant is $1,280,144,325 and
is based upon the last sales price as quoted on The NASDAQ Stock
Market as of June 30, 2005.

As of January 31, 2006, the Registrant had
94,045,813 shares of common stock, par value $0.01 per share,
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Proxy Statement for the May 18, 2006,
Annual Meeting of Stockholders is incorporated by reference into
Part III.



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##### 










UCBH HOLDINGS, INC. AND SUBSIDIARIES

Table of Contents


|             |  |                                                                                                                      |  |      |     |  |  | 
|------------ |  | -------------------------------------------------------------------------------------------------------------------- |  | ---- | --- |  |  | 
|             |  |                                                                                                                      |  | Page
|             |  |                                                                                                                      |  |     
|PART I      
|Item 1       |  | Business                                                                                                             |  |      | 2   | 
|Item 1A      |  | Risk Factors                                                                                                         |  |      | 13  | 
|Item 1B      |  | Unresolved Staff Comments                                                                                            |  |      | 16  | 
|Item 2       |  | Properties                                                                                                           |  |      | 16  | 
|Item 3       |  | Legal Proceedings                                                                                                    |  |      | 16  | 
|Item 4       |  | Submission of Matters to a
    Vote of Security Holders                                                              |  |      | 16  | 
|PART II     
|Item 5       |  | Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities |  |      | 17  | 
|Item 6       |  | Selected Financial Data                                                                                              |  |      | 18  | 
|Item 7       |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operation                             |  |      | 20  | 
|Item 7A      |  | Quantitative and Qualitative
    Disclosures About Market Risk                                                       |  |      | 65  | 
|Item 8       |  | Financial Statements and
    Supplementary Data                                                                      |  |      | 66  | 
|Item 9       |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure                             |  |      | 117 | 
|Item 9A      |  | Controls and Procedures                                                                                              |  |      | 117 | 
|Item 9B      |  | Other Information                                                                                                    |  |      | 118 | 
|PART III    
|Item 10      |  | Directors and Executive
    Officers of the Registrant                                                               |  |      | 119 | 
|Item 11      |  | Executive Compensation                                                                                               |  |      | 119 | 
|Item 12      |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters               |  |      | 119 | 
|Item 13      |  | Certain Relationships and
    Related Transactions                                                                   |  |      | 119 | 
|Item 14      |  | Principal Accounting Fees
    and Services                                                                           |  |      | 119 | 
|PART IV     
|Item 15      |  | Exhibits, Financial
    Statement Schedules                                                                          |  |      | 120 | 
|Signatures   |  |                                                                                                                      |  |      | 123 | 
|EXHIBIT 21.0
|EXHIBIT 23.1
|EXHIBIT 31.1
|EXHIBIT 31.2
|EXHIBIT 32.0





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PART I

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 others:



| |   |                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | statements with respect to UCBH Holdings, Inc.
    and its Subsidiaries (collectively, the
    Company) beliefs, plans, objectives, goals,
    guidelines, expectations, anticipations, and future financial
    condition, results of operations and performance;
|
| |  | statements preceded or identified by words,
    such as expects, anticipates,
    intends, plans, believes,
    seeks, estimates, will,
    should, could, projects,
    may, or words of similar import.                                    

These forward-looking statements are based
upon managements current beliefs and expectations and are
not guarantees of future performance, nor should they be relied
upon as representing managements views as of any
subsequent date. These forward-looking statements are also
inherently subject to significant business, economic and
competitive uncertainties, risks and contingencies, many of
which are difficult to predict and generally beyond
managements control. In addition, these forward-looking
statements are subject to assumptions with respect to future
business strategies and decisions that are subject to change and
actual results, performance or achievements may be materially
different from the anticipated results, performance or
achievements discussed, expressed or implied by these
forward-looking statements. Factors that might cause such
differences include, but are not limited to the
following:



| |   |                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Companys ability to successfully
    execute its business plans and achieve its objectives;                                                                                                                
|
| |  | changes in political and economic conditions,
    including the economic effects of terrorist attacks against the
    United States and related events;                                                         
|
| |  | changes in financial market conditions, either
    nationally or locally in areas in which the Company conducts its
    operations;                                                                             
|
| |  | fluctuations in the equity and fixed-income
    markets;                                                                                                                                                        
|
| |  | changes in interest rates;                                                                                                                                                                                      
|
| |  | acquisitions and integration of acquired
    businesses;                                                                                                                                                        
|
| |  | increases in the levels of losses, customer
    bankruptcies, claims and assessments;                                                                                                                           
|
| |  | changes in fiscal, monetary, regulatory, trade
    and tax policies and laws;                                                                                                                                   
|
| |  | continuing consolidation in the financial
    services industry;                                                                                                                                                
|
| |  | new litigation or changes in existing
    litigation;                                                                                                                                                           
|
| |  | success in gaining regulatory approvals, when
    required;                                                                                                                                                     
|
| |  | changes in consumer spending and savings
    habits;                                                                                                                                                            
|
| |  | increased competitive challenges and expanding
    product and pricing pressures among financial institutions,
    whether banks, investment banks, insurance companies or others,
    in the Companys markets;
|
| |  | technological changes;                                                                                                                                                                                          
|
| |  | demographic changes;                                                                                                                                                                                            
|
| |  | legislation or regulatory changes which
    adversely affect the Companys operations and
    businesses;                                                                                                       

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| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Companys ability to comply with
    applicable laws and regulations; and                                                              
|
| |  | changes in accounting policies or procedures
    as may be required by the Financial Accounting Standards Board
    or regulatory agencies.

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




Item 1.     Business

Company Background

UCBH Holdings, Inc. (UCBH) is a
Delaware corporation incorporated in 1998, which is registered
with the Board of Governors of the Federal Reserve System as a
bank holding company. UCBH conducts its principal business
through its wholly owned banking subsidiary, United Commercial
Bank (UCB; UCBH, UCB and UCBs wholly owned
subsidiaries are collectively referred to as the
Company, we, us or
our), which makes up substantially all of our
consolidated assets and revenues. UCB is a California
state-chartered commercial bank.

UCB was founded as United Federal Savings and
Loan Association in 1974 to serve the financial needs of the San
Francisco Chinese community. As the Chinese population grew
significantly and expanded into new communities throughout
California, we became United Savings Bank, F.S.B. to provide
statewide banking services. In 1998, reflecting a rapidly
growing focus on our commercial banking capabilities, we
converted our charter to become United Commercial Bank. On
November 5, 1998, the Company went public and started
trading on The NASDAQ Stock Market (NASDAQ) under
the symbol UCBH.

On October 28, 2002, we acquired all of the
outstanding shares of Bank of Canton of California
(BCC), a $1.45 billion Chinese-focused
California banking corporation. The Company issued approximately
2.7 million shares of UCBHs common stock and paid
$168.8 million in cash, for a total purchase price of
$220.0 million. BCC was immediately merged into UCB. On
December 16, 2002, UCB also purchased selected assets and
assumed selected liabilities of a branch of Broadway National
Bank (BNB), a national banking association located
in Brooklyn, New York.

On July 11, 2003, the Company completed its
acquisition of privately held First Continental Bank
(FCB), a $356.7 million full-service commercial
bank focused on serving the ethnic Chinese market, headquartered
in Rosemead, California. The Company issued approximately
2.3 million shares of UCBHs common stock in exchange
for all of the outstanding shares of common stock of FCB. Also
during 2003, the Company was granted a full banking license by
the Hong Kong Monetary Authority, enabling the Company to open a
full-service branch in Hong Kong. This license has allowed us to
engage in a wide range of banking activities in Hong Kong,
including deposit generation and international trade finance
lending activities. The Hong Kong branch has enhanced our
capability to expand our international banking business across
the Pacific Rim, which we expect will continue in the future.

During 2004, UCB established UCB Investment
Services, Inc. (UCBIS), a wholly owned subsidiary.
UCBIS is a registered broker-dealer with the Securities and
Exchange Commission and is a member of the National Association
of Securities Dealers (the NASD) and the Securities
Investor Protection Corporation (the SIPC). UCBIS
acts as an introducing broker in sales of shares of mutual
funds, listed and over-the-counter equities, and corporate,
municipal, and United States government debt. In addition, UCBIS
sells fixed and variable annuities and covered options and is
registered with the Municipal Securities Rulemaking Board (the
MSRB). UCBIS does not have custody or possession of
customer funds or securities. Instead, customer accounts are
carried on a fully disclosed basis at National Financial
Services, LLC, which is UCBIS clearing firm.

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During 2005, the Company completed two
acquisitions; Pacifica Bancorp, Inc. (Pacifica)
headquartered in Seattle, Washington and Asian American Bank
& Trust Company (AABT) headquartered in Boston,
Massachusetts. The purchase price for Pacifica was
$41.6 million. As of the acquisition date, Pacificas
total assets were $178.8 million and total deposits were
$148.8 million. Two branches in the Seattle area were
included in the acquisition. The purchase price for AABT was
$34.6 million. As of the acquisition date, AABTs
total assets were $133.0 million and total deposits were
$112.1 million. The acquisition included three branches in
the Boston area.

We intend to continue to expand within our
existing markets and move into new markets by developing new
product offerings, opening new branches and/or acquiring
financial institutions in existing markets, and entering into
and/or acquiring financial institutions in other niche markets
in keeping with our capital requirements and management
abilities.

Market Area

We have been expanding to develop both a
nationwide presence to provide services to companies doing
business in China and our local presence in areas with high
concentration of ethnic Chinese. These areas include the San
Francisco Bay Area and the Sacramento/ Stockton, the Los
Angeles, the Seattle, the Boston and the New York metropolitan
areas. We currently have 46 branches/offices in the State of
California, four branches in the New York metropolitan area, two
branches in the Seattle metropolitan area, three branches in the
Boston metropolitan area and a branch in Hong Kong, China. We
also have representative offices in Shenzhen, China and Taipei,
Taiwan. Our Northern and Southern California locations encompass
27 and 19 branches/offices, respectively.

We have tailored our products and services to
meet the financial needs of the growing Asian and ethnic Chinese
communities in our market areas. We believe that this approach,
together with the relationships of our management and Board of
Directors with the Asian and ethnic Chinese communities,
provides us with an advantage in competing for customers in
these areas.

Current Banking Services

Through our branch network, we provide a wide
range of personal and commercial banking services to small-and
medium-sized businesses, business executives, professionals and
other individuals. We offer multilingual services to all of our
customers in English, Cantonese and Mandarin.

We offer the following deposit products:



| |   |                                                                      
| | - | ---------------------------------------------------------------------
| |  | Business and personal checking, savings and money
    market accounts
|
| |  | Time deposits (certificates of deposit)                              
|
| |  | Individual Retirement Accounts (IRAs)                                

We offer a full complement of loan products,
including the following types of loans:



| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Commercial real estate loans (residential and
    nonresidential)                                                                                                      
|
| |  | Construction loans, primarily to small- and
    medium-sized developers for construction of single-family homes,
    multifamily and commercial properties             
|
| |  | Commercial, accounts receivable and inventory
    loans to small- and medium-sized businesses with annual revenues
    generally ranging from $500,000 to $20.0 million
|
| |  | Short-term trade finance facilities for terms of
    less than one year to United States importers, exporters and
    manufacturers                                    
|
| |  | Loans guaranteed by the United States Small
    Business Administration (SBA)                                                                                        
|
| |  | Residential mortgage loans                                                                                                                                             
|
| |  | Home equity lines of credit                                                                                                                                            

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We also provide a wide range of specialized
services, including international trade finance services for
business clients, merchant bankcard services, cash management
services, private client services, brokerage investment products
and services, and online banking services. In addition, we
provide trade finance facilities for customers involved in the
import and/or export of goods principally between Asia and the
United States.

UCB maintains an Internet banking web site at
www.ibankUNITED.com. This web site, which is available in both
English and Chinese character versions, provides information
about UCB as well as easy access to business and personal online
banking services, a web-based trade finance management system
and an online information services for home loans. We believe
our web site serves as a strong platform to promote UCB, to
cross-sell the products and services that UCB offers and to
deliver advanced online banking services.

Subsidiaries of the Company and UCB

UCBH has eight wholly owned subsidiaries,
including UCB. Other than UCB, the subsidiaries are special
purpose trusts formed by UCBH for the purpose of issuing
guaranteed preferred beneficial interests in UCBHs junior
subordinated debentures.

UCB has nine wholly owned subsidiaries. Two of
the nine subsidiaries, United Commercial Bank Building
Corporation and California Canton International Bank (Cayman)
Ltd., were acquired in the BCC transaction and another two
subsidiaries, Asian American Security Corporation and Asian
American Security Corporation II, were acquired in the AABT
transaction. United Commercial Bank Building Corporation owns
the Companys principal offices at 555 Montgomery
Street in San Francisco, California. California Canton
International Bank (Cayman) Ltd. provides banking services and
has deposits of $130.0 million as of December 31,
2005, and assets consisting of cash investments and securities.
A fifth subsidiary is UCBIS, a registered broker-dealer, which
commenced business in early 2004. Of the remaining four
subsidiaries of UCB, two are inactive, one acts as a trustee
under deeds of trust securing promissory notes held by UCB and
one provides investment management services.

Segment Disclosures

The disclosure regarding the Companys
segments are included in Note 26 to the Consolidated Financial
Statement as set forth herein under Item 15.

Competition

The banking and financial services industry in
California, and particularly in our market areas, is highly
competitive. This is due in part to changes in regulation,
changes in technology and product delivery systems, and the
consolidation of the industry. We compete for loans, deposits
and customers with the following types of institutions:



| |   |                                           
| | - | ------------------------------------------
| |  | Commercial banks                          
|
| |  | Savings and loan associations             
|
| |  | Securities and brokerage companies        
|
| |  | Mortgage companies                        
|
| |  | Insurance companies                       
|
| |  | Finance companies                         
|
| |  | Money market funds                        
|
| |  | Credit unions                             
|
| |  | Other nonbank financial services providers

Many of our competitors are much larger in terms
of total assets and capitalization, have greater access to
capital markets, and may offer a broader array of financial
services. To compete with these financial service providers, we
rely on local promotional activities, personal relationships
established by our officers, bilingual

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employees to effectively interact with customers,
and specialized services tailored to meet our customers
needs.


We have several major competitors targeting the
ethnic Chinese markets in California. These competitors have
branch locations in many of the same neighborhoods, provide
similar services and market their services in similar Asian
publications and media in California. Additionally, we compete
with numerous financial institutions that do not target the
ethnic Chinese markets in California.

Supervision and Regulation

Introduction

Both the Company and UCB are extensively
regulated under both federal and state laws. The following is a
summary of selected laws and regulations that govern the
activities of the Company and UCB. These laws and regulations
are intended to protect depositors, the Federal Deposit
Insurance Corporation (the FDIC) Bank Insurance Fund
and the banking system as a whole, and are not intended to
protect security holders.

Regulation of
the Company

UCBH is a bank holding company registered with
the Board of Governors of the Federal Reserve System and is
subject to the Bank Holding Company Act of 1956, as amended, and
the regulations of the Federal Reserve. UCBH files quarterly and
annual reports with the Federal Reserve, as well as any other
information that the Federal Reserve may require under the Bank
Holding Company Act. The Federal Reserve examines UCBH and its
non-bank subsidiaries. UCBH is also a bank holding company under
Delaware law and, together with UCB, is subject to examination
by the California Department of Financial Institutions (the
DFI).

The Federal Reserve has the authority to require
that UCBH stop an activity, whether conducted directly or
through a subsidiary or affiliate, if the Federal Reserve
believes that the activity poses a significant risk to the
financial safety, soundness or stability of UCB. The Federal
Reserve can also regulate provisions of certain debt instruments
issued by bank holding companies, including imposing ceilings on
interest rates and requiring reserves on such debt. In certain
cases, UCBH will be required to file written notice and obtain
approval from the Federal Reserve before repurchasing or
redeeming its equity securities. Additionally, the Federal
Reserve imposes capital requirements on UCBH as a bank holding
company.

As a registered bank holding company, UCBH is
required to obtain the approval of the Federal Reserve before it
may acquire all or substantially all of the assets of any bank,
or ownership or control of the voting shares of any bank if,
after giving effect to such acquisition of shares, UCBH would
own or control more than 5% of the voting shares of such bank.
The Bank Holding Company Act allows UCBH to acquire voting
shares of, or interest in, all or substantially all of the
assets of a bank located outside the State of California,
subject to the provisions of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994.

UCBH and any subsidiaries, which it may acquire
or organize, are deemed affiliates of UCB within the
meaning of that term as defined in the Federal Reserve Act and
Federal Reserve Regulation W. This means, for example, that
there are limitations on loans by UCB to affiliates and on
investments by UCB in affiliates stock.

UCBH and any subsidiaries are also subject to
certain restrictions with respect to engaging in non-banking
activities, including the underwriting, public sale and
distribution of securities and many insurance activities. Under
the 1999 Gramm-Leach-Bliley Financial Modernization Act,
qualifying bank holding companies may make an appropriate
election to the Federal Reserve to become a financial
holding company and may then engage in a full range of
financial activities, including insurance, securities and
merchant banking. See Gramm-Leach-Bliley Financial
Modernization Act following this discussion. Although the
Company currently qualifies to make the election, UCBH has not
elected to become a financial holding company. UCBH continues to
review its business plan to determine whether it would benefit
from the expanded powers of a financial holding company status.

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As a company with securities registered under the
Securities Exchange Act of 1934, as amended (the Exchange
Act), and listed on NASDAQ, UCBH is also subject to the
Sarbanes-Oxley Act of 2002 and regulation by the Securities and
Exchange Commission (the SEC) and NASDAQ. See the
Sarbanes-Oxley Act of 2002 section, which follows
this discussion.

Regulation of
UCB

Bank Regulators.UCB
is a California state-chartered commercial bank and its deposits
are insured by the FDIC up to the applicable legal limits. UCB
is supervised, examined and regulated by the Commissioner of the
DFI, as well as by the FDIC. Either of these regulators may take
formal enforcement action if they determine that the financial
condition, capital resources, asset quality, earnings prospects,
management, or liquidity aspects of UCBs operations are
unsatisfactory. These agencies may also take action if UCB or
its management is violating or has violated any law or
regulation. No regulator has ever taken any such action against
UCB in the past.

Safety and Soundness Standards.The FDIC has adopted guidelines that
establish standards for safety and soundness of banks and bank
holding companies. The guidelines are designed to identify
potential safety and soundness problems and ensure that banks
address those concerns before they pose a risk to the deposit
insurance fund. If the FDIC determines that an institution fails
to meet any of these standards, the agency can require the
institution to prepare and submit a plan to come into
compliance. If the agency determines that the plan is
unacceptable or is not implemented, the agency must, by order,
require the institution to correct the deficiency.

The FDIC also has safety and soundness
regulations and accompanying guidelines on asset quality and
earnings standards. The guidelines provide standards for
establishing and maintaining a system to identify problem assets
and prevent those assets from deteriorating. The guidelines also
provide standards for evaluating and monitoring earnings and for
ensuring that earnings are sufficient to maintain adequate
capital and reserves. If an institution fails to comply with a
safety and soundness standard, the agency may require the
institution to submit and implement an acceptable compliance
plan or face enforcement action.

Other Regulations.The activities of UCB as a consumer
lender are also subject to regulations under various federal
laws, including the Truth in Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act as well as the
Electronic Fund Transfer Act, the Fair Debt Collection Practices
Act, the Community Reinvestment Act, etc., in addition to
various state laws. These statutes impose requirements primarily
on the making, enforcement and collection of consumer loans and
on the types of disclosures that need to be made in connection
with such loans.

Deposit
Insurance Assessments

The FDIC charges an annual assessment ranging
from zero to $0.27 per $100 of domestic deposits, depending on
the risk that a particular institution poses to its deposit
insurance fund, to insure deposits. An institutions
premium assessment is based on the FDICs assessment of the
probability that the deposit insurance fund will incur a loss
with respect to the institution, the likely amount of any such
loss, and the revenue needs of the deposit insurance fund. The
FDIC sets semi-annual assessments in an amount necessary to
maintain or increase the reserve ratio of the insurance fund to
at least 1.25% of insured deposits or a higher percentage as
determined to be justified by the FDIC. On February 8,
2006, President Bush signed into law provisions that reform the
deposit insurance system. The new law gives the FDIC broad
authority to, among other things, require that all depository
institutions pay some deposit insurance premiums.

The Deposit Insurance Fund Act of 1996 includes
provisions to strengthen the Savings Association Insurance Fund
(the SAIF) and to repay outstanding bonds that were
issued to recapitalize the SAIFs predecessor as a result
of payments made due to the insolvency of savings and loan
associations and other federally insured savings institutions.
After January 1, 2001, banks must contribute towards paying
off the financing bonds, including interest. In 2005, the cost
to UCB was $0.02 per $100 of deposits for a total of $742,000.

6



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Capital
Requirements

UCB (on a consolidated basis) is subject to the
risk-based capital guidelines of the FDIC. These guidelines
provide a framework that is sensitive to differences in risk
between banking institutions. The amount of regulatory capital
that UCB is required to have is dependent on the risk-weighting
of its assets. The ratio of its regulatory capital to its
risk-weighted assets is called the risk-based capital
ratio. Assets and certain off-balance-sheet items are
allocated into four categories based on the risk inherent in the
asset, and are weighted from 0% to 100%. The higher the
category, the more risk UCB is subject to and thus more capital
that is required. As of December 31, 2005, UCBs total
risk-based capital ratio was 10.98%.

The guidelines divide a banks capital into
two tiers. Tier 1 capital includes common equity, retained
earnings, certain non-cumulative perpetual preferred stock, and
minority interests in equity accounts of consolidated
subsidiaries. Goodwill and other intangible assets (except for
mortgage servicing rights and purchased credit card
relationships, subject to certain limitations) are subtracted
from Tier 1 capital.

Tier 2 capital includes, among other items,
cumulative perpetual and long-term, limited-life preferred
stock, mandatory convertible securities, certain hybrid capital
instruments, term subordinated debt and the allowance for loan
losses (subject to certain limitations). In addition, certain
items are required to be deducted from Tier 2 capital.
Banks must maintain a total risk-based capital ratio of 8%, of
which at least 4% must be Tier 1 capital, in order to
maintain a status as Adequately capitalized as set
forth by the prompt corrective action rules adopted by the FDIC.
The Well capitalized levels by prompt corrective
action established by the FDIC are 10%, 6%, and 5% for total
risk-based capital ratio, Tier 1 risk-based capital ratio,
and Tier 1 leverage ratio, respectively.

In addition, the FDIC has regulations prescribing
a minimum Tier 1 leverage ratio (Tier 1 capital to
total adjusted assets, as specified in the regulations).
Although the minimum leverage ratio of Tier 1 capital to
total assets is 3%, to maintain a high regulatory rating banks
must have a minimum Tier 1 leverage ratio of 4%. The FDIC
may impose higher limits on individual institutions when
particular circumstances exist. If a bank is experiencing or
anticipating significant growth, the FDIC may expect it to have
capital ratios well above the minimum. At December 31,
2005, UCBs Tier 1 leverage ratio was 8.26%.

UCB was in compliance with the risk-based capital
and leverage ratios at both December 31, 2005 and 2004. For
further discussion of UCBs capital, refer to the Capital
Management section under Managements Discussion and
Analysis incorporated in Part II Item 7 in this
annual report on Form 10-K.

Prompt
Corrective Action

The Federal Deposit Insurance Corporation
Improvement Act of 1991 requires the federal banking regulators
to take prompt corrective action against
undercapitalized institutions. The FDIC and the other bank
regulatory agencies have established the following capital
categories to implement these provisions:



| |   |                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Well capitalized has a total risk-based capital
    ratio of 10% or greater, a Tier 1 risk-based capital ratio
    of 6% or greater, a Tier 1 leverage ratio of 5% or greater,
    and is not subject to any written agreement, order, capital
    directive, or prompt corrective action directive.
|
| |  | Adequately capitalized has a total risk-based
    capital ratio of 8% or greater, a Tier 1 risk-based capital
    ratio of 4% or greater, and a Tier 1 leverage ratio of 4% or
    greater (3% or greater if rated Composite 1 under the
    CAMELS rating system).                               
|
| |  | Undercapitalized has a total risk-based capital
    ratio of less than 8%, a Tier 1 risk-based capital ratio of
    less than 4%, or a leverage ratio of less than 4% (3% if rated
    Composite 1 under the CAMELS rating system).                                                               
|
| |  | Significantly undercapitalized has a total
    risk-based capital ratio of less than 6%, a Tier 1
    risk-based capital ratio of less than 3%, or a leverage capital
    ratio of less than 3%.                                                                                                    
|
| |  | Critically undercapitalized has a ratio of
    tangible equity to total assets that is equal to less than 2%.                                                                                                                                                                                       

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Federal regulators are required to take prompt
corrective action to solve the problems of those institutions
that fail to satisfy their minimum capital requirements. As an
institutions capital level falls, the level of
restrictions becomes increasingly severe and the institution is
allowed less flexibility in its activities.

As of December 31, 2005 and 2004, UCB was
classified as a Well capitalized institution under
these definitions.

Community
Reinvestment Act

Under the Community Reinvestment Act (the
CRA), as implemented by FDIC regulations, a bank has
an obligation, consistent with safe and sound operation, to help
meet the credit needs of its entire community, including low-
and moderate-income neighborhoods. The CRA does not establish
specific lending requirements or programs, nor does it limit a
banks discretion to develop the types of products and
services that it believes are best suited to its community. It
does require that federal banking regulators, when examining an
institution, assess the institutions record of meeting the
credit needs of its community and to take such record into
account in evaluating certain applications. As a state-chartered
non-member bank, UCB is subject to the fair lending requirements
and reporting obligations involving home mortgage and small
business lending operations of the CRA. Federal regulators are
required to provide a written examination report of an
institutions CRA performance using a four-tiered
descriptive rating system. These ratings are available to the
public. UCB has received an Outstanding rating for
the past four CRA examinations.

In March 2006, the FDIC and other federal bank
regulatory agencies announced final guidance to their CRA
regulations. The guidance clarifies, among other things, the
availability of CRA consideration for bank activities that
revitalize or stabilize designated disaster areas. The guidance
implements changes to the agencies CRA regulations that
took effect on September 1, 2005.



| |                                                           
| | ----------------------------------------------------------
| | Gramm-Leach-Bliley Financial Modernization
    Act of 1999

Effective March 11, 2000, the
Gramm-Leach-Bliley Financial Modernization Act (the
Act) eliminated most of the remaining depression-era
firewalls between banks, securities firms and
insurance companies, which were established by The Banking Act
of 1933, also known as the Glass-Steagall Act
(Glass-Steagall). Glass-Steagall sought to insulate
banks as depository institutions from the perceived risks of
securities dealing and underwriting, and related activities.

Bank holding companies, which qualify as
financial holding companies, can now, among other
things, acquire securities firms or create them as subsidiaries,
and securities firms can now acquire banks or start banking
activities through a financial holding company. This
liberalization of United States banking and financial services
regulation applies both to domestic and foreign institutions
conducting business in the United States. Consequently, the
common ownership of banks, securities firms and insurance firms
is now possible, as is the conduct of commercial banking,
merchant banking, investment management, securities underwriting
and insurance within a single financial institution using a
financial holding company structure authorized by
the Act. As noted earlier, the Company has not elected to become
a financial holding company.

The Act also requires that federal financial
institutions and securities regulatory agencies respect the
privacy of their customers and protect the security and
confidentiality of customers non-public personal
information. These regulations require, in general, that
financial institutions:



| |       |                                                                                                                                                                                                                            
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | may not disclose non-public personal information
    of customers to non-affiliated third parties without notice to
    their customers, who must have an opportunity to direct that
    such information not be disclosed;
|
| | (ii)  | may not disclose customer account numbers except
    to consumer reporting agencies; and                                                                                                                                   
|
| | (iii) | must give prior disclosure of their privacy
    policies before establishing new customer relationships.                                                                                                                   

8



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##### Table of Contents



USA PATRIOT
Act of 2001

Under Title III of the USA PATRIOT Act adopted by
the United States Congress on October 26, 2001, to combat
terrorism by strengthening the existing anti-money laundering
provisions of the Bank Secrecy Act, FDIC insured banks are
required to increase their due diligence efforts for
correspondent deposit accounts and private banking customers.
The USA PATRIOT Act requires banks to engage in additional
record keeping and reporting, requiring identification of owners
of deposit accounts, or of the customers of foreign banks with
correspondent deposit accounts, and restricting or prohibiting
certain correspondent deposit accounts. The Federal Crimes
Enforcement Network (FinCEN), a bureau of the
Department of Treasury, has also issued regulations to implement
the provisions of the USA PATRIOT Act. UCBs regulatory
compliance in this important area has been found satisfactory.

Sarbanes-Oxley
Act of 2002

Effective July 30, 2002, the Sarbanes-Oxley
Act of 2002 (the Sarbanes-Oxley Act) represents a
comprehensive revision of laws affecting corporate governance,
accounting obligations and corporate reporting. The
Sarbanes-Oxley Act is applicable to all companies with equity or
debt securities registered under Section 12 of the
Securities and Exchange Act of 1934. In particular, the
Sarbanes-Oxley Act establishes:



| |      |                                                                                                                                                                             
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  | requirements for audit committees, including
    independence, expertise, and responsibilities;                                                                             
|
| | (ii) | additional responsibilities regarding
    certification of the financial statements by the chief executive
    officer and chief financial officer of the reporting company;

(iii)  standards for auditors and
regulation of audits;



| |      |                                                                                                                                 
| | ---- | --------------------------------------------------------------------------------------------------------------------------------
| | (iv) | increased disclosure and reporting obligations
    for the reporting company and their directors and executive
    officers; and
|
| | (v)  | increased civil and criminal penalties for
    violation of the securities laws.                                                

Although we have incurred substantial accounting
and other additional expense in complying with the requirements
under the Sarbanes-Oxley Act and the resulting regulations, such
compliance has not had a material impact on our results of
operations or financial condition.

The Sarbanes-Oxley Act generally prohibits loans
by the Company to its executive officers and directors. However,
the Sarbanes-Oxley Act contains a specific exception from such
prohibitions for loans by UCB to its executive officers and
directors in compliance with federal banking regulations
restrictions on such loans. UCBs authority to extend
credit to affiliates is also governed by federal law. Such loans
are required to be made on terms substantially the same as those
offered to unaffiliated individuals and that do not involve more
than the normal risk of repayment. An exception exists for loans
made pursuant to a benefit or compensation program that is
widely available to all employees of the institution and does
not give preference to affiliates over other employees. The law
limits both the individual and aggregate amount of loans UCB may
make to affiliates based, in part, on UCBs capital
position and requires certain board approval procedures to be
followed. For the years presented, UCBs policy was to make
no loans to the Companys and its executive officers or
directors.

American Jobs
Creation Act of 2004

The American Jobs Creation Act of 2004 (the
AJCA), which was signed by the President of the
United States of America on October 22, 2004, allows the
Company, upon satisfaction of certain conditions, to repatriate
permanently reinvested foreign earnings, as defined by new
Section 965 of the Internal Revenue Code of 1986, as
amended (the Code), at an effective tax rate of
5.25%. During the three months ended June 30, 2005, the
Company elected to repatriate approximately $26.0 million
in previously unremitted foreign earnings. As a result, the
Company recorded a current taxes payable on such previously
unremitted foreign earnings of approximately $703,000 for the
three months ended June 30, 2005. In addition, the Company
has recorded a reduction to deferred tax liabilities of
approximately $4.6 million as a result of the reversal of
the

9



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##### Table of Contents



deferred tax liability related to unremitted
earnings of its foreign subsidiary. This results in a net tax
benefit of approximately $3.9 million.


Basel
Committee on Banking Supervision

The United States federal bank regulatory
agencies risk-based capital guidelines are based upon the
1988 Capital Accord of the Basel Committee on Banking
Supervision (the Basel Committee). The Basel
Committee is a committee of central banks and bank
supervisors/regulators from the major industrialized countries
that develops broad policy guidelines that each countrys
supervisors can use to set the supervisory policies they apply.
In January 2001, the Basel Committee released a proposal to
replace the 1988 Capital Accord with a new capital framework
(the Basel II Framework) that would set capital
requirements for operational risk and would also materially
change the existing capital requirements for credit risk and
market risk exposures. Operational risk is defined by the
proposal to mean the risk of direct or indirect loss resulting
from inadequate or failed internal processes, people and systems
or from external events. The 1988 accord does not include
separate capital requirements for operational risk. The
Basel II standard is intended to strengthen the regulation
of large, complex banking companies by making their capital
requirements more sensitive to changes in risk. The prospects of
reductions in risk-based capital requirements under the
Basel II Accord has given rise to competitive equity
concerns among smaller banks and thrifts.

On October 6, 2005, the United States
banking regulators issued proposed rulemaking regarding the way
that the majority of banks and thrifts in the United States
calculate their minimum capital requirements. This framework is
sometimes referred to as Basel 1-A as it is anticipated to
apply to banks that do not adopt the international Basel II
Accord. The proposed rule is intended to provide these
institutions an opportunity to comment formally about the
competitive issues created by the Basel II Accord, and what
the federal banking regulators should do about them.

Employees

At December 31, 2005, we had 1,098
employees. None of the employees are covered by a collective
bargaining agreement.

Website Access to Company Reports

Our corporate Internet address is www.ucbh.com.
We make available free of charge through our Internet web site
our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to
Section 13(a) of the Exchange Act as soon as reasonably
practicable after we electronically file such material with, or
furnish it to, the SEC.

The public may read and copy any materials that
the Company files with the SEC at the SECs Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers
that file electronically with the SEC. The Internet address of
the SEC web site is www.sec.gov.

10



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##### Table of Contents



Executive Officers of the Registrant

The following table sets forth the names, ages
and positions of the executive officers of UCBH and UCB as of
December 31, 2005. There are no family relationships
between any director or executive officer and any other director
or executive officer of UCBH or UCB.

|                    |  |     |    |                            |  |                                                                                          
|------------------- |  | --- | -- | -------------------------- |  | -----------------------------------------------------------------------------------------
|Name                |  | Age |    | Position with UCBH and UCB
|                    |  |     |    |                           
|Thomas S. Wu        |  |     | 47 |                            |  | Chairman, President and Chief Executive Officer                                          
|Jonathan H. Downing |  |     | 54 |                            |  | Executive Vice President and Director of
    Corporate Development and Investor Relations
|Daniel M. Gautsch   |  |     | 58 |                            |  | Executive Vice President and Director of
    Enterprise Risk Management                  
|Sylvia Loh          |  |     | 50 |                            |  | Executive Vice President and Chief Lending Officer                                       
|Ebrahim Shabudin    |  |     | 57 |                            |  | Executive Vice President and Chief Operating
    Officer                                 
|Alan Thian          |  |     | 53 |                            |  | Executive Vice President and Regional Director of
    Southern California                
|Ka Wah Tsui         |  |     | 52 |                            |  | Executive Vice President and General Manager,
    Greater China Region                   
|Dennis Wu           |  |     | 63 |                            |  | Director, Executive Vice President and Chief
    Financial Officer                       
|John M. Kerr        |  |     | 59 |                            |  | Senior Vice President and Chief Credit Officer                                           
|Joseph W. Kwok      |  |     | 63 |                            |  | Senior Vice President and Director of Private
    Client Services                        
|Dennis A. Lee       |  |     | 63 |                            |  | Senior Vice President, Corporate Counsel and
    Assistant Corporate Secretary           
|Gabriel Li          |  |     | 60 |                            |  | Senior Vice President and Director of Operations                                         
|Peter Y. Sun        |  |     | 61 |                            |  | Senior Vice President and Regional Director, New
    York Region                         
|David X. Wang       |  |     | 45 |                            |  | Senior Vice President and Director of Retail
    Banking                                 
|Roy Bradford Zirkle |  |     | 55 |                            |  | Senior Vice President and Chief Information
    Officer                                  
|Carol F. Zoner      |  |     | 47 |                            |  | Senior Vice President and Director of Human
    Resources                                

The Chief Executive Officer updates UCBHs
and UCBs Management Succession Plan on an annual basis for
review by the Compensation Committee and the Board of Directors.

Mr. Thomas S. Wuhas been Chairman, President, and
Chief Executive Officer of UCBH and UCB since October 10,
2001. Prior to this appointment, Mr. Wu served as President
and Chief Executive Officer of UCB effective January 1,
1998. Prior to that appointment, Mr. Wu was an Executive
Vice President and Director of UCB as of September 25,
1997. Mr. Wu was elected President and Chief Executive
Officer of UCBH effective March 26, 1998, and as a director
of UCBH on April 17, 1998. Previously, Mr. Wu was the
Director of Customer Care for Pacific Link Communications
Limited in Hong Kong where he was responsible for formulating
and implementing customer care, customer retention, and customer
communications strategies. Mr. Wu served as a director of
UCB from 1995 to 1996 and was a Senior Vice President, Head of
Retail Banking of UCB from 1992 to 1996, when in addition to
heading up the retail banking division, he directed marketing,
public relations, loan originations, branch administration and
operations control functions. Mr. Wu also served as Vice
President and Regional Manager of UCBs Southern California
Retail Banking Division from 1991 to 1992. Prior to joining
UCBH, Mr. Wu held various banking positions with First
Pacific Bank in Hong Kong, Chase Manhattan Bank, Banque
Nationale De Paris and Standard Chartered Bank.

Mr. Jonathan H. Downingwas appointed Executive Vice President
and Director of Corporate Development and Investor Relations of
UCBH and UCB effective June 9, 2005. Prior to this
appointment, Mr. Downing was Executive Vice President and
Chief Financial Officer of UCBH and UCB since January 9,
2003. Prior to that appointment, he served as Executive Vice
President, Chief Financial Officer and Treasurer of UCBH and UCB
effective January 1, 2002. Prior to that appointment, he
served as Senior Vice President and Chief Financial Officer of
UCBH and UCB since 1989. Mr. Downing served as director of
UCB from January 1991 to June 2005, and as director of UCBH from
November 1993 to June 2005. Mr. Downing joined UCB in 1986
in conjunction with the acquisition of FPM Mortgage, of which
Mr. Downing was a co-founder.

Mr. Daniel M. Gautschwas appointed Executive Vice President
and Director of Enterprise Risk Management of UCBH and UCB
effective February 7, 2005. Prior to joining UCB,
Mr. Gautsch was the Assistant Regional Director, San
Francisco Region of the FDIC responsible for overseeing over 270
insured

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##### Table of Contents



institutions in Alaska, Hawaii, Northern
California, Oregon, Washington and the Pacific Rim. His career
at the FDIC spanned more than 30 years during which he
served in various management and other positions.


Ms. Sylvia Lohwas appointed Executive Vice President
and Chief Lending Officer of UCBH and UCB effective
August 1, 2005. Prior to this appointment, Ms. Loh was
Executive Vice President and Director of Commercial Banking of
UCBH and UCB since July 1, 2002, and joined UCB as Vice
President and Head of Commercial Banking in January 1996. From
1992 to 1996, Ms. Loh held the position of Vice President,
Relationship Manager at Bank of America, International Trade
Division.

Mr. Ebrahim Shabudinwas appointed Executive Vice President
and Chief Operating Officer of UCBH and UCB effective
August 1, 2005. Prior to this appointment, he served as
Executive Vice President and Chief Credit Officer of UCBH and
UCB since January 1, 2004. Prior to joining UCBH,
Mr. Shabudin was the Managing Director of Credit Risk
Management with Deloitte & Touche LLP. Prior to that,
Mr. Shabudin worked for Bank of America in various
management positions for over 25 years with the most recent
experience as a Senior Vice President and Credit Policy
Executive.

Mr. Alan Thianhas been Executive Vice President and
Regional Director of Southern California of UCBH and UCB since
July 11, 2003. Prior to this appointment, Mr. Thian
was formerly the Chairman, President and Chief Executive Officer
of First Continental Bank (FCB) and joined UCB
following UCBs acquisition of FCB on July 11, 2003.
Prior to FCB, Mr. Thian served as President and Chief
Executive Officer of American International Bank in Los Angeles
and was previously a Senior Vice President of General Bank.

Mr. Ka Wah Tsuiwas appointed Executive Vice President
and General Manager, Greater China Region of UCBH and UCB
effective January 1, 2005. Prior to this appointment, he
served as Senior Vice President and General Manager of our Hong
Kong Branch since September 2003. Previously, Mr. Tsui held
various management positions at Citibank, First Pacific Bank and
International Bank of Asia in Hong Kong.

Mr. Dennis Wuwas appointed Executive Vice President
and Chief Financial Officer of UCBH and UCB effective
June 9, 2005. Mr. Wu was elected as a director of UCBH
and UCB at the May 19, 2005, Annual Meeting of
Stockholders. Mr. Wu joined UCBH after a thirty-seven year
career with the public accounting firm of Deloitte & Touche
LLP, where he served as National Managing Partner of the
firms Chinese Services Group since June 2000. Mr. Wu
served as a partner at Deloitte & Touche LLP from 1979 to
2004, including the partner-in-charge of the firms
Enterprise Group of Northern California, which includes its
banking, savings and loan, securities brokerage, insurance, real
estate, healthcare, and not-for-profit clients.

Mr. John M. Kerrwas appointed Senior Vice President
and Chief Credit Officer of UCBH and UCB effective
October 13, 2005. Prior to joining UCB, Mr. Kerr
served as Senior Portfolio Manager for Primus Financial
Products, an AAA-rated credit insurer in New York and a company
in which he played a key role in building the business from a
start-up in 2002 to its going public in 2004. Prior to that,
Mr. Kerr was with Bank of America for 18 years, where
he held senior positions in credit approval, corporate and
commercial banking, private banking, and international banking.
He also spent 11 years with Royal Bank of Canada in
business development and credit in corporate and commercial
banking, in strategic planning, and in international banking.

Mr. Joseph W. Kwokhas been the Senior Vice President and
Director of Private Client Services (formerly Asia Banking) of
UCBH and of UCB since June 30, 2000. Prior to his
appointment, he served as the Vice President of the Asia Banking
Center of Bank of America, San Francisco, since July 1,
1998. Prior to that, he served as Senior Vice President and
Managing Director of the Asia Banking Division at the Bank of
San Francisco since July 1, 1996.

Mr. Dennis A. Leehas been Senior Vice President and
Corporate Counsel of UCBH and UCB since January 1, 2001.
Prior to that appointment, he served as Vice President and
Corporate Counsel of UCBH and UCB since 1993.

Mr. Gabriel Lihas been Senior Vice President and
Director of Operations of UCBH and UCB since February 1,
2002. Previously, Mr. Li was Executive Vice President and
Chief Financial Officer of Guaranty Bank of California from
April 1993 to January 2002. Prior to that, he served as
Executive Vice President and

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Chief Operations Officer of Security Pacific
Asian Bank, previously known as the Bank of Canton Ltd. in Hong
Kong since April 1974.


Mr. Peter Y. Sunhas been Senior Vice President and
Regional Director, New York Region of UCBH and UCB since June
2003. Previously, Mr. Sun was Executive Vice President with
California Pacific Bank.

Mr. David X. Wanghas been Senior Vice President and
Director of Retail Banking for UCBH and UCB since
October 16, 2004. Prior to this appointment, Mr. Wang
was the First Vice President and Head of Business Banking Group
of UCB since January 1998. Previously, Mr. Wang was the
Senior Vice President and Regional Manager in charge of Small
Business Lending with East West Bank from 1994 to 1998. Prior to
that, Mr. Wang was a Vice President with General Bank and
was responsible for assisting in the establishment of the SBA
Division as well as loan production and administration from 1990
to 1994.

Mr. Roy Bradford Zirklehas been Senior Vice President and
Chief Information Officer of UCBH and UCB since August 1,
2003. Previously, Mr. Zirkle served as First Vice President
and Manager of Information Services of UCB since 1993. Prior to
that appointment, he served as Vice President and Manager of
Central Operations of UCB since 1991.

Ms. Carol F. Zonerhas been Senior Vice President and
Director of Human Resources of UCBH and UCB since
October 1, 2004. Previously, Ms. Zoner served as
Director of Human Resources with Heller Ehrman White &
McAuliffe LLP. Prior to that, Ms. Zoner was the Senior Vice
President of Human Resources for Bayview Capital Corporation
from 1998 to 2003. She has more than 20 years of experience
in Human Resources management, the majority of which is in the
financial services industry.






|         |             
|-------- | ------------
|Item 1A. | Risk Factors

The following describes some of the risk factors
associated with the Company:

Our business strategy includes the execution
of growth plans, and our financial condition and results of
operations could be negatively affected if we fail to grow or
fail to manage our growth effectively.

We expect to experience growth in both loans and
deposits as well as in our level of operations. Achieving our
growth targets will require us to attract customers that
currently do business at other financial institutions in our
existing and future markets. Our ability to successfully grow
will depend on a variety of factors, including our ability to
attract and retain experienced management staff, the continued
availability of desirable business opportunities, the
competitive responses from other financial institutions in our
markets and our ability to effectively manage our growth. While
we believe we have the management resources and internal systems
in place to successfully manage our future growth, there can be
no assurance that we will be able to achieve our growth goals.

Changing interest rates may reduce net
interest income.

Banking companies earnings depend largely
on the relationship between the cost of funds, primarily
deposits, and the yield on earning assets, primarily loans and
investments. This relationship, known as the interest rate
margin, is subject to fluctuation and is affected by economic
and competitive factors, which influence interest rates, the
volume and mix of interest-earning assets and interest-bearing
liabilities, and the level of nonperforming assets. Fluctuations
in interest rates will also affect the customers demand
for the products and services that we offer.

The Company operations are subject to
fluctuations in interest rates, to the degree that its
interest-bearing liabilities may reprice or mature more slowly
or more rapidly or on a different basis than their
interest-earning assets. Given our current volume and mix of
interest-bearing liabilities and interest-earning assets, the
Companys net interest margin would be expected to increase
during times of rising interest rates and, conversely, to
decline during times of falling interest rates. As a result,
significant fluctuations in interest rates may have an adverse
effect on the Companys consolidated results of operations.

13



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Our business is subject to the success of the
local economies in which we operate.

Because the majority of our borrowers and
depositors are individuals and businesses located and doing
business in the state of California, our success depends on the
strength of the California economy. In addition, as we expand
into other areas in the United States and into China, we will
become increasingly dependent on the local economies in those
markets, as well. Adverse economic conditions in these markets
could reduce our growth rate, affect the ability of our
customers to repay their loans and generally affect our
financial condition and results of operations. Conditions, such
as inflation, recession, unemployment, high interest rates,
short money supply, scarce natural resources, international
disorders, terrorism and other factors beyond our control, may
adversely affect our profitability. In addition, any sustained
period of increased payment delinquencies, foreclosures or
losses caused by adverse market or economic conditions in our
markets could adversely affect the value of our assets,
revenues, results of operations and financial condition.

Our continued pace of growth may require us to
raise additional capital in the future, but that capital may not
be available when it is needed.

We are required by federal regulatory authorities
to maintain adequate levels of capital to support our
operations. We believe that our capital resources will satisfy
these capital requirements for the foreseeable future. However,
we may at some point need to raise additional capital to support
our continued growth. Our ability to raise additional capital,
if needed, will depend on conditions in the capital markets at
that time, which are outside our control. Accordingly, we cannot
be assured of our ability to raise additional capital, if
needed, on terms acceptable to us. If we cannot raise additional
capital when needed, our ability to further expand our
operations through internal growth and acquisitions could be
materially impaired.

Our wholesale funding sources may prove
insufficient to replace deposits at maturity and support our
future growth.

We must maintain sufficient funds to respond to
the needs of our depositors and borrowers. As a part of our
liquidity management, we use a number of funding sources in
addition to core deposit growth and repayments and maturities of
loans and investments. As we continue to grow, we are likely to
become more dependent on these sources, which include Federal
Home Loan Bank advances, proceeds from the sale of loans,
brokered certificates of deposit and a line of credit from
another financial institution. Our financial flexibility could
be severely constrained if we are unable to maintain our access
to funding or if adequate financing is not available to
accommodate future growth at acceptable interest rates. Finally,
if we are required to rely more heavily on more expensive
funding sources to support future growth, our revenues may not
increase proportionately to cover our costs. In this case, our
operating margins and profitability would be adversely affected.

Intense competition exists for loans and
deposits.

The banking and financial services business is
highly competitive. Competitive pressure is increasing as a
result of changes in regulation, changes in technology and
product delivery systems, and the accelerating pace of
consolidation among financial service providers. The Company
must compete for loans, deposits and customers with other
commercial banks, savings and loan associations, securities and
brokerage companies, mortgage companies, insurance companies,
finance companies, money market funds, credit unions and other
nonbank financial service providers. Many of these competitors
are much larger in total assets and capitalization, have greater
access to capital markets and offer a broader array of financial
services than we do. There can be no assurance that the Company
will be able to compete effectively in its markets and the
Companys consolidated results of operations could be
adversely affected if circumstances affecting the nature or
level of competition change.

Our allowance for loan losses may prove to be
insufficient to absorb losses in our loan portfolio.

Like all financial institutions, we maintain an
allowance for loan losses to provide for loans in our portfolio
that may not be repaid in their entirety. We believe that our
allowance for loan losses is maintained at a level that is
adequate to absorb probable losses inherent in our loan
portfolio as of the respective balance sheet date.

14



---



##### Table of Contents



However, our allowance for loan losses may not be
sufficient to cover actual loan losses, and future provisions
for loan losses could materially adversely affect our operating
results.


If the value of real estate in our primary
market areas were to decline materially, a significant portion
of our loan portfolio could become under-collateralized, which
could have a material adverse effect on us.

With most of our loans currently concentrated in
the state of California, a decline in local economic conditions
could adversely affect the value of the real estate collateral
securing our loans. A decline in property values would diminish
our ability to recover on defaulted loans by selling the real
estate collateral, making it more likely that we would suffer
losses on defaulted loans. Additionally, a decrease in asset
quality could require additions to our allowance for loan losses
through increased provisions for loan losses, which would reduce
our future profits. Real estate values are affected by various
factors in addition to local economic conditions, including,
among other things, changes in general or regional economic
conditions, governmental rules or policies and natural disasters.

The loan portfolio may not perform as
expected.

The Companys performance and prospects will
depend to a significant extent on the performance of its loan
portfolio. There are a number of factors that could negatively
impact the performance of the loan portfolio including, among
others, the general political and economic conditions in the
Companys markets, significant changes in the interest rate
environment, pressures from products and services from
competitors and on any negative changes in the financial
condition of the individual borrowers. In addition, to the
extent that the Company does not retain the customers that it
acquires in its acquisitions or incurs additional expenses in
retaining them, there could be adverse effects on the
Companys future consolidated results of operations.

Changes in government regulation and monetary
policy may have an unfavorable impact on the Company.

The banking industry is subject to extensive
federal and state supervision and regulation. Such regulations
limit the manner in which the Company conducts its business,
undertakes new investments and activities, and obtains
financing. These regulations have been designed primarily for
the protection of the deposit insurance funds and consumers, and
not to benefit holders of the Companys common stock.
Financial institution regulation has also been the subject of
considerable legislation in recent years, and may be the subject
of further significant legislation in the future, none of which
is within our control. New legislation or changes in, or repeal
of, existing laws may cause the Companys consolidated
results to differ materially from its historical performance.
Further, federal monetary policy, particularly as implemented
through the Federal Reserve System, significantly affects credit
conditions for financial institutions, primarily through open
market operations in United States government securities, the
discount rate for bank borrowings, and bank reserve
requirements. Any material change in these conditions would
likely have a material impact on the Companys consolidated
results of operations.

We may be unable to successfully integrate the
operations of future acquisitions.

We have announced that our future growth strategy
could include acquiring other financial service companies. While
we have just successfully completed the integration of two
acquisitions, we could encounter unplanned difficulties
associated with integrating the operations of any new
acquisitions. These difficulties could include retaining
customers, successful conversion of systems and processes,
combining different corporate cultures, and retaining key
employees. Any problems with integration would negatively impact
the Companys day-to-day operations and increase the costs
associated with the acquisition, which, in turn, could
negatively affect the Companys results of operations.

Unanticipated costs relating to the
Companys recent acquisitions could reduce its future
earnings per share.

We believe that we have reasonably estimated the
likely costs of integrating the operations of our recent
acquisitions into the Companys operations and the
incremental operating costs that will impact its operations

15



---



##### Table of Contents



subsequent to the acquisitions. However, it is
possible that unexpected transition costs or future operating
expenses, as well as other types of unanticipated developments,
could have a material adverse effect on the Companys
future results of operations and financial condition. If costs
and expenses of this type are incurred, the Companys
earnings per share could be reduced as a result.


The Company may engage in further expansion
through new branch openings or acquisitions, which could
adversely affect net income.

The Company has disclosed its intention to take
advantage of future expansion opportunities. There are risks
associated with such expansion and, in particular, expansion
through acquisitions. These risks include, among others,
incorrectly assessing the asset quality of a bank acquired in a
particular acquisition, encountering greater than anticipated
costs of opening new branches or integrating acquired
businesses, facing resistance from customers or employees, and
being unable to profitably deploy assets acquired through
expansion or in acquisitions. Additional country- and
region-specific risks are associated with any expansion and
acquisitions that take place outside the United States,
including in China. To the extent UCBH issues capital stock in
connection with additional acquisitions, these acquisitions and
related stock issuances may have a dilutive effect on earnings
per share and share ownership.

UCBH may issue additional capital stock in the
future.

To fund internal growth and future acquisitions,
UCBH may offer shares of its common stock to the public and
future acquirees. Any such offerings would have a dilutive
effect on earnings per share and share ownership. In addition,
there is no assurance that UCBH would be able to effectively
utilize any additional capital in the manner that it has done so
in the past. UCBH does not currently have any definitive
understandings or plans to raise additional capital.






|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments

None.






|        |           
|------- | ----------
|Item 2. | Properties

UCBH Holdings, Inc.s (UCBH)
principal office is located at 555 Montgomery Street in San
Francisco, California, which also serves as UCBHs and
United Commercial Banks (UCB) headquarters.
UCB owns this office building through its subsidiary, United
Commercial Bank Building Corporation. UCB also owns an office
building located at 711 Van Ness Avenue in San Francisco,
California. With the purchase of Asian American Bank & Trust
Company, UCB acquired two buildings in the Boston, Massachusetts
area, which serve as branch and administrative facilities for
the Boston banking operations. In addition, UCB owns five branch
facilities and leases all of its remaining branch and office
facilities under noncancellable operating leases. Some of these
branch leases contain renewal options and some included rent
escalation clauses.






|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

United Commercial Bank has been a party to
litigation incidental to various aspects of its operations, in
the ordinary course of business. Management is not currently
aware of any litigation that in managements opinion is
likely to have a material adverse impact on the UCBH Holdings,
Inc.s consolidated financial condition or the results of
operations.






|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

No matters were submitted to a vote of security
holders or otherwise for the three months ended
December 31, 2005.

16



---



##### Table of Contents



PART II






|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

Market Information

UCBH Holdings, Inc.s (UCBH)
common stock is traded on The NASDAQ Stock Market
(NASDAQ) under the symbol UCBH. At
December 31, 2005, there were 34,026 stockholders of the
UCBHs common stock. The last reported sale price of the
common stock on NASDAQ on January 31, 2006, was $17.35 per
share.

The high and low sales prices of UCBHs
common stock, as quoted on NASDAQ, during the years ended
December 31, 2005 and 2004, were as follows:

|                                 |  |         |       |         |  |      |       |     |  |   |       |  |  |   |       | 
|-------------------------------- |  | ------- | ----- | ------- |  | ---- | ----- | --- |  | - | ----- |  |  | - | ----- | 
|                                 |  |         |       |        
|                                 |  | 2005(1) |       | 2004(1)
|                                 |  |         |       |        
|                                 |  | High    |       | Low     |  | High |       | Low
|                                 |  |         |       |         |  |      |       |    
|Three months ended March 31,     |  | $       | 23.03 |         |  | $    | 19.74 |     |  | $ | 20.75 |  |  | $ | 17.92 | 
|Three months ended June 30,      |  |         | 20.45 |         |  |      | 15.07 |     |  |   | 21.13 |  |  |   | 16.86 | 
|Three months ended September 30, |  |         | 19.70 |         |  |      | 16.20 |     |  |   | 20.64 |  |  |   | 18.43 | 
|Three months ended December 31,  |  |         | 18.80 |         |  |      | 16.31 |     |  |   | 23.98 |  |  |   | 18.92 | 



---



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(1) | Reflects the effects of a two-for-one stock split
    that was completed on April 12, 2005.

Dividends

The frequency and amount of dividends paid during
the years ended December 31, 2005 and 2004, were as follows:

|                                |  |                    |       |         |  |              |       |             |  |   |       |  |  |   |       | 
|------------------------------- |  | ------------------ | ----- | ------- |  | ------------ | ----- | ----------- |  | - | ----- |  |  | - | ----- | 
|                                |  |                   
|                                |  | Three Months Ended
|                                |  |                   
|                                |  | March 31           |       | June 30 |  | September 30 |       | December 31
|                                |  |                    |       |         |  |              |       |            
|Year ended December 31, 2005(1) |  | $                  | 0.025 |         |  | $            | 0.025 |             |  | $ | 0.025 |  |  | $ | 0.025 | 
|Year ended December 31, 2004(1) |  |                    | 0.020 |         |  |              | 0.020 |             |  |   | 0.020 |  |  |   | 0.020 | 



---



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(1) | Reflects the effects of a two-for-one stock split
    that was completed on April 12, 2005.

On January 26, 2006, UCBHs Board of
Directors declared a dividend of $0.03 per share payable on
April 12, 2006, to the stockholders of record as of
March 31, 2006.

17



---



##### Table of Contents






Item 6.     Selected
Financial Data

The following selected financial data should be
read in conjunction with the UCBH Holdings, Inc. and
subsidiaries consolidated financial statements and the
accompanying notes presented elsewhere in this annual report on
Form 10-K (dollars in thousands, except per share amounts):

|                                                               |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |       |  
|-------------------------------------------------------------- | ------------------------- | ------------ | --------- | ----- | - | ---- | --------- | ----- | - | ---- | --------- | ----- | - | - | --------- | ----- | - | - | --------- | ----- | -
|                                                               |                           |             
|                                                               |                           | December 31,
|                                                               |                           |             
|                                                               |                           | 2005         |           | 2004  |   | 2003 |           | 2002  |   | 2001
|                                                               |                           |              |           |       |   |      |           |       |   |     
|Financial Condition and Other Data:                            |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |      
|Total assets                                                   |                           | $            | 7,961,117 |       |   | $    | 6,315,681 |       |   | $    | 5,587,927 |       |   | $ | 4,853,636 |       |   | $ | 2,932,043 |      
|Loans held in portfolio, net                                   |                           |              | 5,774,118 |       |   |      | 3,994,269 |       |   |      | 3,713,255 |       |   |   | 2,978,945 |       |   |   | 2,229,753 |      
|Securities available for sale                                  |                           |              | 1,117,724 |       |   |      | 1,169,140 |       |   |      | 1,221,070 |       |   |   | 1,469,387 |       |   |   | 541,921   |      
|Securities held to maturity                                    |                           |              | 308,608   |       |   |      | 325,202   |       |   |      | 284,712   |       |   |   | 111,994   |       |   |   | 51,472    |      
|Deposits                                                       |                           |              | 6,264,169 |       |   |      | 5,215,862 |       |   |      | 4,483,521 |       |   |   | 4,006,818 |       |   |   | 2,466,173 |      
|Subordinated debentures                                        |                           |              | 146,000   |       |   |      | 136,000   |       |   |      | 136,000   |       |   |   | 136,000   |       |   |   | 36,000    |      
|Short-term borrowings                                          |                           |              | 279,425   |       |   |      | 72,310    |       |   |      | 234,134   |       |   |   | 77,500    |       |   |   | 5,000     |      
|Long-term borrowings                                           |                           |              | 562,033   |       |   |      | 334,952   |       |   |      | 271,408   |       |   |   | 275,874   |       |   |   | 233,000   |      
|Stockholders equity (1)                                       |                           |              | 603,514   |       |   |      | 484,012   |       |   |      | 414,466   |       |   |   | 282,367   |       |   |   | 174,124   |      
|Nonperforming assets                                           |                           |              | 19,133    |       |   |      | 12,574    |       |   |      | 5,857     |       |   |   | 4,654     |       |   |   | 991       |      
|Ratio of stockholders equity to total assets                  |                           |              | 7.58      | %     |   |      | 7.66      | %     |   |      | 7.42      | %     |   |   | 5.82      | %     |   |   | 5.94      | %    
|Asset Quality Data:                                            |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |      
|Loan delinquency ratio                                         |                           |              | 0.48      | %     |   |      | 0.90      | %     |   |      | 0.87      | %     |   |   | 0.88      | %     |   |   | 0.64      | %    
|Nonperforming assets to total assets                           |                           |              | 0.24      |       |   |      | 0.20      |       |   |      | 0.10      |       |   |   | 0.10      |       |   |   | 0.03      |      
|Nonperforming loans to total loans                             |                           |              | 0.32      |       |   |      | 0.29      |       |   |      | 0.15      |       |   |   | 0.15      |       |   |   | 0.04      |      
|Allowance for loan losses to total loans held in
    portfolio |                           |              | 1.11      |       |   |      | 1.39      |       |   |      | 1.54      |       |   |   | 1.61      |       |   |   | 1.53      |      
|Allowance for loan losses to nonperforming loans               |                           |              | 337.33    |       |   |      | 449.12    |       |   |      | 992.42    |       |   |   | 1,049.96  |       |   |   | 3,486.38  |      
|Total loan to deposit ratio                                    |                           |              | 95.71     |       |   |      | 83.91     |       |   |      | 84.57     |       |   |   | 75.57     |       |   |   | 91.82     |      
|Regulatory Capital Ratios:                                     |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |      
|United Commercial Bank and subsidiaries:                       |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |      
|                                                               | Tier 1 risk-based capital |              |           | 9.91  | % |      |           | 11.42 | % |      |           | 10.92 | % |   |           | 10.26 | % |   |           | 9.65  | %
|                                                               | Total risk-based capital  |              |           | 10.98 |   |      |           | 12.67 |   |      |           | 12.18 |   |   |           | 11.52 |   |   |           | 10.91 |  
|                                                               | Tier 1 leverage           |              |           | 8.26  |   |      |           | 8.49  |   |      |           | 7.86  |   |   |           | 7.57  |   |   |           | 7.26  |  
|UCBH Holdings, Inc. and subsidiaries:                          |                           |              |           |       |   |      |           |       |   |      |           |       |   |   |           |       |   |   |           |      
|                                                               | Tier 1 risk-based capital |              |           | 10.26 |   |      |           | 11.98 |   |      |           | 11.69 |   |   |           | 9.70  |   |   |           | 9.99  |  
|                                                               | Total risk-based capital  |              |           | 11.33 |   |      |           | 13.23 |   |      |           | 12.94 |   |   |           | 10.95 |   |   |           | 11.24 |  
|                                                               | Tier 1 leverage ratio     |              |           | 8.56  |   |      |           | 8.92  |   |      |           | 8.42  |   |   |           | 7.15  |   |   |           | 7.52  |  

|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                                        |  |                        
|                                                        |  | Year Ended December 31,
|                                                        |  |                        
|                                                        |  | 2005                    |          | 2004 |  | 2003 |         | 2002 |  | 2001
|                                                        |  |                         |          |      |  |      |         |      |  |     
|Operating Data:                                         |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Interest and dividend income                            |  | $                       | 402,400  |      |  | $    | 300,064 |      |  | $    | 260,262 |   |  | $ | 205,178 |   |  | $ | 202,787  |  
|Interest expense                                        |  |                         | (161,910 | )    |  |      | (92,583 | )    |  |      | (91,714 | ) |  |   | (80,232 | ) |  |   | (104,330 | )
|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Net interest income                                     |  |                         | 240,490  |      |  |      | 207,481 |      |  |      | 168,548 |   |  |   | 124,946 |   |  |   | 98,457   |  
|Provision for loan losses                               |  |                         | (6,091   | )    |  |      | (4,201  | )    |  |      | (9,967  | ) |  |   | (9,673  | ) |  |   | (5,620   | )
|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Net interest income after provision for loan
    losses |  |                         | 234,399  |      |  |      | 203,280 |      |  |      | 158,581 |   |  |   | 115,273 |   |  |   | 92,837   |  
|Noninterest income                                      |  |                         | 26,684   |      |  |      | 30,877  |      |  |      | 23,203  |   |  |   | 12,145  |   |  |   | 6,913    |  
|Noninterest expense (2)                                 |  |                         | (116,913 | )    |  |      | (99,153 | )    |  |      | (80,208 | ) |  |   | (64,352 | ) |  |   | (49,304  | )
|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Income before income tax expense                        |  |                         | 144,170  |      |  |      | 135,004 |      |  |      | 101,576 |   |  |   | 63,066  |   |  |   | 50,446   |  
|Income tax expense                                      |  |                         | (46,344  | )    |  |      | (49,401 | )    |  |      | (36,938 | ) |  |   | (24,138 | ) |  |   | (19,958  | )
|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Net income                                              |  | $                       | 97,826   |      |  | $    | 85,603  |      |  | $    | 64,638  |   |  | $ | 38,928  |   |  | $ | 30,488   |  
|                                                        |  |                         |          |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  

18



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##### Table of Contents



|                                           |  |                         |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|------------------------------------------ |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                           |  |                        
|                                           |  | Year Ended December 31,
|                                           |  |                        
|                                           |  | 2005                    |       | 2004 |  | 2003 |       | 2002 |  | 2001
|                                           |  |                         |       |      |  |      |       |      |  |     
|Per Share Data:                            |  |                         |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|Basic earnings per share (1)(3)            |  | $                       | 1.06  |      |  | $    | 0.95  |      |  | $    | 0.74  |   |  | $ | 0.49  |   |  | $ | 0.40  |  
|Diluted earnings per share (1)(3)          |  |                         | 1.02  |      |  |      | 0.90  |      |  |      | 0.71  |   |  |   | 0.47  |   |  |   | 0.38  |  
|Dividends declared per share (3)           |  |                         | 0.10  |      |  |      | 0.08  |      |  |      | 0.06  |   |  |   | 0.05  |   |  |   | 0.04  |  
|Operating Ratios and Other Data:           |  |                         |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|Return on average assets                   |  |                         | 1.40  | %    |  |      | 1.44  | %    |  |      | 1.26  | % |  |   | 1.14  | % |  |   | 1.12  | %
|Return on average equity                   |  |                         | 18.42 |      |  |      | 18.92 |      |  |      | 18.84 |   |  |   | 18.42 |   |  |   | 19.58 |  
|Efficiency ratio (4)                       |  |                         | 43.76 |      |  |      | 41.60 |      |  |      | 41.83 |   |  |   | 46.94 |   |  |   | 46.79 |  
|Noninterest expense to average assets      |  |                         | 1.68  |      |  |      | 1.67  |      |  |      | 1.56  |   |  |   | 1.88  |   |  |   | 1.82  |  
|Average equity to average assets           |  |                         | 7.61  |      |  |      | 7.62  |      |  |      | 6.66  |   |  |   | 6.18  |   |  |   | 5.74  |  
|Dividend payout ratio (5)                  |  |                         | 9.80  |      |  |      | 8.89  |      |  |      | 8.51  |   |  |   | 10.64 |   |  |   | 10.39 |  
|Net charge-offs to average gross loans (6) |  |                         | 0.03  |      |  |      | 0.11  |      |  |      | 0.06  |   |  |   | 0.23  |   |  |   | 0.00  |  
|Interest rate spread (7)                   |  |                         | 3.25  |      |  |      | 3.42  |      |  |      | 3.21  |   |  |   | 3.46  |   |  |   | 3.30  |  
|Net interest margin (7)                    |  |                         | 3.58  |      |  |      | 3.63  |      |  |      | 3.41  |   |  |   | 3.73  |   |  |   | 3.69  |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In conjunction with the acquisitions of Asian
    American Bank & Trust Company on November 28, 2005,
    Pacifica Bancorp, Inc. on October 31, 2005, First
    Continental Bank on July 11, 2003, and Bank of Canton of
    California on October 28, 2002, UCBH issued 878,000,
    1.2 million, 2.3 million and 2.7 million shares
    of common stock, respectively.
|   
|(2) | Includes $6.75 million of expense
    representing litigation settlement in 2002.                                                                                                                                                                                                                                                                                       
|   
|(3) | UCBH completed a two-for-one stock split during
    the years ended December 31, 2005, 2003 and 2001. Accordingly,
    for the years ended December 31, 2004, 2003, 2002 and 2001,
    basic earnings per share, diluted earnings per share and
    dividends per share have been adjusted to reflect the effect of
    the stock splits.                               
|   
|(4) | Represents noninterest expense divided by the
    total of our net interest income before provision for loan
    losses and our noninterest income.                                                                                                                                                                                                                     
|   
|(5) | Dividends declared per share as a percentage of
    diluted earnings per share.                                                                                                                                                                                                                                                                                         
|   
|(6) | Average gross loans include loans held for sale.                                                                                                                                                                                                                                                                                                                        
|   
|(7) | Calculated on a nontax equivalent basis.                                                                                                                                                                                                                                                                                                                                

19



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##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operation

EXECUTIVE SUMMARY

UCBH Holdings, Inc. (UCBH) is a
$7.96 billion bank holding company with headquarters in
San Francisco, California. Its operations are conducted
primarily through its banking subsidiary, United Commercial Bank
(UCB; UCBH, UCB and UCBs wholly owned
subsidiaries are collectively referred to as the
Company, we, us or
our). UCB operates through 58 offices in the United
States and Asia and is a leader in providing financial services
to the ethnic Chinese in the United States. UCBs ability
to generate revenue is affected not only by changes in economic
conditions, changes in interest rates and levels of customer
confidence, but also by UCBs competition and the
regulatory environment in which UCB operates.

In providing its services, UCB has two primary
goals:



| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | To be the best performing commercial bank
    primarily serving the ethnic Chinese in the United States by
    continuing to expand our franchise in areas of high growth
    opportunities.                
|
| |  | To further differentiate ourselves from our
    competitors by providing seamless service to customers doing
    business across the Pacific Rim by establishing offices in
    strategic locations in Asia.



| |                           
| | --------------------------
| | Services to Ethnic Chinese

UCB intends to continue establishing branches in
areas of high Asian population concentration to attract retail
deposits through de novo branch openings as well as through
acquisitions. At the beginning of 2005, we had 46 domestic
branches and offices; twenty-seven in Northern California,
nineteen in Southern California and two in the New York
metropolitan area. UCB also has a branch in Hong Kong and
representative offices in Shenzhen, China and Taipei, Taiwan.
During 2005, UCB expanded its franchise by adding two additional
branches in the New York metropolitan area, and by completing
two acquisitions that added a presence in the Pacific Northwest
and the Greater New England area.

In the Pacific Northwest, we completed the
acquisition of Pacifica Bancorp, Inc. (Pacifica), a
$176.9 million bank holding company with two branches in
the Seattle metropolitan area. The addition of Pacifica has
expanded UCBs retail banking operations such that UCB is
now located in the three largest centers of ethnic Chinese
population on the west coast. UCB is planning on additional
expansion in this market in 2006.

In the Greater New England area, we completed the
acquisition of Asian American Bank & Trust Company
(AABT), a $133.0 million bank with three branch
offices in the Boston metropolitan area. For 2006, UCB is
planning additional branch openings in both the New York
metropolitan and in Boston metropolitan areas.



| |               
| | --------------
| | Asia Locations

Currently, UCB has a fully operating branch in
Hong Kong and representative offices in Shenzhen, China and
Taipei, Taiwan. As of December 31, 2005, UCBs Hong
Kong branch had total deposits of $555.5 million, a 69.0%
increase over year-end 2004. This office has expanded its trade
finance services since its opening and the fees associated with
those services have also increased over last year. In addition,
Pacifica has added a strong trade finance platform to UCBs
domestic operations and we anticipate growth opportunities in
the trade finance area.

UCB intends to establish additional overseas
offices and branches to facilitate international trade across
the Pacific Rim. In this regard, UCB has focused much of its
growth strategies toward the expanding opportunities that have
been emerging from China. Trade between China and the United
States has increased steadily over the past several years and
the trade finance business has followed. We anticipate that the
opportunities for growth presented by the expansion of the
Chinese economy will continue for some time.

20



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| |                
| | ---------------
| | Keys to Success

Success in attaining our goals will be dependent
on our adherence to the fundamentals that we believe are vital
to our ongoing successful growth. These fundamentals include:



| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continued enhancement of UCBs business
    development capabilities, in terms of both diversification in
    the development of products and services and in developing new
    ways to differentiate UCB in the marketplace.
|
| |  | Continued development of a strong trade finance
    platform, which will enable UCB to take advantage of the
    opportunities as they continue to develop in the Pacific Rim.                                                
|
| |  | Continued maintenance of credit quality at the
    highest level.                                                                                                                                                             
|
| |  | Continued focus on maintaining and enhancing our
    risk and compliance management infrastructures.                                                                                                                          
|
| |  | Continued attention to the design and development
    of our existing unique delivery networks to ensure that UCB
    products and services are easily available to its customers.                                            
|
| |  | Continued concentration on maintaining a senior
    management team with the financial services expertise required
    by our operations and goals.                                                                           
|
| |  | Continued development of UCBs systems
    infrastructure to support our planned growth.                                                                                                                                      

In addition, we believe that we have a unique set
of capabilities that provide us with an in-depth understanding
of the ethnic Chinese population, our targeted market. These
capabilities help to differentiate us and enable us to enhance
the service that we provide. These capabilities include:



| |   |                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------
| |  | Trilingual branch staff, lending/relationship
    officers, marketing team and phone banking service.
|
| |  | Automated teller machines in both Chinese and
    English.                                           
|
| |  | Product brochures in both Chinese and English.                                                       
|
| |  | 7-day banking in selected locations.                                                                 
|
| |  | E-business services in both Chinese and English.                                                     
|
| |  | Products other than just loans and deposits,
    including investment products and services.         

MANAGEMENTS OVERVIEW OF 2005
PERFORMANCE

We are providing you with an overview of what we
believe are the most significant factors and developments that
impacted the Companys results for 2005 and that could
impact future results. We encourage you to carefully read this
full document for more detailed information with regard to the
trends, events and uncertainties that have impacted us.

The Companys primary or core
business consists of providing commercial and retail banking
services to both individuals and companies in markets with high
concentration of ethnic Chinese. We believe that this core
banking business performed well in 2005 as the general economic
environment both in these markets and generally throughout the
United States improved. However, the challenges presented by the
general interest rate environment that we must work within did
impact the Companys performance in 2005.

The Company reported earnings for 2005 of
$97.8 million or $1.02 per diluted share. This
compares with $85.6 million or $0.90 per diluted share
in 2004 and $64.6 million or $0.71 per diluted share
in 2003. The per diluted share amounts for both 2004 and 2003
have been adjusted to reflect a two-for-one stock split that
took effect in 2005. The 2005 earnings differ from the
$1.03 per diluted share that was included in our Earnings
Release dated January 26, 2006, as a result of events that
came to managements attention subsequent to the issuance
of the Earnings Release. Return on average equity was 18.42% and
return on average assets was 1.40% in 2005, compared with 18.92%
and 1.44% in 2004 and 18.84% and 1.26% in 2003, respectively.

When we evaluate the Companys performance,
we focus on five primary areas: (1) loan and deposit
growth, (2) credit quality, (3) net interest margin,
(4) expense control and (5) capital adequacy.

21



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##### Table of Contents





| |                        
| | -----------------------
| | Loan and Deposit Growth

Since 2001, UCB has experienced steady and strong
growth in loans and deposits. This was accomplished in light of
a challenging economic environment that was present during a
large portion of this time period. The changes in net loans and
total deposits for each of the five years ended
December 31, 2005, were as follows (dollars in thousands):

|                             |  |              |           |      |  |      |           |      |  |      |           |  |  |   |           |  |  |   |           | 
|---------------------------- |  | ------------ | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | --------- | 
|                             |  |             
|                             |  | December 31,
|                             |  |             
|                             |  | 2005         |           | 2004 |  | 2003 |           | 2002 |  | 2001
|                             |  |              |           |      |  |      |           |      |  |     
|Loans held in portfolio, net |  | $            | 5,774,118 |      |  | $    | 3,994,269 |      |  | $    | 3,713,255 |  |  | $ | 2,978,945 |  |  | $ | 2,229,753 | 
|Deposits                     |  |              | 6,264,169 |      |  |      | 5,215,862 |      |  |      | 4,483,521 |  |  |   | 4,006,818 |  |  |   | 2,466,173 | 

The loan portfolio has increased 159.0% since
2001 and deposits have grown 154.0% during this same period. The
growth that was experienced in loans and deposits reflects
growth achieved both organically and from acquisitions. Over the
past four years, the Company acquired four banking companies,
which added an aggregate of $972.4 million in net loans
held in portfolio and $1.84 billion in deposits as of the
date of acquisition.

Assuming that the current economic momentum
continues, we expect continued growth in loans and deposits,
especially in the areas of commercial business and international
trade finance loans. In addition, UCB has established an ongoing
program for loan sales as part of a balance sheet restructuring
plan. We expect selected commercial real estate loan sales in
the range of $150 million to $200 million per quarter
during 2006.



| |               
| | --------------
| | Credit Quality

While loan growth has been substantial over the
past several years, UCB has maintained strong credit quality
levels. We believe that this has been accomplished through
UCBs conservative credit underwriting criteria and credit
risk management processes, which are discussed in more detail in
Credit Risk Management that follows later in this
document. We expect that if UCBs loan portfolio increases,
UCBs allowance for loan losses would increase accordingly.

|                                          |  |                                          |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|----------------------------------------- |  | ---------------------------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | - |  | - | --------- | -
|                                          |  |                                         
|                                          |  | As of or For the Year Ended December 31,
|                                          |  |                                         
|(Dollar amounts in thousands)             |  | 2005                                     |           | 2004 |  | 2003 |           | 2002 |  | 2001
|                                          |  |                                          |           |      |  |      |           |      |  |     
|Average gross loans(1)                    |  | $                                        | 5,148,952 |      |  | $    | 4,077,799 |      |  | $    | 3,380,121 |   |  | $ | 2,442,790 |   |  | $ | 2,062,419 |  
|Total charge-offs                         |  |                                          | 1,614     |      |  |      | 4,798     |      |  |      | 3,349     |   |  |   | 5,563     |   |  |   | 121       |  
|Nonperforming loans to total loans        |  |                                          | 0.32      | %    |  |      | 0.29      | %    |  |      | 0.15      | % |  |   | 0.15      | % |  |   | 0.04      | %
|Net charge-offs to average gross loans(1) |  |                                          | 0.03      |      |  |      | 0.11      |      |  |      | 0.06      |   |  |   | 0.23      |   |  |   | 0.00      |  



---



|    |                                                 
|--- | ------------------------------------------------
|(1) | Average gross loans include loans held for sale.



| |                    
| | -------------------
| | Net Interest Margin

Despite the difficult and challenging interest
rate environment that has been affecting financial institutions
over the past three years, we were able to maintain a stable net
interest margin. However, we expect to continue our efforts to
improve the net interest margin in the future through balance
sheet management and growth in core deposits. See Interest
Rate and Market Risk Management later in this document.

|                           |  |                         |      |      |  |      |      |      |  |      |      |   |  |  |      |   |  |  |      |  
|-------------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | - |  |  | ---- | -
|                           |  |                        
|                           |  | Year Ended December 31,
|                           |  |                        
|                           |  | 2005                    |      | 2004 |  | 2003 |      | 2002 |  | 2001
|                           |  |                         |      |      |  |      |      |      |  |     
|Net interest margin(1)     |  |                         | 3.58 | %    |  |      | 3.63 | %    |  |      | 3.41 | % |  |  | 3.73 | % |  |  | 3.69 | %
|Average federal funds rate |  |                         | 3.19 |      |  |      | 1.36 |      |  |      | 1.12 |   |  |  | 1.67 |   |  |  | 3.90 |  



---



|    |                                         
|--- | ----------------------------------------
|(1) | Calculated on a nontax equivalent basis.

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| |                
| | ---------------
| | Expense Control

We are continuously monitoring our costs and
expenses and seeking new ways to maintain them at acceptable
levels. These efforts have resulted in a relatively constant
efficiency ratio over the past five years. For 2005, we
experienced an increase in our noninterest expense and, as a
result, our efficiency ratio. Much of this increase was a result
of increased personnel expense as we added staff to support the
growth in our commercial banking business, the expansion of the
Hong Kong branch and the further development of UCBs
infrastructure to support a larger and growing organization. The
AABT and Pacifica acquisitions also contributed on a small scale
to our staffing increase, but will impact our personnel expenses
in 2006.



| |                 
| | ----------------
| | Capital Adequacy

As regulated financial institutions, the Company
and UCB (on a consolidated basis) are required to maintain
adequate levels of capital as measured by several regulatory
capital ratios. One of our goals is to maintain our well
capitalized level of regulatory capital for both the
Company and UCB.

|                                          |                           |              |  |       |   |      |  |       |   |      |  |       |   |  |  |       |   |  |  |       |  
|----------------------------------------- | ------------------------- | ------------ |  | ----- | - | ---- |  | ----- | - | ---- |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                          |                           |             
|                                          |                           | December 31,
|                                          |                           |             
|                                          |                           | 2005         |  | 2004  |   | 2003 |  | 2002  |   | 2001
|                                          |                           |              |  |       |   |      |  |       |   |     
|United Commercial Bank:                   |                           |              |  |       |   |      |  |       |   |      |  |       |   |  |  |       |   |  |  |      
|                                          | Tier 1 leverage           |              |  | 8.26  | % |      |  | 8.49  | % |      |  | 7.86  | % |  |  | 7.57  | % |  |  | 7.26  | %
|                                          | Tier 1 risk-based capital |              |  | 9.91  |   |      |  | 11.42 |   |      |  | 10.92 |   |  |  | 10.26 |   |  |  | 9.65  |  
|                                          | Total risk-based capital  |              |  | 10.98 |   |      |  | 12.67 |   |      |  | 12.18 |   |  |  | 11.52 |   |  |  | 10.91 |  
|UCBH Holdings, Inc. and
    subsidiaries: |                           |              |  |       |   |      |  |       |   |      |  |       |   |  |  |       |   |  |  |      
|                                          | Tier 1 leverage           |              |  | 8.56  |   |      |  | 8.92  |   |      |  | 8.42  |   |  |  | 7.15  |   |  |  | 7.52  |  
|                                          | Tier 1 risk-based capital |              |  | 10.26 |   |      |  | 11.98 |   |      |  | 11.69 |   |  |  | 9.70  |   |  |  | 9.99  |  
|                                          | Total risk-based capital  |              |  | 11.33 |   |      |  | 13.23 |   |      |  | 12.94 |   |  |  | 10.95 |   |  |  | 11.24 |  

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT
ESTIMATES

The notes to the consolidated financial
statements contain a summary of the Companys significant
accounting policies that are presented elsewhere in this annual
report on Form 10-K. We believe that an understanding of
certain policies, along with the related estimates that we are
required to make in recording the financial transactions of the
Company, is important to have a complete picture of the
Companys financial condition. In addition, in arriving at
these estimates, we are required to make complex and subjective
judgments, many of which include a high degree of uncertainty.
The following is a discussion of these critical accounting
policies and significant estimates related to these policies. We
have discussed each of these accounting policies and the related
estimates with the Audit Committee of the Companys Board
of Directors.



| |                          
| | -------------------------
| | Allowance for Loan Losses

The allowance for loan losses represents our
estimate of the losses that are inherent in the loan and lease
portfolios. The determination of the appropriate level of the
allowance is based on periodic evaluations of the portfolios
along with other relevant factors. These evaluations require us
to make certain assumptions, estimates and judgments.

UCB continuously monitors the quality of its loan
portfolio and maintains an allowance for loan losses sufficient
to absorb probable losses inherent in the loan portfolio. At
December 31, 2005, UCBs total allowance was
$64.5 million, which represented 1.11% of year end gross
loans held in portfolio.

UCBs methodology for assessing the adequacy
of the allowance for loan losses includes the evaluation of two
distinct allowance components: an allowance applied to the
portfolio as a whole and a specific allowance for each loan
deemed to be impaired. Loans that are determined to be impaired
are excluded from the allowance analysis and are assessed
individually.

Loans are considered impaired when we believe it
is probable that UCB will not be able to collect all amounts
due, including interest payments, in accordance with the
loans contractual terms. Unless the loan is

23



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collateral dependent, loan impairment is measured
based on the present value of expected future cash flows that
have been discounted at the loans effective interest rate.
If the loan is collateral dependent, either the observable
market price or the current fair value of the collateral,
reduced by estimated disposition costs, is used.


In assessing the adequacy of the allowance, we
apply an internal risk rating system and an evaluation of
various internal and external conditions. The evaluation takes
into account the loan portfolio mix, the credit quality of the
portfolio, growth in the portfolio, trends relating to
delinquent and classified loans, general economic conditions and
any other characteristics that directly relate to the
collectibility of the loans in the portfolio.

UCB divides the loan portfolio into major
segments based primarily on loan type, and applies loss factors
to the portfolio segments. These loss factors have been
developed considering historic charge-off experience, trends in
collateral values, portfolio segment delinquency and
classification trends, portfolio concentrations, macro-economic
conditions, as well as other qualitative aspects. Additionally,
for our heterogeneous loan portfolio, we perform comparative
analyses, utilizing both a peer data benchmarking approach and
an expected loss approach. A heterogeneous loan is one that is
evaluated individually for impairment. This contrasts to smaller
balance homogeneous loans that are collectively evaluated for
impairment.

During 2005, UCB continued its ongoing process of
evaluating the loss factors in light of current economic
conditions, UCBs historical loss experience, loan
delinquency trends and the changes in classified and other
problem loans. As part of this evaluation, the portion of the
allowance previously presented as non-loan category
specific was allocated to specific loan portfolios in 2004
and 2005, to align the potential imprecision arising from the
accuracy of the risk rating process and general business and
economic conditions affecting our key lending areas with the
underlying loan portfolio.

In assessing the adequacy of the allowance, UCB
applies standard loss factors for classified and criticized
loans.

UCB also estimates a reserve related to unfunded
commitments. In assessing the adequacy of this reserve, UCB uses
a process similar to the one it uses in estimating the allowance
for loan losses including comparative analysis using an expected
loss approach. The reserve for unfunded commitments is included
in other liabilities on the statement of financial position.
During 2005, UCB updated the loss factors associated with these
commitments. The loss factors were lowered as a result of these
evaluations, reflecting continued improvement in the loss
experience associated with these exposures.

There are numerous components that enter into the
evaluation of the allowance for loan losses. Some are
quantitative while others required UCB to make qualitative
judgments. Although UCB believes that its processes for
determining an appropriate level for the allowance adequately
address all of the components that could potentially result in
credit losses, the processes and their elements include features
that may be susceptible to significant change. Any unfavorable
differences between the actual outcome of credit-related events
and UCBs estimates and projections could require an
additional allowance for credit losses, which would negatively
impact the Companys results of operations in future
periods. As an example, if classified loans were to increase by
10% in the same proportion as the existing portfolio, the amount
of the allowance for loan losses at December 31, 2005,
would increase by approximately $1.0 million. This
sensitivity analysis is hypothetical and has been provided only
to indicate the potential impact that changes in the level of
the criticized and classified loans may have on the allowance
estimation process. We believe that given the procedures that
UCB follows in determining the potential losses in the loan
portfolio, the various components used in the current estimation
processes are appropriate.

Loan Sales
and Mortgage Service Rights

UCB periodically enters into transactions that
transfer loans from UCB to third-party purchasers. In most
instances, UCB continues to provide the servicing on these loans
as a condition of the transfer. In addition, as part of these
transactions, UCB may retain a cash reserve account or an
interest-only strip, all of which are considered to be retained
interests in the sold loans.

24



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##### Table of Contents



Whenever UCB initiates a loan transfer, the first
determination that it must make in connection with the
transaction is whether the transfer constitutes a sale under
accounting principles generally accepted in the United States of
America (GAAP). If it does, the assets are removed
from UCBs consolidated statement of financial condition
with a gain or loss recognized. Otherwise, the transfer is
considered a financing, resulting in no gain or loss being
recognized on the transfer and is recorded as a liability on
UCBs consolidated statement of financial condition. The
financing treatment could have unfavorable financial
implications including an adverse effect on the Companys
results of operations and capital ratios. Generally, UCBs
loan transfers have been structured to meet the existing
criteria for sale treatment.

UCB must also make assumptions to determine the
amount of gain or loss resulting from a sale transaction as well
as the subsequent carrying amount for the above-discussed
servicing rights and retained interests. Initially, the total
carrying value of the loans being sold is allocated among the
loans themselves, the servicing rights and any retained
interests based on their relative fair values. The purchase
price is then compared to the amount assigned to the loans, and
any difference is recorded as either a gain or a loss on the
sale. In determining the fair values of the components of the
transaction, UCB uses estimates and assumptions that are based
on the facts surrounding each sale. Using different assumptions
could affect the amount of gain or loss recognized on the
transaction and, in turn, the Companys results of
operations.

UCB uses a third-party service to calculate the
ongoing fair values of the servicing rights and retained
interests subsequent to the transaction date. In valuing the
servicing rights and retained interests, UCB stratifies its
mortgage servicing rights based on the risk characteristics of
the underlying loan pools. The fair value of mortgage servicing
rights is determined by calculating the present value of
estimated future net servicing cash flows, using assumptions of
prepayments, defaults, ancillary income, servicing costs and
discount rates that UCB believes market participants would use
for similar assets. These value estimations require a number of
assumptions, including:



| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | the appropriateness of the method to use in
    computing the prepayments of the loans;
|
| |  | the annualized prepayment speed of the loans;                                          
|
| |  | the weighted average life of the loans;                                                
|
| |  | the expected annual net credit loss rate; and                                          
|
| |  | the discount rate for the residual cash flows.                                         

If the carrying amounts of the servicing assets
and residual interests are greater than their fair values,
impairment is recognized through a valuations allowance for each
type of asset.

Since the valuations are based upon estimates and
assumptions, any unfavorable differences between the actual
outcome of the future performance of the sold loans and our
estimates and assumptions could result in future impairment in
excess of that currently recorded. For example, if prepayment
speeds were to change adversely in a static environment by 10%,
the fair value of our mortgage servicing rights would decrease
by $617,000. A 20% adverse change would reduce the fair value by
$1.2 million. If the discount rate for the residual cash
flows were to change adversely by 100 basis points, the fair
value of our mortgage servicing rights would decrease by
$355,000. A 200 basis points adverse change would reduce the
fair value by $693,000.

The sensitivities discussed above are
hypothetical and should be considered with caution. As is shown,
changes in fair value based on variations in assumptions are not
subject to simple extrapolation, as the relationship of the
change in the assumption to the change in the fair value may not
be linear. In addition, the effect of a variation in one
assumption is in reality likely to cause changes in other
assumptions, which could potentially magnify or counteract the
sensitivities.

Accounting
for Goodwill

Goodwill arises from business acquisitions and
represents the value attributable to the unidentifiable
intangible elements in our acquired businesses. Goodwill is
initially recorded at fair value and is subsequently evaluated
at least annually for impairment in accordance with Statement of
Financial Accounting Standards (SFAS) No. 142.
The Company performs this annual test as of September 30 of
each year. Evaluations are

25



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also performed on a more frequent basis if events
or circumstances indicate that an impairment could have taken
place. Such events could include, among others, a significant
adverse change in the business climate, an adverse action by a
regulator, an unanticipated change in the competitive
environment, and a decision to change the operations or dispose
of a reporting unit.


The first step in this evaluation process is to
determine if a potential impairment exists in any of the
Companys reporting units, and, if required from the
results of this step, a second step measures the amount of any
impairment loss. The computations required by both steps one and
two call for us to make a number of estimates and assumptions.

In completing step one, we determine the fair
value of the reporting unit that is being evaluated. There are a
number of methods that we can use in completing this step,
including market capitalization and the discounted present value
of managements estimates of future cash or income flows.

If step one indicates a potential impairment of a
reporting unit, step two requires us to estimate the
implied fair value of that unit. This process
estimates the fair value of the units individual assets
and liabilities in the same manner as if a purchase of the
reporting unit were taking place. To do this, we must determine
the fair value of the assets, liabilities and identifiable
intangible assets of the reporting unit based upon the best
available information. If the value of goodwill calculated in
step two is less than the carrying amount of goodwill for the
reporting unit, an impairment is indicated and the carrying
value of goodwill is written down to the calculated value.

Since estimates are an integral part of the
impairment computations, changes in these estimates could have a
significant impact on any calculated impairment amount. Factors
that may significantly affect the estimates include, among
others, changes in revenue growth trends, changes in stock
prices, market values of mergers and acquisitions, and changes
in industry or market sector conditions.

As of September 30, 2005, we performed our
annual goodwill impairment evaluation for the entire
organization. Step one was performed by using a market value
approach for the reporting units. In the market value approach,
we determined the Companys market capitalization and
compared that to the Companys stockholders equity.

Upon completion of step one of the evaluation
process, we concluded that no potential impairment existed for
any of the Companys reporting units. In reaching this
conclusion, we determined that the fair value of goodwill
exceeded the recorded value of goodwill. Since this evaluation
process required us to make estimates and assumptions with
regard to the fair value of the Companys reporting units,
actual values may differ significantly from these estimates.
Such differences could result in future impairment of goodwill
that would, in turn, negatively impact the Companys
results of operations. However, had our estimated fair value of
our reporting units been as much as 20% lower, there would still
have been no indication of impairment for our reporting units.

Stock-Based
Compensation

We account for the Companys stock-based
compensation in accordance with SFAS No. 123, Accounting
for Stock-Based Compensation. Under SFAS No. 123,
companies have a choice of two alternatives to account for stock
options. One alternative is to expense the estimated fair value
of the options on a straight-line basis over their respective
vesting periods. The other is to use the intrinsic method of
accounting as prescribed by Accounting Principles Board (the
APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and disclose in the footnotes to the
financial statements the pro forma impact on net income and
income per common share as if the fair values of our options had
been expensed. In accounting for our options under APB Opinion
No. 25, we have not recorded any compensation expense as
the exercise price of all of our stock options was equal to the
quoted market price of the stock on the date of the grant.

Effective December 27, 2005, UCBHs
Board of Directors authorized the Company to accelerate the
vesting of all unvested options associated with grants issued on
or prior to October 26, 2005. By accelerating the vesting
of these Options, the Company estimates that approximately
$16.4 million of future compensation expense, net of taxes,
has been eliminated, of which $10.6 million would have been
incurred in the year ending

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##### Table of Contents



December 31, 2006. The decision to
accelerate the vesting of the options, which UCBH believes is in
the best interests of its stockholders, was made primarily to
reduce the impact of recording approximately $22.7 million
of noncash compensation expense over the next three years upon
the implementation of SFAS No. 123 (revised 2004)
(SFAS No. 123R), Share-Based Payment,
which the Company has adopted effective January 1, 2006.
SFAS No. 123R requires that all share-based payments to
employees, officers and directors, including grants of employee
stock options, be recognized as compensation expense over the
vesting period of each award, based on their fair values at the
grant date.


The options acceleration was treated as a
modification of the terms of the existing option grants, thereby
requiring a new value measurement as of the acceleration date.
Any increase between the newly measured value and the original
grant price is viewed as additional intrinsic value and may need
to be included in future compensation expense under certain
conditions related to prospective employee terminations. We
prepared an estimate of expense that may result during the next
three years as a result of the acceleration using the new grant
values and using assumptions regarding the potential for future
employee terminations. These assumptions incorporated the
forfeiture rates that we use to compute the previously discussed
pro forma disclosures as required by SFAS No. 123 (see Note
1 to the Consolidated Financial Statements for additional
information). Our estimate indicated a potential after tax
expense of less than $50,000 as a result of the acceleration.
Since our estimate required us to make assumptions with regard
to future terminations of employees, there is no assurance that
the actual future expense incurred will be the same as the
estimate. However, the maximum amount of expense that the
Company could incur during the next three years as a result of
the acceleration amounts to approximately $1.0 million on
an after-tax basis. Management believes, however, that it would
be unlikely that the expense would approach that amount.

Asset
Valuation

Certain assets of the Company are recorded on the
consolidated balance sheet at fair value. Included among these
assets are goodwill, mortgage servicing rights, which are
discussed separately in this Critical Accounting Policies
and Significant Estimates discussion, securities
classified as available for sale, other intangible assets, such
as core deposit intangibles and loans that are held-for-sale. In
determining the fair values of these assets, market values may
not be readily available and we must make estimates to arrive at
a value to record. These estimates may change from period to
period as they are affected by changes in interest rates or
other market conditions. As a result, the values that we have
assigned to these assets may not necessarily represent amounts
that could be ultimately realized upon their disposal.

Available for Sale
Securities.Securities that are held
to meet investment objectives, such as interest rate risk and
liquidity management, and may be sold to implement management
strategies are classified as available for sale. The fair values
of most securities classified as available for sale are based on
quoted market prices. If quoted market prices are unavailable,
fair values are extrapolated from the quoted prices of similar
instruments. Any declines in fair value that are determined to
be other-than-temporary result in a write-down of the security
and a corresponding charge to noninterest expense.

Core Deposit
Intangibles.Core deposit intangibles
are created as a result of the Companys acquisition of
another financial institution. They represent the value that the
acquired deposits have as a source of funding when compared to
alternative funding sources, such as borrowings. When acquired,
core deposit intangibles are valued by an outside service by
computing the present value of the expected cost savings
attributable to the core deposit funding relative to an
alternative source of funding. Subsequent to the initial
recording, core deposit intangibles are amortized based upon the
expected runoff rate of the related deposits. In addition, the
value of core deposit intangibles is reviewed each quarter for
possible impairment by comparing actual deposit runoff to
estimated runoff. Should the actual runoff exceed the estimate,
the core deposit intangible is written down to the adjusted
amount through a charge to noninterest expense. At that point,
the runoff estimates are adjusted to reflect the actual runoff
and the new estimates are used for subsequent amortization.

Loans Held For Sale.A loan is classified as being held-for-sale when it has been
identified as either available to be sold or when it has been
included in a pool of loans that are awaiting sale. During 2005,
loans held-for-sale included SBA loans, commercial real estate
loans and multifamily loans. As of December 31, 2005, only
commercial real estate loans and SBA loans were included in the
portfolio.

27



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Whenever UCB determines that a loan is for sale,
the loan is transferred from loans held in portfolio to loans
held for sale. At that time, UCB computes the market value of
the loan and compares that value with the carrying amount of the
loan. If the market value is less than the carrying amount, UCB
writes down the carrying amount to the market value through a
charge to the income statement.

UCB uses outside service companies to calculate
the market value of its held for sale loans. For SBA loans, the
service performing the valuation uses market prices for similar
loans to determine the value of the non-guaranteed portion of
each loan. For commercial loans, the outside service uses a CMBS
pricing matrix in which loans are converted to an equivalent
investment using various key factors associated with the loan.
These factors include the contractual interest rate, maturity
date, loan to value ratio, and current credit risk rating of the
loan, among others. The equivalent investment is then given a
market value rating and an associated premium or discount is
assigned to the loan. The related estimated selling costs
associated with each loan are also included in the valuation
calculation.

Recent Accounting Pronouncements



| |                                                        
| | -------------------------------------------------------
| | Accounting for Certain Hybrid Financial
    Instruments

In February 2006, the FASB issued SFAS
No. 155, Accounting for Certain Hybrid Financial
Instruments, an amendment of FASB Statements No. 133 and
140. SFAS No. 155 permits fair value remeasurement for
any hybrid financial instrument that contains an embedded
derivative that otherwise would require bifurcation; clarifies
which interest-only strips and principal-only strips are not
subject to the requirements of SFAS No. 133; establishes a
requirement to evaluate interests in securitized financial
assets to identify interests that are freestanding derivatives
or that are hybrid financial instruments that contain an
embedded derivative requiring bifurcation; clarifies that
concentrations of credit risk in the form of subordination are
not embedded derivatives; and amends SFAS No. 140 to
eliminate the prohibition on a qualifying special-purpose entity
from holding a derivative financial instrument that pertains to
a beneficial interest other than another derivative financial
instrument. The new standard is effective for all financial
instruments acquired or issued after the beginning of the
Companys first fiscal year that begins after
September 15, 2006. The Company does not expect the
adoption of SFAS No. 155 to have a material impact on its
consolidated financial position, results of operations or cash
flows.



| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | The Meaning of Other-Than-Temporary
    Impairment and its Application to Certain
    Investments

In November 2005, the FASB issued FSP 115-1,
The Meaning of Other-Than-Temporary Impairment and its
Application to Certain Investments. FSP 115-1 address the
determination as to when an investment is considered impaired,
whether that impairment is other than temporary and the
measurement of an impairment loss. FSP 115-1 also includes
accounting considerations subsequent to the recognition of an
other-than-temporary impairment and requires certain disclosures
about unrealized losses that have not been recognized as
other-than-temporary impairments. The guidance in FSP 115-1
amends SFAS No. 115, Accounting for Certain Investments
in Debt and Equity Securities, and APB Opinion No. 18,
The Equity Method of Accounting for Investments in Common
Stock. FSP 115-1 applies to reporting periods beginning
after December 15, 2005. We do not expect FSP 115-1 will
have a material impact on our financial position, results of
operations, or cash flows.



| |                                                        
| | -------------------------------------------------------
| | Determining Whether to Aggregate Operating
    Segments

In June 2005, the Emerging Issues Task Force (the
EITF) reached a consensus on EITF No. 04-10,
Determining Whether to Aggregate Operating Segments That Do
Not Meet the Quantitative Thresholds. EITF No. 04-10
provides guidance on SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information,and how to
determine whether operating segments, which do not meet certain
quantitative thresholds, may be aggregated and reported as a
single operating segment. The EITF is effective for fiscal years
ending after September 15, 2005, and corresponding
information for earlier periods, including interim periods,
should be restated unless it is impractical to do so. The
adoption of this standard did not have a material impact on the
Companys consolidated financial statements.

28



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| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | Determining the Amortization Period for
    Leasehold Improvements Purchased After Lease Inception or
    Acquired in a Business Combination

In June 2005, the EITF reached a consensus on
EITF No. 05-6, Determining the Amortization Period for
Leasehold Improvements Purchased after Lease Inception or
Acquired in a Business Combination, which was modified in
September 2005. EITF No. 05-6 provides guidance on whether
a lease term should be reevaluated at the time of a purchase
business combination or when leasehold improvements are
purchased after lease inception. EITF No. 05-6 is effective for
leasehold improvements that are purchased or acquired in
reporting periods beginning after June 29, 2005. The
adoption of this standard did not have a material impact on the
Companys consolidated financial statements.



| |                                            
| | -------------------------------------------
| | Accounting Changes and Error
    Correction

On June 7, 2005, the FASB issued SFAS
No. 154, Accounting Changes and Error
Corrections  a replacement of APB Opinion
No. 20, Accounting Changes, and SFAS No. 3, Reporting
Accounting Changes in Interim Financial Statements. SFAS No.
154 changes the requirements for the accounting for and the
reporting of a change in accounting principle. Previously, most
voluntary changes in accounting principles were required to be
recognized by way of a cumulative effect adjustment within net
income during the period of change. SFAS No. 154 requires
retrospective application to prior periods financial
statements, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change.
SFAS No. 154 is effective for accounting changes made in
fiscal years beginning after December 15, 2005; however,
SFAS No. 154 does not change the transition provisions of
any existing accounting pronouncements. The Company does not
believe the adoption of SFAS No. 154 will have a material
effect on its consolidated financial position, results of
operations or cash flows.



| |                                            
| | -------------------------------------------
| | Accounting for Stock-Based
    Compensation

On December 16, 2004, the FASB issued SFAS
No. 123R, Share-Based Payment. SFAS No. 123R is
a revision of SFAS No. 123. SFAS No. 123R eliminates
the ability to account for share-based compensation transactions
using the intrinsic value method as prescribed under APB Opinion
No. 25, and requires that such transactions be accounted
for using a fair value-based method. SFAS No. 123R covers a
wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards,
share appreciation rights, and employee share purchase plans.
For the Company, SFAS No. 123R became effective as of
January 1, 2006.

SFAS No. 123R may be adopted using one of
two methods: (1) A modified prospective method
in which compensation cost is recognized beginning with the
effective date (a) based on the requirements of SFAS
No. 123R for all share-based payments granted after the
effective date and (b) based on the requirements of SFAS
No. 123 for all awards granted to employees prior to the
effective date of SFAS No. 123R that remain unvested on the
effective date; or (2) A modified retrospective
method which includes the requirements of the modified
prospective method described above, but also permits entities to
restate based on the amounts previously recognized under SFAS
No. 123 for purposes of pro forma disclosures either
(a) all prior periods presented or (b) prior interim
periods of the year of adoption.

Effective January 1, 2006, the Company
adopted the modified prospective method to account for
share-based compensation as allowed by SFAS No. 123.
Depending on the level of future option grants, the adoption of
SFAS No. 123R may have a material impact on the
Companys future financial position and results of
operation. See Note 1 to the Consolidated Financial Statements
for additional information regarding the Companys decision
to accelerate the vesting of its stock options in anticipation
of the adoption of SFAS No. 123R.



| |                                                                           
| | --------------------------------------------------------------------------
| | Accounting for Certain Loans or Debt
    Securities Acquired in a Transfer

In December 2003, the American Institute of
Certified Public Accountants (the AICPA) issued
Statement of Position (SOP) 03-3, which addresses
accounting for loans or debt securities acquired in a transfer
and the resulting differences between contractual cash flows and
cash flows expected to be collected. SOP 03-3 limits the yield
that may be accreted into income to the excess of the
investors estimate of undiscounted expected principal,
interest, and other cash flows over the investors initial
investment in the

29



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##### Table of Contents



loan. SOP 03-3 requires that the excess of
contractual cash flows over cash flows expected to be collected
not be recognized as an adjustment of yield, loss accrual, or
valuation allowance. In addition, SOP 03-3 prohibits
carrying over or creating valuation allowances in
the initial accounting of all loans acquired in a transfer that
are within the scope of SOP 03-3. The prohibition of the
valuation allowance carryover applies to the purchase of
individual loans, pools of loans and loans acquired in a
purchase business combination. SOP 03-3 does not apply to loans
originated by UCB.


SOP 03-3 is effective for loans acquired in
fiscal years beginning after December 15, 2004. For loans
acquired in fiscal years beginning on or before
December 15, 2004, decreases in cash flows expected to be
collected should be applied prospectively. The adoption of SOP
03-3 did not have a material impact on the financial condition
or operating results of the Company.

30



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##### Table of Contents



RESULTS OF OPERATIONS

Financial Highlights

|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |          |       | 
|--------------- | ------------------------------------------------------- | -------------------------------------------------------------------------- | ---------- | ------------------------------------------- | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------ | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------ | ------ | ----- |  | ------ | -------- | ----- | 
|                |                                                         |                                                                            |            |                                            
|                |                                                         | Year Ended December 31, Increase (Decrease)                                |            | Year Ended December 31, Increase (Decrease)
|                |                                                         |                                                                            |            |                                            
|                |                                                         | 2005                                                                       |            | 2004                                        |         | Amount |   | %       |         | 2004   |   | 2003    |         | Amount |   | %     
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |       
|                |                                                         |                                                                           
|                |                                                         | (Dollars in Thousands, Except Per Share Data)                             
|Operating Data: |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Interest & dividend income:                             |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |         
|                |                                                         | Loans                                                                      |            | $                                           | 333,159 |        |   | $       | 226,292 |        |   | $       | 106,867 |        |   |        | 47.23   | %      |   | $       | 226,292 |        |   | $       | 191,754 |        |   | $      | 34,538 |       |  |        | 18.01    | %    
|                |                                                         | Funds sold and due from bank                                               |            |                                             | 2,121   |        |   |         | 649     |        |   |         | 1,472   |        |   |        | 226.81  |        |   |         | 649     |        |   |         | 106     |        |   |        | 543    |       |  |        | 512.26   |      
|                |                                                         | Investment & mortgage-backed securities:                                   |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |          |      
|                |                                                         |                                                                            | Taxable    |                                             |         | 56,503 |   |         |         | 63,646 |   |         |         | (7,143 | ) |        |         | (11.22 | ) |         |         | 63,646 |   |         |         | 60,870 |   |        |        | 2,776 |  |        |          | 4.56  | 
|                |                                                         |                                                                            | Nontaxable |                                             |         | 10,617 |   |         |         | 9,477  |   |         |         | 1,140  |   |        |         | 12.03  |   |         |         | 9,477  |   |         |         | 7,532  |   |        |        | 1,945 |  |        |          | 25.82 | 
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Total interest & dividend income                        |                                                                            |            | 402,400                                     |         |        |   | 300,064 |         |        |   | 102,336 |         |        |   | 34.10  |         |        |   | 300,064 |         |        |   | 260,262 |         |        |   | 39,802 |        |       |  | 15.29  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Interest expense:                                       |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |         
|                |                                                         | Deposits                                                                   |            |                                             | 123,317 |        |   |         | 67,267  |        |   |         | 56,050  |        |   |        | 83.32   |        |   |         | 67,267  |        |   |         | 68,724  |        |   |        | (1,457 | )     |  |        | (2.12    | )    
|                |                                                         | Short-term borrowings                                                      |            |                                             | 10,605  |        |   |         | 2,165   |        |   |         | 8,440   |        |   |        | 389.84  |        |   |         | 2,165   |        |   |         | 1,084   |        |   |        | 1,081  |       |  |        | 99.72    |      
|                |                                                         | Subordinated debentures                                                    |            |                                             | 9,353   |        |   |         | 8,185   |        |   |         | 1,168   |        |   |        | 14.27   |        |   |         | 8,185   |        |   |         | 7,922   |        |   |        | 263    |       |  |        | 3.32     |      
|                |                                                         | Long-term borrowings                                                       |            |                                             | 18,635  |        |   |         | 14,966  |        |   |         | 3,669   |        |   |        | 24.52   |        |   |         | 14,966  |        |   |         | 13,984  |        |   |        | 982    |       |  |        | 7.02     |      
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Total interest expense                                  |                                                                            |            | 161,910                                     |         |        |   | 92,583  |         |        |   | 69,327  |         |        |   | 74.88  |         |        |   | 92,583  |         |        |   | 91,714  |         |        |   | 869    |        |       |  | 0.95   |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Net interest income                                     |                                                                            |            | 240,490                                     |         |        |   | 207,481 |         |        |   | 33,009  |         |        |   | 15.91  |         |        |   | 207,481 |         |        |   | 168,548 |         |        |   | 38,933 |        |       |  | 23.10  |         
|                | Provision for loan losses                               |                                                                            |            | 6,091                                       |         |        |   | 4,201   |         |        |   | 1,890   |         |        |   | 44.99  |         |        |   | 4,201   |         |        |   | 9,967   |         |        |   | (5,766 | )      |       |  | (57.85 | )       
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Net interest income after provision for loan
    losses |                                                                            |            | 234,399                                     |         |        |   | 203,280 |         |        |   | 31,119  |         |        |   | 15.31  |         |        |   | 203,280 |         |        |   | 158,581 |         |        |   | 44,699 |        |       |  | 28.19  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Noninterest income:                                     |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |         
|                |                                                         | Commercial banking fees                                                    |            |                                             | 10,607  |        |   |         | 8,254   |        |   |         | 2,353   |        |   |        | 28.51   |        |   |         | 8,254   |        |   |         | 6,650   |        |   |        | 1,604  |       |  |        | 24.12    |      
|                |                                                         | Service charges on deposits                                                |            |                                             | 3,038   |        |   |         | 2,654   |        |   |         | 384     |        |   |        | 14.47   |        |   |         | 2,654   |        |   |         | 2,249   |        |   |        | 405    |       |  |        | 18.01    |      
|                |                                                         | Gain (loss) on sale of securities, net                                     |            |                                             | (5      | )      |   |         | 12,713  |        |   |         | (12,718 | )      |   |        | (100.04 | )      |   |         | 12,713  |        |   |         | 11,013  |        |   |        | 1,700  |       |  |        | 15.44    |      
|                |                                                         | Gain on sale of SBA loans, net                                             |            |                                             | 3,356   |        |   |         | 1,463   |        |   |         | 1,893   |        |   |        | 129.39  |        |   |         | 1,463   |        |   |         | 3,030   |        |   |        | (1,567 | )     |  |        | (51.72   | )    
|                |                                                         | Gain on sale of multifamily & commercial
    real estate loans, net        |            |                                             | 12,207  |        |   |         | 7,732   |        |   |         | 4,475   |        |   |        | 57.88   |        |   |         | 7,732   |        |   |         |        |        |   |        | 7,732  |       |  |        |         |      
|                |                                                         | Unrealized loss on loans held for sale                                     |            |                                             | (1,152  | )      |   |         |        |        |   |         | (1,152  | )      |   |        |        |        |   |         |        |        |   |         |        |        |   |        |       |       |  |        |         |      
|                |                                                         | Equity loss in other equity investments                                    |            |                                             | (2,296  | )      |   |         | (2,210  | )      |   |         | (86     | )      |   |        | 3.89    |        |   |         | (2,210  | )      |   |         | (152    | )      |   |        | (2,058 | )     |  |        | 1,353.95 |      
|                |                                                         | Other fees                                                                 |            |                                             | 929     |        |   |         | 271     |        |   |         | 658     |        |   |        | 242.80  |        |   |         | 271     |        |   |         | 413     |        |   |        | (142   | )     |  |        | (34.38   | )    
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Total noninterest income                                |                                                                            |            | 26,684                                      |         |        |   | 30,877  |         |        |   | (4,193  | )       |        |   | (13.58 | )       |        |   | 30,877  |         |        |   | 23,203  |         |        |   | 7,674  |        |       |  | 33.07  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Noninterest expense:                                    |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |        |         
|                |                                                         | Personnel                                                                  |            |                                             | 60,152  |        |   |         | 50,931  |        |   |         | 9,221   |        |   |        | 18.10   |        |   |         | 50,931  |        |   |         | 42,310  |        |   |        | 8,621  |       |  |        | 20.38    |      
|                |                                                         | Occupancy                                                                  |            |                                             | 12,238  |        |   |         | 10,164  |        |   |         | 2,074   |        |   |        | 20.41   |        |   |         | 10,164  |        |   |         | 5,869   |        |   |        | 4,295  |       |  |        | 73.18    |      
|                |                                                         | Data processing                                                            |            |                                             | 6,847   |        |   |         | 5,896   |        |   |         | 951     |        |   |        | 16.13   |        |   |         | 5,896   |        |   |         | 4,826   |        |   |        | 1,070  |       |  |        | 22.17    |      
|                |                                                         | Furniture & equipment                                                      |            |                                             | 6,534   |        |   |         | 6,458   |        |   |         | 76      |        |   |        | 1.18    |        |   |         | 6,458   |        |   |         | 4,456   |        |   |        | 2,002  |       |  |        | 44.93    |      
|                |                                                         | Professional fees & contracted services                                    |            |                                             | 10,763  |        |   |         | 7,496   |        |   |         | 3,267   |        |   |        | 43.58   |        |   |         | 7,496   |        |   |         | 5,802   |        |   |        | 1,694  |       |  |        | 29.20    |      
|                |                                                         | Deposit insurance                                                          |            |                                             | 742     |        |   |         | 774     |        |   |         | (32     | )      |   |        | (4.13   | )      |   |         | 774     |        |   |         | 695     |        |   |        | 79     |       |  |        | 11.37    |      
|                |                                                         | Communication                                                              |            |                                             | 955     |        |   |         | 1,287   |        |   |         | (332    | )      |   |        | (25.80  | )      |   |         | 1,287   |        |   |         | 1,066   |        |   |        | 221    |       |  |        | 20.73    |      
|                |                                                         | Core deposit intangible amortization                                       |            |                                             | 1,345   |        |   |         | 1,282   |        |   |         | 63      |        |   |        | 4.91    |        |   |         | 1,282   |        |   |         | 1,762   |        |   |        | (480   | )     |  |        | (27.24   | )    
|                |                                                         | Loss on extinguishment of subordinated
    debentures & secured borrowings |            |                                             | 1,246   |        |   |         |        |        |   |         | 1,246   |        |   |        |        |        |   |         |        |        |   |         |        |        |   |        |       |       |  |        |         |      
|                |                                                         | Other general & administrative                                             |            |                                             | 16,091  |        |   |         | 14,865  |        |   |         | 1,226   |        |   |        | 8.25    |        |   |         | 14,865  |        |   |         | 13,422  |        |   |        | 1,443  |       |  |        | 10.75    |      
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Total noninterest expense                               |                                                                            |            | 116,913                                     |         |        |   | 99,153  |         |        |   | 17,760  |         |        |   | 17.91  |         |        |   | 99,153  |         |        |   | 80,208  |         |        |   | 18,945 |        |       |  | 23.62  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Income before income tax expense                        |                                                                            |            | 144,170                                     |         |        |   | 135,004 |         |        |   | 9,166   |         |        |   | 6.79   |         |        |   | 135,004 |         |        |   | 101,576 |         |        |   | 33,428 |        |       |  | 32.91  |         
|                | Income tax expense                                      |                                                                            |            | 46,344                                      |         |        |   | 49,401  |         |        |   | (3,057  | )       |        |   | (6.19  | )       |        |   | 49,401  |         |        |   | 36,938  |         |        |   | 12,463 |        |       |  | 33.74  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       
|                | Net income                                              |                                                                            | $          | 97,826                                      |         |        | $ | 85,603  |         |        | $ | 12,223  |         |        |   | 14.28  |         |        | $ | 85,603  |         |        | $ | 64,638  |         |        | $ | 20,965 |        |       |  | 32.43  |         
|                |                                                         |                                                                            |            |                                             |         |        |   |         |         |        |   |         |         |        |   |        |         |        |   |         |         |        |   |         |         |        |   |        |        |       |  |       

31



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|                                 |                                       |                                               |   |                                             |   |        |   |       |  |      |   |      |      |        |  |        |    |  |   |       |   |  |   |       |  |  |   |      |     |  |  |       |  
|-------------------------------- | ------------------------------------- | --------------------------------------------- | - | ------------------------------------------- | - | ------ | - | ----- |  | ---- | - | ---- | ---- | ------ |  | ------ | -- |  | - | ----- | - |  | - | ----- |  |  | - | ---- | --- |  |  | ----- | -
|                                 |                                       |                                               |   |                                            
|                                 |                                       | Year Ended December 31, Increase (Decrease)   |   | Year Ended December 31, Increase (Decrease)
|                                 |                                       |                                               |   |                                            
|                                 |                                       | 2005                                          |   | 2004                                        |   | Amount |   | %     |  | 2004 |   | 2003 |      | Amount |  | %     
|                                 |                                       |                                               |   |                                             |   |        |   |       |  |      |   |      |      |        |  |       
|                                 |                                       |                                              
|                                 |                                       | (Dollars in Thousands, Except Per Share Data)
|Per Share Data:                  |                                       |                                               |   |                                             |   |        |   |       |  |      |   |      |      |        |  |        |    |  |   |       |   |  |   |       |  |  |   |      |     |  |  |      
|                                 | Basic earnings per share(1)           |                                               | $ | 1.06                                        |   |        | $ | 0.95  |  |      | $ | 0.11 |      |        |  | 11.58  | %  |  | $ | 0.95  |   |  | $ | 0.74  |  |  | $ | 0.21 |     |  |  | 28.38 | %
|                                 | Diluted earnings per share(1)         |                                               |   | 1.02                                        |   |        |   | 0.90  |  |      |   | 0.12 |      |        |  | 13.33  |    |  |   | 0.90  |   |  |   | 0.71  |  |  |   | 0.19 |     |  |  | 26.76 |  
|                                 | Dividends declared per share(1)       |                                               |   | 0.10                                        |   |        |   | 0.08  |  |      |   | 0.02 |      |        |  | 25.00  |    |  |   | 0.08  |   |  |   | 0.06  |  |  |   | 0.02 |     |  |  | 33.33 |  
|Operating Ratios and Other Data: |                                       |                                               |   |                                             |   |        |   |       |  |      |   |      |      |        |  |        |    |  |   |       |   |  |   |       |  |  |   |      |     |  |  |      
|                                 | Return on average assets              |                                               |   | 1.40                                        | % |        |   | 1.44% |  |      |   | (4   | )bp* |        |  | (2.78  | )% |  |   | 1.44  | % |  |   | 1.26% |  |  |   | 18   | bp* |  |  | 14.29 | %
|                                 | Return on average equity              |                                               |   | 18.42                                       |   |        |   | 18.92 |  |      |   | (50  | )    |        |  | (2.64  | )  |  |   | 18.92 |   |  |   | 18.84 |  |  |   | 8    |     |  |  | 0.42  |  
|                                 | Efficiency ratio(2)                   |                                               |   | 43.76                                       |   |        |   | 41.60 |  |      |   | 216  |      |        |  | 5.19   |    |  |   | 41.60 |   |  |   | 41.83 |  |  |   | (23  | )   |  |  | (0.55 | )
|                                 | Noninterest expense to average assets |                                               |   | 1.68                                        |   |        |   | 1.67  |  |      |   | 1    |      |        |  | 0.60   |    |  |   | 1.67  |   |  |   | 1.56  |  |  |   | 11   |     |  |  | 7.05  |  
|                                 | Average equity to average assets      |                                               |   | 7.61                                        |   |        |   | 7.62  |  |      |   | (1   | )    |        |  | (0.13  | )  |  |   | 7.62  |   |  |   | 6.66  |  |  |   | 96   |     |  |  | 14.41 |  
|                                 | Dividend payout ratio(3)              |                                               |   | 9.80                                        |   |        |   | 8.89  |  |      |   | 91   |      |        |  | 10.24  |    |  |   | 8.89  |   |  |   | 8.51  |  |  |   | 38   |     |  |  | 4.47  |  
|                                 | Net loan charge-offs to average loans |                                               |   | 0.03                                        |   |        |   | 0.11  |  |      |   | (8   | )    |        |  | (72.73 | )  |  |   | 0.11  |   |  |   | 0.06  |  |  |   | 5    |     |  |  | 83.33 |  
|                                 | Interest rate spread(4)               |                                               |   | 3.33                                        |   |        |   | 3.51  |  |      |   | (18  | )    |        |  | (5.13  | )  |  |   | 3.51  |   |  |   | 3.29  |  |  |   | 22   |     |  |  | 6.69  |  
|                                 | Net interest margin(4)                |                                               |   | 3.66                                        |   |        |   | 3.72  |  |      |   | (6   | )    |        |  | (1.61  | )  |  |   | 3.72  |   |  |   | 3.49  |  |  |   | 23   |     |  |  | 6.59  |  



---



|    |                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company completed a two-for-one stock split
    during the years ended December 31, 2005 and 2003.
    Accordingly, for the years ended December 31, 2004 and
    2003, basic earnings per share, diluted earnings per share and
    dividends per share have been restated to reflect the effect of
    the stock split.
|   
|(2) | Represents noninterest expense divided by the
    total of our net interest income before provision for loan
    losses and our noninterest income.                                                                                                                                                                          
|   
|(3) | Dividends declared per share as a percentage of
    diluted earnings per share.                                                                                                                                                                                                                                              
|   
|(4) | Calculated on a tax equivalent basis. Interest
    income from nontaxable investment securities calculated on a tax
    equivalent basis was $5.2 million, $5.4 million and
    $4.0 million for the years ended December 31, 2005,
    2004 and 2003, respectively.                                                         

*   Basis point



| |                                                                           
| | --------------------------------------------------------------------------
| | Year Ended December 31, 2005, Compared
    to Year Ended December 31, 2004

The consolidated net income of the Company for
the year ended December 31, 2005, increased by
$12.2 million, or 14.3%, to $97.8 million, compared to
$85.6 million for the year ended December 31, 2004.
The annualized return on average equity (ROE) and
return on average assets (ROA) ratios for the year
ended December 31, 2005, were 18.42% and 1.40%,
respectively. These amounts compare with annualized ROE and ROA
ratios of 18.92% and 1.44%, respectively, for the year ended
December 31, 2004. These lower ratios are reflective of the
increases in the growth rates of assets and equity that exceeded
the growth in net income. The efficiency ratio was 43.76% for
the year ended December 31, 2005, compared with 41.60% for
the same period in 2004. The efficiency ratio increased
primarily due to higher personnel costs, occupancy costs,
professional fees and contracted services, and the loss on
extinguishment of subordinated debentures for the year ended
December 31, 2005, compared with the year ended
December 31, 2004. Diluted earnings per share were $1.02
for the year ended December 31, 2005, compared with $0.90
on a post-split basis for the year ended December 31, 2004.

Net Interest Income and Net Interest
Margin.Net interest income increased
15.3%, compared to the same period in 2004. The increase in net
interest income was principally due to a $998.2 million
increase in average interest-earning assets, which resulted
primarily from organic loan growth. The average cost of deposits
increased 83 basis points from 1.39% for the year ended
December 31, 2004, to 2.22% for the year ended
December 31, 2005, as a result of an increase in market
interest rates during the past twelve months, the change in the
composition of deposits and the procurement of certificates of
deposit from brokers. These factors were partially offset by a
92 basis point increase in average loan yields from 5.55% for
the year ended December 31, 2004, to 6.47% for the year
ended December 31, 2005. The increase in loan yield
reflects repricing of adjustable-rate loans resulting from
higher market interest rate indices. The taxable securities
yield decreased from 4.51% for the year ended December 31,
2004, to 4.39% for the year ended December 31, 2005. The
nontaxable securities yields decreased from 4.79% for the year
ended December 31, 2004, to 4.78% for the year ended
December 31, 2005. The decrease in the taxable securities
yields is attributable to lower-yielding securities.

32



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##### Table of Contents



The following table reflects the distribution of
average assets and liabilities, and stockholders equity,
as well as the total dollar amounts of interest income from
average interest-earning assets, and the resultant yields and
dollar amounts of interest expense of average interest-bearing
liabilities, expressed both in dollars and rates for the years
ended December 31, 2005 and 2004 (dollars in thousands):

|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |      |      |  
|-------------------------------------------------------------------- | ------------------------------- | --------------------------------------- | --------- | --------- | --------- | ---------- | ------- | ------- | ------ | -------- | ---- | ---------- | ---- | - | --------- | --------- | --------- | - | ------- | ------ | ------ |  | ---- | ---- | ---- | -
|                                                                     |                                 |                                         |           |          
|                                                                     |                                 | 2005                                    |           | 2004     
|                                                                     |                                 |                                         |           |          
|                                                                     |                                 |                                         |           | Interest  |           |            |         |         |        | Interest |      |           
|                                                                     |                                 | Average                                 |           | Income/   |           | Average    |         | Average |        | Income/  |      | Average   
|                                                                     |                                 | Balance                                 |           | Expense   |           | Yield/Cost |         | Balance |        | Expense  |      | Yield/Cost
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |           
|Interest-Earning Assets:                                             |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Loans(1)(2)                                                          |                                 | $                                       | 5,148,952 |           |           | $          | 333,159 |         |        |          | 6.47 | %          |      | $ | 4,077,799 |           |           | $ | 226,292 |        |        |  | 5.55 | %   
|                                                                     | Taxable securities(3)           |                                         |           | 1,288,508 |           |            |         | 56,503  |        |          |      | 4.39       |      |   |           | 1,411,155 |           |   |         | 63,646 |        |  |      | 4.51 |     
|                                                                     | Nontaxable securities(3)        |                                         |           | 222,196   |           |            |         | 10,617  |        |          |      | 4.78       |      |   |           | 197,885   |           |   |         | 9,477  |        |  |      | 4.79 |     
|                                                                     | Other                           |                                         |           | 56,179    |           |            |         | 2,121   |        |          |      | 3.78       |      |   |           | 30,770    |           |   |         | 649    |        |  |      | 2.11 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total interest-earning assets                                        |                                 |                                         | 6,715,835 |           |           |            | 402,400 |         |        |          | 5.99 |            |      |   | 5,717,609 |           |           |   | 300,064 |        |        |  | 5.25 |     
|Noninterest-earning assets                                           |                                 |                                         | 259,142   |           |           |            |        |         |        |          |      |            |      |   | 222,289   |           |           |   |        |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total assets                                                         |                                 | $                                       | 6,974,977 |           |           | $          | 402,400 |         |        |          | 5.77 | %          |      | $ | 5,939,898 |           |           | $ | 300,064 |        |        |  | 5.05 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Interest-bearing liabilities:                                        |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|                                                                     | Deposits:                       |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |      |     
|                                                                     |                                 | NOW, checking and money market accounts |           | $         | 1,095,964 |            |         | $       | 20,572 |          |      |            | 1.88 | % |           | $         | 827,861   |   |         | $      | 9,295  |  |      |      | 1.12 | %
|                                                                     |                                 | Savings accounts                        |           |           | 841,271   |            |         |         | 9,336  |          |      |            | 1.11 |   |           |           | 921,106   |   |         |        | 8,451  |  |      |      | 0.92 |  
|                                                                     |                                 | Time deposits                           |           |           | 3,169,956 |            |         |         | 93,409 |          |      |            | 2.95 |   |           |           | 2,699,287 |   |         |        | 49,521 |  |      |      | 1.83 |  
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|                                                                     | Total interest-bearing deposits |                                         |           | 5,107,191 |           |            |         | 123,317 |        |          |      | 2.41       |      |   |           | 4,448,254 |           |   |         | 67,267 |        |  |      | 1.51 |     
|                                                                     | Short-term borrowings           |                                         |           | 304,251   |           |            |         | 10,605  |        |          |      | 3.49       |      |   |           | 172,225   |           |   |         | 2,165  |        |  |      | 1.26 |     
|                                                                     | Long-term borrowings            |                                         |           | 361,411   |           |            |         | 18,635  |        |          |      | 5.16       |      |   |           | 299,252   |           |   |         | 14,966 |        |  |      | 5.00 |     
|                                                                     | Subordinated debentures         |                                         |           | 131,901   |           |            |         | 9,353   |        |          |      | 7.09       |      |   |           | 136,000   |           |   |         | 8,185  |        |  |      | 6.02 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total interest-bearing liabilities                                   |                                 |                                         | 5,904,754 |           |           |            | 161,910 |         |        |          | 2.74 |            |      |   | 5,055,731 |           |           |   | 92,583  |        |        |  | 1.83 |     
|Noninterest-bearing deposits                                         |                                 |                                         | 448,301   |           |           |            |        |         |        |          |      |            |      |   | 374,269   |           |           |   |        |        |        |  |      |     
|Other noninterest-bearing liabilities                                |                                 |                                         | 90,800    |           |           |            |        |         |        |          |      |            |      |   | 57,445    |           |           |   |        |        |        |  |      |     
|Stockholders equity                                                 |                                 |                                         | 531,122   |           |           |            |        |         |        |          |      |            |      |   | 452,453   |           |           |   |        |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total liabilities and stockholders equity                           |                                 | $                                       | 6,974,977 |           |           | $          | 161,910 |         |        |          | 2.32 | %          |      | $ | 5,939,898 |           |           | $ | 92,583  |        |        |  | 1.56 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Net interest income/net interest rate spread(4)(5)                   |                                 |                                         |           |           |           | $          | 240,490 |         |        |          | 3.25 | %          |      |   |           |           |           | $ | 207,481 |        |        |  | 3.42 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Net interest-earning assets/net interest
    margin(5)(6)            |                                 | $                                       | 811,081   |           |           |            |         |         |        |          | 3.58 | %          |      | $ | 661,878   |           |           |   |         |        |        |  | 3.63 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Ratio of interest-earning assets to
    interest-bearing liabilities |                                 |                                         | 1.14      | x         |           |            |         |         |        |          |      |            |      |   | 1.13      | x         |           |   |         |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     



---



|    |                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Nonaccrual loans are included in the table for
    computation purposes; however, interest for such loans is
    recognized on a cash basis.                                                                                 
|   
|(2) | 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 rate spread and net interest margin
    are calculated on a nontax equivalent basis.                                                                                                                            
|   
|(6) | Net interest margin represents net interest
    income divided by average interest-earning assets.                                                                                                                           

The net interest margin, calculated on a tax
equivalent basis, was 3.66% for the year ended December 31,
2005, as compared to 3.72% for 2004. Certain interest-earning
assets of the Company qualify for federal tax exemptions or
credits. The net interest margin, calculated on a tax equivalent
basis, considers the tax benefit

33



---



##### Table of Contents



derived from these assets. The net interest
margin decline reflects the impact of increased costs of money
market accounts and certificates of deposit resulting from
higher market interest rates, the change in the composition of
deposits and the procurement of costlier certificates of deposit
from brokers partially offset by higher loan yields.


Average interest-earning assets for the year
ended December 31, 2005, increased 17.5% compared to the
year ended December 31, 2004, primarily as a result of
organic commercial loan growth. Average outstanding loans
increased by $1.07 billion for the year ended
December 31, 2005, from the year ended December 31,
2004, principally as a result of UCBs continued focus on
commercial lending activities. Average commercial loan balances
increased 24.9% compared to the corresponding period of 2004,
primarily due to UCBs past emphasis on commercial real
estate and continued emphasis on commercial business loans, and
expansion of its Hong Kong branch. Average consumer loans for
the year ended December 31, 2005, increased
$157.1 million, or 38.9%, compared to the same period in
2004. As of December 31, 2005, total loans represented
75.3% of total assets. New loan commitments of
$3.91 billion for the year ended December 31, 2005,
were comprised of $3.68 billion in commercial loan
commitments and $229.0 million in consumer loan commitments.

Average securities for the year ended
December 31, 2005, were down $98.3 million, or 6.1%,
from the year ended December 31, 2004. One of the
Companys long-term goals is to reduce the securities
portfolio to a range of 10% to 15% of the balance sheet. The
current level is 17.9%.

Average total deposits increased
$733.0 million, or 15.2%, for the year ended
December 31, 2005, from the year ended December 31,
2004, reflecting UCBs ongoing focus on the generation of
commercial and consumer demand deposits. Also, for the first
time, UCB accepted $156.8 million in brokered deposits.
Average interest-bearing deposits increased to
$5.11 billion for the year ended December 31, 2005, up
14.8% from the year ended December 31, 2004, and average
noninterest-bearing deposits increased to $448.3 million,
or 19.8%, for the year ended December 31, 2005, compared to
the year ended December 31, 2004.

The changes in interest income and interest
expense for the major categories of interest-earning assets and
interest-bearing liabilities, and the amount of change that is
attributable to volume and rate changes by comparing the years
ended December 31, 2005 to 2004, are as follows (dollars in
thousands):

|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |         |        | 
|------------------------------------------ | ---------------------------------------------------------- | ---------------------------------------- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | - | ------ | ------- | ------ | 
|                                           |                                                            |                                         
|                                           |                                                            | Year Ended December 31, 2005            
|                                           |                                                            | Compared to 2004                        
|                                           |                                                            |                                         
|                                           |                                                            |                                          |        |       
|                                           |                                                            | Changes due to                           |        |       
|                                           |                                                            |                                          |        |       
|                                           |                                                            | Volume                                   |        | Rate   |        | Total
|                                           |                                                            |                                          |        |        |        |      
|Interest income:                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|                                           | Loans                                                      |                                          | $      | 69,308 |        |       | $      | 37,559 |        |   | $      | 106,867 |       
|                                           | Taxable securities                                         |                                          |        | (5,378 | )      |       |        | (1,765 | )      |   |        | (7,143  | )     
|                                           | Nontaxable securities                                      |                                          |        | 1,162  |        |       |        | (22    | )      |   |        | 1,140   |       
|                                           | Other                                                      |                                          |        | 959    |        |       |        | 513    |        |   |        | 1,472   |       
|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|                                           | Total interest income on interest-earning assets           |                                          |        | 66,051 |        |       |        | 36,285 |        |   |        | 102,336 |       
|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|Interest expense:                          |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|                                           | Deposits:                                                  |                                          |        |        |        |       |        |        |        |   |        |         |       
|                                           |                                                            | NOW, checking, and money market accounts |        |        | 5,032  |       |        |        | 6,245  |   |        |         | 11,277 | 
|                                           |                                                            | Savings accounts                         |        |        | (886   | )     |        |        | 1,771  |   |        |         | 885    | 
|                                           |                                                            | Time deposits                            |        |        | 13,869 |       |        |        | 30,019 |   |        |         | 43,888 | 
|                                           | Short-term borrowings                                      |                                          |        | 4,602  |        |       |        | 3,838  |        |   |        | 8,440   |       
|                                           | Long-term borrowings                                       |                                          |        | 3,205  |        |       |        | 464    |        |   |        | 3,669   |       
|                                           | Subordinated debentures                                    |                                          |        | (291   | )      |       |        | 1,459  |        |   |        | 1,168   |       
|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|                                           | Total interest expense on interest-bearing
    liabilities |                                          |        | 25,531 |        |       |        | 43,796 |        |   |        | 69,327  |       
|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        
|Increase (decrease) in net interest income |                                                            | $                                        | 40,520 |        |        | $     | (7,511 | )      |        | $ | 33,009 |        
|                                           |                                                            |                                          |        |        |        |       |        |        |        |   |        |        

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Changes not solely attributable to rate or volume
have been allocated to volume and rate changes in proportion to
the relationship of the absolute dollar amounts of the changes
in each.

Provision for Loan
Losses.The provision for loan losses
is the amount of expense that, based on our judgment, is
required to maintain the allowance for loan losses at an
adequate level. The provision for unfunded lending commitments
is used to maintain the allowance for unfunded lending
commitments at an adequate level. In determining adequate levels
of the allowances, we perform periodic evaluations of UCBs
various portfolios, and considering the levels of actual loan
losses and statistical trends and other economic factors. See
Credit Risk Management for more information on how
we determine the appropriate level for the allowances for loan
and lease losses and unfunded lending commitments.

For the year ended December 31, 2005, the
provision for loan losses was $6.1 million, compared to
$4.2 million for 2004. The higher provision for 2005
reflects the growth in the loan portfolio partially offset by
improvements in certain loss factors used in determining the
appropriate level of the allowance for loan losses.

Noninterest Income.Noninterest income decreased by $4.2 million, or 13.6%, for
the year ended December 31, 2005, compared to the year
ended December 31, 2004. The decrease was primarily
attributable to a decrease in gains from the sale of securities.
UCB incurred a $5,000 loss on sale of securities for the year
ended December 31, 2005, as compared to a
$12.7 million gain on sale of securities for 2004. In
addition, UCB incurred a $1.2 million in unrealized losses
resulting from lower of cost or market adjustments on the
multifamily and commercial real estate loans in the loans held
for sale portfolio during the year ended December 31, 2005.
These factors were partially offset by an increase in gains on
sale of multifamily real estate and other loans of
$12.2 million for the year ended December 31, 2005,
compared to $7.7 million for the same period in 2004. In
addition, there was an increase in commercial banking fees to
$10.6 million for the year ended December 31, 2005,
compared to $8.3 million for the same period in 2004.
Included in the loss on sale of securities for the year ended
December 31, 2005, was a gain of $614,000 resulting from
the sale of $29.7 million of securities classified as
available for sale to provide funding for executing the
Companys plan required by the American Jobs Creation Act
of 2004 (AJCA).

Noninterest Expense.Noninterest expense increased $17.8 million, or 17.91%, for
the year ended December 31, 2005, compared to the year
ended December 31, 2004. The increase resulted principally
from increases in personnel expenses, occupancy expenses,
professional fees and contracted services, and loss on
extinguishment of junior subordinated debentures. For the year
ended December 31, 2005, personnel expenses increased
18.1%, from the year ended December 31, 2004, due to
additional staffing required to support the growth of UCBs
commercial banking business, the expansion of the Hong Kong
branch, the opening of new branches in California and New York,
and the expansion of UCBs infrastructure to support a
larger and growing organization. These increases were partially
offset by a reduction in discretionary and incentive bonuses.
Occupancy expenses increased by 20.41% for the year ended
December 31, 2005, compared to the year ended
December 31, 2004, as a result of a write-off of leasehold
improvements, the opening of new branches in California and New
York, completion of the relocation of the San Francisco
headquarters and the expansion of the Hong Kong branch. Also,
for the year ended December 31, 2005, occupancy expenses
reflect a full year of occupancy expenses related to branches
and representative offices, which had been opened during the
latter part of 2004. Professional fees and contracted services
increased by 43.6% for the year ended December 31, 2005,
compared to the year ended December 31, 2004, as a result
of higher consulting fees resulting from continued
self-assessment and compliance related to the requirements of
the Sarbanes-Oxley Act of 2002. The Company also incurred a loss
on extinguishment of the 9.375% junior subordinated debentures
due May 1, 2028, of $1.2 million from the write-off of
the unamortized subordinated debenture issuance costs for the
year ended December 31, 2005.

Income Tax Expense.Income tax expense was $46.3 million on income before taxes
of $144.2 million for the year ended December 31,
2005, compared to $49.4 million on income before taxes of
$135.0 million for the same period in 2004. The effective
tax rate for the year ended December 31, 2005, was 32.1%,
compared with 36.6% for the year ended December 31, 2004.
These rates are generally lower than the combined federal and
state statutory rate of 42.0%, primarily due to federal and
state tax credits and incentives, tax-exempt income, the true-up
of tax estimates for the enterprise zone credits and the
reversal of the deferred tax liability related to unremitted
earnings of its foreign subsidiary more fully described below.

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During the three months ended June 30, 2005,
the Company elected to repatriate approximately
$26.7 million in previously unremitted foreign earnings.
During the three months ended December 31, 2005, the
Company repatriated $26.7 million in previously unremitted
foreign earnings. As a result, the Company has recorded current
taxes payable on such previously unremitted foreign earnings of
approximately $703,000. In addition, the Company has recorded a
reduction to deferred tax liabilities of approximately
$4.6 million as a result of the reversal of the deferred
tax liability related to unremitted earnings of its foreign
subsidiary. This results in a net tax benefit of approximately
$3.9 million.



| |                                                                           
| | --------------------------------------------------------------------------
| | Year Ended December 31, 2004, Compared
    to Year Ended December 31, 2003

The consolidated net income of the Company during
the year ended December 31, 2004, increased by
$21.0 million, or 32.4%, to $85.6 million, compared to
$64.6 million for the preceding year, primarily as a result
of the increase in interest-earning assets. The return on
average assets (ROA) and the return on average
equity (ROE) for the year ended December 31,
2004, improved primarily due to higher net interest income. The
slight decrease in the efficiency ratio from December 31,
2004 compared to December 31, 2003 was primarily due to
higher interest income and a $7.7 million gain in
multifamily loan sales.

Net Interest Income and Net Interest
Margin.Net interest income before
provision for loan losses increased $38.9 million for the
year ended December 31, 2004 compared to the prior year.
The increase in net interest income reflects the growth in
interest-earning assets, primarily in the Companys loan
portfolio, coupled with a 23 basis point improvement in the net
interest margin. The average cost of deposits decreased 22 basis
points from 2003 to 2004. This savings was partially offset by a
12 basis point decrease in average loan yields from 2003 to
2004. The decreases in loan yields and the deposit costs reflect
the decline in the overall market interest rate environment from
the prior year. The decrease in loan yields also reflects
repricing of adjustable-rate loans resulting from reductions in
market interest rate indices, as well as the impact of
accelerated prepayments on higher-yielding loans due to the low
market interest rates.

The average yield on taxable securities increased
15 basis points in the year ended December 31, 2004, from
the year ended December 31, 2003. The average yield on
nontaxable securities decreased 6 basis points in the year ended
December 31, 2004, from the year ended December 31,
2003. Premiums on securities purchased as a percentage of the
outstanding balance on the securities portfolio declined
substantially between December 31, 2003, and
December 31, 2004. In the second quarter of 2003, the
Company began to sell securities with purchased premiums and
replace them with bonds that were discounted or close to par.
This restructuring of the securities portfolio was completed in
the second quarter of 2004. Additionally, in the third quarter
of 2003, amortization of the investments premium increased as a
result of accelerated prepayments caused by the sharp decline in
the general level of market interest rates. The effect of these
factors was partially offset by the higher average yield on
securities in the first quarter of 2003 compared with the same
period in 2004, reflecting the decline in market interest rates
subsequent to the first quarter of 2003.

The net interest margin, calculated on a tax
equivalent basis, was 3.72% for the year ended December 31,
2004, as compared to 3.49% for the prior year. Certain
interest-earning assets of the Company qualify for state or
federal tax exemptions or credits. The net interest margin,
calculated on a tax equivalent basis, considers the tax benefit
derived from these assets. The increase in the net interest
margin reflects the favorable impact of increasing loans and
related yields while decreasing the cost of deposits.

The increase of $776.8 million on average
interest-earning assets for the year ended December 31,
2004, resulted primarily from organic commercial loan growth.
Average outstanding loans increased by $697.7 million for
the year ended December 31, 2004, from the same period last
year as a result of UCBs continued focus on commercial
lending activities. Average commercial loan balances increased
$655.5 million for the year ended December 31, 2004.
This increase was primarily due to UCBs continued emphasis
on commercial real estate and commercial business loans. Average
consumer loans for the years ended December 31, 2004 and
2003, were at $404.0 million and $361.5 million,
respectively. As of December 31, 2004, the loan pipeline
approximated $1.35 billion, which was comprised of
$1.32 billion for commercial loans and $29.4 million
of consumer loans.

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Average securities increased $58.2 million
for the year ended December 31, 2004. Securities
prepayments, which accelerated with the low market interest rate
environment, were substantially replaced with new securities
purchases. During 2004, the Company also sold securities with an
aggregate principal balance of $809.1 million. Securities
were sold in 2004 to protect the Company from accelerating
prepayments of securities with purchase premiums in a time of
increasing market interest rates. The Companys
restructuring strategy was to replace securities that have high
prepayment and extension risk with shorter-dated securities with
less prepayment and extension risk.

Average outstanding deposits increased
$561.3 million for the year ended December 31, 2004,
compared to the prior year. This increase is a result of the
Companys ongoing focus on the generation of commercial and
consumer demand deposits. Average interest-bearing and average
noninterest-bearing deposits increased $483.4 million and
$78.0 million, respectively, for the year ended
December 31, 2004, compared to the prior year.

The following is the distribution of average
assets and liabilities, and stockholders equity, as well
as the total dollar amounts of interest income from average
interest-earning assets, and the resultant yields and dollar

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amounts of interest expense of average
interest-bearing liabilities, expressed both in dollars and
rates for the years ended December 31, 2004 and 2003
(dollars in thousands):


|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |      |      | 
|-------------------------------------------------------------------- | ------------------------------- | --------------------------------------- | --------- | --------- | --------- | ---------- | ------- | ------- | ------ | -------- | ---- | ---------- | ---- | - | --------- | --------- | --------- | - | ------- | ------ | ------ |  | ---- | ---- | ---- | 
|                                                                     |                                 |                                         |           |          
|                                                                     |                                 | 2004                                    |           | 2003     
|                                                                     |                                 |                                         |           |          
|                                                                     |                                 |                                         |           | Interest  |           |            |         |         |        | Interest |      |           
|                                                                     |                                 | Average                                 |           | Income/   |           | Average    |         | Average |        | Income/  |      | Average   
|                                                                     |                                 | Balance                                 |           | Expense   |           | Yield/Cost |         | Balance |        | Expense  |      | Yield/Cost
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |           
|Interest-Earning Assets:                                             |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Loans(1)(2)                                                          |                                 | $                                       | 4,077,799 |           |           | $          | 226,292 |         |        |          | 5.55 | %          |      | $ | 3,380,121 |           |           | $ | 191,754 |        |        |  | 5.67 | %   
|                                                                     | Taxable securities(3)           |                                         |           | 1,411,155 |           |            |         | 63,646  |        |          |      | 4.51       |      |   |           | 1,395,621 |           |   |         | 60,915 |        |  |      | 4.36 |     
|                                                                     | Nontaxable securities(3)        |                                         |           | 197,885   |           |            |         | 9,477   |        |          |      | 4.79       |      |   |           | 155,220   |           |   |         | 7,532  |        |  |      | 4.85 |     
|                                                                     | Other                           |                                         |           | 30,770    |           |            |         | 649     |        |          |      | 2.11       |      |   |           | 9,826     |           |   |         | 61     |        |  |      | 0.62 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total interest-earning assets                                        |                                 |                                         | 5,717,609 |           |           |            | 300,064 |         |        |          | 5.25 |            |      |   | 4,940,788 |           |           |   | 260,262 |        |        |  | 5.27 |     
|Noninterest-earning assets                                           |                                 |                                         | 222,289   |           |           |            |        |         |        |          |      |            |      |   | 209,442   |           |           |   |        |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total assets                                                         |                                 | $                                       | 5,939,898 |           |           | $          | 300,064 |         |        |          | 5.05 |            |      | $ | 5,150,230 |           |           | $ | 260,262 |        |        |  | 5.05 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Interest-bearing liabilities:                                        |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|                                                                     | Deposits:                       |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |      |     
|                                                                     |                                 | NOW, checking and money market accounts |           | $         | 827,861   |            |         | $       | 9,295  |          |      |            | 1.12 |   |           | $         | 624,330   |   |         | $      | 6,774  |  |      |      | 1.09 | 
|                                                                     |                                 | Savings accounts                        |           |           | 921,106   |            |         |         | 8,451  |          |      |            | 0.92 |   |           |           | 787,796   |   |         |        | 7,191  |  |      |      | 0.91 | 
|                                                                     |                                 | Time deposits                           |           |           | 2,699,287 |            |         |         | 49,521 |          |      |            | 1.83 |   |           |           | 2,552,769 |   |         |        | 54,759 |  |      |      | 2.15 | 
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|                                                                     | Total interest-bearing deposits |                                         |           | 4,448,254 |           |            |         | 67,267  |        |          |      | 1.51       |      |   |           | 3,964,895 |           |   |         | 68,724 |        |  |      | 1.73 |     
|                                                                     | Short-term borrowings           |                                         |           | 172,225   |           |            |         | 2,165   |        |          |      | 1.26       |      |   |           | 76,827    |           |   |         | 1,084  |        |  |      | 1.41 |     
|                                                                     | Long- term borrowings           |                                         |           | 299,252   |           |            |         | 14,966  |        |          |      | 5.00       |      |   |           | 272,147   |           |   |         | 13,984 |        |  |      | 5.14 |     
|                                                                     | Subordinated debentures         |                                         |           | 136,000   |           |            |         | 8,185   |        |          |      | 6.02       |      |   |           | 136,000   |           |   |         | 7,922  |        |  |      | 5.83 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total interest-bearing liabilities                                   |                                 |                                         | 5,055,731 |           |           |            | 92,583  |         |        |          | 1.83 |            |      |   | 4,449,869 |           |           |   | 91,714  |        |        |  | 2.06 |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Noninterest-bearing deposits                                         |                                 |                                         | 374,269   |           |           |            |        |         |        |          |      |            |      |   | 296,306   |           |           |   |        |        |        |  |      |     
|Other noninterest-bearing liabilities                                |                                 |                                         | 57,445    |           |           |            |        |         |        |          |      |            |      |   | 61,046    |           |           |   |        |        |        |  |      |     
|Stockholders equity                                                 |                                 |                                         | 452,453   |           |           |            |        |         |        |          |      |            |      |   | 343,009   |           |           |   |        |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Total liabilities and stockholders equity                           |                                 | $                                       | 5,939,898 |           |           | $          | 92,583  |         |        |          | 1.56 | %          |      | $ | 5,150,230 |           |           | $ | 91,714  |        |        |  | 1.78 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Net interest income/net interest rate spread(4)(5)                   |                                 |                                         |           |           |           | $          | 207,481 |         |        |          | 3.42 | %          |      |   |           |           |           | $ | 168,548 |        |        |  | 3.21 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Net interest-earning assets/net interest
    margin(5)(6)            |                                 | $                                       | 661,878   |           |           |            |         |         |        |          | 3.63 | %          |      | $ | 490,919   |           |           |   |         |        |        |  | 3.41 | %   
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     
|Ratio of interest-earning assets to
    interest-bearing liabilities |                                 |                                         | 1.13      | x         |           |            |         |         |        |          |      |            |      |   | 1.11      | x         |           |   |         |        |        |  |      |     
|                                                                     |                                 |                                         |           |           |           |            |         |         |        |          |      |            |      |   |           |           |           |   |         |        |        |  |      |     



---



|    |                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 rate spread and net interest margin
    are calculated on a nontax equivalent basis.                                                                                                                            
|   
|(6) | Net interest margin represents net interest
    income divided by average interest-earning assets.                                                                                                                           

Our net interest income is affected by changes in
the amount and mix of our interest-earning assets and
interest-bearing liabilities, referred to as volume
changes. It is also affected by changes in the yields that
we earn on interest-earning assets and rates that we pay on
interest-bearing deposits and other borrowed funds, referred to
as rate changes.

38



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The changes in interest income and interest
expense for the major categories of interest-earning assets and
interest-bearing liabilities, and the amount of change that is
attributable to volume and rate changes by comparing the years
ended December 31, 2004 to 2003, are as follows (dollars in
thousands):

|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |        |        |  
|------------------------------------------ | ----------------------- | ---------------------------------------------------------- | ------ | ------ | ------ | ----- | ----- | ------ | ------ | - | ------ | ------ | ------ | -
|                                           |                         |                                                           
|                                           |                         | Year Ended December 31, 2004                              
|                                           |                         | Compared to 2003                                          
|                                           |                         |                                                           
|                                           |                         |                                                            |        |       
|                                           |                         | Changes due to                                             |        |       
|                                           |                         |                                                            |        |       
|                                           |                         | Volume                                                     |        | Rate   |        | Total
|                                           |                         |                                                            |        |        |        |      
|Interest income:                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|                                           | Loans                   |                                                            | $      | 38,717 |        |       | $     | (4,179 | )      |   | $      | 34,538 |       
|                                           | Taxable securities      |                                                            |        | 701    |        |       |       | 2,030  |        |   |        | 2,731  |       
|                                           | Nontaxable securities   |                                                            |        | 2,043  |        |       |       | (98    | )      |   |        | 1,945  |       
|                                           | Other                   |                                                            |        | 442    |        |       |       | 146    |        |   |        | 588    |       
|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|                                           |                         | Total interest income on interest-earning assets           |        |        | 41,903 |       |       |        | (2,101 | ) |        |        | 39,802 |  
|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|Interest expense:                          |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|                                           | Deposits:               |                                                            |        |        |        |       |       |        |        |   |        |        |       
|                                           |                         | NOW, checking, and money market accounts                   |        |        | 2,285  |       |       |        | 236    |   |        |        | 2,521  |  
|                                           |                         | Savings accounts                                           |        |        | 1,223  |       |       |        | 37     |   |        |        | 1,260  |  
|                                           |                         | Time deposits                                              |        |        | 2,688  |       |       |        | (7,926 | ) |        |        | (5,238 | )
|                                           | Short-term borrowings   |                                                            |        | 1,199  |        |       |       | (118   | )      |   |        | 1,081  |       
|                                           | Long-term borrowings    |                                                            |        | 1,356  |        |       |       | (374   | )      |   |        | 982    |       
|                                           | Subordinated debentures |                                                            |        |       |        |       |       | 263    |        |   |        | 263    |       
|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|                                           |                         | Total interest expense on interest-bearing
    liabilities |        |        | 8,751  |       |       |        | (7,882 | ) |        |        | 869    |  
|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       
|Increase (decrease) in net interest income |                         | $                                                          | 33,152 |        |        | $     | 5,781 |        |        | $ | 38,933 |       
|                                           |                         |                                                            |        |        |        |       |       |        |        |   |        |       

Changes not solely attributable to rate or volume
have been allocated to volume and rate changes in proportion to
the relationship of the absolute dollar amounts of the changes
in each.

Provision for Loan Losses.For the year 2004, the provision for
loan losses was $4.2 million and $10.0 million for
2003. The decline from 2003 is a result of improvements in the
overall credit quality in the loan portfolio.

Noninterest Income.Our noninterest income increased by $7.7 million, or 33.1%,
for the year ended December 31, 2004, compared to the
preceding year. The increase was primarily due to increases in
commercial banking fees and gains on sales of loans and
securities. During 2004, UCB sold $362.4 million of
multifamily loans for a gain of $7.7 million. There were no
multifamily loans sales in prior years. Commercial banking fees
increased 24.1% to $8.3 million for the year ended
December 31, 2004, as compared to $6.7 million for the
corresponding period of 2003, as a result of increased
commercial banking activities, primarily our trade finance
business.

The Company recognized $2.2 million of
equity losses from its CRA-related investments during the year
ended December 31, 2004. As disclosed in Note 1 to the
Consolidated Financial Statements, the Company invests in CRA
qualified investments. Such investments have increased to assist
UCB in fulfilling its requirements under the Community
Reinvestment Act. The $2.2 million was our share of the
underlying investment equity losses exclusive of tax benefits
and credits. The tax savings on such equity losses was
$2.2 million, which includes $929,000 of a reduction of
income taxes and $1.2 million resulting from CRA-related
tax credits.

Noninterest Expense.Our noninterest expense increased $18.9 million, or 23.6%,
compared to 2003. Personnel expenses increased by
$8.6 million from 2003 to 2004 due to the additional
staffing required to support the growth of UCBs commercial
banking business, the expansion of the Hong Kong and California
branches, the expansion of UCBs infrastructure to support
a larger and growing organization, and the FCB acquisition,
which closed in July 2003. Professional fees and contracted
services increased by 29.2% to

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$7.5 million in 2004 compared to
$5.8 million in 2003, predominately as a result of
preparation costs related to Sarbanes-Oxley compliance.
Furniture and equipment increased 44.9% and occupancy expenses
increased 73.2% for 2004 compared to 2003, reflecting primarily
the opening of the Foster City, Torrance, Westminster and Van
Nuys branches in California, the Bowery Branch in New York, the
expansion of the Hong Kong branch and the Companys
corporate headquarters office relocation. The increase in other
general and administrative expenses of $1.4 million for
2004, compared with 2003 was primarily related to the
Companys continued expansion, corporate headquarters
office relocation and higher advertising costs.


Income Tax Expense.During 2004, we recorded a $49.4 million provision for
income taxes, which resulted in an effective tax rate of 36.6%,
compared with an effective tax rate of 36.4% for the year ended
December 31, 2003. The effective tax rates for 2004 and
2003 reflect the realization of tax benefits from UCBs
lending and hiring activities in Enterprise Zones areas in
California, the federal and state tax benefits from qualified
investments pursuant to the Community Reinvestment Act and the
Federal tax benefit from UCBs municipal bond portfolio.

BUSINESS SEGMENT RESULTS

Currently, UCB comprises substantially all of the
Companys operations. In addition, no portion of UCB meets
the thresholds designated by generally accepted accounting
principles for separate segment disclosures. As a result, the
previous discussion of the results of operations and the
subsequent balance sheet analyses are applicable to UCB as well
as to the Company. See Note 26 to the Consolidated Financial
Statements for additional information on the Companys
segments.

BALANCE SHEET ANALYSIS

Investment Securities

UCB maintains an investment and mortgage-backed
securities portfolio (Portfolio) to provide both
liquidity and to enhance the income of the organization. The
Portfolio is comprised of two segments: Available for Sale
(AFS) and Held to Maturity (HTM).
UCBs AFS Portfolio is recorded at fair value, with
unrealized changes in the fair value of the securities reflected
as accumulated other comprehensive income (loss). At the end of
each month, UCB adjusts the carrying value of its AFS Portfolio
to reflect the current fair value of each security. The HTM
Portfolio is carried at amortized cost. At the time a security
is purchased, UCB classifies the security either as AFS or HTM.
The securities are classified as HTM if UCB has the positive
intent and ability to hold such securities to maturity.

UCBs Portfolio investments are governed by
an Asset/ Liability Policy (A/ L Policy), which is
approved by UCBs Board of Directors. The A/ L Policy sets
exposure limits for selected investments, as a function of total
assets, total securities and Tier 1 capital, as well as the
maximum maturity and duration limits. The A/ L Policy also
limits the concentration in a particular investment as a
function of the total issue. Finally, the A/ L Policy sets goals
for each type of investment with respect to ROA, ROE and total
risk-based capital ratio and also sets limits for interest rate
sensitivity for each type of investment.

Investments permitted by the A/ L Policy include
United States Government obligations, agency securities,
municipal obligations, investment grade securities, commercial
paper, corporate debt, money market mutual funds and guaranteed
preferred beneficial interests in junior subordinated
debentures. UCBs Board of Directors has directed
management to invest in securities with the objective of
optimizing the yield on investments that appropriately balances
the risk-based capital utilization and interest rate
sensitivity. The A/ L Policy requires that all securities be of
investment grade at the time of purchase.

The AFS and HTM balance decreased by
$68.0 million from December 31, 2004, to
December 31, 2005. With respect to the AFS portfolio, this
was primarily the result of sales of $108.2 million,
principal payments and securities calls of $193.4 million,
and maturities and payoffs of $273.2 million, partially
offset by purchases of $507.8 million. UCBs HTM
Portfolio declined from $325.2 million at December 31,
2004, to $308.6 million at December 31, 2005. This
decrease resulted from the receipt of principal payments of
$26.3 million. UCB plans from time to time to continue to
purchase securities for its HTM Portfolio. However, for the
foreseeable future, UCB expects that the majority of its
Portfolio will be classified as AFS.

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UCB intends to continue restructure its balance
sheet by accelerating the organic growth of its loan portfolio
and decreasing its securities concentration.


The amortized cost and market value of the
Portfolio at December 31, 2005, 2004 and 2003, were as
follows (dollars in thousands):

|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |         | 
|---------------------------------------------------------------------- | -------------------------- | --------- | --------- | ------- |  | --------- | --------- | ------- |  | --------- | --------- | ------- |  | - | --------- | ------- |  | - | --------- | ------- |  | - | --------- | ------- | 
|                                                                       |                            |           |           |         |  |          
|                                                                       |                            | 2005      |           | 2004    |  | 2003     
|                                                                       |                            |           |           |         |  |          
|                                                                       |                            | Amortized |           | Market  |  | Amortized |           | Market  |  | Amortized |           | Market 
|                                                                       |                            | Cost      |           | Value   |  | Cost      |           | Value   |  | Cost      |           | Value  
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |        
|Investment securities available for sale:                              |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|                                                                       | Trust preferred securities |           | $         | 33,443  |  |           | $         | 32,946  |  |           | $         | 18,441  |  |   | $         | 18,219  |  |   | $         | 13,189  |  |   | $         | 12,795  | 
|                                                                       | Federal agency notes       |           |           | 159,655 |  |           |           | 155,185 |  |           |           | 232,594 |  |   |           | 230,046 |  |   |           | 222,309 |  |   |           | 218,753 | 
|                                                                       | Asset-backed securities    |           |           |        |  |           |           |        |  |           |           |        |  |   |           |        |  |   |           | 16,426  |  |   |           | 16,285  | 
|                                                                       | Municipals                 |           |           |        |  |           |           |        |  |           |           |        |  |   |           |        |  |   |           | 90      |  |   |           | 90      | 
|                                                                       | Domestic corporate bonds   |           |           |        |  |           |           |        |  |           |           |        |  |   |           |        |  |   |           | 5,153   |  |   |           | 5,148   | 
|                                                                       | Commercial paper           |           |           |        |  |           |           |        |  |           |           |        |  |   |           |        |  |   |           | 9,991   |  |   |           | 9,991   | 
|                                                                       | Other                      |           |           | 11,012  |  |           |           | 10,911  |  |           |           |        |  |   |           |        |  |   |           |        |  |   |           |        | 
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total investment securities available for sale                         |                            |           | 204,110   |         |  |           | 199,042   |         |  |           | 251,035   |         |  |   | 248,265   |         |  |   | 267,158   |         |  |   | 263,062   |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Mortgage-backed securities available for sale:                         |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|                                                                       | FNMA                       |           |           | 355,135 |  |           |           | 344,190 |  |           |           | 366,307 |  |   |           | 363,097 |  |   |           | 440,835 |  |   |           | 440,453 | 
|                                                                       | GNMA                       |           |           | 88,184  |  |           |           | 85,033  |  |           |           | 106,501 |  |   |           | 105,072 |  |   |           | 79,103  |  |   |           | 78,842  | 
|                                                                       | FHLMC                      |           |           | 302,540 |  |           |           | 292,316 |  |           |           | 288,789 |  |   |           | 285,965 |  |   |           | 275,882 |  |   |           | 273,940 | 
|                                                                       | Other                      |           |           | 202,264 |  |           |           | 197,143 |  |           |           | 167,719 |  |   |           | 166,741 |  |   |           | 163,687 |  |   |           | 164,773 | 
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total mortgage-backed securities available for
    sale                |                            |           | 948,123   |         |  |           | 918,682   |         |  |           | 929,316   |         |  |   | 920,875   |         |  |   | 959,507   |         |  |   | 958,008   |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total investment and mortgage-backed securities
    available for sale |                            |           | 1,152,233 |         |  |           | 1,117,724 |         |  |           | 1,180,351 |         |  |   | 1,169,140 |         |  |   | 1,226,665 |         |  |   | 1,221,070 |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Investment securities held to maturity:                                |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|                                                                       | Municipals                 |           |           | 225,573 |  |           |           | 232,279 |  |           |           | 215,594 |  |   |           | 222,297 |  |   |           | 184,264 |  |   |           | 187,735 | 
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Mortgage-backed securities held to maturity:                           |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|                                                                       | FNMA                       |           |           | 5,112   |  |           |           | 4,923   |  |           |           | 5,765   |  |   |           | 5,689   |  |   |           |        |  |   |           |        | 
|                                                                       | GNMA                       |           |           | 77,261  |  |           |           | 76,133  |  |           |           | 102,439 |  |   |           | 102,595 |  |   |           | 99,524  |  |   |           | 98,713  | 
|                                                                       | FHLMC                      |           |           | 662     |  |           |           | 639     |  |           |           | 1,404   |  |   |           | 1,388   |  |   |           |        |  |   |           |        | 
|                                                                       | Other                      |           |           |        |  |           |           |        |  |           |           |        |  |   |           |        |  |   |           | 924     |  |   |           | 924     | 
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total mortgage-backed securities held to maturity                      |                            |           | 83,035    |         |  |           | 81,695    |         |  |           | 109,608   |         |  |   | 109,672   |         |  |   | 100,448   |         |  |   | 99,637    |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total investment and mortgage-backed securities
    held to maturity   |                            |           | 308,608   |         |  |           | 313,974   |         |  |           | 325,202   |         |  |   | 331,969   |         |  |   | 284,712   |         |  |   | 287,372   |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        
|Total investment and mortgage-backed securities                        |                            | $         | 1,460,841 |         |  | $         | 1,431,698 |         |  | $         | 1,505,553 |         |  | $ | 1,501,109 |         |  | $ | 1,511,377 |         |  | $ | 1,508,442 |        
|                                                                       |                            |           |           |         |  |           |           |         |  |           |           |         |  |   |           |         |  |   |           |         |  |   |           |        

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As of December 31, 2005, the carrying value
and the market value of the AFS Portfolio were
$1.15 billion and $1.12 billion, respectively. The
total net unrealized loss on these securities was
$34.5 million. Such unrealized losses are
$20.0 million net of tax and are reflected as accumulated
other comprehensive loss in stockholders equity. The
difference between the carrying value and market value of
securities that are held to maturity, aggregating a gain of
$5.4 million, has not been recognized in the financial
statements as of December 31, 2005. The unrealized net
gains are the result of movements in market interest rates.
Additionally, certain securities that UCB holds have unrealized
losses that extend for periods in excess of twelve months.
However, since the unrealized losses are solely attributable to
movement in market interest rates and UCB has the intent and
ability to hold these securities until recovery of such
unrealized loss, UCB has concluded that the impairment on these
securities is temporary.

Notes 1 and 5 to the Consolidated Financial
Statements discusses the recognition of the unrealized gains and
losses on investment securities and the factors considered by
UCB in assessing whether an unrealized loss is temporary or
other-than-temporary. When an unrealized loss is
determined to be other-than-temporary, the difference between
amortized cost and market value is recorded as a charge against
earnings.

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The carrying value, weighted average yields and
contractual maturities of the Portfolio at December 31,
2005, were as follows (dollars in thousands):

|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|---------------------------------------------------------------------- |  | --------------- | ------ | ------------------ |  | ----------------- | ---- | --------------- |  | -------- | ------ | -------- |  | -------- | ---- | -------- |  | -------- | ------- | -------- |  |  | ---- | - |  | - | --------- |  |  |  | ---- | - |  | - | --------- |  |  |  | ---- | -
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |         
|                                                                       |  |                 |        | After One Year     |  | After Five Years  |      |                 |  |         
|                                                                       |  | Within One Year |        | Through Five Years |  | Through Ten Years |      | After Ten Years |  | Total   
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |         
|                                                                       |  |                 |        | Weighted           |  |                   |      | Weighted        |  |          |        | Weighted |  |          |      | Weighted |  |          |         | Weighted
|                                                                       |  | Carrying        |        | Average            |  | Carrying          |      | Average         |  | Carrying |        | Average  |  | Carrying |      | Average  |  | Carrying |         | Average 
|                                                                       |  | Value           |        | Yield              |  | Value             |      | Yield           |  | Value    |        | Yield    |  | Value    |      | Yield    |  | Value    |         | Yield   
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |         
|Investment securities available for sale:                              |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Trust preferred securities                                             |  | $               |       |                    |  |                   |     | %               |  | $        |       |          |  |          |     | %        |  | $        |        |          |  |  |     | % |  | $ | 32,946    |  |  |  | 5.74 | % |  | $ | 32,946    |  |  |  | 5.74 | %
|Federal agency notes                                                   |  |                 | 9,929  |                    |  |                   | 3.74 |                 |  |          | 56,108 |          |  |          | 4.54 |          |  |          | 89,148  |          |  |  | 4.60 |   |  |   |          |  |  |  |     |   |  |   | 155,185   |  |  |  | 4.52 |  
|Other                                                                  |  |                 | 1,011  |                    |  |                   | 4.62 |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 9,900     |  |  |  | 5.17 |   |  |   | 10,911    |  |  |  | 5.17 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total investment securities available for sale                         |  |                 | 10,940 |                    |  |                   | 3.82 |                 |  |          | 56,108 |          |  |          | 4.54 |          |  |          | 89,148  |          |  |  | 4.60 |   |  |   | 42,846    |  |  |  | 5.61 |   |  |   | 199,042   |  |  |  | 4.76 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Mortgage-backed securities available for sale:                         |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|FNMA                                                                   |  |                 |       |                    |  |                   |     |                 |  |          | 6,836  |          |  |          | 4.18 |          |  |          | 29,676  |          |  |  | 4.76 |   |  |   | 307,678   |  |  |  | 4.68 |   |  |   | 344,190   |  |  |  | 4.68 |  
|GNMA                                                                   |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 85,033    |  |  |  | 4.41 |   |  |   | 85,033    |  |  |  | 4.41 |  
|FHLMC                                                                  |  |                 |       |                    |  |                   |     |                 |  |          | 7,771  |          |  |          | 3.88 |          |  |          | 34,774  |          |  |  | 4.79 |   |  |   | 249,771   |  |  |  | 4.56 |   |  |   | 292,316   |  |  |  | 4.57 |  
|Other                                                                  |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 197,143   |  |  |  | 4.88 |   |  |   | 197,143   |  |  |  | 4.88 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total mortgage-backed securities available for
    sale                |  |                 |       |                    |  |                   |     |                 |  |          | 14,607 |          |  |          | 4.02 |          |  |          | 64,450  |          |  |  | 4.78 |   |  |   | 839,625   |  |  |  | 4.67 |   |  |   | 918,682   |  |  |  | 4.66 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total investment and mortgage-backed securities
    available for sale |  |                 | 10,940 |                    |  |                   | 3.82 |                 |  |          | 70,715 |          |  |          | 4.43 |          |  |          | 153,598 |          |  |  | 4.67 |   |  |   | 882,471   |  |  |  | 4.71 |   |  |   | 1,117,724 |  |  |  | 4.68 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Investment securities held to maturity:                                |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Municipals (1)                                                         |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          | 1,323   |          |  |  | 4.85 |   |  |   | 224,250   |  |  |  | 4.77 |   |  |   | 225,573   |  |  |  | 4.77 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Mortgage-backed securities held to maturity:                           |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|FNMA                                                                   |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 5,112     |  |  |  | 4.67 |   |  |   | 5,112     |  |  |  | 4.67 |  
|GNMA                                                                   |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 77,261    |  |  |  | 4.92 |   |  |   | 77,261    |  |  |  | 4.92 |  
|FHLMC                                                                  |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 662       |  |  |  | 4.10 |   |  |   | 662       |  |  |  | 4.10 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total mortgage-backed securities held to maturity                      |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          |        |          |  |  |     |   |  |   | 83,035    |  |  |  | 4.90 |   |  |   | 83,035    |  |  |  | 4.90 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total investment and mortgage-backed securities
    held to maturity   |  |                 |       |                    |  |                   |     |                 |  |          |       |          |  |          |     |          |  |          | 1,323   |          |  |  | 4.85 |   |  |   | 307,285   |  |  |  | 4.80 |   |  |   | 308,608   |  |  |  | 4.80 |  
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  
|Total investment and mortgage-backed securities                        |  | $               | 10,940 |                    |  |                   | 3.82 | %               |  | $        | 70,715 |          |  |          | 4.43 | %        |  | $        | 154,921 |          |  |  | 4.68 | % |  | $ | 1,189,756 |  |  |  | 4.73 | % |  | $ | 1,426,332 |  |  |  | 4.71 | %
|                                                                       |  |                 |        |                    |  |                   |      |                 |  |          |        |          |  |          |      |          |  |          |         |          |  |  |      |   |  |   |           |  |  |  |      |   |  |   |           |  |  |  |      |  



---



|    |                                                                       
|--- | ----------------------------------------------------------------------
|(1) | Weighted average yield is calculated on a nontax
    equivalent basis.

43



---



##### Table of Contents



Loans

The components of UCBs loans held in
portfolio by amount and percentage of gross loans held in
portfolio for each major loan category at December 31,
2005, 2004, 2003, 2002 and 2001, were as follows (dollars in
thousands):

|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |       | 
|----------------------------------------- | ---------------- | ------ | --------- | --------- |  | ------ | ------ | ----- |  | ------ | --------- | --------- |  | ------ | ------ | ----- |  | ------ | --------- | --------- |  |  | ------ | ----- |  | - | --------- | --------- |  |  | ------ | ----- |  | - | --------- | --------- |  |  | ------ | ----- | 
|                                          |                  |        |           |           |  |        |        |       |  |       
|                                          |                  | 2005   |           | 2004      |  | 2003   |        | 2002  |  | 2001  
|                                          |                  |        |           |           |  |        |        |       |  |       
|                                          |                  | Amount |           | %         |  | Amount |        | %     |  | Amount |           | %         |  | Amount |        | %     |  | Amount |           | %        
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |          
|Commercial:                               |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Secured by real estate  nonresidential   |                  | $      | 2,307,381 |           |  |        | 39.52  | %     |  | $      | 1,943,868 |           |  |        | 47.99  | %     |  | $      | 1,704,138 |           |  |  | 45.18  | %     |  | $ | 1,276,862 |           |  |  | 42.17  | %     |  | $ | 797,310   |           |  |  | 35.21  | %    
|Secured by real estate  multifamily      |                  |        | 1,506,848 |           |  |        | 25.81  |       |  |        | 866,079   |           |  |        | 21.38  |       |  |        | 1,161,512 |           |  |  | 30.80  |       |  |   | 913,882   |           |  |  | 30.18  |       |  |   | 676,771   |           |  |  | 29.89  |      
|Construction                              |                  |        | 494,841   |           |  |        | 8.47   |       |  |        | 289,936   |           |  |        | 7.16   |       |  |        | 292,563   |           |  |  | 7.76   |       |  |   | 214,788   |           |  |  | 7.09   |       |  |   | 181,235   |           |  |  | 8.00   |      
|Business                                  |                  |        | 863,935   |           |  |        | 14.80  |       |  |        | 468,128   |           |  |        | 11.56  |       |  |        | 296,026   |           |  |  | 7.85   |       |  |   | 261,775   |           |  |  | 8.65   |       |  |   | 163,673   |           |  |  | 7.23   |      
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|                                          | Total commercial |        |           | 5,173,005 |  |        |        | 88.60 |  |        |           | 3,568,011 |  |        |        | 88.09 |  |        |           | 3,454,239 |  |  |        | 91.59 |  |   |           | 2,667,307 |  |  |        | 88.09 |  |   |           | 1,818,989 |  |  |        | 80.33 | 
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Consumer:                                 |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Residential mortgage (one-to-four family) |                  |        | 613,988   |           |  |        | 10.52  |       |  |        | 434,423   |           |  |        | 10.72  |       |  |        | 273,431   |           |  |  | 7.25   |       |  |   | 309,653   |           |  |  | 10.23  |       |  |   | 429,311   |           |  |  | 18.96  |      
|Other                                     |                  |        | 51,667    |           |  |        | 0.88   |       |  |        | 48,307    |           |  |        | 1.19   |       |  |        | 43,711    |           |  |  | 1.16   |       |  |   | 50,850    |           |  |  | 1.68   |       |  |   | 16,003    |           |  |  | 0.71   |      
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|                                          | Total consumer   |        |           | 665,655   |  |        |        | 11.40 |  |        |           | 482,730   |  |        |        | 11.91 |  |        |           | 317,142   |  |  |        | 8.41  |  |   |           | 360,503   |  |  |        | 11.91 |  |   |           | 445,314   |  |  |        | 19.67 | 
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Loans held in portfolio(1)                |                  |        | 5,838,660 |           |  |        | 100.00 | %     |  |        | 4,050,741 |           |  |        | 100.00 | %     |  |        | 3,771,381 |           |  |  | 100.00 | %     |  |   | 3,027,810 |           |  |  | 100.00 | %     |  |   | 2,264,303 |           |  |  | 100.00 | %    
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Allowance for loan losses                 |                  |        | 64,542    |           |  |        |        |       |  |        | (56,472   | )         |  |        |        |       |  |        | (58,126   | )         |  |  |        |       |  |   | (48,865   | )         |  |  |        |       |  |   | (34,550   | )         |  |  |        |      
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      
|Net loans held in portfolio               |                  | $      | 5,774,118 |           |  |        |        |       |  | $      | 3,994,269 |           |  |        |        |       |  | $      | 3,713,255 |           |  |  |        |       |  | $ | 2,978,945 |           |  |  |        |       |  | $ | 2,229,753 |           |  |  |        |      
|                                          |                  |        |           |           |  |        |        |       |  |        |           |           |  |        |        |       |  |        |           |           |  |  |        |       |  |   |           |           |  |  |        |       |  |   |           |           |  |  |        |      



---



|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net unamortized deferred loan fees of
    $7.4 million and $7.3 million at December 31,
    2005 and 2004, respectively.

During the year ended December 31, 2005,
total loans held in portfolio increased by $1.79 billion.
This growth resulted primarily from an organic increase in
commercial loans from UCBs continued focus on originating
such loans, but also included $225.9 million that came in
with the Pacifica and AABT acquisitions. Total commercial loans
grew by $1.60 billion at December 31, 2005, from
$3.57 billion at December 31, 2004, as a result of
continued loan generation efforts, partially offset by principal
repayments and loan sales. Consumer loans increased to
$665.7 million at December 31, 2005, from
$482.2 million at December 31, 2004, primarily due to
organic growth. Additionally, in 2005 UCB transferred
$235.9 million of multifamily real estate loans from loans
held for sale to loans held in portfolio, as a result of the
reduced market premiums on sales of multifamily real estate
loans. UCB believes that it is currently more beneficial to
retain the multifamily real estate loans in loans held in
portfolio and realize the longer term spread income as opposed
to making a current sale of such loans. During the three months
ended September 30, 2005, UCB also determined that the
level of its commercial real estate loans was reaching its
internally set informal guidelines for these loans, which is
calculated as a percentage of risk-based capital. In addition,
with the impending integrations of Pacifica and AABT, UCB
determined that a reduction of its commercial real estate
concentration would be beneficial. As a result,
$265.1 million of commercial real estate loans (with
underlying collateral located in California) were transferred
from held in portfolio to held for sale. The sale of these loans
contributed to UCBs goal of product and geographic
diversification. Consistent with UCBs stated long-term
objectives for the next five years, UCB will be systematically
reducing its concentration in commercial real estate loans,
while increasing its concentration in commercial business loans.

44



---



##### Table of Contents



UCB has identified certain loans that it intends
to sell; and as a result, such loans are classified as held for
sale. The components of the loans held for sale by amount and
percentage of gross loans held for sale for each major loan
category at December 31, 2005, 2004 and 2003, are as
follows (dollars in thousands):

|                       |                                         |        |         |         |  |        |         |        |  |        |         |         |  |  |        |       |   |   |        |        |  |  |        |       |  
|---------------------- | --------------------------------------- | ------ | ------- | ------- |  | ------ | ------- | ------ |  | ------ | ------- | ------- |  |  | ------ | ----- | - | - | ------ | ------ |  |  | ------ | ----- | -
|                       |                                         |        |         |         |  |       
|                       |                                         | 2005   |         | 2004    |  | 2003  
|                       |                                         |        |         |         |  |       
|                       |                                         | Amount |         | %       |  | Amount |         | %      |  | Amount |         | %      
|                       |                                         |        |         |         |  |        |         |        |  |        |         |        
|Commercial:            |                                         |        |         |         |  |        |         |        |  |        |         |         |  |  |        |       |   |   |        |        |  |  |        |      
|                       | Secured by real estate  nonresidential |        | $       | 154,087 |  |        |         | 98.31% |  |        | $       | 26,882  |  |  |        | 8.25  | % |   | $      | 14,203 |  |  |        | 70.10 | %
|                       | Secured by real estate  multifamily    |        |         |        |  |        |         |       |  |        |         | 295,788 |  |  |        | 90.73 |   |   |        |       |  |  |        |      |  
|                       | Business                                |        |         | 2,653   |  |        |         | 1.69   |  |        |         | 3,337   |  |  |        | 1.02  |   |   |        | 6,059  |  |  |        | 29.90 |  
|                       |                                         |        |         |         |  |        |         |        |  |        |         |         |  |  |        |       |   |   |        |        |  |  |        |      
|Loans held for sale(1) |                                         | $      | 156,740 |         |  |        | 100.00% |        |  | $      | 326,007 |         |  |  | 100.00 | %     |   | $ | 20,262 |        |  |  | 100.00 | %    
|                       |                                         |        |         |         |  |        |         |        |  |        |         |         |  |  |        |       |   |   |        |        |  |  |        |      



---



|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net unamortized deferred loan fees of
    $372,000 at December 31, 2005, and net unamortized deferred
    loan costs of $535,000 at December 31, 2004.

As a result of changing the loan origination
focus to commercial business loans, UCB is originating more
loans that reprice in shorter time periods than the traditional
repricing terms of residential mortgage (one-to-four family)
loans. Construction loans, commercial business loans and SBA
loans generally have monthly repricing terms. Commercial real
estate loans generally reprice monthly or are intermediate
fixed, meaning that the loans have interest rates that are fixed
for a period, typically five years, after which the loans
generally reprice monthly or become due and payable. Multifamily
real estate loans are generally intermediate fixed. Residential
mortgage (one-to-four family) loans may be adjustable rate that
reprice semiannually or annually; fixed rate, meaning that the
loans have interest rates that are fixed over the term of the
loans, typically 15 or 30 years; or have interest rates
that are fixed for a period, typically five years, and then
generally reprice semiannually or annually, thereafter.

The components of gross loans held in portfolio
by interest rate type and percentage of gross loans held in
portfolio at December 31, 2005, 2004, 2003, 2002 and 2001,
were as follows (dollars in thousands):

|                                 |  |        |           |      |  |        |        |      |  |        |           |   |  |        |        |   |  |        |           |   |  |  |        |   |  |   |           |  |  |  |        |   |  |   |           |  |  |  |        |  
|-------------------------------- |  | ------ | --------- | ---- |  | ------ | ------ | ---- |  | ------ | --------- | - |  | ------ | ------ | - |  | ------ | --------- | - |  |  | ------ | - |  | - | --------- |  |  |  | ------ | - |  | - | --------- |  |  |  | ------ | -
|                                 |  |        |           |      |  |        |        |      |  |       
|                                 |  | 2005   |           | 2004 |  | 2003   |        | 2002 |  | 2001  
|                                 |  |        |           |      |  |        |        |      |  |       
|                                 |  | Amount |           | %    |  | Amount |        | %    |  | Amount |           | % |  | Amount |        | % |  | Amount |           | %
|                                 |  |        |           |      |  |        |        |      |  |        |           |   |  |        |        |   |  |        |           |  
|Adjustable-rate loans            |  | $      | 2,951,945 |      |  |        | 50.50  | %    |  | $      | 2,603,889 |   |  |        | 64.17  | % |  | $      | 2,679,428 |   |  |  | 70.88  | % |  | $ | 2,304,837 |  |  |  | 75.99  | % |  | $ | 1,481,955 |  |  |  | 65.33  | %
|Intermediate fixed-rate loans    |  |        | 1,711,915 |      |  |        | 29.28  |      |  |        | 881,774   |   |  |        | 21.73  |   |  |        | 563,570   |   |  |  | 14.91  |   |  |   | 205,587   |  |  |  | 6.78   |   |  |   | 221,561   |  |  |  | 9.77   |  
|Fixed-rate loans                 |  |        | 1,182,198 |      |  |        | 20.22  |      |  |        | 572,419   |   |  |        | 14.10  |   |  |        | 537,027   |   |  |  | 14.21  |   |  |   | 522,459   |  |  |  | 17.23  |   |  |   | 564,883   |  |  |  | 24.90  |  
|                                 |  |        |           |      |  |        |        |      |  |        |           |   |  |        |        |   |  |        |           |   |  |  |        |   |  |   |           |  |  |  |        |   |  |   |           |  |  |  |        |  
|Gross loans held in portfolio(1) |  | $      | 5,846,058 |      |  |        | 100.00 | %    |  | $      | 4,058,052 |   |  |        | 100.00 | % |  | $      | 3,780,025 |   |  |  | 100.00 | % |  | $ | 3,032,883 |  |  |  | 100.00 | % |  | $ | 2,268,399 |  |  |  | 100.00 | %
|                                 |  |        |           |      |  |        |        |      |  |        |           |   |  |        |        |   |  |        |           |   |  |  |        |   |  |   |           |  |  |  |        |   |  |   |           |  |  |  |        |  



---



|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes net deferred loan fees of
    $7.4 million, $7.3 million, $8.6 million,
    $5.1 million and $4.1 million at December 31,
    2005, 2004, 2003, 2002 and 2001, respectively.

45



---



##### Table of Contents



The components of gross loans held in portfolio
by interest type for each major loan category at
December 31, 2005, were as follows (dollars in thousands):

|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |           |           | 
|-------------------------------- | ----------------------------------------- | ---------------- | --------- | ------------ | --------- | ----- | --------- | --------- | --------- | - | --------- | ------- | ------- | - | --------- | --------- | --------- | 
|                                 |                                           |                  |           | Intermediate |           |       |           |          
|                                 |                                           | Adjustable       |           | Fixed        |           | Fixed |           | Total    
|                                 |                                           |                  |           |              |           |       |           |          
|Commercial:                      |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|                                 | Secured by real estate  nonresidential   |                  | $         | 1,292,872    |           |       | $         | 426,985   |           |   | $         | 593,169 |         |   | $         | 2,313,026 |          
|                                 | Secured by real estate  multifamily      |                  |           | 320,137      |           |       |           | 1,051,677 |           |   |           | 131,200 |         |   |           | 1,503,014 |          
|                                 | Construction                              |                  |           | 468,272      |           |       |           |          |           |   |           | 29,905  |         |   |           | 498,177   |          
|                                 | Business                                  |                  |           | 783,410      |           |       |           | 1,821     |           |   |           | 78,932  |         |   |           | 864,163   |          
|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|                                 |                                           | Total commercial |           |              | 2,864,691 |       |           |           | 1,481,483 |   |           |         | 833,206 |   |           |           | 5,178,380 | 
|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|Consumer:                        |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|                                 | Residential mortgage (one-to-four family) |                  |           | 44,913       |           |       |           | 228,737   |           |   |           | 339,898 |         |   |           | 613,548   |          
|                                 | Other                                     |                  |           | 42,341       |           |       |           | 2,695     |           |   |           | 9,094   |         |   |           | 54,130    |          
|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|                                 |                                           | Total consumer   |           |              | 87,254    |       |           |           | 231,432   |   |           |         | 348,992 |   |           |           | 667,678   | 
|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          
|Gross loans held in portfolio(1) |                                           | $                | 2,951,945 |              |           | $     | 1,711,915 |           |           | $ | 1,182,198 |         |         | $ | 5,846,058 |          
|                                 |                                           |                  |           |              |           |       |           |           |           |   |           |         |         |   |           |          



---



|    |                                                                          
|--- | -------------------------------------------------------------------------
|(1) | Excludes net deferred loan fees of
    $7.4 million at December 31, 2005.

Adjustable-rate loans increased
$371.1 million from December 31, 2004, to
December 31, 2005. Adjustable-rate loans represented 50.6%
of gross loans at December 31, 2005, compared with 64.2% of
gross loans at December 31, 2004. The increase of
$837.3 million in intermediate fixed-rate loans from
December 31, 2004, to December 31, 2005, is a result
of increased market demand for that loan product. Fixed-rate
loans increased $613.3 million from December 31, 2004,
to December 31, 2005.

The estimated impact of repricing of loans held
in portfolio at December 31, 2005, are as follows (dollars
in thousands):

|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |           |           | 
|----------------------------- | ----------------------------------------- | ---------------- | --------- | ----------- | --------- | ----------- | ------- | ---------- | ------- | ------------ | ------- | ------------ | ------- | ----- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | --------- | --------- | --------- | 
|                              |                                           |                  |           | After       |           | After       |         | After      |         | After        |         |              |         |      
|                              |                                           |                  |           | One Year    |           | Three Years |         | Five Years |         | Ten Years    |         |              |         |      
|                              |                                           | Within           |           | Through     |           | Through     |         | Through    |         | Through      |         | After        |         |      
|                              |                                           | One Year         |           | Three Years |           | Five Years  |         | Ten Years  |         | Twenty Years |         | Twenty Years |         | Total
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |      
|Commercial:                   |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|                              | Secured by real estate  nonresidential   |                  | $         | 1,268,895   |           |             | $       | 184,169    |         |              | $       | 269,066      |         |       | $       | 572,796 |         |   | $       | 16,193  |         |   | $       | 1,907   |         |   | $         | 2,313,026 |          
|                              | Secured by real estate  multifamily      |                  |           | 320,137     |           |             |         | 515,248    |         |              |         | 505,638      |         |       |         | 111,552 |         |   |         | 50,439  |         |   |         |        |         |   |           | 1,503,014 |          
|                              | Construction                              |                  |           | 488,150     |           |             |         | 4,009      |         |              |         | 6,018        |         |       |         |        |         |   |         |        |         |   |         |        |         |   |           | 498,177   |          
|                              | Business                                  |                  |           | 812,482     |           |             |         | 37,688     |         |              |         | 5,215        |         |       |         | 7,816   |         |   |         | 962     |         |   |         |        |         |   |           | 864,163   |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|                              |                                           | Total commercial |           |             | 2,889,664 |             |         |            | 741,114 |              |         |              | 785,937 |       |         |         | 692,164 |   |         |         | 67,594  |   |         |         | 1,907   |   |           |           | 5,178,380 | 
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|Consumer:                     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|                              | Residential mortgage (one-to-four family) |                  |           | 43,299      |           |             |         | 62,561     |         |              |         | 97,766       |         |       |         | 75,652  |         |   |         | 233,945 |         |   |         | 100,325 |         |   |           | 613,548   |          
|                              | Other                                     |                  |           | 43,533      |           |             |         | 127        |         |              |         | 79           |         |       |         |        |         |   |         | 2,695   |         |   |         | 7,696   |         |   |           | 54,130    |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|                              |                                           | Total consumer   |           |             | 86,832    |             |         |            | 62,688  |              |         |              | 97,845  |       |         |         | 75,652  |   |         |         | 236,640 |   |         |         | 108,021 |   |           |           | 667,678   | 
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|Gross loans held in portfolio |                                           | $                | 2,976,496 |             |           | $           | 803,802 |            |         | $            | 883,782 |              |         | $     | 767,816 |         |         | $ | 304,234 |         |         | $ | 109,928 |         |         | $ | 5,846,058 |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|Net deferred origination fees |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   | (7,398    | )        
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|Loans held in portfolio       |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   | 5,838,660 |          
|Allowance for loan losses     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   | (64,542   | )        
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          
|Net loans                     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         | $ | 5,774,118 |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |         |         |         |   |         |         |         |   |         |         |         |   |           |          

46



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Adjustable-rate mortgages are shown in the period
in which they reprice, rather than when they become due, with
the exception of adjustable-rate loans that have reached a
contractual floor. Loans that are at the floor level are shown
in the period they become due. The table does not include the
effects of possible prepayments. The rate of loan prepayment
varies from time to time, depending upon various factors,
including market interest rates.

The contractual maturity of loans held in
portfolio at December 31, 2005, are as follows (dollars in
thousands):

|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |           |           | 
|----------------------------- | ----------------------------------------- | ---------------- | --------- | ----------- | --------- | ----------- | ------- | ---------- | ------- | ------------ | ------- | ------------ | ------- | ----- | --------- | --------- | --------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | --------- | --------- | --------- | 
|                              |                                           |                  |           | After       |           | After       |         | After      |         | After        |         |              |         |      
|                              |                                           |                  |           | One Year    |           | Three Years |         | Five Years |         | Ten Years    |         |              |         |      
|                              |                                           | Within           |           | Through     |           | Through     |         | Through    |         | Through      |         | After        |         |      
|                              |                                           | One Year         |           | Three Years |           | Five Years  |         | Ten Years  |         | Twenty Years |         | Twenty Years |         | Total
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |      
|Commercial:                   |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|                              | Secured by real estate  nonresidential   |                  | $         | 105,240     |           |             | $       | 272,344    |         |              | $       | 461,860      |         |       | $         | 1,411,677 |           |   | $       | 35,573  |         |   | $       | 26,332  |         |   | $         | 2,313,026 |          
|                              | Secured by real estate  multifamily      |                  |           | 532         |           |             |         | 15,875     |         |              |         | 16,280       |         |       |           | 1,147,793 |           |   |         | 238,765 |         |   |         | 83,769  |         |   |           | 1,503,014 |          
|                              | Construction                              |                  |           | 381,208     |           |             |         | 107,285    |         |              |         | 9,684        |         |       |           |          |           |   |         |        |         |   |         |        |         |   |           | 498,177   |          
|                              | Business                                  |                  |           | 677,708     |           |             |         | 97,805     |         |              |         | 50,425       |         |       |           | 27,833    |           |   |         | 7,270   |         |   |         | 3,122   |         |   |           | 864,163   |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|                              |                                           | Total commercial |           |             | 1,164,688 |             |         |            | 493,309 |              |         |              | 538,249 |       |           |           | 2,587,303 |   |         |         | 281,608 |   |         |         | 113,223 |   |           |           | 5,178,380 | 
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|Consumer:                     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|                              | Residential mortgage (one-to-four family) |                  |           | 4,156       |           |             |         | 3,522      |         |              |         | 2,254        |         |       |           | 7,963     |           |   |         | 244,676 |         |   |         | 350,977 |         |   |           | 613,548   |          
|                              | Other                                     |                  |           | 4,294       |           |             |         | 999        |         |              |         | 101          |         |       |           |          |           |   |         | 7,305   |         |   |         | 41,431  |         |   |           | 54,130    |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|                              |                                           | Total consumer   |           |             | 8,450     |             |         |            | 4,521   |              |         |              | 2,355   |       |           |           | 7,963     |   |         |         | 251,981 |   |         |         | 392,408 |   |           |           | 667,678   | 
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|Gross loans held in portfolio |                                           | $                | 1,173,138 |             |           | $           | 497,830 |            |         | $            | 540,604 |              |         | $     | 2,595,266 |           |           | $ | 533,589 |         |         | $ | 505,631 |         |         | $ | 5,846,058 |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|Net deferred origination fees |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   | (7,398    | )        
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|Loans held in portfolio       |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   | 5,838,660 |          
|Allowance for loan losses     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   | (64,542   | )        
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          
|Net loans                     |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         | $ | 5,774,118 |          
|                              |                                           |                  |           |             |           |             |         |            |         |              |         |              |         |       |           |           |           |   |         |         |         |   |         |         |         |   |           |          

The table does not include the effects of
possible prepayments. The rate of loan prepayment varies from
time to time, depending upon various factors, including market
interest rates.

47



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Loan commitments related to loans held for sale
and held in portfolio for years ended December 31, 2005,
2004 and 2003, were as follows (dollars in thousands):

|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |         |           | 
|------------------------ | ----------------------------------------- | ------------------------------------------- | - | --------- | --------- | ---- | - | ------- | --------- |  | - | ------- | --------- | 
|                         |                                           | 2005                                        |   | 2004      |           | 2003
|                         |                                           |                                             |   |           |           |     
|Loans held for sale:     |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|Commercial:              |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         | Secured by real estate  nonresidential   |                                             | $ | 62,027    |           |      | $ | 17,399  |           |  | $ | 9,463   |          
|                         | Secured by real estate  multifamily      |                                             |   | 489,968   |           |      |   | 169,645 |           |  |   |        |          
|                         | Business                                  |                                             |   |          |           |      |   |        |           |  |   | 2,398   |          
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total commercial loans                      |   |           | 551,995   |      |   |         | 187,044   |  |   |         | 11,861    | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|Consumer:                |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         | Residential mortgage (one-to-four family) |                                             |   | 325       |           |      |   |        |           |  |   |        |          
|                         | Other                                     |                                             |   |          |           |      |   |        |           |  |   |        |          
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total consumer loans                        |   |           | 325       |      |   |         |          |  |   |         |          | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total loans held for sale commitments(1)    |   |           | 552,320   |      |   |         | 187,044   |  |   |         | 11,861    | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|Loans held in portfolio: |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|Commercial:              |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         | Secured by real estate  nonresidential   |                                             |   | 1,080,502 |           |      |   | 748,506 |           |  |   | 625,038 |          
|                         | Secured by real estate  multifamily      |                                             |   | 591,449   |           |      |   | 575,421 |           |  |   | 612,603 |          
|                         | Construction                              |                                             |   | 694,472   |           |      |   | 421,924 |           |  |   | 344,352 |          
|                         | Business                                  |                                             |   | 763,701   |           |      |   | 460,290 |           |  |   | 232,609 |          
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total commercial loans                      |   |           | 3,130,124 |      |   |         | 2,206,141 |  |   |         | 1,814,602 | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|Consumer:                |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         | Residential mortgage (one-to-four family) |                                             |   | 188,309   |           |      |   | 234,522 |           |  |   | 199,169 |          
|                         | Other                                     |                                             |   | 40,376    |           |      |   | 39,677  |           |  |   | 34,605  |          
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total consumer loans                        |   |           | 228,685   |      |   |         | 274,199   |  |   |         | 233,774   | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total loan held in portfolio commitments(1) |   |           | 3,358,809 |      |   |         | 2,480,340 |  |   |         | 2,048,376 | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        
|                         |                                           | Total loan commitments(1)                   |   | $         | 3,911,129 |      |   | $       | 2,667,384 |  |   | $       | 2,060,237 | 
|                         |                                           |                                             |   |           |           |      |   |         |           |  |   |        



---



|    |                                                         
|--- | --------------------------------------------------------
|(1) | Excludes commitments related to loan
    participations.

Deposits

Deposits have traditionally been UCBs
primary source of funds to use in its lending and investment
activities. At December 31, 2005, 56.4% of UCBs
deposits were time deposits, 28.5% were negotiable order of
withdrawal accounts (NOW), demand deposits and money
market accounts, and 15.1% were savings accounts. By comparison,
at December 31, 2004, 53.4% of UCBs deposits were
time deposits, 27.4% were NOW, demand deposits and money market
accounts, and 19.2% were savings accounts.

UCB obtains its deposits primarily from the
communities that it serves. With the exception of state and
federal government entities (Public
Fund Sector) contributing 6.6% to total deposits, no
other material portion of UCBs deposits were from or were
dependent upon any one customer, source or industry. Included in
time deposits at December 31, 2005, is $2.33 billion
of deposits of $100,000 or greater, compared to
$1.87 billion at December 31, 2004. Such deposits made
up 37.2% of total deposits at December 31, 2005, compared
to 35.8% at December 31, 2004. Also included in time
deposits is $156.8 million of brokered deposits, which UCB
began accepting during the fourth quarter of 2005.

48



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The balances and rates paid for categories of
deposits at December 31, 2005, 2004 and 2003, were as
follows (dollars in thousands):

|                                        |                     |                     |           |           |           |        |      |          |      |        |           |           |           |  |      |      |      |   |           |           |           |  |      |      |      |  
|--------------------------------------- | ------------------- | ------------------- | --------- | --------- | --------- | ------ | ---- | -------- | ---- | ------ | --------- | --------- | --------- |  | ---- | ---- | ---- | - | --------- | --------- | --------- |  | ---- | ---- | ---- | -
|                                        |                     |                     |           |           |           |       
|                                        |                     | 2005                |           | 2004      |           | 2003  
|                                        |                     |                     |           |           |           |       
|                                        |                     |                     |           | Weighted  |           |        |      | Weighted |      |        |           | Weighted 
|                                        |                     |                     |           | Average   |           |        |      | Average  |      |        |           | Average  
|                                        |                     | Amount              |           | Rate      |           | Amount |      | Rate     |      | Amount |           | Rate     
|                                        |                     |                     |           |           |           |        |      |          |      |        |           |          
|NOW, checking and money market accounts |                     | $                   | 1,784,065 |           |           |        | 1.65 | %        |      | $      | 1,427,366 |           |           |  | 0.96 | %    |      | $ | 1,026,047 |           |           |  | 0.65 | %   
|Savings accounts                        |                     |                     | 946,714   |           |           |        | 1.85 |          |      |        | 1,000,489 |           |           |  | 1.03 |      |      |   | 884,064   |           |           |  | 0.77 |     
|Time deposits:                          |                     |                     |           |           |           |        |      |          |      |        |           |           |           |  |      |      |      |   |           |           |           |  |      |     
|                                        | Less than $100,000  |                     |           | 1,203,001 |           |        |      | 2.69     |      |        |           | 918,650   |           |  |      | 1.79 |      |   |           | 1,042,843 |           |  |      | 1.73 |     
|                                        | $100,000 or greater |                     |           | 2,330,389 |           |        |      | 3.98     |      |        |           | 1,869,357 |           |  |      | 2.26 |      |   |           | 1,530,567 |           |  |      | 1.82 |     
|                                        |                     |                     |           |           |           |        |      |          |      |        |           |           |           |  |      |      |      |   |           |           |           |  |      |     
|                                        |                     | Total time deposits |           |           | 3,533,390 |        |      |          | 3.54 |        |           |           | 2,788,007 |  |      |      | 2.11 |   |           |           | 2,573,410 |  |      |      | 1.79 |  
|                                        |                     |                     |           |           |           |        |      |          |      |        |           |           |           |  |      |      |      |   |           |           |           |  |      |     
|                                        |                     | Total deposits      |           | $         | 6,264,169 |        |      |          | 2.75 | %      |           | $         | 5,215,862 |  |      |      | 1.59 | % |           | $         | 4,483,521 |  |      |      | 1.33 | %
|                                        |                     |                     |           |           |           |        |      |          |      |        |           |           |           |  |      |      |      |   |           |           |           |  |      |     

Our average cost of deposits for the year ended
December 31, 2005, was 2.22% as compared to 1.39% for 2004
and 1.61% for 2003. Our average interest rate paid on deposits
was 2.75%, 1.59% and 1.33% at December 31, 2005, 2004 and
2003, respectively.

Core deposits increased 12.5% to
$2.73 billion at December 31, 2005, compared to
$2.43 billion at December 31, 2004. Core deposits
include NOW accounts, demand deposit and money market accounts,
and savings accounts. This growth in core deposits resulted
primarily from the acquisition of Pacifica and AABT, which added
a total of $260.9 million in deposits, and also from
UCBs continued focus on developing new commercial
relationships in the ethnic Chinese community and further
expansion into UCBs retail niche market. Time deposits
increased 26.7% to $3.53 billion at December 31, 2005,
from $2.79 billion at December 31, 2004, primarily as
a result of the further expansion that UCB has made in its niche
markets.

Core deposits increased 27.1% to
$2.43 billion at December 31, 2004, compared to
$1.91 billion at December 31, 2003. This growth in
core deposits resulted primarily from UCBs continued focus
on developing new commercial relationships in the ethnic Chinese
community and further expansion into UCBs retail niche
market. Time deposits increased 8.3% to $2.79 billion at
December 31, 2004, from $2.57 billion at
December 31, 2003, primarily as a result of the further
expansion that UCB has made in its niche markets.

The remaining maturities on time deposits of
$100,000 or greater as of December 31, 2005, are as follows
(dollars in thousands):



|                                     |  |   |           | 
|------------------------------------ |  | - | --------- | 
|Three months or less                 |  | $ | 997,077   | 
|Over three months through six months |  |   | 685,428   | 
|Over six months through twelve years |  |   | 607,057   | 
|Over twelve months                   |  |   | 40,827    | 
|                                     |  |   |           | 
|Total                                |  | $ | 2,330,389 | 
|                                     |  |   |           | 

49



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##### Table of Contents



Borrowings

Short-term and long-term borrowings for the years
ended December 31, 2005, 2004 and 2003, were as follows
(dollars in thousands):

|                                                                    |                                                                             |      |   |         |   |      |   |         |   |  |   |         |  
|------------------------------------------------------------------- | --------------------------------------------------------------------------- | ---- | - | ------- | - | ---- | - | ------- | - |  | - | ------- | -
|                                                                    |                                                                             | 2005 |   | 2004    |   | 2003
|                                                                    |                                                                             |      |   |         |   |     
|Short-term borrowings:                                              |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|FHLB of San Francisco advances and other
    short-term borrowings: |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|                                                                    | Average balance outstanding                                                 |      | $ | 301,400 |   |      | $ | 164,964 |   |  | $ | 76,827  |  
|                                                                    | Maximum amount outstanding at any month end period                          |      |   | 566,169 |   |      |   | 300,695 |   |  |   | 234,134 |  
|                                                                    | Balance outstanding at end of period                                        |      |   | 279,425 |   |      |   | 72,310  |   |  |   | 234,134 |  
|                                                                    | Weighted average interest rate during the period                            |      |   | 3.51    | % |      |   | 1.30    | % |  |   | 1.41    | %
|                                                                    | Weighted average interest rate at end of period                             |      |   | 4.09    | % |      |   | 1.22    | % |  |   | 1.00    | %
|                                                                    | Weighted average remaining term to maturity at
    end of period (in years) |      |   |        |   |      |   |        |   |  |   |        |  
|Long-term borrowings:                                               |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|FHLB of San Francisco advances:                                     |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|                                                                    | Average balance outstanding                                                 |      | $ | 361,677 |   |      | $ | 299,253 |   |  | $ | 271,688 |  
|                                                                    | Maximum amount outstanding at any month end period                          |      |   | 562,033 |   |      |   | 335,104 |   |  |   | 274,000 |  
|                                                                    | Balance outstanding at end of period                                        |      |   | 562,033 |   |      |   | 334,952 |   |  |   | 271,408 |  
|                                                                    | Weighted average interest rate during the period                            |      |   | 5.15    | % |      |   | 5.00    | % |  |   | 5.15    | %
|                                                                    | Weighted average interest rate at end of period                             |      |   | 4.76    | % |      |   | 4.89    | % |  |   | 5.12    | %
|                                                                    | Weighted average remaining term to maturity at
    end of period (in years) |      |   | 5.0     |   |      |   | 2.9     |   |  |   | 4.0     |  

UCB recorded certain loan sale transactions as
secured borrowings as of December 31, 2005, since these
transactions did not qualify for sales treatment under
SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities. The short-term secured borrowings amounted to
$19.1 million at December 31, 2005. Additionally, UCB
recorded certain loan sale transactions as secured borrowings as
of June 30, 2005, since these transactions did not qualify
for sales treatment under SFAS No. 140. The short-term
and long-term secured borrowings amounted to $5.4 million
and $45.1 million, respectively, at June 30, 2005.
Subsequently in August 2005, a portion of the loan sales
agreements were amended to permit loan sale transactions related
to $29.6 million of secured borrowings to qualify for sales
treatment resulting in a gain on sale of loans of $233,000.
Additionally in September 2005, UCB exercised its option to
repurchase the remaining $20.8 million of loans related to
the secured borrowings from the loan participants, which
resulted in a loss on extinguishment from secured borrowings of
$89,000. Short-term borrowings with the FHLB totaled $226.0
million at December 31, 2005.



| |                        
| | -----------------------
| | Subordinated Debentures

UCBH established special purpose trusts in 1997,
2001, 2002 and 2005 for the sole purpose of issuing guaranteed
preferred beneficial interests in its junior subordinated
debentures (the Capital Securities) and investing
the proceeds thereof in the junior subordinated debentures
issued by UCBH. Payment of distributions out of the monies held
by the trusts and payments on liquidation of the trusts or the
redemption of the Capital Securities are guaranteed by UCBH to
the extent the trusts have funds available. The obligations of
UCBH under the guarantees and the junior subordinated debentures
are subordinate and junior in right of payment to all
indebtedness of UCBH and will be structurally subordinated to
all liabilities and obligations of UCBHs subsidiaries.
UCBH had $146.0 million and $136.0 million of
subordinated debentures outstanding at December 31, 2005
and 2004, respectively.

Pursuant to an indenture dated as of
April 17, 1998 (the Indenture), between UCBH
and Wilmington Trust Company (Wilmington), as
Trustee, UCBH on June 27, 2005, redeemed the entire
$30,928,000 aggregate principal amount of the 9.375% junior
subordinated debentures due May 1, 2028 (the

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Debentures), issued by UCBH under the
Indenture. The redemption price consisted of the $30,928,000
aggregate principal amount plus aggregate unpaid interest of
$451,000. The redemption of the Debentures resulted in a loss of
$1.2 million in 2005 from the write-off of the unamortized
Debentures issuance costs and other legal costs.


On September 22, 2005, UCBH issued
$41.2 million in junior subordinated debentures to a newly
formed Delaware trust subsidiary, UCBH Capital Trust V. The
junior subordinated debentures bear interest at a fixed rate of
5.82% until November 23, 2010, after which date the rate
will automatically convert to a floating rate equal to the
three-month London Interbank Offered Rate (LIBOR)
plus 1.38% and will adjust quarterly until maturity. The junior
subordinated debentures will mature on November 23, 2035,
but may be redeemed by UCBH at its option in whole or in part at
anytime on or after November 23, 2010. Additionally, UCBH
may redeem the junior subordinated debentures at its option in
whole at anytime upon certain events.

OFF-BALANCE SHEET ARRANGEMENTS

As previously discussed, the Company has
established special purpose trusts for the sole purpose of
issuing guaranteed preferred beneficial interests and investing
in the junior subordinated debentures issued by the Company. The
Companys consolidated results exclude these special
purpose trusts pursuant to Financial Accounting Standards Board
(the FASB) Interpretation (FIN) No. 46R,
Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51, since UCBH is not deemed to be
the primary beneficiary of these trusts.

RISK ELEMENTS

Since risk is inherent in substantially all of
the Companys operations, management of risk is integral to
its successful operations and is also a key determinant of its
overall performance. We manage all major aspects of our business
through an integrated risk infrastructure that includes planning
and review processes. We evaluate our risk and returns to
produce sustainable revenue, to reduce earnings volatility and
increase shareholder value. As part of this evaluation, we apply
various strategies to identify, manage and reduce the risks to
which the Companys operations are exposed, namely credit,
operational, interest rate and market, and liquidity risks.

We evaluate risk through various management
committees with the oversight of the Board of Directors. The key
risk management committees of the Company are:



| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Enterprise Risk Management Committee reviews
    credit, market, liquidity and operational risk.                                                      
|
| |  | Credit Risk Management Committee reviews credit
    policies, products, and problem assets risk.                                                      
|
| |  | Market Risk Management Committee reviews
    securities, loans and borrowings to assess yield, market and
    interest rate risk.                     
|
| |  | Operational Risk Management Committee reviews
    those risks not covered by the Credit Risk Management and the
    Market Risk Management Committees.
|
| |  | Regulatory Compliance Committee                                                                                                                       

Management has established control processes and
procedures to align risk-taking and risk management throughout
our organization. Each of our business groups is responsible for
identifying, quantifying, mitigating and managing all risks
associated with their operations. In addition, each business
unit prepares and executes business plans, which must address
the changing nature of these risks making them best able to take
actions to manage and mitigate those risks.

The Enterprise Risk Division is responsible for
translating the group business plans into approved limits,
approving any requests for changes to those limits, authorizing
transactions as appropriate and working closely with the
business groups to establish and monitor risk parameters. Our
internal audit function provides an independent assessment of
our management systems and internal controls. Internal audit
activities are designed to provide reasonable assurance that
resources are adequately protected; significant financial,
managerial and operating information is complete and accurate,
and that employees actions are in compliance

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with corporate policies, standards, procedures,
and applicable laws and regulations. In 2005, internal audit
also assisted in the management testing phase of the
Sarbanes-Oxley Section 404 project.


UCB also has an internal risk rating process to
which all loans in the portfolio are subjected. Criticized loans
are classified in the following categories:



| |   |                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Special Mention: loans that should
    not yet be adversely classified, but have credit deficiencies or
    potential weaknesses that warrant UCBs attention.                                                           
|
| |  | Substandard: loans with one or more
    well-defined weaknesses, which have the distinct possibility
    that UCB will sustain some loss if the weaknesses are not
    corrected.                                        
|
| |  | Doubtful: loans with the weaknesses
    of a substandard loan plus such weaknesses, which make
    collection or liquidation in full questionable, based on current
    information, and have a high probability of loss.
|
| |  | Loss: loans considered uncollectible.                                                                                                                                                                                    

Credit Risk Management

Credit risk is the possibility of loss from the
failure of a borrower or contractual counterparty to fully
perform under the terms of a credit-related contract. Credit
risk arises primarily from UCBs lending activities, as
well as from other on- and off-balance-sheet credit instruments.

Effective management of credit risk is essential
in maintaining a safe and sound financial institution. We have
in place a set of formal loan policies and procedures, which
provide UCB with a framework for consistent loan underwriting
and a basis for sound credit decisions. In addition, UCB has a
well-defined set of standards for evaluating its loan portfolio
and management utilizes a comprehensive loan grading system to
identify the risk potential in the portfolio. Loans are
periodically reviewed with regard to the borrowers ability
to repay the loan during which a risk grade is assigned to the
loan. The reviews include evaluations of various factors
including, the borrowers debt capacity and financial
flexibility, the borrowers earnings, the sources of
repayment, the level and nature of any contingencies, the
quality of any collateral, and the industry in which the
borrower operates. The reviews also address an evaluation of
historical information as well as subjective assessments and
interpretations. Further, an independent internal credit review
function periodically conducts reviews of UCBs lending
operations and loan portfolios. These reviews are designed to
place an emphasis on the early detection of problem credits so
that action plans can be developed and implemented on a timely
basis to mitigate any potential losses.

We also assign a loss rating to each credit
facility. These loss ratings are determined by borrower and by
type of collateral, based principally upon our own historical
loss experience or on independent verifiable data that help to
estimate these ratings. The ratings are used as a tool to
monitor a loans performance and also in estimating any
potential loss associated with it.

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Another aspect of UCBs credit risk
management strategy is to maintain diversification in the loan
portfolio. The concentration of the loans held in portfolio for
each major loan category at December 31, 2005 and 2004, is
as follows (dollars in thousands):

|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |       |  
|-------------------------- | ----------------------------------------- | ------ | --------- | ---------- |  | ------ | ------ | ---------- | - | - | --------- | --------- |  |  | ------ | ----- | -
|                           |                                           |        |           |           
|                           |                                           | 2005   |           | 2004      
|                           |                                           |        |           |           
|                           |                                           |        |           | % of Total |  |        |        | % of Total
|                           |                                           | Amount |           | Loans      |  | Amount |        | Loans     
|                           |                                           |        |           |            |  |        |        |           
|Commercial:                |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|                           | Secured by real estate  nonresidential   |        | $         | 2,307,381  |  |        |        | 39.52      | % |   | $         | 1,943,868 |  |  |        | 47.99 | %
|                           | Secured by real estate  multifamily      |        |           | 1,506,848  |  |        |        | 25.81      |   |   |           | 866,079   |  |  |        | 21.38 |  
|                           | Construction                              |        |           | 494,841    |  |        |        | 8.47       |   |   |           | 289,936   |  |  |        | 7.16  |  
|                           | Business                                  |        |           | 863,935    |  |        |        | 14.80      |   |   |           | 468,128   |  |  |        | 11.56 |  
|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|Total commercial           |                                           |        | 5,173,005 |            |  |        | 88.60  |            |   |   | 3,568,011 |           |  |  | 88.09  |      
|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|Consumer:                  |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|                           | Residential mortgage (one-to-four family) |        |           | 613,988    |  |        |        | 10.52      |   |   |           | 434,423   |  |  |        | 10.72 |  
|                           | Other                                     |        |           | 51,667     |  |        |        | 0.88       |   |   |           | 48,307    |  |  |        | 1.19  |  
|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|Total consumer             |                                           |        | 665,655   |            |  |        | 11.40  |            |   |   | 482,730   |           |  |  | 11.91  |      
|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      
|Loans held in portfolio(1) |                                           | $      | 5,838,660 |            |  |        | 100.00 | %          |   | $ | 4,050,741 |           |  |  | 100.00 | %    
|                           |                                           |        |           |            |  |        |        |            |   |   |           |           |  |  |        |      



---



|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net unamortized deferred loan fees of
    $7.4 million and $7.3 million at December 31,
    2005 and 2004, respectively.

UCB actively monitors the levels of commercial
real estate loans as a percentage of risk-based capital. In
addition, UCB periodically reviews the geographic concentration
of such loans. During the three months ended December 31,
2005, as a result of the geographic concentration review,
coupled with the acquisitions of Pacifica and AABT, UCB
management determined that UCB needed to reduce the level of its
commercial real estate loans located in Northern and Southern
California. As a result, approximately $265.1 million in
commercial real estate loans were transferred from held in
portfolio to held for sale. Approximately $151.2 million
were sold in November and December 2005.

Consistent with our planned long-term objectives,
UCB will be systematically reducing the concentration in
commercial and multifamily real estate loans while increasing
the portfolio of commercial business loans. Finally, UCB
attempts to avoid the risk of undue concentration of credits in
a particular industry, trade group or property type. UCB also
has no significant exposure to highly-leveraged transactions or
to any individual customer or counterparty.

Internal Loan Securitizations.UCB may also use internal loan
securitizations to reduce its exposure to credit risk. In such
securitizations, UCB has exchanged either multifamily or
residential (one-to-four family) mortgage loans for securities
issued by the Federal National Mortgage Association
(FNMA), thus transferring the credit risk on the
loans to FNMA. The average yield that UCB earns on the
securities is lower than the yield on the underlying loans. This
difference is the guarantee fee that is retained by FNMA as
compensation for assuming the credit risk. Since we retain all
of the securities that FNMA issues in the exchange, no gain or
loss is recognized on the transaction. UCB continues to service
the securitized loans. Residential mortgage (one-to-four family)
loans are generally included in the 50% risk weight for
risk-based capital purposes, whereas multifamily real estate
loans may fall either into the 50% or 100% risk weight depending
on the specific criteria of each individual loan. FNMA
securities are classified as a 20% risk weight.

These internal securitizations do not have a cash
impact to UCB, since selected loans from its loans held in
portfolio are exchanged for FNMA securities. Such securities are
represented by exactly the same loans previously held in
UCBs loans held in portfolio. The FNMA securities are
generally held as available for sale (AFS)
securities in UCBs investment and mortgage-backed
securities portfolio.

Through these securitization transactions, UCB
also reduces its credit risk. In these securitizations, UCB
fully transfers credit risk on the related loans to FNMA.
UCBs yield on the FNMA securities is reduced by the
guarantee fee that is retained by FNMA, but, since UCB retains
all of the securities issued by FNMA in

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the securitization, no gain or loss is recognized
on the exchange transaction. UCB also continues to service the
loans included in these securitizations. In addition, these
securitization transactions improve UCBs liquidity, since
FNMA securities receive more favorable treatment as a collateral
base for borrowings than do loans.


UCB internally securitized $147.1 million of
multifamily real estate loans for the year ended
December 31, 2004, and $91.9 million of residential
mortgage (one-to four-family) loans and $194.2 million of
multifamily real estate loans for the year ended
December 31, 2003. There were no securitizations for the
year ended December 31, 2005.

Nonperforming Assets

Nonperforming assets include nonaccrual and
restructured loans and other real estate owned
(OREO). Loans are generally placed on nonaccrual
status when a loan becomes 90 days past due as to principal
and interest, unless the loan is both well secured and in the
process of collection. Loans may be placed on nonaccrual earlier
if in managements opinion, the full and timely collection
of principal or interest becomes uncertain. When a loan is
placed on nonaccrual status, any accrued but unpaid interest is
reversed and charged against interest income. UCB charges off
loans when it determines that collection becomes unlikely. OREO,
of which UCB had none at year-end 2005, is acquired primarily
through or in lieu of foreclosure on loans secured by real
estate.

The level of the UCBs nonperforming assets
increased in 2005 compared to 2004. Total nonperforming loans
increased $6.5 million or 52.2% compared to year-end 2004.
The increase was a result of one commercial real estate loan and
four commercial business loans being added to nonaccrual loans
partially offset by the removal of three construction loans from
nonaccrual loans.

UCBs nonperforming assets as of
December 31, 2005, 2004, 2003, 2002 and 2001, were as
follows (dollars in thousands):

|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |     | 
|--------------------------------------------------------------------------- | ----------------------------------------- | ---- | --------- | ------ |  | ---- | --------- | ----- |  | ---- | --------- | ----- |  | - | --------- | ----- |  | - | --------- | --- | 
|                                                                            |                                           | 2005 |           | 2004   |  | 2003 |           | 2002  |  | 2001
|                                                                            |                                           |      |           |        |  |      |           |       |  |     
|Commercial loans:                                                           |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|                                                                            | Secured by real estate  nonresidential   |      | $         | 12,792 |  |      | $         | 8,085 |  |      | $         |      |  |   | $         |      |  |   | $         |    | 
|                                                                            | Secured by real estate  multifamily      |      |           |       |  |      |           |      |  |      |           |      |  |   |           |      |  |   |           | 210 | 
|                                                                            | Construction                              |      |           |       |  |      |           | 4,353 |  |      |           | 5,102 |  |   |           | 4,533 |  |   |           |    | 
|                                                                            | Business                                  |      |           | 5,903  |  |      |           | 136   |  |      |           | 631   |  |   |           | 68    |  |   |           |    | 
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Total commercial loans                                                      |                                           |      | 18,695    |        |  |      | 12,574    |       |  |      | 5,733     |       |  |   | 4,601     |       |  |   | 210       |    
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Consumer loans:                                                             |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|                                                                            | Residential mortgage (one-to-four family) |      |           | 388    |  |      |           |      |  |      |           | 124   |  |   |           |      |  |   |           | 781 | 
|                                                                            | Other                                     |      |           | 50     |  |      |           |      |  |      |           |      |  |   |           | 53    |  |   |           |    | 
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Total consumer loans                                                        |                                           |      | 438       |        |  |      |          |       |  |      | 124       |       |  |   | 53        |       |  |   | 781       |    
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Total nonaccrual loans                                                      |                                           |      | 19,133    |        |  |      | 12,574    |       |  |      | 5,857     |       |  |   | 4,654     |       |  |   | 991       |    
|Other real estate owned (OREO)                                              |                                           |      |          |        |  |      |          |       |  |      |          |       |  |   |          |       |  |   |          |    
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Total nonperforming assets                                                  |                                           | $    | 19,133    |        |  | $    | 12,574    |       |  | $    | 5,857     |       |  | $ | 4,654     |       |  | $ | 991       |    
|                                                                            |                                           |      |           |        |  |      |           |       |  |      |           |       |  |   |           |       |  |   |           |    
|Nonperforming assets to total assets                                        |                                           |      | 0.24      | %      |  |      | 0.20      | %     |  |      | 0.10      | %     |  |   | 0.10      | %     |  |   | 0.03      | %  
|Nonaccrual loans to total loans                                             |                                           |      | 0.32      |        |  |      | 0.29      |       |  |      | 0.16      | %     |  |   | 0.15      |       |  |   | 0.04      |    
|Nonperforming assets to total loans and OREO                                |                                           |      | 0.32      |        |  |      | 0.29      |       |  |      | 0.16      |       |  |   | 0.15      |       |  |   | 0.04      |    
|Total loans                                                                 |                                           | $    | 5,995,400 |        |  | $    | 4,376,748 |       |  | $    | 3,771,381 |       |  | $ | 3,027,810 |       |  | $ | 2,264,303 |    
|Gross income not recognized on nonaccrual loans                             |                                           |      | 790       |        |  |      | 699       |       |  |      | 363       |       |  |   | 211       |       |  |   | 24        |    
|Accruing loans contractually past due
    90 days or more                   |                                           |      | 5,374     |        |  |      | 3,101     |       |  |      | 1,469     |       |  |   | 4,302     |       |  |   | 1,269     |    
|Loans classified as troubled debt restructurings
    and not included above |                                           |      | 10,827    |        |  |      | 11,329    |       |  |      | 9,094     |       |  |   |          |       |  |   |          |    

The $10.8 million of performing restructured
loans reflected in the table above represents one commercial
real estate loan and one commercial loan. The first loan is a
nonresidential loan secured by real estate for

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$8.8 million. This loan has been classified
as a performing restructured loan as a result of UCB making
interest rate concessions on a separate loan for
$1.5 million to the same obligor and is secured by the same
property. The separate loan of $1.5 million is included in
the nonaccrual commercial real estate in the table above. The
other loan is a commercial business loan of $2.0 million on
which UCB provided an interest rate concession.


With the exception of the loans described in the
above paragraph, the classified loans and two impaired loans
that were well secured and in process of collection, UCB is not
aware of any other loans as of December 31, 2005, where
known credit problems of the borrower lead UCB to believe that
they will not comply with their repayment schedule, or that
would result in the loan being included in the nonperforming
loan table at a future date.

Included in nonaccrual loans are loans that we
have determined to be impaired. Loans, other than those included
in large groups of smaller-balance homogeneous loans, are
considered to be impaired when, based on current information and
events, it is probable that UCB will be unable to collect all
amounts due in accordance with the contractual terms of the loan
agreement, included scheduled interest payments. The amount of a
loans impairment is measured based on either the present
value of expected cash flows, the observable market price of the
loan, or the fair value of the collateral securing the loan.

At December 31, 2005 and 2004, UCBs
investment in loans that were considered to be impaired was
$24.5 million and $14.9 million, respectively.
Estimated losses on impaired loans are added to the allowance
for loan losses through the provision for loan losses. At
December 31, 2005, the allowance for loan losses included
$3.2 million for impaired loans with a $16.3 million
recorded investment. At December 31, 2004, the allowance
included $3.6 million for impaired loans with a recorded
investment of $14.8 million. See Notes 1 and 8 to the
Consolidated Financial Statements for additional information on
impaired loans.

Management cannot predict the extent to which
economic conditions in UCBs market areas may change or the
full impact that such changes may have on UCBs loan
portfolio. Accordingly, there can be no assurance that
additional loans will not become 90 days or more past due,
be placed on nonaccrual status, or become impaired or
restructured loans or OREO in the future.

Allowances for Credit Losses

Allowance for Loan
Losses.The allowance for loan losses
is established to provide for probable losses inherent in
UCBs credit portfolio. The determination of the
appropriate level of the allowance is based on quarterly
evaluations of the loan portfolios along with other relevant
factors. UCBs methodology for determining the appropriate
level of the allowance includes the evaluation of two distinct
allowance components: an allowance applied to the portfolio as a
whole and a specific allowance for loans deemed to be impaired
or otherwise exhibiting problem characteristics. Loans that are
determined to be impaired or otherwise exhibit specific problems
are excluded from the allowance analysis and assessed
individually.

In assessing the adequacy of the allowance, UCB
utilizes the application of an internal risk rating system and
an evaluation of various internal and external conditions. The
evaluation takes into account the loan portfolio mix, the credit
quality of the portfolio, growth in the portfolio, trends
relating to delinquent and classified loans, general economic
conditions and any other characteristics that directly relate to
the collectibility of the loans in the portfolio.

UCB then divides the loan portfolio into major
segments based primarily on loan type, after which loss factors
are applied to the portfolio segments. These loss factors have
been developed from historic charge-off experience, reviews of
regional trends in collateral values, portfolio segment
delinquency and classification trends, portfolio concentrations,
macro-economic conditions, as well as other qualitative aspects.
Additionally, for our heterogeneous loan portfolio, we perform
comparative analyses, utilizing both a peer data benchmarking
approach and an expected loss approach.

During 2005, UCB continued its ongoing process of
evaluating the loss factors in light of current economic
conditions, UCBs historical loss experience, loan
delinquency trends and the changes in classified and other
problem loans. As part of this evaluation, the portion of the
allowance previously presented as non-loan category
specific was allocated to specific loan portfolio in 2004
and 2005, to address potential

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imprecision arising from the accuracy of the risk
rating process and general business and economic conditions
affecting our key lending areas. Upon completion of these
evaluations, the loss factors applicable to the construction and
commercial loan portfolios were revised and lowered, since the
evaluations determined that the inherent risk in the portfolio
had been decreased due to stronger identification,
administration and action plan implementation on credits in
these portfolios. In addition, UCB decided to segregate its
commercial real estate and commercial loans that are secured by
cash and reduce the associated loss factors to better reflect
the inherent risk in this loan segment.


In assessing the adequacy of the specific
allowance, UCB applies the expected loss factors used by the
banking regulators for classified and criticized loans. These
factors are 10.0% for loans classified special
mention, 20.0% to 30.0% for substandard, 50.0%
for doubtful and 100% for loss.

UCB also estimates a reserve related to unfunded
commitments. In assessing the adequacy of this reserve, UCB uses
a process similar to the one it uses in estimating the allowance
for loan losses including comparative analysis using an expected
loss approach. The reserve for unfunded commitments is included
in other liabilities on the statement of financial position.
During 2005, UCB updated the loss factors associated with these
commitments. The loss factors were lowered as a result of these
evaluation, reflecting continued improvement in the loss
experience associated with these exposures.

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The components of the allowance for loan losses
and allowance for losses related to unfunded commitments for
each of the five years ended December 31, 2005, were as
follows (dollars in thousands):

|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |     |     | 
|-------------------------------------------------------- | ----------------- | ----------------------------------------- | ------ | ----- | --- | ---- | ------ | ----- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | - | ------ | --- | --- | 
|                                                         |                   | 2005                                      |        | 2004  |     | 2003 |        | 2002  |       | 2001
|                                                         |                   |                                           |        |       |     |      |        |       |       |     
|Balance at beginning of year:                            |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Allowance for loan losses                                |                   | $                                         | 56,472 |       |     | $    | 58,126 |       |       | $    | 48,865 |       |       | $ | 34,550 |       |       | $ | 28,901 |    
|Allowance for losses  unfunded
    commitments          |                   |                                           | 3,940  |       |     |      | 2,737  |       |       |      |       |       |       |   |       |       |       |   |       |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Total allowance for losses at beginning of year          |                   | $                                         | 60,412 |       |     |      | 60,863 |       |       |      | 48,865 |       |       |   | 34,550 |       |       |   | 28,901 |    
|Acquired allowance for loan losses                       |                   |                                           | 2,932  |       |     |      |       |       |       |      | 4,028  |       |       |   | 10,162 |       |       |   |       |    
|Provision for loan losses                                |                   |                                           | 6,091  |       |     |      | 4,202  |       |       |      | 9,967  |       |       |   | 9,673  |       |       |   | 5,620  |    
|Charge-offs:                                             |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Commercial:       |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |     |    
|                                                         |                   | Secured by real estate  nonresidential   |        |       | 838 |      |        |       | 1,577 |      |        |       | 87    |   |        |       |      |   |        |     |    | 
|                                                         |                   | Secured by real estate  multifamily      |        |       |    |      |        |       | 127   |      |        |       |      |   |        |       |      |   |        |     |    | 
|                                                         |                   | Construction                              |        |       |    |      |        |       |      |      |        |       | 170   |   |        |       | 2,172 |   |        |     |    | 
|                                                         |                   | Business                                  |        |       | 750 |      |        |       | 2,985 |      |        |       | 2,713 |   |        |       | 3,337 |   |        |     | 121 | 
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total commercial  |                                           |        | 1,588 |     |      |        | 4,689 |       |      |        | 2,970 |       |   |        | 5,509 |       |   |        | 121 |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Consumer:         |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |     |    
|                                                         |                   | Residential mortgage (one-to-four family) |        |       |    |      |        |       |      |      |        |       |      |   |        |       |      |   |        |     |    | 
|                                                         |                   | Other                                     |        |       | 26  |      |        |       | 109   |      |        |       | 379   |   |        |       | 54    |   |        |     |    | 
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total consumer    |                                           |        | 26    |     |      |        | 109   |       |      |        | 379   |       |   |        | 54    |       |   |        |    |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total charge-offs |                                           |        | 1,614 |     |      |        | 4,798 |       |      |        | 3,349 |       |   |        | 5,563 |       |   |        | 121 |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Recoveries:                                              |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Commercial:       |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |     |    
|                                                         |                   | Secured by real estate  nonresidential   |        |       |    |      |        |       |      |      |        |       | 30    |   |        |       |      |   |        |     |    | 
|                                                         |                   | Secured by real estate  multifamily      |        |       |    |      |        |       |      |      |        |       |      |   |        |       |      |   |        |     |    | 
|                                                         |                   | Construction                              |        |       |    |      |        |       |      |      |        |       | 300   |   |        |       |      |   |        |     |    | 
|                                                         |                   | Business                                  |        |       | 63  |      |        |       | 119   |      |        |       | 952   |   |        |       | 13    |   |        |     | 68  | 
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total commercial  |                                           |        | 63    |     |      |        | 119   |       |      |        | 1,282 |       |   |        | 13    |       |   |        | 68  |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Consumer:         |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |     |    
|                                                         |                   | Residential mortgage (one-to-four family) |        |       | 34  |      |        |       |      |      |        |       |      |   |        |       |      |   |        |     |    | 
|                                                         |                   | Other                                     |        |       | 26  |      |        |       | 26    |      |        |       | 70    |   |        |       | 30    |   |        |     | 82  | 
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total consumer    |                                           |        | 60    |     |      |        | 26    |       |      |        | 70    |       |   |        | 30    |       |   |        | 82  |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|                                                         | Total recoveries  |                                           |        | 123   |     |      |        | 145   |       |      |        | 1,352 |       |   |        | 43    |       |   |        | 150 |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Total allowance for losses at end of year                |                   | $                                         | 67,944 |       |     | $    | 60,412 |       |       | $    | 60,863 |       |       | $ | 48,865 |       |       | $ | 34,550 |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Allowance for loan losses                                |                   | $                                         | 64,542 |       |     | $    | 56,472 |       |       | $    | 58,126 |       |       | $ | 48,865 |       |       | $ | 34,550 |    
|Allowance for losses  unfunded
    commitments          |                   |                                           | 3,402  |       |     |      | 3,940  |       |       |      | 2,737  |       |       |   |       |       |       |   |       |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Total allowance for losses at end of year                |                   | $                                         | 67,944 |       |     | $    | 60,412 |       |       | $    | 60,863 |       |       | $ | 48,865 |       |       | $ | 34,550 |    
|                                                         |                   |                                           |        |       |     |      |        |       |       |      |        |       |       |   |        |       |       |   |        |    
|Allowance for loan losses to loans held in
    portfolio |                   |                                           | 1.11   | %     |     |      | 1.39   | %     |       |      | 1.54   | %     |       |   | 1.61   | %     |       |   | 1.53   | %  
|Net charge-offs to average loans outstanding(1)          |                   |                                           | 0.03   |       |     |      | 0.11   |       |       |      | 0.06   |       |       |   | 0.23   |       |       |   |       |    



---

|    |                                                        
|--- | -------------------------------------------------------
|(1) | Average loans balance includes loans held for
    sale.

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The allocation of the allowance for loan losses
analysis and the percentage of gross loans held in portfolio at
December 31, 2005, 2004, 2003, 2002 and 2001, were as
follows (dollars in thousands):

|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|--------------------------------------------------- |  | ------ | ------ | ---- |  | ------ | ------ | ---- |  | ------ | ------ | - |  | ------ | ------ | - |  | ------ | ------ | - |  |  | ------ | - |  | - | ------ |  |  |  | ------ | - |  | - | ------ |  |  |  | ------ | -
|                                                    |  |        |        |      |  |        |        |      |  |       
|                                                    |  | 2005   |        | 2004 |  | 2003   |        | 2002 |  | 2001  
|                                                    |  |        |        |      |  |        |        |      |  |       
|                                                    |  | Amount |        | %    |  | Amount |        | %    |  | Amount |        | % |  | Amount |        | % |  | Amount |        | %
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |  
|Allocated:                                          |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Commercial:                                         |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Secured by real estate  nonresidential             |  | $      | 30,778 |      |  |        | 39.52  |      |  | $      | 30,885 |   |  |        | 47.99  |   |  | $      | 26,702 |   |  |  | 45.18  |   |  | $ | 18,647 |  |  |  | 42.17  |   |  | $ | 11,435 |  |  |  | 35.21  |  
|Secured by real estate  multifamily                |  |        | 1,075  |      |  |        | 25.81  |      |  |        | 629    |   |  |        | 21.38  |   |  |        | 5,263  |   |  |  | 30.80  |   |  |   | 8,977  |  |  |  | 30.18  |   |  |   | 6,087  |  |  |  | 29.89  |  
|Construction                                        |  |        | 9,412  |      |  |        | 8.47   |      |  |        | 8,929  |   |  |        | 7.16   |   |  |        | 9,274  |   |  |  | 7.76   |   |  |   | 9,275  |  |  |  | 7.09   |   |  |   | 4,654  |  |  |  | 8.00   |  
|Business                                            |  |        | 22,406 |      |  |        | 14.80  |      |  |        | 14,971 |   |  |        | 11.56  |   |  |        | 6,011  |   |  |  | 7.85   |   |  |   | 7,017  |  |  |  | 8.65   |   |  |   | 4,401  |  |  |  | 7.23   |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Total commercial                                    |  |        | 63,671 |      |  |        | 88.60  |      |  |        | 55,414 |   |  |        | 88.09  |   |  |        | 47,250 |   |  |  | 91.59  |   |  |   | 43,916 |  |  |  | 88.09  |   |  |   | 26,577 |  |  |  | 80.33  |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Consumer:                                           |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Residential mortgage (one-to-four family)           |  |        | 697    |      |  |        | 10.52  |      |  |        | 728    |   |  |        | 10.72  |   |  |        | 292    |   |  |  | 7.25   |   |  |   | 1,555  |  |  |  | 10.23  |   |  |   | 2,187  |  |  |  | 18.96  |  
|Other                                               |  |        | 174    |      |  |        | 0.88   |      |  |        | 330    |   |  |        | 1.19   |   |  |        | 465    |   |  |  | 1.16   |   |  |   | 635    |  |  |  | 1.68   |   |  |   | 183    |  |  |  | 0.71   |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Total consumer                                      |  |        | 871    |      |  |        | 11.40  |      |  |        | 1,058  |   |  |        | 11.91  |   |  |        | 757    |   |  |  | 8.41   |   |  |   | 2,190  |  |  |  | 11.91  |   |  |   | 2,370  |  |  |  | 19.67  |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Total allocated                                     |  |        | 64,452 |      |  |        | 100.00 | %    |  |        | 56,472 |   |  |        | 100.00 | % |  |        | 48,007 |   |  |  | 100.00 | % |  |   | 46,106 |  |  |  | 100.00 | % |  |   | 28,947 |  |  |  | 100.00 | %
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Non-loan category specific(2)                       |  |        |       |      |  |        |        |      |  |        |       |   |  |        |        |   |  |        | 10,122 |   |  |  |        |   |  |   | 2,759  |  |  |  |        |   |  |   | 5,603  |  |  |  |        |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Allowance for loan losses                           |  | $      | 64,542 |      |  |        |        |      |  | $      | 56,472 |   |  |        |        |   |  | $      | 58,129 |   |  |  |        |   |  | $ | 48,865 |  |  |  |        |   |  | $ | 34,550 |  |  |  |        |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  
|Allowance for losses  unfunded
    commitments (1) |  | $      | 3,402  |      |  |        |        |      |  | $      | 3,940  |   |  |        |        |   |  | $      | 2,737  |   |  |  |        |   |  | $ |       |  |  |  |        |   |  | $ |       |  |  |  |        |  
|                                                    |  |        |        |      |  |        |        |      |  |        |        |   |  |        |        |   |  |        |        |   |  |  |        |   |  |   |        |  |  |  |        |   |  |   |        |  |  |  |        |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Included in allowance for loan losses in 2002 and
    2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | During the course of 2004 and 2005, UCB continued
    its ongoing evaluation of the loss factors used to determine the
    allowance. As part of this evaluation, the portion of the
    allowance previously presented as non loan category
    specific was allocated to specific loan portfolios, to
    align the potential imprecision arising from the accuracy of the
    risk rating process and general economic and business conditions
    affecting our key lending areas with the underlying loan
    portfolio. The presentation for 2004 and 2005 reflects this
    modification.

The allocation of the allowance to each category
is not necessarily indicative of future loss in any particular
category and does not restrict our use of the allowance to
absorb losses in other categories.

The ratio of allowance for loan losses to total
loans held in portfolio was 1.11% at December 31, 2005,
compared with 1.39% at December 31, 2004. The allowance for
loan losses was $64.5 million at December 31, 2005,
compared with $56.5 million at December 31, 2004. The
increase in the allowance for loan losses primarily reflects the
growth in the loan portfolio and the increase in commercial
loans for the year ended December 31, 2005, and the
allowance for loan losses of $2.1 million and $788,000 from
the acquisitions of Pacifica and AABT. For the year ended
December 31, 2005, UCB continued its ongoing process of
reviewing its loan portfolio by evaluating the loss factors and
current economic conditions in light of its own historical loss
experience, loan delinquency and classification in determining
the adequate level of allowance for loan losses. Accordingly,
UCB provided for $6.1 million of loan losses for the year
ended December 31, 2005, compared with $4.2 million
provided for the year ended December 31, 2004. In addition,
UCB experienced lower net loan charge-offs for the year ended
December 31, 2005, when compared with the net loan
charge-offs for the year ended December 31, 2004. The net
charge-offs were $1.6 million and $4.8 million for the
year ended December 31, 2005 and 2004, respectively. The
Federal Reserve has consistently raised interest rates during
2005 and has communicated its intention to continue this into
2006. As interest rates rise, additional pressure may be place
on our borrowers abilities to meet their contractual loan
obligations, which may result in future increases to the
allowance for loan losses and, in turn, higher provisions for
loan losses.

Allowance for Unfunded
Commitments.We also estimate a
reserve related to unfunded commitments. The allowance is
included in other liabilities on the Companys consolidated
balance sheet with any related

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increases or decreases in the allowance included
in noninterest expense in the Companys consolidated income
statement.


In assessing the adequacy of this reserve, we use
a process similar to the one used in estimating the allowance
for loan losses. Loss factors have been developed based upon
historical experience with regard to the portions of these
commitments that eventually become funded. During 2005, we
updated the loss factors associated with these commitments based
upon current experience. The factors were lowered as a result of
these evaluations, reflecting continued improvement in the
losses associated with these exposures. This resulted in a
reduction in the allowance of $538,000, net of increase in
commitments.

Commitments to extend credit upon, which the
above allowances were calculated on December 31, 2005 and
2004, were $1.30 billion and $787.9 million,
respectively.

Operational Risk Management

Operational risk is the potential for unexpected
losses attributable to human error, systems failures, fraud, or
inadequate internal controls and procedures. Successful
operational risk management is particularly important to a
diversified financial services company like ours because of the
nature, volume and complexity of our various businesses.

The Enterprise Risk Management Committee provides
oversight to accelerate and facilitate consistency of effective
policies, best practices, controls and monitoring tools for
managing and assessing all types of operational risks across the
Company. Such risks are managed through corporate wide or
business division specific policies and procedures, controls and
monitoring tools. Examples of these include personnel management
practices, data reconciliation processes, transaction processing
monitoring and analysis, systems interruptions and new product
introduction processes. In addition, we have an Operational Risk
Management group in place, whose responsibility is to help
Company management identify and monitor the key controls and
processes that the Company has in place to mitigate operational
risk.

We classify operational risk into two major
categories: business specific and corporate-wide affecting all
business lines. Management of operational risk requires a
different strategy for each category. For business specific
risks, the Operational Risk Management Group works with the
divisions to ensure consistency in policies, processes, and
assessments. With respect to corporate-wide risks, such as
information security, business recovery, legal and compliance,
the Operational Risk Management Group assesses the risks,
develops a consolidated corporate view and communicates that
view to the business groups.

In addition, to help manage company-wide risks,
we have specialized support groups, such as the Legal
Department, Information Security, Business Recovery, Corporate
Finance, Corporate Compliance, and Technology and Operations.
These groups assist the lines of business in the development and
implementation of risk management practices specific to the
needs of the individual businesses.

Interest Rate and Market Risk
Management

Interest rate risk is the potential for loss
resulting from adverse changes in the level of interest rates on
UCBs net interest income. Market risk is the potential for
loss arising from adverse changes in the prices of UCBs
financial instruments as a result of changes in interest rates
or other factors. As a financial institution that engages in
transactions involving an array of financial products, UCB is
constantly exposed to both interest rate risk and market risk.

UCBs Board of Directors is responsible for
approving the overall policies relating to the management of
financial risk of UCB. In addition, UCBs Board of
Directors must understand the key strategies set by management
for managing risk, establish and periodically revise the policy
limits, and review all reported limit exceptions. The UCBs
Board of Directors has appointed a Market Risk Management
Committee (MRMC) that is responsible for working
with UCBs Board of Directors to establish strategies to
manage interest rate risk and to evaluate the effectiveness of
these strategies. MRMC also estimates the effect of changes in
interest rate on our net portfolio value (NPV) and
whether such effects are within the limits set by UCBs
Board of Directors.

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Interest Rate Risk.Interest rate risk is one of the most significant risks to which
UCB is regularly exposed and is managed centrally in the
Corporate Treasury function. A sudden and substantial change in
interest rates could negatively affect our earnings if the rates
of interest UCB earns on its loans and investments do not change
at the same speed, to the same extent, or on the same basis as
the interest rates UCB pays on its deposits and borrowings.

One of UCBs highest priorities is to
actively monitor and manage its exposure to interest rate risk.
UCB accomplishes this by first evaluating the interest rate risk
that is inherent in the makeup of its assets and liabilities.
UCB then determines an appropriate level of risk that it is
willing to assume considering its business strategy, current
operating environment, capital and liquidity requirements, as
well as our current performance objectives.

Interest rate risk is managed in a number of
ways. UCB actively manages the rates on the various types of
loans and deposits that it offers its customers. These offering
rates are a primary tool for encouraging or discouraging the
production of loans with specific characteristics such as
repricing frequency, amortization term and maturity;
certificates of deposits with longer or shorter terms; and the
mix of deposits. Nevertheless, banking is a competitive industry
and although we endeavor to influence the types of loans and
deposits that we produce, market conditions ultimately govern
the outcome of those efforts.

UCB also manages the composition of its assets by
selling loans with specific repricing characteristics, adjusting
the relative size of its investment securities portfolio, which
predominately fixed-rate, and replenishing the investment
securities portfolio with securities of specific durations and
final maturities. UCB also manages the composition of its
liabilities by choosing borrowings with longer or shorter
expected maturities.

UCB monitors its interest rate sensitivity
through the use of a model, which estimates the change in our
NPV and net interest income in the event of a range of assumed
changes in market interest rates. Net portfolio value is defined
as the current market value of our assets, less the current
market value of our liabilities, plus or minus the current value
of off-balance-sheet items. As market interest rates decline,
the average expected lives of our fixed-rate loans and
investment securities shorten due to quicker prepayments,
causing a relatively moderate increase in their value. The value
of our deposit portfolio exhibits only relatively minor
movements in a declining interest rate environment, since they
are primarily short term in nature. This results in the value of
deposits decreasing more quickly than the value of assets
increasing. As market interest rates rise, the average expected
life of our fixed-rate loans and securities lengthens as
prepayments decrease, causing a decline in value. The value of
our deposits increases slowly in a rising rate environment, due
to the concentration of time deposits in our deposit base, which
have terms of one year or less.

UCB may use certain derivative financial
instruments for hedging purposes, such as interest rate swaps,
caps, and floors as part of our hedging program, to help
mitigate our interest rate risk. Such instruments involve, to
varying degrees, elements of credit and interest rate risk in
excess of the amount that is presented on our balance sheet. See
the Contractual Obligation and Off-Balance-Sheet Arrangements
section for additional information.

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The percentage change in UCBs NPV and net
interest income, assuming an immediate change in interest rates
of plus or minus 100 and 200 basis points, from the levels at
December 31, 2005 and 2004, and sustained through the
projected forward rates are as follows (dollars in thousands):

|                                          |       |                     |   |                     |  |          |   |          |   |          |  |          |    |  |   |         |  |  |   |         |   |  |  |       |   
|----------------------------------------- | ----- | ------------------- | - | ------------------- |  | -------- | - | -------- | - | -------- |  | -------- | -- |  | - | ------- |  |  | - | ------- | - |  |  | ----- | --
|                                          |       |                     |   |                    
|                                          |       | Net Portfolio Value |   | Net Interest Income
|                                          |       |                     |   |                    
|Change in Interest Rates in Basis Points: |       | Amount              |   | $ Change            |  | % Change |   | Amount   |   | $ Change |  | % Change
|                                          |       |                     |   |                     |  |          |   |          |   |          |  |         
|December 31, 2005:                        |       |                     |   |                     |  |          |   |          |   |          |  |          |    |  |   |         |  |  |   |         |   |  |  |      
|                                          | 200   |                     | $ | 738,174             |  |          | $ | (178,904 | ) |          |  | (19.51   | )% |  | $ | 267,431 |  |  | $ | (5,840  | ) |  |  | (2.14 | )%
|                                          | 100   |                     |   | 832,947             |  |          |   | (84,131  | ) |          |  | (9.17    | )  |  |   | 271,580 |  |  |   | (1,691  | ) |  |  | (0.62 | ) 
|                                          | 0     |                     |   | 917,078             |  |          |   |         |   |          |  |         |    |  |   | 273,271 |  |  |   |        |   |  |  |      |   
|                                          | (100) |                     |   | 955,972             |  |          |   | 38,893   |   |          |  | 4.24     |    |  |   | 273,605 |  |  |   | 334     |   |  |  | 0.12  |   
|                                          | (200) |                     |   | 945,275             |  |          |   | 28,197   |   |          |  | 3.07     |    |  |   | 262,226 |  |  |   | (11,045 | ) |  |  | (4.04 | ) 
|December 31, 2004:                        |       |                     |   |                     |  |          |   |          |   |          |  |          |    |  |   |         |  |  |   |         |   |  |  |      
|                                          | 200   |                     | $ | 662,958             |  |          | $ | (97,361  | ) |          |  | (12.81   | )% |  | $ | 218,052 |  |  |   | 18,888  |   |  |  | 9.48  | % 
|                                          | 100   |                     |   | 716,363             |  |          |   | (43,956  | ) |          |  | (5.78    | )  |  |   | 210,045 |  |  |   | 10,881  |   |  |  | 5.46  |   
|                                          | 0     |                     |   | 760,319             |  |          |   |         |   |          |  |         |    |  |   | 199,164 |  |  |   |        |   |  |  |      |   
|                                          | (100) |                     |   | 783,618             |  |          |   | 23,298   |   |          |  | 3.06     |    |  |   | 188,212 |  |  |   | (10,952 | ) |  |  | (5.50 | ) 
|                                          | (200) |                     |   | 744,158             |  |          |   | (16,162  | ) |          |  | (2.13    | )  |  |   | 179,299 |  |  |   | (19,865 | ) |  |  | (9.97 | ) 

All loans and investments presented in the above
table are classified as held to maturity or available for sale.
We had no trading securities at those dates.

Like all models that are dependent upon future
interest rate movements and other variables, the interest rate
risk model that we use has certain shortcomings. We are required
to make certain assumptions, such as estimated prepayment rates,
which may or may not actually reflect how actual yields and
costs will react to market interest rates. For example, the
interest rate risk model assumes that the makeup of our interest
rate-sensitive assets and liabilities will remain constant over
the period being measured. Thus, although using such a model can
be instructive in providing an indication of UCBs exposure
to interest rate risk, we cannot precisely forecast the effects
of a change in market interest rates and the results indicated
by the model are likely to differ from actual results.

Liquidity Risk

Overview.Liquidity
risk is the possibility that UCBs cash flows may not be
adequate to fund its ongoing operations and meet its commitments
in a timely cost-effective manner. Since liquidity risk is
closely tied to both credit risk and market risk, many of the
previously discussed risk control mechanisms also apply to the
monitoring and management of liquidity risk. UCB manages its
liquidity to provide adequate funds to meet its anticipated
financial and contractual obligations, including withdrawals by
depositors, debt service requirements and lease obligations, as
well as to fund customers needs for credit. In addition,
UCBs liquidity may be adversely affected by unexpected
withdrawals of deposits, excessive interest rates paid by our
competitors and other factors. However, UCB continuously reviews
its liquidity positions in light of its actual and expected
growth in loans and deposits to ensure that its liquidity needs
are met.

Maintaining liquidity is the responsibility of
the Market Risk Management Committee, which has established
corporate liquidity guidelines by which liquidity and funding
are managed. These guidelines address maintaining liquidity
needs, diversifying funding positions, monitoring liquidity
needs at both the Company and UCB levels, and anticipating
future funding needs. Liquidity and funding are managed by
UCBs Treasury Department under the direction of the
Treasurer.

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Contractual
Obligations.The Companys
contractual obligations at December 31, 2005, were as
follows (dollars in thousands):

|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |           |  
|------------------------------------------ | ----------------------------------------- | ---------- | --------- | ------------ | - | ------------- | ------- | --------- |  | ----- | ------ | ------ |  |  | ------- | ------- |  |  | --------- | --------- | -
|                                           |                                           |            |           | After One    |   | After Three   |         | More      |  |      
|                                           |                                           | Within One |           | Year Through |   | Years Through |         | Than Five |  |      
|                                           |                                           | Year       |           | Three Years  |   | Five Years    |         | Years     |  | Total
|                                           |                                           |            |           |              |   |               |         |           |  |      
|Deposits:                                  |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           | Demand and savings accounts(1)            |            | $         | 2,730,779    |   |               | $       |          |  |       | $      |       |  |  | $       |        |  |  | $         | 2,730,779 |  
|                                           | Time deposits                             |            |           | 3,446,384    |   |               |         | 81,742    |  |       |        | 5,263  |  |  |         | 1       |  |  |           | 3,533,390 |  
|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           |                                           |            | 6,177,183 |              |   |               | 86,742  |           |  |       | 5,263  |        |  |  | 1       |         |  |  | 6,264,169 |          
|Long-term debt:                            |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           | Borrowings                                |            |           | 280,596      |   |               |         | 313,836   |  |       |        | 40,380 |  |  |         | 206,646 |  |  |           | 841,458   |  
|                                           | Subordinated debentures                   |            |           |             |   |               |         |          |  |       |        |       |  |  |         | 146,000 |  |  |           | 146,000   |  
|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           |                                           |            | 280,596   |              |   |               | 313,836 |           |  |       | 40,380 |        |  |  | 352,646 |         |  |  | 987,458   |          
|Unfunded CRA investment commitments        |                                           |            | 5,365     |              |   |               |        |           |  |       |       |        |  |  |        |         |  |  | 5,365     |          
|Derivatives:                               |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           | Foreign exchange contracts receivable     |            |           | (217,827     | ) |               |         |          |  |       |        |       |  |  |         |        |  |  |           | (217,827  | )
|                                           | Foreign exchange contracts payable        |            |           | 216,892      |   |               |         |          |  |       |        |       |  |  |         |        |  |  |           | 216,892   |  
|                                           | Put option to buy                         |            |           | 11,269       |   |               |         |          |  |       |        |       |  |  |         |        |  |  |           | 11,269    |  
|                                           | Put option to sell                        |            |           | (11,269      | ) |               |         |          |  |       |        |       |  |  |         |        |  |  |           | (11,269   | )
|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           |                                           |            | (935      | )            |   |               |        |           |  |       |       |        |  |  |        |         |  |  | (935      | )        
|Off-balance-sheet arrangements:            |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|Letters of credit                          |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           | Commercial                                |            |           | 32,910       |   |               |         | 4,031     |  |       |        |       |  |  |         |        |  |  |           | 36,941    |  
|                                           | Standby                                   |            |           | 52,574       |   |               |         | 1,080     |  |       |        |       |  |  |         |        |  |  |           | 53,654    |  
|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           |                                           |            | 85,484    |              |   |               | 5,111   |           |  |       |       |        |  |  |        |         |  |  | 90,595    |          
|Commitments to extend credit:              |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           | Consumer (including residential mortgage) |            |           | 88,407       |   |               |         |          |  |       |        |       |  |  |         |        |  |  |           | 88,407    |  
|                                           | Commercial (excluding construction)       |            |           | 672,662      |   |               |         |          |  |       |        |       |  |  |         |        |  |  |           | 672,662   |  
|                                           | Construction                              |            |           | 539,955      |   |               |         |          |  |       |        |       |  |  |         |        |  |  |           | 539,955   |  
|                                           |                                           |            |           |              |   |               |         |           |  |       |        |        |  |  |         |         |  |  |           |          
|                                           |                                           |            | 1,301,024 |              |   |               |        |           |  |       |       |        |  |  |        |         |  |  | 1,301,024 |          
|Unfunded CRA investment commitments        |                                           |            | 4,760     |              |   |               |        |           |  |       |       |        |  |  |        |         |  |  | 4,760     |          
|Noncancellable operating lease obligations |                                           |            | 8,744     |              |   |               | 14,806  |           |  |       | 9,572  |        |  |  | 15,607  |         |  |  | 48,729    |          



---



|    |                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------
|(1) | Accounts with indeterminate maturities, such as
    savings and checking, are included in one year or less category.

In addition to the commitments specifically noted
in the previous table, the Company enters into a number of
contractual commitments in the ordinary course of business.
These include systems licensing and maintenance,
telecommunications services, facilities maintenance and
management, equipment servicing, supplies purchasing, and other
goods and services used in the operation of our business.
Generally, these contracts are renewable or cancelable at least
annually, although in some cases to secure favorable pricing
concessions, the Company has committed to contracts that may
extend to several years. The Company has no pension or other
post-employment benefit obligations.

Liquidity
Management.Liquidity is managed
centrally for both UCBH and UCB. UCBHs cash requirements
consist primarily of debt service, operating expenses, income
taxes, and dividends to stockholders. UCBHs cash needs are
routinely met through dividends from UCB, investment income and
debt issuances. UCBs primary source of funding is its core
deposits. Operational cash flows, while constituting a funding
source for the Company, are not large enough to provide funding
in the amounts that fulfill the

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needs of UCBH and UCB. For 2005, operations
contributed $303.4 million toward these needs. As a result,
the Company utilizes other sources at its disposal to manage its
liquidity needs.


During 2005, UCBH received $30.0 million in
dividends from UCB. At December 31, 2005,
$244.9 million of dividend capacity was available for UCB
to pay UCBH without obtaining regulatory approval. The dividend
capacity is dependent upon the continued profitability of UCB
and no significant changes in the current regulatory
environment. While we have no current expectation that these two
conditions will change, should a change take place to either in
the future, the source of funding to UCBH may become more
limited or even unavailable. See Note 16 to the
Consolidated Financial Statements for the details related to
dividend capacities and limitations.

As mentioned earlier, UCBs primary source
of funding is its core deposits consisting of demand, savings
and money market deposits and time deposits under $100,000. At
December 31, 2005, these deposits, in aggregate,
constituted 62.8% of total deposits compared with 64.2% at
year-end 2004. For the year 2005, deposit increases resulted in
net cash inflows of $787.5 million. Our liquidity may be
adversely affected by unexpected withdrawals of deposits, which
would require us to seek alternative funding sources, such as
Federal Funds and other borrowings.

UCB maintains borrowing lines with numerous
correspondent banks and brokers and with the Federal Home Loan
Bank of San Francisco (the FHLB) to supplement its
supply of lendable funds and to manage liquidity. Such
borrowings are generally secured with mortgage loans and/or
securities with a market value at least equal to outstanding
balances. In addition to loans and securities, advances from the
FHLB are typically secured by a pledge of UCBs stock in
the FHLB. UCB had $788.0 million and $407.3 million of
FHLB advances outstanding at December 31, 2005 and 2004,
respectively. At December 31, 2005, UCB had
$1.85 billion of additional FHLB borrowings available for
future borrowing capacity.

Included in the $788.0 million of FHLB
advances outstanding as of December 31, 2005, were
$226.0 million of short-term, fixed-rate advances that
mature within one year. The remaining $562.0 million in
long-term advances mature between 2007 and 2015. As of
December 31, 2005, $436.5 million of these advances
may be terminated at the option of the FHLB. The FHLB may
terminate the advances at quarterly intervals at specified
periods ranging from three to five years beyond the original
advance dates. In December, the FHLB terminated one advance
totaling $5.0 million. In the event the FHLB decides to
exercise this option, UCB would need to repay the advances using
other funding sources.

The FHLB is also a source of liquidity for UCB.
The FHLB allows member banks to borrow against their eligible
loans to meet liquidity requirements. For 2005, the activity in
short-term FHLB borrowings resulted in a net cash outflow of
$10.9 million, while activity in long-term borrowings
resulted in net cash inflows of $248.6 million. At
December 31, 2005, amounts of unused lines of credit
available for additional FHLB advances totaled
$1.85 billion. Borrowings from the FHLB may increase in the
future depending on availability of funds from other sources.
However, UCB must maintain its FHLB membership to continue to
access this source of funding.

For the year 2005, UCBH issued $41.2 million
of subordinated debentures. This issuance was primarily to
provide the cash required to consummate the two acquisitions,
which closed in 2005. In addition, the Company has a
$20.0 million unsecured borrowing line with Wells Fargo
Bank. As of December 31, 2005, no advances had been drawn
against this line.

During 2004 and continuing through the first
three quarters of 2005, UCB originated multi-family real estate
loans that were earmarked for sale to the secondary markets. As
such, these loans were classified as held for sale at the point
of loan origination. During the third quarter of 2005, however,
UCB management made a decision to discontinue the practice of
originating these multi-family loans solely with the intent to
sell. This decision was primarily the result of changes in
market conditions for multi-family loans in the secondary
markets. As a result of this decision, at September 30,
2005, approximately $235.9 million of multi-family
commercial real estate loans were transferred from held for sale
to the held in portfolio. The Company had previously recognized
a charge of $773,000 to reflect a decline in market value of the
loans. During 2005, this multi-family loan sale activity
resulted in net cash inflows of approximately
$538.1 million.

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In addition, during the fourth quarter of 2005,
UCB sold commercial real estate loans from its portfolio that
were not originated with the intent to sell. These loan sales
provided an additional $141.7 million in net cash inflows
during 2005. We expect that loan sales will continue to be a
tool that we use for liquidity and credit risk management
purposes. Finally, the previously discussed internal loan
securitization transactions also help to improve the
Companys liquidity, since FNMA securities receive more
favorable treatment as a collateral base for borrowings than do
whole loans. During 2005, the Company did not securitize any
loans since loan sales provided more efficient and effective
execution.

While not considered a primary source of funding,
the Companys investment activities can also provide or use
cash, depending on the investment strategy being used for the
portfolio. During 2005, investment securities activities
resulted in a decrease in investment holdings and a net inflow
of cash in the amount of $85.6 million.

Maturing balances in the various loan portfolios
also provide additional flexibility in managing cash flows. In
most situations, however, loan growth has resulted in cash
outflows from a funding standpoint. For 2005, loan growth
resulted in a net cash outflow of $1.37 billion. With the
loan growth that we have experienced over the past year, we
expect that our lending operations will continue to be a use of
funds rather than a source.

CAPITAL MANAGEMENT

The Board of Directors is responsible for
approving the policies associated with capital management. The
ultimate goal of our capital management program is to maintain
the Company and UCB (on a consolidated basis) at the well
capitalized level as defined by the federal banking
regulators. As of December 31, 2005, both the Company and
UCB exceeded the minimum risk-based capital ratios to be
considered well capitalized.

UCBs also manages its risk-based capital
levels through internal loan securitizations. In such
securitizations, UCB will exchange either multifamily or
residential (one-to-four family) mortgage loans for securities
issued by the Federal National Mortgage Association
(FNMA). Residential (one-to-four family) mortgages
are generally included in the 50% risk weighted category for
risk-based capital purposes. Multifamily loans may receive
either a 50% or 100% risk weighting depending on specific loan
criteria. FNMA securities, however, are classified at a 20% risk
weight.

These internal securitizations do not have a cash
flow impact on UCB, since selected loans from its loan portfolio
are exchanged for FNMA securities. Such securities are supported
by exactly the same loans that were held in UCBs
portfolio. The securities are generally included in the
available for sale investment securities portfolio.

Total stockholders equity at
December 31, 2005, was $603.5 million, an increase of
24.7% over the $484.0 million at December 31, 2004.
The increase reflects the retention of earnings and the
issuances of new shares of stock in connection with the
Companys recent acquisitions. UCBs risk-based
capital ratios for the past five years were as follows:

|                          |  |                         |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | - |  |  | ----- | -
|                          |  |                        
|                          |  | Year Ended December 31,
|                          |  |                        
|                          |  | 2005                    |       | 2004 |  | 2003 |       | 2002 |  | 2001
|                          |  |                         |       |      |  |      |       |      |  |     
|Tier 1 leverage           |  |                         | 8.26  | %    |  |      | 8.49  | %    |  |      | 7.86  | % |  |  | 7.57  | % |  |  | 7.26  | %
|Tier 1 risk-based capital |  |                         | 9.91  |      |  |      | 11.42 |      |  |      | 10.92 |   |  |  | 10.26 |   |  |  | 9.65  |  
|Total risk-based capital  |  |                         | 10.98 |      |  |      | 12.67 |      |  |      | 12.18 |   |  |  | 11.52 |   |  |  | 10.91 |  

The risk-based capital ratios for the Company are
at levels slightly higher than those of UCB. See Note 16 to
the Consolidated Financial Statements for additional information
on risk-based capital.

UCBH has continuously paid quarterly dividends on
its common stock since 2000. UCBH paid out dividends of $0.10
per share for a total payment of $8.7 million in 2005,
compared to $0.08 per share or $6.8 million in 2004. The
per share dividend amount for 2004 has been adjusted for the
two-for-one stock split that took effect in 2005. The payment of
dividends during 2005 had the effect of reducing the
Companys Tier 1 leverage ratio by 12 basis points and the
total risk-based capital ratio by 15 basis points. During the

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January 26, 2006, meeting, UCBHs Board
of Directors declared a quarterly dividend of $0.03 per share
payable on April 12, 2006 to the stockholders of record as
of March 31, 2006.





Item 7A.Quantitative
and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures
regarding market risks in our portfolio, see the discussion
under Market Risk Management included in
Managements Discussion and Analysis of Financial
Condition and Results of Operations.

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Item 8.     Financial
Statements and Supplemental Data

UCBH HOLDINGS, INC. AND SUBSIDIARIES

Index to Consolidated Financial
Statements


|                                                                                                                                                |  |      |    | 
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                                                |  | Page
|                                                                                                                                                |  |     
|Report of Independent Registered Public
    Accounting Firm                                                                                     |  |      | 67 | 
|Consolidated Balance Sheets as of
    December 31, 2005 and 2004                                                                                |  |      | 69 | 
|Consolidated Statements of Operations for each of
    the three years ended December 31, 2005                                                   |  |      | 70 | 
|Consolidated Statements of Changes in
    Stockholders Equity and Comprehensive Income for each of
    the three years ended December 31, 2005 |  |      | 71 | 
|Consolidated Statements of Cash Flows for each of
    the three years ended December 31, 2005                                                   |  |      | 72 | 
|Notes to Consolidated Financial Statements                                                                                                      |  |      | 73 | 

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REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board of Directors and Stockholders of
UCBH Holdings, Inc.:

We have completed integrated audits of UCBH
Holdings, Inc.s 2005 and 2004 consolidated financial
statements and of its internal control over financial reporting
as of December 31, 2005 and an audit of its 2003
consolidated financial statements in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Our opinions, based on our audits, are
presented below.

Consolidated financial
statements

In our opinion, the consolidated financial
statements listed in the accompanying index present fairly, in
all material respects, the financial position of UCBH Holdings,
Inc. and its subsidiaries at December 31, 2005 and 2004,
and the results of their operations and their cash flows for
each of the three years in the period ended December 31,
2005 in conformity with accounting principles generally accepted
in the United States of America. These financial statements are
the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit of financial statements
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

Internal control over financial
reporting

Also, in our opinion, managements
assessment, included in Managements Report on Internal
Control Over Financial Reporting appearing under Item 9A,
that the Company maintained effective internal control over
financial reporting as of December 31, 2005 based on
criteria established in Internal Control 
Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), is fairly
stated, in all material respects, based on those criteria.
Furthermore, in our opinion, the Company maintained, in all
material respects, effective internal control over financial
reporting as of December 31, 2005, based on criteria
established in Internal Control  Integrated
Frameworkissued by the COSO. The Companys management
is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility
is to express opinions on managements assessment and on
the effectiveness of the Companys internal control over
financial reporting based on our audit. We conducted our audit
of internal control over financial reporting in accordance with
the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was
maintained in all material respects. An audit of internal
control over financial reporting includes obtaining an
understanding of internal control over financial reporting,
evaluating managements assessment, testing and evaluating
the design and operating effectiveness of internal control, and
performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable
basis for our opinions.

A companys internal control over financial
reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A
companys internal control over financial reporting
includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of financial

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statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.


Because of its inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures
may deteriorate.

As described in Managements Report on
Internal Control Over Financial Reporting, management has
excluded Pacifica Bancorp, Inc. and Asian American
Bank & Trust Company from its assessment of internal
control over financial reporting as of December 31, 2005,
because they were acquired by the Company in purchase business
combinations during the fourth quarter of 2005. We have also
excluded Pacifica Bancorp, Inc. and Asian American
Bank & Trust Company from our audit of internal control
over financial reporting. Pacifica Bancorp, Inc. and Asian
American Bank & Trust Company represent combined total
assets and combined total revenues of 3.2% and 0.4%,
respectively, of the related consolidated financial statement
amounts as of and for the year ended December 31, 2005.

PRICEWATERHOUSECOOPERS LOGO

San Francisco, California 
 March 15, 2006


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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Share and Par
Value Amounts)


|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |           |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------------------------ | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                                                                            |                             |                                           
|                                                                                                                                                                                                            |                             | December 31,                              
|                                                                                                                                                                                                            |                             |                                           
|                                                                                                                                                                                                            |                             | 2005                                       |           | 2004     
|                                                                                                                                                                                                            |                             |                                            |           |          
|ASSETS                                                                                                                                                                                                     
|Cash and due from banks                                                                                                                                                                                     |                             | $                                          | 200,072   |           |           | $ | 73,864    |          
|Federal funds sold                                                                                                                                                                                          |                             |                                            | 2,993     |           |           |   | 134,500   |          
|Investment and mortgage-backed securities
    available for sale, at fair value                                                                                                                             |                             |                                            | 1,117,724 |           |           |   | 1,169,140 |          
|Investment and mortgage-backed securities held to
    maturity, at cost (fair value of $313,974 and $331,969 at
    December 31, 2005 and 2004, respectively)                                               |                             |                                            | 308,608   |           |           |   | 325,202   |          
|Federal Home Loan Bank stock and other equity
    investments                                                                                                                                               |                             |                                            | 75,445    |           |           |   | 56,867    |          
|Loans held for sale                                                                                                                                                                                         |                             |                                            | 156,740   |           |           |   | 326,007   |          
|Loans held in portfolio                                                                                                                                                                                     |                             |                                            | 5,838,660 |           |           |   | 4,050,741 |          
|Allowance for loan losses                                                                                                                                                                                   |                             |                                            | (64,542   | )         |           |   | (56,472   | )        
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            | Net loans held in portfolio |                                            |           | 5,774,118 |           |   |           | 3,994,269 |          
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|Accrued interest receivable                                                                                                                                                                                 |                             |                                            | 37,750    |           |           |   | 24,507    |          
|Premises and equipment, net                                                                                                                                                                                 |                             |                                            | 98,289    |           |           |   | 92,643    |          
|Goodwill                                                                                                                                                                                                    |                             |                                            | 106,648   |           |           |   | 68,301    |          
|Core deposit intangibles, net                                                                                                                                                                               |                             |                                            | 14,981    |           |           |   | 9,829     |          
|Mortgage servicing rights, net                                                                                                                                                                              |                             |                                            | 10,642    |           |           |   | 7,747     |          
|Other assets                                                                                                                                                                                                |                             |                                            | 57,107    |           |           |   | 32,805    |          
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            |                             | Total assets                               |           | $         | 7,961,117 |   |           | $         | 6,315,681 | 
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                           
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                                                                                   
|Noninterest-bearing deposits                                                                                                                                                                                |                             | $                                          | 558,649   |           |           | $ | 428,602   |          
|Interest-bearing deposits                                                                                                                                                                                   |                             |                                            | 5,705,520 |           |           |   | 4,787,260 |          
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            |                             | Total deposits                             |           |           | 6,264,169 |   |           |           | 5,215,862 | 
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|Short-term borrowings                                                                                                                                                                                       |                             |                                            | 279,425   |           |           |   | 72,310    |          
|Subordinated debentures                                                                                                                                                                                     |                             |                                            | 146,000   |           |           |   | 136,000   |          
|Accrued interest payable                                                                                                                                                                                    |                             |                                            | 12,582    |           |           |   | 6,110     |          
|Long-term borrowings                                                                                                                                                                                        |                             |                                            | 562,033   |           |           |   | 334,952   |          
|Other liabilities                                                                                                                                                                                           |                             |                                            | 93,394    |           |           |   | 66,435    |          
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            |                             | Total liabilities                          |           |           | 7,357,603 |   |           |           | 5,831,669 | 
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|Commitments and contingencies (Notes 22 and
    23)                                                                                                                                                         |                             |                                            |           |           |           |   |           |          
|Preferred stock, $0.01 par value, 10,000,000
    shares authorized, none issued and outstanding                                                                                                             |                             |                                            |          |           |           |   |          |          
|Common stock, $0.01 par value, 180,000,000 shares
    authorized at December 31, 2005 and 2004; 94,037,878 and
    91,131,824 shares issued and outstanding at
    December 31, 2005 and 2004, respectively |                             |                                            | 940       |           |           |   | 456       |          
|Additional paid-in capital                                                                                                                                                                                  |                             |                                            | 247,340   |           |           |   | 203,432   |          
|Retained earnings                                                                                                                                                                                           |                             |                                            | 375,220   |           |           |   | 286,622   |          
|Accumulated other comprehensive loss                                                                                                                                                                        |                             |                                            | (19,986   | )         |           |   | (6,498    | )        
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            |                             | Total stockholders equity                 |           |           | 603,514   |   |           |           | 484,012   | 
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          
|                                                                                                                                                                                                            |                             | Total liabilities and stockholders equity |           | $         | 7,961,117 |   |           | $         | 6,315,681 | 
|                                                                                                                                                                                                            |                             |                                            |           |           |           |   |           |          

See accompanying notes to consolidated financial
statements.

69



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Dollars in Thousands, Except Per Share
Amounts)


|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |         |        |         | 
|------------------------------------------------------- | ---------------------------------------------------------------------------- | ----------------------- | ---------------------------------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | 
|                                                        |                                                                              |                        
|                                                        |                                                                              | Year Ended December 31,
|                                                        |                                                                              |                        
|                                                        |                                                                              | 2005                    |                                    | 2004    |        | 2003   
|                                                        |                                                                              |                         |                                    |         |        |        
|Interest and dividend income:                           |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Loans                                                                        |                         | $                                  | 333,159 |        |         | $       | 226,292 |        |         | $       | 191,754 |       
|                                                        | Funds sold and due from banks                                                |                         |                                    | 2,121   |        |         |         | 649     |        |         |         | 106     |       
|                                                        | Investment and mortgage-backed securities:                                   |                         |                                    |         |        |         |         |         |        |         |         |         |       
|                                                        |                                                                              | Taxable                 |                                    |         | 56,503 |         |         |         | 63,646 |         |         |         | 60,870 |        
|                                                        |                                                                              | Non-taxable             |                                    |         | 10,617 |         |         |         | 9,477  |         |         |         | 7,532  |        
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        |                                                                              |                         | Total interest and dividend income |         |        | 402,400 |         |         |        | 300,064 |         |         |        | 260,262 | 
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Interest expense:                                       |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Deposits                                                                     |                         |                                    | 123,317 |        |         |         | 67,267  |        |         |         | 68,724  |       
|                                                        | Short-term borrowings                                                        |                         |                                    | 10,605  |        |         |         | 2,165   |        |         |         | 1,084   |       
|                                                        | Subordinated debentures                                                      |                         |                                    | 9,353   |        |         |         | 8,185   |        |         |         | 7,922   |       
|                                                        | Long-term borrowings                                                         |                         |                                    | 18,635  |        |         |         | 14,966  |        |         |         | 13,984  |       
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        |                                                                              |                         | Total interest expense             |         |        | 161,910 |         |         |        | 92,583  |         |         |        | 91,714  | 
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Net interest income                                     |                                                                              |                         | 240,490                            |         |        |         | 207,481 |         |        |         | 168,548 |        
|Provision for loan losses                               |                                                                              |                         | 6,091                              |         |        |         | 4,201   |         |        |         | 9,967   |        
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Net interest income after provision for loan
    losses |                                                                              |                         | 234,399                            |         |        |         | 203,280 |         |        |         | 158,581 |        
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Noninterest income:                                     |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Commercial banking fees                                                      |                         |                                    | 10,607  |        |         |         | 8,254   |        |         |         | 6,650   |       
|                                                        | Service charges on deposits                                                  |                         |                                    | 3,038   |        |         |         | 2,654   |        |         |         | 2,249   |       
|                                                        | Gain (loss) on sale of securities, net                                       |                         |                                    | (5      | )      |         |         | 12,713  |        |         |         | 11,013  |       
|                                                        | Gain on sale of SBA loans, net                                               |                         |                                    | 3,356   |        |         |         | 1,463   |        |         |         | 3,030   |       
|                                                        | Gain on sale of multifamily and commercial real
    estate loans, net        |                         |                                    | 12,207  |        |         |         | 7,732   |        |         |         |        |       
|                                                        | Unrealized loss on loans held for sale                                       |                         |                                    | (1,152  | )      |         |         |        |        |         |         |        |       
|                                                        | Equity loss in other equity investments                                      |                         |                                    | (2,296  | )      |         |         | (2,210  | )      |         |         | (152    | )     
|                                                        | Other fees                                                                   |                         |                                    | 929     |        |         |         | 271     |        |         |         | 413     |       
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        |                                                                              |                         | Total noninterest income           |         |        | 26,684  |         |         |        | 30,877  |         |         |        | 23,203  | 
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Noninterest expense:                                    |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Personnel                                                                    |                         |                                    | 60,152  |        |         |         | 50,931  |        |         |         | 42,310  |       
|                                                        | Occupancy                                                                    |                         |                                    | 12,238  |        |         |         | 10,164  |        |         |         | 5,869   |       
|                                                        | Data processing                                                              |                         |                                    | 6,847   |        |         |         | 5,896   |        |         |         | 4,826   |       
|                                                        | Furniture and equipment                                                      |                         |                                    | 6,534   |        |         |         | 6,458   |        |         |         | 4,456   |       
|                                                        | Professional fees and contracted services                                    |                         |                                    | 10,763  |        |         |         | 7,496   |        |         |         | 5,802   |       
|                                                        | Deposit insurance                                                            |                         |                                    | 742     |        |         |         | 774     |        |         |         | 695     |       
|                                                        | Communication                                                                |                         |                                    | 955     |        |         |         | 1,287   |        |         |         | 1,066   |       
|                                                        | Core deposit intangible amortization                                         |                         |                                    | 1,345   |        |         |         | 1,282   |        |         |         | 1,762   |       
|                                                        | Loss on extinguishment of subordinated debentures
    and secured borrowings |                         |                                    | 1,246   |        |         |         |        |        |         |         |        |       
|                                                        | Other general and administrative                                             |                         |                                    | 16,091  |        |         |         | 14,865  |        |         |         | 13,422  |       
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        |                                                                              |                         | Total noninterest expense          |         |        | 116,913 |         |         |        | 99,153  |         |         |        | 80,208  | 
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Income before income tax expense                        |                                                                              |                         | 144,170                            |         |        |         | 135,004 |         |        |         | 101,576 |        
|Income tax expense                                      |                                                                              |                         | 46,344                             |         |        |         | 49,401  |         |        |         | 36,938  |        
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Net income                                              |                                                                              | $                       | 97,826                             |         |        | $       | 85,603  |         |        | $       | 64,638  |        
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|Earnings per share:                                     |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Basic                                                                        |                         | $                                  | 1.06    |        |         | $       | 0.95    |        |         | $       | 0.74    |       
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        
|                                                        | Diluted                                                                      |                         | $                                  | 1.02    |        |         | $       | 0.90    |        |         | $       | 0.71    |       
|                                                        |                                                                              |                         |                                    |         |        |         |         |         |        |         |         |        

See accompanying notes to consolidated financial
statements.

70



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY AND

COMPREHENSIVE INCOME


(Dollars in Thousands, Except Share and Per
Share Amounts)


|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |         |   | 
|----------------------------- | --------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ---------- | ---------- | --------- | -------- | --- | ------------- | -- | ---------------- | ------- | ------------- | ------ | ------ | ------- | ------ | - | - | ------- | ------- | - | - | ------- | ------- | ------ |  | - | ------- | - | 
|                              |                                                                                                                 |                                     |            |            |           |          |     | Accumulated   |    |                  |         |              
|                              |                                                                                                                 | Common Stock                        |            | Additional |           |          |     | Other         |    | Total            |         |              
|                              |                                                                                                                 |                                     |            | Paid-In    |           | Retained |     | Comprehensive |    | Stockholders    |         | Comprehensive
|                              |                                                                                                                 | Shares                              |            | Amount     |           | Capital  |     | Earnings      |    | Income (Loss)(1) |         | Equity        |        | Income
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |       
|Balance at December 31, 2002. |                                                                                                                 |                                     | 84,037,456 |            |           | $        | 210 |               |    | $                | 124,440 |               |        | $      | 148,664 |        |   | $ | 9,053   |         |   | $ | 282,367 |         |        |  |   |        
|                              | Net income                                                                                                      |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | 64,638 |   |   |         |        |   |   |         | 64,638  |        |  | $ | 64,638  |  
|                              | Other comprehensive loss, net of tax benefit of
    $8,905                                                      |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         | (12,298 | ) |   |         | (12,298 | )      |  |   | (12,298 | )
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Comprehensive income                                                                                            |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         |        |   |   |         |        |        |  | $ | 52,340  |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Stock options exercised, including related tax
    benefit                                                      |                                     |            | 1,458,286  |           |          |     | 7             |    |                  |         | 14,785        |        |        |         |       |   |   |         |        |   |   |         | 14,792  |        |  |   |         |  
|                              | Cash dividend of $0.06 per share                                                                                |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | (5,031 | ) |   |         |        |   |   |         | (5,031  | )      |  |   |         |  
|                              | Shares issued in connection with acquisition of
    First Continental Bank                                      |                                     |            | 4,581,014  |           |          |     | 23            |    |                  |         | 69,975        |        |        |         |       |   |   |         |        |   |   |         | 69,998  |        |  |   |         |  
|                              | Stock split                                                                                                     |                                     |            |           |           |          |     | 210           |    |                  |         | (210          | )      |        |         |       |   |   |         |        |   |   |         |        |        |  |   |         |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|Balance at December 31, 2003  |                                                                                                                 |                                     | 90,076,756 |            |           |          | 450 |               |    |                  | 208,990 |               |        |        | 208,271 |        |   |   | (3,245  | )       |   |   | 414,466 |         |        |  |   |        
|                              | Net income                                                                                                      |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | 85,603 |   |   |         |        |   |   |         | 85,603  |        |  | $ | 85,603  |  
|                              | Other comprehensive loss, net of tax benefit of
    $2,364                                                      |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         | (3,253  | ) |   |         | (3,253  | )      |  |   | (3,253  | )
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Comprehensive income                                                                                            |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         |        |   |   |         |        |        |  | $ | 82,350  |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Stock options exercised, including related tax
    benefit                                                      |                                     |            | 1,055,068  |           |          |     | 6             |    |                  |         | 11,233        |        |        |         |       |   |   |         |        |   |   |         | 11,239  |        |  |   |         |  
|                              | Cash dividend of $0.08 per share                                                                                |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | (7,252 | ) |   |         |        |   |   |         | (7,252  | )      |  |   |         |  
|                              | Adjustment to purchase consideration in
    connection with acquisition of First Continental Bank
    (Note 10) |                                     |            |           |           |          |     |              |    |                  |         | (16,791       | )      |        |         |       |   |   |         |        |   |   |         | (16,791 | )      |  |   |         |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|Balance at December 31, 2004  |                                                                                                                 |                                     | 91,131,824 |            |           | $        | 456 |               |    | $                | 203,432 |               |        | $      | 286,622 |        |   | $ | (6,498  | )       |   | $ | 484,012 |         |        |  |   |        
|                              | Net income                                                                                                      |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | 97,826 |   |   |         |        |   |   |         | 97,826  |        |  | $ | 97,826  |  
|                              | Other comprehensive income, net of tax benefit of
    $9,899                                                    |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         | (13,488 | ) |   |         | (13,488 | )      |  |   | (13,488 | )
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Comprehensive income                                                                                            |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         |       |   |   |         |        |   |   |         |        |        |  | $ | 84,338  |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|                              | Stock options exercised, including related tax
    benefit                                                      |                                     |            | 786,614    |           |          |     | 6             |    |                  |         | 7,670         |        |        |         |       |   |   |         |        |   |   |         | 7,676   |        |  |   |         |  
|                              | Cash dividend of $0.10 per share                                                                                |                                     |            |           |           |          |     |              |    |                  |         |              |        |        |         | (9,228 | ) |   |         |        |   |   |         | (9,228  | )      |  |   |         |  
|                              | Shares issued in connection with acquisition of:                                                                |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |         |  
|                              |                                                                                                                 | Pacifica Bancorp, Inc.              |            |            | 1,241,194 |          |     |               | 12 |                  |         |               | 21,080 |        |         |        |  |   |         |         |  |   |         |         | 21,092 |  |   |         |   | 
|                              |                                                                                                                 | Asian American Bank & Trust Company |            |            | 878,246   |          |     |               | 9  |                  |         |               | 15,615 |        |         |        |  |   |         |         |  |   |         |         | 15,624 |  |   |         |   | 
|                              | Stock split                                                                                                     |                                     |            |           |           |          |     | 457           |    |                  |         | (457          | )      |        |         |       |   |   |         |        |   |   |         |        |        |  |   |         |  
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        
|Balance at December 31, 2005. |                                                                                                                 |                                     | 94,037,878 |            |           | $        | 940 |               |    | $                | 247,340 |               |        | $      | 375,220 |        |   | $ | (19,986 | )       |   | $ | 603,514 |         |        |  |   |        
|                              |                                                                                                                 |                                     |            |            |           |          |     |               |    |                  |         |               |        |        |         |        |   |   |         |         |   |   |         |         |        |  |   |        



---



|    |                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Accumulated Other Comprehensive Income (Loss)
    arises solely from net unrealized gains (losses) on
    investment and mortgage-backed securities available for sale,
    presented net of tax.

See accompanying notes to consolidated financial
statements.

71



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Dollars in Thousands)


|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |          |            |  
|----------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | - | ---------- | ---------- | ---- | - | ---------- | ---------- | - | - | -------- | ---------- | -
|                                          |                                                                                       |                                                                               
|                                          |                                                                                       | Year Ended December 31,                                                       
|                                          |                                                                                       |                                                                               
|                                          |                                                                                       | 2005                                                                           |   | 2004       |            | 2003
|                                          |                                                                                       |                                                                                |   |            |            |     
|Cash flows from operating
    activities: |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          | Net income                                                                            |                                                                                | $ | 97,826     |            |      | $ | 85,603     |            |   | $ | 64,638   |           
|                                          | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                |   |            |            |      |   |            |            |   |   |          |           
|                                          |                                                                                       | Provision for loan losses                                                      |   |            | 6,091      |      |   |            | 4,201      |   |   |          | 9,967      |  
|                                          |                                                                                       | Amortization of net deferred loan fees                                         |   |            | (6,262     | )    |   |            | (5,285     | ) |   |          | (4,169     | )
|                                          |                                                                                       | Amortization of net securities premiums and
    discounts                      |   |            | 103        |      |   |            | 1,688      |   |   |          | 9,259      |  
|                                          |                                                                                       | Federal Home Loan Bank stock dividend                                          |   |            | (1,351     | )    |   |            | (1,009     | ) |   |          | (1,161     | )
|                                          |                                                                                       | First Continental Bank acquisition purchase price
    adjustment               |   |            |           |      |   |            | 2,345      |   |   |          |           |  
|                                          |                                                                                       | Bank of Canton of California acquisition purchase
    price adjustment         |   |            |           |      |   |            |           |   |   |          | 2,863      |  
|                                          |                                                                                       | Amortization of intangibles                                                    |   |            | 3,642      |      |   |            | 2,670      |   |   |          | 2,191      |  
|                                          |                                                                                       | Depreciation and amortization of premises and
    equipment                    |   |            | 8,543      |      |   |            | 6,851      |   |   |          | 5,753      |  
|                                          |                                                                                       | Gain on sale of loans held in portfolio,
    securities, and other assets, net |   |            | (5,640     | )    |   |            | (21,519    | ) |   |          | (14,002    | )
|                                          |                                                                                       | Unrealized loss on loans held for sale                                         |   |            | 1,152      |      |   |            |           |   |   |          |           |  
|                                          |                                                                                       | Equity loss in other equity investments                                        |   |            | 2,296      |      |   |            | 2,210      |   |   |          | 152        |  
|                                          |                                                                                       | Loss on extinguishment of subordinated debentures
    and secured borrowings   |   |            | 1,246      |      |   |            |           |   |   |          |           |  
|                                          |                                                                                       | Other, net                                                                     |   |            | (2,037     | )    |   |            | (203       | ) |   |          | (181       | )
|                                          | Changes in operating assets and liabilities:                                          |                                                                                |   |            |            |      |   |            |            |   |   |          |           
|                                          |                                                                                       | Decrease in loans originated for sale                                          |   |            | 44,173     |      |   |            |           |   |   |          |           |  
|                                          |                                                                                       | Decrease (increase) in accrued interest
    receivable                         |   |            | (11,971    | )    |   |            | (2,751     | ) |   |          | 1,939      |  
|                                          |                                                                                       | Decrease (increase) in other assets                                            |   |            | (11,146    | )    |   |            | (11,618    | ) |   |          | 3,212      |  
|                                          |                                                                                       | Increase (decrease) in accrued interest
    payable                            |   |            | 5,065      |      |   |            | (2,236     | ) |   |          | (3,509     | )
|                                          |                                                                                       | Increase (decrease) in other liabilities                                       |   |            | 29,901     |      |   |            | 20,023     |   |   |          | (10,174    | )
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          |                                                                                       | Net cash provided by operating activities                                      |   |            | 161,631    |      |   |            | 80,970     |   |   |          | 66,778     |  
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|Cash flows from investing
    activities: |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          | Payment for purchase of Pacifica Bancorp, Inc.,
    net of cash acquired              |                                                                                |   | (2,312     | )          |      |   |           |            |   |   |         |           
|                                          | Payment for purchase of Asian American Bank &
    Trust Company, net of cash acquired |                                                                                |   | (4,993     | )          |      |   |           |            |   |   |         |           
|                                          | Cash acquired from purchase of First Continental
    Bank, net of cash paid           |                                                                                |   |           |            |      |   |           |            |   |   | 45,594   |           
|                                          | Investment and mortgage-backed securities,
    available for sale:                    |                                                                                |   |            |            |      |   |            |            |   |   |          |           
|                                          |                                                                                       | Principal payments and maturities                                              |   |            | 418,294    |      |   |            | 756,762    |   |   |          | 599,316    |  
|                                          |                                                                                       | Purchases                                                                      |   |            | (486,062   | )    |   |            | (1,442,128 | ) |   |          | (1,079,454 | )
|                                          |                                                                                       | Sales                                                                          |   |            | 114,991    |      |   |            | 821,821    |   |   |          | 953,143    |  
|                                          |                                                                                       | Called                                                                         |   |            | 22,000     |      |   |            | 68,136     |   |   |          | 98,932     |  
|                                          | Investment and mortgage-backed securities, held
    to maturity:                      |                                                                                |   |            |            |      |   |            |            |   |   |          |           
|                                          |                                                                                       | Principal payments and maturities                                              |   |            | 26,296     |      |   |            | 28,278     |   |   |          | 11,807     |  
|                                          |                                                                                       | Purchases                                                                      |   |            | (9,892     | )    |   |            | (69,074    | ) |   |          | (184,691   | )
|                                          | Proceeds from redemption of Federal Home Loan
    Bank stock                          |                                                                                |   | 9,725      |            |      |   |           |            |   |   | 10,206   |           
|                                          | Purchase of Federal Home Loan Bank stock                                              |                                                                                |   | (20,623    | )          |      |   |           |            |   |   | (2,793   | )         
|                                          | Funding of other equity investments                                                   |                                                                                |   | (12,529    | )          |      |   | (6,388     | )          |   |   | (6,235   | )         
|                                          | Proceeds from the sale of loans held in portfolio                                     |                                                                                |   | 206,615    |            |      |   | 479,660    |            |   |   | 136,222  |           
|                                          | Loans held in portfolio originated and purchased,
    net of principal collections    |                                                                                |   | (1,614,022 | )          |      |   | (1,202,029 | )          |   |   | (935,211 | )         
|                                          | Purchases of premises and other equipment                                             |                                                                                |   | (6,915     | )          |      |   | (12,444    | )          |   |   | (9,459   | )         
|                                          | Capitalization of loan servicing rights                                               |                                                                                |   | (5,192     | )          |      |   | (5,209     | )          |   |   | (1,963   | )         
|                                          | Other investing activities, net                                                       |                                                                                |   | 201        |            |      |   | (74        | )          |   |   | 1,380    |           
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          |                                                                                       | Net cash used in investing activities                                          |   |            | (1,364,418 | )    |   |            | (582,689   | ) |   |          | (363,206   | )
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|Cash flows from financing
    activities: |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          | Net increase in demand deposits, NOW, money
    market and savings accounts           |                                                                                |   | 155,806    |            |      |   | 517,744    |            |   |   | 318,135  |           
|                                          | Net increase (decrease) in time deposits                                              |                                                                                |   | 631,701    |            |      |   | 214,597    |            |   |   | (157,211 | )         
|                                          | Net increase (decrease) in short-term
    borrowings                                  |                                                                                |   | 156,214    |            |      |   | (167,824   | )          |   |   | 152,634  |           
|                                          | Proceeds from long-term borrowings                                                    |                                                                                |   | 266,520    |            |      |   | 70,000     |            |   |   |         |           
|                                          | Principal payments of long-term borrowings                                            |                                                                                |   | (17,916    | )          |      |   |           |            |   |   |         |           
|                                          | Proceeds from issuance of subordinated debentures                                     |                                                                                |   | 40,000     |            |      |   |           |            |   |   |         |           
|                                          | Redemption of subordinated debentures                                                 |                                                                                |   | (30,000    | )          |      |   |           |            |   |   |         |           
|                                          | Proceeds from stock option exercises                                                  |                                                                                |   | 3,863      |            |      |   | 5,560      |            |   |   | 5,433    |           
|                                          | Payment of cash dividend on common stock                                              |                                                                                |   | (8,700     | )          |      |   | (6,780     | )          |   |   | (4,731   | )         
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          |                                                                                       | Net cash provided by financing activities                                      |   |            | 1,197,488  |      |   |            | 633,297    |   |   |          | 314,260    |  
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          | Net increase (decrease) in cash and cash
    equivalents                              |                                                                                |   | (5,299     | )          |      |   | 131,578    |            |   |   | 17,832   |           
|                                          | Cash and cash equivalents at beginning of year                                        |                                                                                |   | 208,364    |            |      |   | 76,786     |            |   |   | 58,954   |           
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         
|                                          |                                                                                       | Cash and cash equivalents at end of year                                       |   | $          | 203,065    |      |   | $          | 208,364    |   |   | $        | 76,786     |  
|                                          |                                                                                       |                                                                                |   |            |            |      |   |            |            |   |   |         

See accompanying notes to consolidated financial
statements.

72



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##### Table of Contents






UCBH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS



|   |                                                                                       
|-- | --------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies



| |             
| | ------------
| | Organization

UCBH Holdings, Inc. (UCBH) is a bank
holding company organized under the laws of Delaware that
conducts its business through its principal subsidiary, United
Commercial Bank (UCB; UCBH, UCB and UCBs
wholly owned subsidiaries are collectively referred to as the
Company, we, us and
our), a California state-chartered commercial bank.
Additionally, UCBH owns all of the common stock of seven special
purpose trusts created specifically to issue guaranteed
preferred beneficial interests in UCBHs junior
subordinated debentures. UCB offers a full range of commercial
and consumer banking products through its retail branches and
other banking offices in the states of California, Washington,
Massachusetts and New York, and internationally through its
full-service branch in Hong Kong. UCB also has representative
offices in Shenzhen, China and Taipei, Taiwan. UCB through its
wholly owned subsidiary, California Canton International Bank
(Cayman) Ltd., is licensed to conduct banking business under a
Category B Bank & Trust license granted by the
Government of the Cayman Islands. UCB also engages in the offer
and sale of variable life and annuity insurance products, mutual
funds and certain equity securities to the clients of its
registered representatives through its wholly owned subsidiary,
UCB Investment Services, Inc. (UCBIS). UCBIS is a
registered broker-dealer with the Securities and Exchange
Commission and a member of the National Association of
Securities Dealers (NASD) and the Securities
Investor Protection Corporation (SIPC).



| |                            
| | ---------------------------
| | Principles of Consolidation

The consolidated financial statements include the
accounts of the Company. The consolidated results exclude the
special purpose trusts referred to above. These trusts are
excluded pursuant to Financial Accounting Standards Board (the
FASB) Interpretation (FIN) No. 46R,
Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51, issued in December of
2003. As a result, UCBH is not deemed to be the primary
beneficiary of these trusts.



| |                  
| | -----------------
| | Reclassifications

Certain reclassifications have been made to prior
years consolidated financial statements to conform to the
December 31, 2005, presentation.

On January 27, 2005, UCBH declared a
two-for-one stock split in the form of a stock dividend payable
to the stockholders of record as of March 31, 2005, and
distributed the stock dividend on April 12, 2005.
Accordingly, basic and diluted earnings per share on the
consolidated statements of operations for the years ended
December 31, 2004 and 2003, have been adjusted to reflect
the impact of the stock split. Additionally, the number of
issued and outstanding shares of UCBHs common stock on the
consolidated balance sheet at December 31, 2004, and the
statement of changes in stockholders equity and
comprehensive income (loss) for the years ended
December 31, 2004 and 2003, have also been adjusted to take
into account the stock split.



| |                                                            
| | -----------------------------------------------------------
| | Use of Estimates in Preparation of
    Financial Statements

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America (GAAP) requires management
to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes.
Actual results could differ from those estimated results.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

Cash and cash equivalents consist of cash and
noninterest-bearing deposits, federal funds sold and securities
purchased under agreements to resell. For purposes of the
statements of cash flows, the Company

73



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

considers all highly liquid debt instruments with
original maturities of three months or less when purchased to be
cash equivalents.



| |                                                                           
| | --------------------------------------------------------------------------
| | Federal Funds Sold and Securities Purchased
    Under Agreements to Resell

UCB is required to maintain cash reserves in a
noninterest-bearing account at the Federal Reserve Bank of San
Francisco. Through the Federal Reserve Bank, the cash in this
account in excess of UCBs reserve requirement
(Federal Funds) is available for overnight and one
day period sales to other institutions with accounts at the
Federal Reserve Bank. UCB received interest on these sales at
the prevailing Federal Funds rate.

UCB periodically purchases securities under
agreements to resell (repurchase agreements). The amounts
advanced under such agreements represent short-term loans.
During the agreement period, the securities are maintained by a
dealer under a written custodial agreement that explicitly
recognizes UCBs interest in the securities.



| |                                              
| | ---------------------------------------------
| | Investment and Mortgage-Backed
    Securities

UCB classifies its investment and mortgage-backed
securities according to their purpose and holding period. Gains
and losses on the sale of securities are recognized on a
trade-date basis using the specific identification method and
recorded in noninterest income. UCB does not maintain a trading
account for securities.

Investment and mortgage-backed securities that
have been classified as held to maturity are carried at cost,
adjusted for the amortization of premiums and accretion of
discounts. Cost is determined on a specific identification
basis. Upon purchase, UCB has the ability and intent to hold the
held to maturity securities in its portfolio until maturity.

Securities that are held to meet investment
objectives, such as interest rate risk and liquidity management,
and may be sold to implement management strategies are
classified as available for sale. Investment and mortgage-backed
securities that might be sold prior to maturity are classified
as available for sale and are carried at fair value. Fair value
is generally determined by the quoted market price of the market
security, but if a quoted market price is not available, the
fair value is extrapolated from the quoted prices of similar
instruments. Unrealized holding gains or losses, net of
applicable taxes, are recorded as a component of comprehensive
income. Declines in fair values that are deemed
other-than-temporary impairment, if any, are reported in
noninterest income.

Premiums and discounts on investment and
mortgage-backed securities are amortized against interest
income, using the interest method, with the amortization period
based on the expected lives of the underlying securities.



| |                    
| | -------------------
| | Loans Held for Sale

Loans that have been identified with the
intention to sell are carried at the lower of aggregate cost or
market value.



| |                        
| | -----------------------
| | Loans Held in Portfolio

Loans are carried at their principal balance
outstanding, net of premiums and discounts and unearned income.
Premiums and discounts are recognized generally as an adjustment
of loan yield by the interest method based on the contractual
term of the loans. Unearned income, which includes deferred fees
net of deferred direct incremental loan origination costs, is
amortized to interest income generally over the expected

74



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

life of the loan using the interest method.
Amortization of net deferred loan fees is discontinued on
nonperforming loans. Interest is accrued as earned.



| |                 
| | ----------------
| | Nonaccrual Loans

Loans are generally placed on nonaccrual status
when the payments of principal and interest become 90 days
past due, or earlier if, in managements opinion, the full
and timely collection of principal or interest becomes
uncertain. Any accrued and unpaid interest on such loans is
reversed and charged against current interest income. A loan may
be returned to accrual status when all delinquent interest and
principal becomes current in accordance with the terms of the
loan agreement or when the loan becomes both well secured and in
the process of collection.

UCB generally recognizes interest income on
nonaccrual loans to the extent received in cash. However, where
there is doubt regarding the ultimate collectibility of the loan
principal, cash receipts, whether designated as principal or
interest, are applied to reduce the carrying value of the loan.



| |                                    
| | -----------------------------------
| | Impaired and Restructured
    Loans

UCB considers a loan to be impaired when, based
on current information and events, it is probable that UCB will
be unable to collect all amounts due according to the
contractual terms of the loan agreement, including scheduled
interest payments. For a loan that has been restructured, the
contractual terms of the loan agreement refer to the contractual
terms specified by the original loan agreement, not the
contractual terms specified by the restructuring agreement.
Performing restructured loans are not placed on nonaccrual
status.

When evaluating loans for possible impairment,
UCB makes a loan-by-loan assessment for impairment when and
while such loans are on nonaccrual status or whether the loan
has been restructured. When a loan has been identified as being
impaired, the amount of impairment is measured by using the
loans discounted cash flows, except in situations where it
is determined that the primary remaining source of repayment is
the operation or liquidation of the underlying collateral. In
such cases, the current fair value of the collateral, reduced by
estimated costs to sell, is used in place of discounted cash
flows. UCB does not apply the loan-by-loan evaluation process
described above to large groups of smaller balance homogeneous
loans that are evaluated collectively for impairment, such as
residential mortgage (one-to-four family) loans, home equity
loans, and other consumer loans.

If the measurement of an impaired loan is less
than the recorded investment in the loan (including accrued
interest, net deferred loan fees or costs and unamortized
premium or discount), an impairment is recognized by creating or
adjusting an existing allocation of the allowance for loan
losses. UCBs charge-off policy with respect to impaired
loans is similar to its charge-off policy for all loans.
Specifically, loans are charged off at the point where they are
considered uncollectible.



| |                          
| | -------------------------
| | Allowance for Loan Losses

The allowance for loan losses represents our
estimate of the losses that are inherent in the loan and lease
portfolios. The determination of the appropriate level of the
allowance is based on periodic evaluations of the portfolios
along with other relevant factors. These evaluations are
inherently subjective and require us to make numerous
assumptions, estimates and judgments.

UCBs methodology for assessing the adequacy
of the allowance for loan losses includes the evaluation of two
distinct allowance components: an allowance applied to the
portfolio as a whole and a specific allowance for loans deemed
to be impaired or otherwise exhibiting problem characteristics.
Loans that are determined to

75



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

be impaired or otherwise exhibit specific
problems are excluded from the allowance analysis and assessed
individually.

Loans are considered impaired when it is probable
that UCB will not be able to collect all amounts due, including
interest payments, in accordance with the loans
contractual terms. Unless the loan is collateral dependent, loan
impairment is measured based on the present value of expected
future cash flows that have been discounted at the loans
effective interest rate. If the loan is collateral dependent,
either the observable market price or the current fair value of
the collateral, reduced by estimated disposition costs, is used
in place of the discounted cash flow analysis.

In assessing the adequacy of the allowance, UCB
utilizes the application of an internal risk rating system and
an evaluation of various internal and external conditions. The
evaluation takes into account the loan portfolio mix, the credit
quality of the portfolio, growth in the portfolio, trends
relating to delinquent and classified loans, general economic
conditions and any other characteristics that directly relate to
the collectibility of the loans in the portfolio.

UCB then divides the loan portfolio into major
segments based primarily on loan type, after which loss factors
are applied to the portfolio segments. These loss factors have
been developed from historical charge-off experience, reviews of
regional trends in collateral values, portfolio segment
delinquency and classification trends, portfolio concentrations,
macro-economic conditions, as well as other qualitative aspects.
Additionally, for our heterogeneous loan portfolio, we perform
comparative analyses, utilizing both a peer data benchmarking
approach and an expected loss approach.

During 2005, UCB continued its ongoing process of
evaluating the loss factors in light of current economic
conditions, UCBs historical loss experience, loan
delinquency trends and the changes in classified and other
problem loans. Upon completion of these evaluations, the loss
factors applicable to the construction and commercial loan
portfolios were revised and lowered, since the evaluations
determined that the inherent risk in the portfolio had been
decreased due to stronger identification, administration and
action plan implementation on credits in these portfolios. In
addition, UCB decided to segregate its commercial real estate
and commercial loans that are secured by cash and reduced the
associated loss factors to better reflect the inherent risk in
this loan segment.

In assessing the adequacy of the specific
allowance, UCB applies the expected loss factors used by the
banking regulators for classified and criticized loans. These
factors are 5% for loans classified as watch, 10%
for loans classified special mention, 20% to 30% for
substandard, 50% for doubtful and 100%
for loss.

UCB also estimates an allowance for loan losses
related to unfunded commitments. In assessing the adequacy of
this allowance, UCB uses a process similar to the one we use in
estimating the allowance for loan losses. Loss factors have been
developed based upon historical experience with regard to the
portions of these commitments that eventually become funded.
During 2005, UCB updated the loss factors associated with these
commitments based upon current experience. The factors were
lowered as a result of these evaluations, reflecting continued
improvement in the losses associated with these exposures.

Management believes that, as of December 31,
2005 and 2004, the allowance for loan losses was adequate based
on information available at the time. If the economy weakens in
UCBs principal market areas, UCBs loan portfolios
could be adversely affected and higher charge-offs and increases
in nonperforming assets could result. Such an adverse impact
could also require a larger allowance for loan losses and could
result in increased charge-offs.

76



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)



| |                       
| | ----------------------
| | Premises and Equipment

Premises and equipment are carried at cost, less
accumulated depreciation and amortization. Provisions for
depreciation and amortization are determined on a straight-line
basis over the estimated useful lives. Terms range from three to
ten years for furniture, equipment, and computer software, and
from forty to fifty years for premises. Leasehold improvements
are amortized over the terms of the respective leases or the
estimated useful lives of the improvements, whichever is shorter.



| |                                     
| | ------------------------------------
| | Other Real Estate Owned
    (OREO)

Foreclosed assets (other real estate owned)
consist of properties acquired through, or in lieu of,
foreclosure and are carried at the lower of cost or fair value
less estimated selling costs. Cost includes the unpaid loan
balance adjusted for applicable accrued interest, unamortized
deferred loan fees and acquisition costs. In the event that the
fair value less estimated selling costs is less than cost at the
time of acquisition, the shortfall is charged to the allowance
for loan losses. Subsequent write-downs, if any, and disposition
gains and losses are reflected as charges to current operations.
UCB had no OREO at December 31, 2005 and 2004.



| |                         
| | ------------------------
| | Other Equity Investments

UCB is subject to certain requirements of the
Community Reinvestment Act (the CRA). The CRA
generally requires the federal banking agencies to evaluate a
financial institution in meeting the credit needs of its local
communities, including low-income and moderate-income
neighborhoods. UCB invests in CRA-qualified investments, such as
affordable housing and small business investment companies. Such
investments are included in Federal Home Loan Bank stock and
other equity investments on the consolidated balance sheets.
Affordable housing investments are accounted for using the
equity method of accounting.Similarly, other limited
partnership and limited liability investments of 5% and over are
accounted for under the equity accounting method; minor
interests less than 5% are accounted for under the cost basis.
Under the equity method of accounting, UCB adjusts its cost
basis by recognizing its share of the earnings or losses of the
underlying investment. Under cost basis accounting, UCBs
cost basis in each investment is reduced by dividends or other
distributions received until the cost of the individual
investment is fully recovered. None of these investments meet
the criteria of FIN No. 46 as referred to above and,
therefore, are not consolidated. These investments totaled
$36.4 million and $30.9 million as of
December 31, 2005 and 2004, respectively.



| |                                                                  
| | -----------------------------------------------------------------
| | Accounting for Acquisitions of Certain
    Financial Institutions

Acquisitions are accounted for using the purchase
method of accounting. Under the purchase method, net assets of
the acquired business are recorded at their estimated fair
values as of the date of the acquisition. Any excess of cost
over the fair value of the net assets and other identifiable
intangible assets acquired is recorded as goodwill. Results of
operations of the acquired business are included in the
statement of income from the date of acquisition forward.



| |                                          
| | -----------------------------------------
| | Goodwill and Core Deposit
    Intangibles

Goodwill resulting from the Companys
acquisitions is tested annually for impairment or more
frequently if conditions arise that might indicate that an
impairment has taken place. Identifiable intangible assets,
namely core deposit intangibles, are amortized over their
estimated period of benefit. Core deposit intangibles are also
tested for impairment on a quarterly basis.



| |                                                   
| | --------------------------------------------------
| | Securities Sold Under Agreements to
    Repurchase

UCB periodically enters into sales of securities
under agreements to repurchase (reverse repurchase agreements).
Fixed-coupon reverse repurchase agreements are treated as
financings. Accordingly, the

77



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

securities underlying the agreements remain in
the asset accounts, and the obligations to repurchase securities
sold are reflected as a liability in the consolidated balance
sheets. The securities underlying the agreements are delivered
to the dealers who arrange the transactions. Under some
agreements, the dealers may sell, lend, or otherwise dispose of
the securities to other parties and agree to resell to UCB
substantially identical securities at the maturities of the
agreements.



| |                                                  
| | -------------------------------------------------
| | Derivative Instruments and Hedging
    Activities

Financial derivatives are instruments where a
notional principal amount is tied to an underlying interest
rate, currency exchange rate or other financial asset, index or
pricing measure. Examples of derivative financial instrument are
foreign exchange contracts (swaps and forwards), interest rate
swaps, options, caps, floors, forwards, and similar instruments.

UCB does not speculate on the future direction of
interest or exchange rates. Nonetheless, UCB may from time to
time enter into financial derivative transactions to mitigate
interest rate exposures inherent in its assets, liabilities, or
its net interest position and/or to hedge various market or
foreign exchange risks. UCB may also engage in financial
derivative transactions on behalf of customers and to facilitate
their transactions.

As of December 31, 2005 and 2004, UCB had no
derivative transactions designated as hedges according to the
relevant accounting criteria. UCBs derivatives not
accounted for as hedges are carried at fair value in the
financial statements with any gains or losses reflected in
noninterest expense and included in other general and
administrative.



| |                          
| | -------------------------
| | Accounting for Loan Sales

UCB primarily sells loans on a whole loan basis
with UCB either releasing or retaining the right to service the
loans. When UCB does not retain the servicing rights to the
loans, the gain or loss on the sale is equal to the difference
between the proceeds received and the carrying value of the
loans sold. If the loans are sold with UCB retaining the
servicing rights, the gain or loss depends in part on the fair
value attributed to the servicing rights.

In calculating the gain or loss on such a sale,
UCB allocates the cost basis of the loans sold between the
assets sold and servicing rights and retained interests based on
their relative fair values at the date of sale. A gain or loss
is recognized as the difference between the cash proceeds from
the sale and the allocated cost basis of the loans sold. Since
market quotes are generally not available for servicing assets,
UCB estimates fair value based upon modeling techniques, which
are based on the assumptions that UCB believes market
participants would use for similar assets and liabilities.



| |                            
| | ---------------------------
| | Accounting for Income Taxes

The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 109, Accounting for Income
Taxes. SFAS No. 109 requires the recognition of
deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the
Companys financial statements or tax returns. The Company
provides a valuation allowance against net deferred tax assets
to the extent that realization of the assets is not considered
more likely than not. The Company and UCB file a consolidated
federal income tax return and a combined California state income
tax return.

FASB Staff Position (FSP) 109-2,
Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Job Creations Act of
2004(AJCA), indicates that the lack of
clarification of certain provisions within the AJCA and the
timing of the enactment necessitate a practical

78



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

exception to the SFAS No. 109,
requirement to reflect in the period of enactment the effect of
the new tax law. Accordingly, an enterprise is allowed time
beyond the financial reporting period of enactment to evaluate
the effect of the AJCA on its plan for reinvestment or
repatriation of foreign earnings. FSP 109-2 requires that the
provisions of SFAS No. 109 be applied as an enterprise
decides on its plan for reinvestment or repatriation of its
unremitted foreign earnings.



| |                                            
| | -------------------------------------------
| | Accounting for Stock-Based
    Compensation

The Company accounts for employee stock-based
compensation using the intrinsic value method in accordance with
APB Opinion No. 25, Accounting for Stock Issued to
Employees, as allowed by SFAS No. 123,
Accounting for Stock-Based Compensation, as amended by
SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure. Under the intrinsic
value method, the Company records no stock-based employee
compensation cost provided the stock options are granted with an
exercise price equal to or greater than the market value of the
underlying common stock on the date of grant. As of
December 31, 2005, the Company has one stock-based employee
compensation plan, which is described more fully in
Note 18. No stock-based employee compensation cost is
reflected in net income, as all options granted under this plan
had an exercise price equal to the market value of the
underlying common stock on the date of grant.

The impact on net income and earnings per share
if we had expensed compensation cost for the Companys
stock-based compensation arrangements for the years ended
December 31, 2005, 2004 and 2003, consistent with the
provisions of SFAS No. 123 were as follows (dollars in
thousands, except per share amounts):

|                            |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |        |  
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | - | ------- | - | ---- | - | ------ | - |  | - | ------ | -
|                            |                                                                                                                                                    | 2005 |   | 2004    |   | 2003
|                            |                                                                                                                                                    |      |   |         |   |     
|Net income:                 |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |       
|                            | As reported                                                                                                                                        |      | $ | 97,826  |   |      | $ | 85,603 |   |  | $ | 64,638 |  
|                            | Deduct: Total stock-based employee compensation
    expense determined under fair value based method of all awards,
    net of related tax effects |      |   | (25,917 | ) |      |   | (6,367 | ) |  |   | (4,452 | )
|                            |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |       
|                            | Pro forma net income                                                                                                                               |      | $ | 71,909  |   |      | $ | 79,236 |   |  | $ | 60,186 |  
|                            |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |       
|Basic earnings per share:   |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |       
|                            | As reported                                                                                                                                        |      | $ | 1.06    |   |      | $ | 0.95   |   |  | $ | 0.74   |  
|                            | Pro forma                                                                                                                                          |      | $ | 0.78    |   |      | $ | 0.88   |   |  | $ | 0.69   |  
|Diluted earnings per share: |                                                                                                                                                    |      |   |         |   |      |   |        |   |  |   |       
|                            | As reported                                                                                                                                        |      | $ | 1.02    |   |      | $ | 0.90   |   |  | $ | 0.71   |  
|                            | Pro forma                                                                                                                                          |      | $ | 0.75    |   |      | $ | 0.83   |   |  | $ | 0.66   |  

UCBHs Board of Directors approved the
accelerated vesting of all outstanding unvested stock options
awarded to employees, officers and directors on or before
October 26, 2005, under its stock option plan. The
effective date of the accelerated vesting was December 27,
2005. Stock options covering approximately 5.1 million
shares of UCBHs common stock were affected by this action,
including approximately 1.9 million shares that are held by
the Companys executive officers and directors. Of the
$25.9 million total pro forma stock-based compensation
expense amount, $16.1 million related to accelerated
vesting of the stock options for the year ended
December 31, 2005. The number of shares, exercise prices
and all of the other relevant terms and conditions applicable to
the accelerated Options remained unchanged. By accelerating the
vesting of these Options, the Company estimates that
approximately $16.4 million of future compensation expense,

79



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

net of taxes, has been eliminated, of which
$10.6 million would have been incurred in the year ending
December 31, 2006.

The decision to accelerate the vesting of the
Options, which UCBH believes is in the best interests of its
stockholders, was made primarily to reduce the impact of
recording noncash compensation expense upon the implementation
of SFAS No. 123R, starting January 1, 2006.
SFAS No. 123R requires all share-based payments to
employees, officers and directors, including grants of employee
stock options, to be recognized as compensation expense in the
Companys financial statements over the vesting period of
each award, based on their fair values at the grant date.

The pro forma calculations require the use of
option pricing models, even though such models were developed to
estimate the fair value of freely tradable, fully transferable
options without vesting restrictions, which significantly differ
from the Companys stock option awards. These models as
required by current accounting pronouncements also require
subjective assumptions, including future stock price volatility,
dividend yield, and expected time to exercise, which greatly
affect the calculated values. The following weighted average
assumptions were used in the Black-Scholes option-pricing model
for options granted for the years ended December 31, 2005,
2004 and 2003:

|                        |  |      |       |      |  |      |       |   |  |  |       |  
|----------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                        |  | 2005 |       | 2004 |  | 2003
|                        |  |      |       |      |  |     
|Dividend yield          |  |      | 0.60  | %    |  |      | 0.44  | % |  |  | 0.60  | %
|Volatility              |  |      | 29.03 | %    |  |      | 21.99 | % |  |  | 21.18 | %
|Risk-free interest rate |  |      | 4.22  | %    |  |      | 4.24  | % |  |  | 3.45  | %
|Expected lives (years)  |  |      | 7.50  |      |  |      | 7.56  |   |  |  | 7.36  |  



| |                   
| | ------------------
| | Earnings per Share

The Company computes basic earnings per share by
dividing net income by the weighted average number of shares
outstanding during the period. Diluted earnings per share is
computed based upon the weighted average number of common and
common equivalent shares outstanding during the period, which is
calculated using the treasury stock method for stock options.
Common equivalent shares are excluded from the computation in
periods in which they have an anti-dilutive effect on earnings
per share, and accordingly, are excluded from the calculation.



| |                                                                
| | ---------------------------------------------------------------
| | Transfers of Financial Assets and Mortgage
    Servicing Rights

UCB accounts for transfers of financial assets in
accordance with SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities. SFAS No. 140 requires application
of a financial components approach that focuses on
control. Under this approach, after a transfer of financial
assets, an entity recognizes the financial and servicing assets
it controls and the liabilities it has incurred, derecognizes
financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. The statement also
distinguishes transfers of financial assets that are sales from
transfers of financial assets that are secured borrowings. UCB
recognizes as servicing assets, rights to service loans it does
not own but services for others for a fee.

Mortgage servicing rights are carried at the
lower of cost or fair value and are amortized in proportion to
and over the period of the estimated net servicing revenue.

In determining fair value, UCB stratifies its
mortgage servicing rights based on the risk characteristics of
the underlying loan pools. The fair value of mortgage servicing
rights is determined by calculating the present value of
estimated future net servicing cash flows, using assumptions of
prepayments, defaults, ancillary income, servicing costs and
discount rates that UCB believes market participants would use
for similar assets.

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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|1. | Basis of Presentation and Summary of
    Significant Accounting and Reporting Policies 
    (Continued)

If UCB determines that the impairment for a
stratum is temporary, a valuation allowance is recognized
through a charge to current earnings for the amount the
amortized balance exceeds the current fair value. If the fair
value of the stratum were to later increase, the reduction of
the valuation allowance may be recorded as a recovery through
income.

UCB evaluates other-than-temporary impairment of
mortgage servicing rights by considering both historical and
projected trends in interest rates, pay off activity and whether
the impairment could be recovered through interest rate
increases. If UCB determines that an impairment for a stratum is
other-than-temporary, the value of the mortgage servicing rights
and any related valuation allowance is written down with a
corresponding charge to expense. A direct write-down permanently
reduces the carrying value of the mortgage servicing rights.

Additionally, UCB exchanges either multifamily or
residential mortgage (one-to-four family) loans for Federal
National Mortgage Association (FNMA) securities.
These internal securitizations do not have a cash impact to UCB,
since selected loans from UCBs loan portfolio are
exchanged for FNMA securities. Such securities are represented
by exactly the same loans previously held in UCBs loan
portfolio. The FNMA securities are generally held as available
for sale (AFS) securities in UCBs investment
and mortgage-backed securities portfolio. Since UCB retains all
of the securities issued by FNMA in the securitization, no gain
or loss is recognized on the exchange transaction. UCB continues
to service the loans included in these securitizations.
Servicing rights related to these internal securitizations are
not material.



| |                                      
| | -------------------------------------
| | Translation of Foreign
    Currencies

UCB considers the functional currency of its
foreign branch to be the United States dollar. Accordingly, UCB
remeasures monetary assets and liabilities at year-end exchange
rates, while nonmonetary items are remeasured at historical
rates. Income and expense accounts are remeasured at the average
rates in effect during the year, except for depreciation, which
is remeasured at historical rates. Foreign currency transaction
gains and losses are recognized in income in the period of
occurrence.



|   |                                 
|-- | --------------------------------
|2. | Recent Accounting Pronouncements



| |                                                        
| | -------------------------------------------------------
| | Accounting for Certain Hybrid Financial
    Instruments

In February 2006, the FASB issued
SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Statements
No. 133 and 140. SFAS No. 155 permits fair
value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require
bifurcation; clarifies which interest-only strips and
principal-only strips are not subject to the requirements of
SFAS No. 133; establishes a requirement to evaluate
interests in securitized financial assets to identify interests
that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring
bifurcation; clarifies that concentrations of credit risk in the
form of subordination are not embedded derivatives; and amends
SFAS No. 140 to eliminate the prohibition on a
qualifying special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial interest
other than another derivative financial instrument. The new
standard is effective for all financial instruments acquired or
issued after the beginning of the Companys first fiscal
year that begins after September 15, 2006. The Company does
not expect the adoption of SFAS No. 155 to have a
material impact on its consolidated financial position, results
of operations or cash flows.



| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | The Meaning of Other-Than-Temporary
    Impairment and its Application to Certain
    Investments

In November 2005, the FASB issued FSP 115-1,
The Meaning of Other-Than-Temporary Impairment and its
Application to Certain Investments. FSP 115-1 address the
determination as to when an investment is considered impaired,
whether that impairment is other than temporary and the
measurement of an

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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|   |                                                   
|-- | --------------------------------------------------
|2. | Recent Accounting Pronouncements 
    (Continued)

impairment loss. FSP 115-1 also includes
accounting considerations subsequent to the recognition of an
other-than-temporary impairment and requires certain disclosures
about unrealized losses that have not been recognized as
other-than-temporary impairments. The guidance in FSP 115-1
amends SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities, and APB Opinion
No. 18, The Equity Method of Accounting for Investments
in Common Stock. FSP 115-1 applies to reporting periods
beginning after December 15, 2005. We do not expect FSP
115-1 will have a material impact on our financial position,
results of operations, or cash flows.



| |                                                        
| | -------------------------------------------------------
| | Determining Whether to Aggregate Operating
    Segments

In June 2005, the Emerging Issues Task Force (the
EITF) reached a consensus on EITF No. 04-10,
Determining Whether to Aggregate Operating Segments That Do
Not Meet the Quantitative Thresholds. EITF No. 04-10
provides guidance on SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, and
how to determine whether operating segments, which do not meet
certain quantitative thresholds, may be aggregated and reported
as a single operating segment. The EITF is effective for fiscal
years ending after September 15, 2005, and corresponding
information for earlier periods, including interim periods,
should be restated unless it is impractical to do so. The
adoption of this standard did not have a material impact on the
Companys consolidated financial statements.



| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | Determining the Amortization Period for
    Leasehold Improvements Purchased After Lease Inception or
    Acquired in a Business Combination

In June 2005, the EITF reached a consensus on
EITF No. 05-6, Determining the Amortization Period for
Leasehold Improvements Purchased after Lease Inception or
Acquired in a Business Combination, which was modified in
September 2005. EITF No. 05-6 provides guidance on whether
a lease term should be reevaluated at the time of a purchase
business combination or when leasehold improvements are
purchased after lease inception. EITF No. 05-6 is effective
for leasehold improvements that are purchased or acquired in
reporting periods beginning after June 29, 2005. The
adoption of this standard did not have a material impact on the
Companys consolidated financial statements.



| |                                            
| | -------------------------------------------
| | Accounting Changes and Error
    Correction

On June 7, 2005, the FASB issued
SFAS No. 154, Accounting Changes and Error
Corrections  a replacement of APB Opinion
No. 20, Accounting Changes, and SFAS No. 3,
Reporting Accounting Changes in Interim Financial
Statements. SFAS No. 154 changes the requirements
for the accounting for and the reporting of a change in
accounting principle. Previously, most voluntary changes in
accounting principles were required to be recognized by way of a
cumulative effect adjustment within net income during the period
of change. SFAS No. 154 requires retrospective
application to prior periods financial statements, unless
it is impracticable to determine either the period-specific
effects or the cumulative effect of the change.
SFAS No. 154 is effective for accounting changes made
in fiscal years beginning after December 15, 2005; however,
SFAS No. 154 does not change the transition provisions
of any existing accounting pronouncements. The Company does not
believe the adoption of SFAS No. 154 will have a
material effect on its consolidated financial position, results
of operations or cash flows.



| |                                            
| | -------------------------------------------
| | Accounting for Stock-Based
    Compensation

On December 16, 2004, the FASB issued
SFAS No. 123R, Share-Based Payment.
SFAS No. 123R is a revision of SFAS No. 123.
SFAS No. 123R eliminates the ability to account for
share-based compensation transactions using the intrinsic value
method as prescribed under APB Opinion No. 25, and requires
that such transactions be accounted for using a fair value-based
method. SFAS No. 123R covers a wide range of
share-based compensation arrangements including share options,
restricted share plans, performance-based awards,

82



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|   |                                                   
|-- | --------------------------------------------------
|2. | Recent Accounting Pronouncements 
    (Continued)

share appreciation rights, and employee share
purchase plans. For the Company, SFAS No. 123R became
effective as of January 1, 2006.

SFAS No. 123R may be adopted using one
of two methods: (1) A modified prospective
method in which compensation cost is recognized beginning with
the effective date (a) based on the requirements of
SFAS No. 123R for all share-based payments granted
after the effective date and (b) based on the requirements
of SFAS No. 123 for all awards granted to employees
prior to the effective date of SFAS No. 123R that
remain unvested on the effective date; or (2) A
modified retrospective method which includes the
requirements of the modified prospective method described above,
but also permits entities to restate based on the amounts
previously recognized under SFAS No. 123 for purposes
of pro forma disclosures either (a) all prior periods
presented or (b) prior interim periods of the year of
adoption.

Effective January 1, 2006, the Company
adopted the modified prospective method to account for
share-based compensation as allowed by SFAS No. 123.
Depending on the level of future option grants, the adoption of
SFAS No. 123R may have a material impact on the
Companys future financial position and results of
operation.



| |                                                                           
| | --------------------------------------------------------------------------
| | Accounting for Certain Loans or Debt
    Securities Acquired in a Transfer

In December 2003, the American Institute of
Certified Public Accountants (the AICPA) issued
Statement of Position (SOP) 03-3, which addresses
accounting for loans or debt securities acquired in a transfer
and the resulting differences between contractual cash flows and
cash flows expected to be collected. SOP 03-3 limits the yield
that may be accreted into income to the excess of the
investors estimate of undiscounted expected principal,
interest, and other cash flows over the investors initial
investment in the loan. SOP 03-3 requires that the excess of
contractual cash flows over cash flows expected to be collected
not be recognized as an adjustment of yield, loss accrual, or
valuation allowance. In addition, SOP 03-3 prohibits
carrying over or creating valuation allowances in
the initial accounting of all loans acquired in a transfer that
are within the scope of SOP 03-3. The prohibition of the
valuation allowance carryover applies to the purchase of
individual loans, pools of loans and loans acquired in a
purchase business combination. SOP 03-3 does not apply to
loans originated by UCB.

SOP 03-3 is effective for loans acquired in
fiscal years beginning after December 15, 2004. For loans
acquired in fiscal years beginning on or before
December 15, 2004, decreases in cash flows expected to be
collected should be applied prospectively. The adoption of SOP
03-3 did not have a material impact on the financial condition
or operating results of the Company.

3.     Business
Combinations



| |                       
| | ----------------------
| | Pacifica Bancorp, Inc.

UCBH and Pacifica Bancorp, Inc.
(Pacifica), the holding company of Pacifica Bank, a
Washington state-chartered bank, entered into an Agreement and
Plan of Merger dated as of May 23, 2005. On
October 31, 2005, UCBH completed its acquisition of
Pacifica for a total consideration of approximately
$41.6 million consisting of 1,241,194 shares of UCBHs
common stock valued at $21.1 million and $19.4 million
in cash, which includes $2.9 million related to the
cash-out of the outstanding stock options of Pacifica, and
$1.1 million of direct acquisition costs. The results of
Pacificas operations have been included in the
consolidated financial statements since that date.

83



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|   |                                        
|-- | ---------------------------------------
|3. | Business Combinations 
    (Continued)

The purchase price, including direct acquisition
costs, has been allocated to the assets acquired and liabilities
assumed based on fair values at the acquisition date. The
allocation of purchase price includes goodwill, which will be
tested for impairment at least annually. Additionally, goodwill
is not expected to be deductible for income tax purposes. The
allocation of purchase price at the date of acquisition was as
follows (dollars in thousands):

|                                                                 |  |   |         | 
|---------------------------------------------------------------- |  | - | ------- | 
|Cash and due from banks                                          |  | $ | 17,949  | 
|Investment and mortgage-backed securities
    available for sale |  |   | 13,522  | 
|Investment and mortgage-backed securities held to
    maturity   |  |   | 256     | 
|FHLB stock                                                       |  |   | 635     | 
|Loans held in portfolio, net                                     |  |   | 136,968 | 
|Accrued interest receivable                                      |  |   | 691     | 
|Premises and equipment                                           |  |   | 1,093   | 
|Goodwill                                                         |  |   | 23,277  | 
|Core deposit intangibles                                         |  |   | 3,800   | 
|Other assets                                                     |  |   | 3,854   | 
|                                                                 |  |   |         | 
|Total assets acquired                                            |  |   | 202,045 | 
|                                                                 |  |   |         | 
|Deposits                                                         |  |   | 148,733 | 
|Accrued interest payable                                         |  |   | 836     | 
|Short-term borrowings                                            |  |   | 163     | 
|Long-term borrowings                                             |  |   | 8,698   | 
|Other liabilities                                                |  |   | 2,006   | 
|                                                                 |  |   |         | 
|Total liabilities assumed                                        |  |   | 160,436 | 
|                                                                 |  |   |         | 
|Total allocation of purchase price                               |  | $ | 41,609  | 
|                                                                 |  |   |         | 



| |                                        
| | ---------------------------------------
| | Asian American Bank &
    Trust Company

UCBH and Asian American Bank &
Trust Company (AABT), a Massachusetts
state-chartered banking corporation, entered into an Agreement
and Plan of Merger dated as of August 2, 2005. On
November 28, 2005, UCBH completed its acquisition of AABT
for a total consideration of approximately $34.6 million
consisting of 878,246 shares of UCBHs common stock valued
at $15.6 million and $18.2 million in cash and
$743,000 of direct acquisition costs. The results of AABTs
operations have been included in the consolidated financial
statements since that date.

84



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|   |                                        
|-- | ---------------------------------------
|3. | Business Combinations 
    (Continued)

The purchase price, including direct acquisition
costs, has been allocated to the assets acquired and liabilities
assumed based on fair values at the acquisition date. The
allocation of purchase price includes goodwill, which will be
tested for impairment at least annually. Additionally, goodwill
is not expected to be deductible for income tax purposes. The
allocation of purchase price at the date of acquisition was as
follows (dollars in thousands):



|                                                                 |  |   |         | 
|---------------------------------------------------------------- |  | - | ------- | 
|Cash and due from banks                                          |  | $ | 13,982  | 
|Investment and mortgage-backed securities
    available for sale |  |   | 27,590  | 
|FHLB stock                                                       |  |   | 346     | 
|Loans held in portfolio, net                                     |  |   | 86,010  | 
|Accrued interest receivable                                      |  |   | 581     | 
|Premises and equipment                                           |  |   | 6,307   | 
|Goodwill                                                         |  |   | 15,070  | 
|Core deposit intangibles                                         |  |   | 2,900   | 
|Other assets                                                     |  |   | 766     | 
|                                                                 |  |   |         | 
|Total assets acquired                                            |  |   | 153,552 | 
|                                                                 |  |   |         | 
|Deposits                                                         |  |   | 112,067 | 
|Accrued interest payable                                         |  |   | 571     | 
|Long-term borrowings                                             |  |   | 2,441   | 
|Other liabilities                                                |  |   | 3,874   | 
|                                                                 |  |   |         | 
|Total liabilities assumed                                        |  |   | 118,953 | 
|                                                                 |  |   |         | 
|Total allocation of purchase price                               |  | $ | 34,599  | 
|                                                                 |  |   |         | 



| |                   
| | ------------------
| | Great Eastern Bank

UCBH and Great Eastern Bank (GEB), a
New York state-chartered banking corporation, entered into an
Agreement and Plan of Merger dated as of October 13, 2005.
Under the terms of the agreement, the value of the transaction
is approximately $103.6 million (based on an average price
prior to announcement of $17.66 per share). Consideration for
the acquisition will consist of approximately $51.8 million
in cash and the issuance of 2,936,013 shares of UCBH common
stock valued at approximately $51.8 million (based on an
average price prior to announcement of $17.66 per share),
subject to certain adjustments detailed in the definitive
agreement. Under certain circumstances, the total consideration
may be adjusted based upon the appraised value of certain GEB
assets and the number of shares of UCBH common stock may be
adjusted in the event of a substantial change in the market
value of UCBH common stock.

The transaction may be terminated or renegotiated
for various reasons prior to the consummation of the merger,
including but not limited to a substantial change in the market
value of the UCBH common stock in relation to the market value
of a defined group of specified financial institutions as a
whole, unless UCBH agrees to increase the amount of total
consideration paid in connection with the merger. Similarly,
UCBH may terminate the transaction for various reasons prior to
the consummation of the merger. If either GEB or UCBH terminates
the transaction upon certain conditions, such party shall pay a
break-up fee to the other. Subsequent to UCBHs
agreement with GEB, another bank submitted an offer to purchase
GEB.

85



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

4.     Cash and Due
from Banks

The components of interest-bearing and
noninterest-bearing cash and due from banks at December 31,
2005 and 2004, were as follows (dollars in thousands):

|                        |  |      |         |      |  |   |        | 
|----------------------- |  | ---- | ------- | ---- |  | - | ------ | 
|                        |  | 2005 |         | 2004
|                        |  |      |         |     
|Interest-bearing        |  | $    | 99,070  |      |  | $ | 16,556 | 
|Noninterest-bearing     |  |      | 101,002 |      |  |   | 57,308 | 
|                        |  |      |         |      |  |   |        | 
|Cash and due from banks |  | $    | 200,072 |      |  | $ | 73,864 | 
|                        |  |      |         |      |  |   |        | 

UCB is required to maintain a percentage of its
deposit balances as reserves either in cash or on deposit at the
Federal Reserve Bank of San Francisco. At December 31, 2005
and 2004, the reserve requirement was $13.1 million and
$6.8 million, respectively.

5.     Investment and
Mortgage-Backed Securities

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, 2005, were as follows (dollars in thousands):

|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |         |  
|---------------------------------------------------------------------- | -------------------------- | --------- | --------- | ---------- |  | ---------- | ----- | ------ |  | ------------------- | ------- | ----------------- | - | ----- | --------- | ---------- |  | ----- | ------- | ---------- |  | - | ------- | ------ | - | - | ------- | ------- |  | - | ------- | ------ | - | - | --------- | ------- |  | - | ------- | ------- | -
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |      
|                                                                       |                            |           |           |            |  |            |       |        |  | Less Than 12 Months |         | 12 Months or More |   | Total
|                                                                       |                            |           |           | Gross      |  | Gross      |       |        |  |                     |         |                   |   |      
|                                                                       |                            | Amortized |           | Unrealized |  | Unrealized |       | Market |  | Fair                |         | Unrealized        |   | Fair  |           | Unrealized |  | Fair  |         | Unrealized
|Description                                                            |                            | Cost      |           | Gains      |  | Losses     |       | Value  |  | Value               |         | Losses            |   | Value |           | Losses     |  | Value |         | Losses    
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |           
|Investment securities available for sale:                              |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|                                                                       | Trust preferred securities |           | $         | 33,443     |  |            | $     |       |  |                     | $       | (497              | ) |       | $         | 32,946     |  |       | $       | 18,671     |  |   | $       | (272   | ) |   | $       | 4,275   |  |   | $       | (225   | ) |   | $         | 22,946  |  |   | $       | (497    | )
|                                                                       | Federal agency notes       |           |           | 159,655    |  |            |       | 2      |  |                     |         | (4,472            | ) |       |           | 155,185    |  |       |         | 55,428     |  |   |         | (381   | ) |   |         | 96,850  |  |   |         | (4,091 | ) |   |           | 152,278 |  |   |         | (4,472  | )
|                                                                       | Other                      |           |           | 11,012     |  |            |       |       |  |                     |         | (101              | ) |       |           | 10,911     |  |       |         | 10,911     |  |   |         | (101   | ) |   |         |        |  |   |         |       |   |   |           | 10,911  |  |   |         | (101    | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total investment securities available for sale                         |                            |           | 204,110   |            |  |            | 2     |        |  |                     | (5,070  | )                 |   |       | 199,042   |            |  |       | 85,010  |            |  |   | (754    | )      |   |   | 101,125 |         |  |   | (4,316  | )      |   |   | 186,135   |         |  |   | (5,070  | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Mortgage-backed securities available for sale:                         |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|                                                                       | FNMA                       |           |           | 355,135    |  |            |       | 2      |  |                     |         | (10,947           | ) |       |           | 344,190    |  |       |         | 162,309    |  |   |         | (3,373 | ) |   |         | 180,746 |  |   |         | (7,574 | ) |   |           | 343,055 |  |   |         | (10,947 | )
|                                                                       | GNMA                       |           |           | 88,184     |  |            |       |       |  |                     |         | (3,151            | ) |       |           | 85,033     |  |       |         | 17,553     |  |   |         | (487   | ) |   |         | 67,480  |  |   |         | (2,664 | ) |   |           | 85,033  |  |   |         | (3,151  | )
|                                                                       | FHLMC                      |           |           | 302,540    |  |            |       | 5      |  |                     |         | (10,229           | ) |       |           | 292,316    |  |       |         | 157,234    |  |   |         | (4,007 | ) |   |         | 133,184 |  |   |         | (6,222 | ) |   |           | 290,418 |  |   |         | (10,229 | )
|                                                                       | Other                      |           |           | 202,264    |  |            |       |       |  |                     |         | (5,121            | ) |       |           | 197,143    |  |       |         | 76,747     |  |   |         | (1,253 | ) |   |         | 120,396 |  |   |         | (3,868 | ) |   |           | 197,143 |  |   |         | (5,121  | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total mortgage-backed securities available for
    sale                |                            |           | 948,123   |            |  |            | 7     |        |  |                     | (29,448 | )                 |   |       | 918,682   |            |  |       | 413,843 |            |  |   | (9,120  | )      |   |   | 501,806 |         |  |   | (20,328 | )      |   |   | 915,649   |         |  |   | (29,448 | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total investment and mortgage-backed securities
    available for sale |                            |           | 1,152,233 |            |  |            | 9     |        |  |                     | (34,518 | )                 |   |       | 1,117,724 |            |  |       | 498,853 |            |  |   | (9,874  | )      |   |   | 602,931 |         |  |   | (24,644 | )      |   |   | 1,101,784 |         |  |   | (34,518 | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Investment securities held to maturity:                                |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|                                                                       | Municipal securities       |           |           | 225,573    |  |            |       | 6,943  |  |                     |         | (237              | ) |       |           | 232,279    |  |       |         | 18,379     |  |   |         | (144   | ) |   |         | 3,342   |  |   |         | (93    | ) |   |           | 21,721  |  |   |         | (237    | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Mortgage-backed securities held to maturity:                           |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|                                                                       | FNMA                       |           |           | 5,112      |  |            |       |       |  |                     |         | (189              | ) |       |           | 4,923      |  |       |         |           |  |   |         |       |   |   |         | 4,923   |  |   |         | (189   | ) |   |           | 4,923   |  |   |         | (189    | )
|                                                                       | GNMA                       |           |           | 77,261     |  |            |       |       |  |                     |         | (1,128            | ) |       |           | 76,133     |  |       |         | 66,867     |  |   |         | (729   | ) |   |         | 9,266   |  |   |         | (399   | ) |   |           | 76,133  |  |   |         | (1,128  | )
|                                                                       | FHLMC                      |           |           | 662        |  |            |       |       |  |                     |         | (23               | ) |       |           | 639        |  |       |         |           |  |   |         |       |   |   |         | 639     |  |   |         | (23    | ) |   |           | 639     |  |   |         | (23     | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total mortgage-backed securities held to maturity                      |                            |           | 83,035    |            |  |            |      |        |  |                     | (1,340  | )                 |   |       | 81,695    |            |  |       | 66,867  |            |  |   | (729    | )      |   |   | 14,828  |         |  |   | (611    | )      |   |   | 81,695    |         |  |   | (1,340  | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total investment and mortgage-backed securities
    held to maturity   |                            |           | 308,608   |            |  |            | 6,943 |        |  |                     | (1,577  | )                 |   |       | 313,974   |            |  |       | 85,246  |            |  |   | (873    | )      |   |   | 18,170  |         |  |   | (704    | )      |   |   | 103,416   |         |  |   | (1,577  | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        
|Total securities                                                       |                            | $         | 1,460,841 |            |  | $          | 6,952 |        |  | $                   | (36,095 | )                 |   | $     | 1,431,698 |            |  | $     | 584,099 |            |  | $ | (10,747 | )      |   | $ | 621,101 |         |  | $ | (25,348 | )      |   | $ | 1,205,200 |         |  | $ | (36,095 | )      
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |         |        |   |   |         |         |  |   |         |        |   |   |           |         |  |   |         |        

As of December 31, 2005, the net unrealized
loss on securities was $29.1 million. The net unrealized
loss on securities that are available for sale was
$34.5 million. Net of tax benefit of $14.5 million,
the unrealized $20.0 million loss is included in other
comprehensive income as a reduction to stockholders
equity. The $5.4 million net gain between the carrying
value and market value of securities that are held to maturity
has

86



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                                                            
|-- | -----------------------------------------------------------
|5. | Investment and Mortgage-Backed
    Securities  (Continued)

not been recognized in the financial statements
for the year ended December 31, 2005. Additionally, certain
securities that UCB holds have unrealized losses that extend for
periods in excess of twelve months. However, since the
unrealized losses are attributable to movement in market
interest rates and UCB intent and has the ability to hold these
securities until recovery of such unrealized loss, UCB has
concluded that the impairment on these securities is temporary.

The amortized cost and approximate market value
of investment and mortgage-backed securities classified as
available for sale and held to maturity, along with the portions
of the portfolio with unrealized loss positions at
December 31, 2004, were as follows (dollars in thousands):

|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |        |  
|---------------------------------------------------------------------- | -------------------------- | --------- | --------- | ---------- |  | ---------- | ----- | ------ |  | ------------------- | ------- | ----------------- | - | ----- | --------- | ---------- |  | ----- | ------- | ---------- |  | - | ------ | ------ | - | - | ------- | ------ |  | - | ------ | ------ | - | - | ------- | ------- |  | - | ------- | ------ | -
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |      
|                                                                       |                            |           |           |            |  |            |       |        |  | Less Than 12 Months |         | 12 Months or More |   | Total
|                                                                       |                            |           |           | Gross      |  | Gross      |       |        |  |                     |         |                   |   |      
|                                                                       |                            | Amortized |           | Unrealized |  | Unrealized |       | Market |  | Fair                |         | Unrealized        |   | Fair  |           | Unrealized |  | Fair  |         | Unrealized
|Description                                                            |                            | Cost      |           | Gains      |  | Losses     |       | Value  |  | Value               |         | Losses            |   | Value |           | Losses     |  | Value |         | Losses    
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |           
|Investment securities available for sale:                              |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|                                                                       | Trust preferred securities |           | $         | 18,441     |  |            | $     | 28     |  |                     | $       | (250              | ) |       | $         | 18,219     |  |       | $       | 3,960      |  |   | $      | (40    | ) |   | $       | 9,290  |  |   | $      | (210   | ) |   | $       | 13,250  |  |   | $       | (250   | )
|                                                                       | Federal agency notes       |           |           | 232,594    |  |            |       | 87     |  |                     |         | (2,635            | ) |       |           | 230,046    |  |       |         | 152,451    |  |   |        | (478   | ) |   |         | 64,818 |  |   |        | (2,157 | ) |   |         | 217,269 |  |   |         | (2,635 | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total investment securities available for sale                         |                            |           | 251,035   |            |  |            | 115   |        |  |                     | (2,885  | )                 |   |       | 248,265   |            |  |       | 156,411 |            |  |   | (518   | )      |   |   | 74,108  |        |  |   | (2,367 | )      |   |   | 230,519 |         |  |   | (2,885  | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Mortgage-backed securities available for sale:                         |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|                                                                       | FNMA                       |           |           | 366,307    |  |            |       | 866    |  |                     |         | (4,076            | ) |       |           | 363,097    |  |       |         | 210,437    |  |   |        | (1,957 | ) |   |         | 65,572 |  |   |        | (2,119 | ) |   |         | 276,009 |  |   |         | (4,076 | )
|                                                                       | GNMA                       |           |           | 106,501    |  |            |       | 79     |  |                     |         | (1,508            | ) |       |           | 105,072    |  |       |         | 65,670     |  |   |        | (1,173 | ) |   |         | 12,971 |  |   |        | (335   | ) |   |         | 78,641  |  |   |         | (1,508 | )
|                                                                       | FHLMC                      |           |           | 288,789    |  |            |       | 495    |  |                     |         | (3,319            | ) |       |           | 285,965    |  |       |         | 108,720    |  |   |        | (1,131 | ) |   |         | 68,595 |  |   |        | (2,188 | ) |   |         | 177,315 |  |   |         | (3,319 | )
|                                                                       | Other                      |           |           | 167,719    |  |            |       | 81     |  |                     |         | (1,059            | ) |       |           | 166,741    |  |       |         | 145,856    |  |   |        | (1,059 | ) |   |         |       |  |   |        |       |   |   |         | 145,856 |  |   |         | (1,059 | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total mortgage-backed securities available for
    sale                |                            |           | 929,316   |            |  |            | 1,521 |        |  |                     | (9,962  | )                 |   |       | 920,875   |            |  |       | 530,683 |            |  |   | (5,320 | )      |   |   | 147,138 |        |  |   | (4,642 | )      |   |   | 677,821 |         |  |   | (9,962  | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total investment and mortgage-backed securities
    available for sale |                            |           | 1,180,351 |            |  |            | 1,636 |        |  |                     | (12,847 | )                 |   |       | 1,169,140 |            |  |       | 687,094 |            |  |   | (5,838 | )      |   |   | 221,246 |        |  |   | (7,009 | )      |   |   | 908,340 |         |  |   | (12,847 | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Investment securities held to maturity:                                |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|                                                                       | Municipal securities       |           |           | 215,594    |  |            |       | 7,415  |  |                     |         | (712              | ) |       |           | 222,297    |  |       |         | 10,457     |  |   |        | (75    | ) |   |         | 19,765 |  |   |        | (637   | ) |   |         | 30,222  |  |   |         | (712   | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Mortgage-backed securities held to maturity:                           |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|                                                                       | FNMA                       |           |           | 5,765      |  |            |       |       |  |                     |         | (76               | ) |       |           | 5,689      |  |       |         | 5,689      |  |   |        | (76    | ) |   |         |       |  |   |        |       |   |   |         | 5,689   |  |   |         | (76    | )
|                                                                       | GNMA                       |           |           | 102,439    |  |            |       | 489    |  |                     |         | (333              | ) |       |           | 102,595    |  |       |         | 8,396      |  |   |        | (18    | ) |   |         | 12,075 |  |   |        | (315   | ) |   |         | 20,471  |  |   |         | (333   | )
|                                                                       | FHLMC                      |           |           | 1,404      |  |            |       |       |  |                     |         | (16               | ) |       |           | 1,388      |  |       |         | 1,388      |  |   |        | (16    | ) |   |         |       |  |   |        |       |   |   |         | 1,388   |  |   |         | (16    | )
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total mortgage-backed securities held to maturity                      |                            |           | 109,608   |            |  |            | 489   |        |  |                     | (425    | )                 |   |       | 109,672   |            |  |       | 15,473  |            |  |   | (110   | )      |   |   | 12,075  |        |  |   | (315   | )      |   |   | 27,548  |         |  |   | (425    | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total investment and mortgage-backed securities
    held to maturity   |                            |           | 325,202   |            |  |            | 7,904 |        |  |                     | (1,137  | )                 |   |       | 331,969   |            |  |       | 25,930  |            |  |   | (185   | )      |   |   | 31,840  |        |  |   | (952   | )      |   |   | 57,770  |         |  |   | (1,137  | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       
|Total securities                                                       |                            | $         | 1,505,553 |            |  | $          | 9,540 |        |  | $                   | (13,984 | )                 |   | $     | 1,501,109 |            |  | $     | 713,024 |            |  | $ | (6,023 | )      |   | $ | 253,086 |        |  | $ | (7,961 | )      |   | $ | 966,110 |         |  | $ | (13,984 | )     
|                                                                       |                            |           |           |            |  |            |       |        |  |                     |         |                   |   |       |           |            |  |       |         |            |  |   |        |        |   |   |         |        |  |   |        |        |   |   |         |         |  |   |         |       

As of December 31, 2004, the total
unrealized loss on securities was $4.4 million. The net
unrealized loss on securities that are available for sale was
$11.2 million. Net of tax benefit of $4.7 million, the
unrealized $6.5 million loss is included as a reduction to
stockholders equity. The $6.8 million gain between
the carrying value and market value of securities that are held
to maturity has not been recognized in the financial statements
for the year ended December 31, 2004.

87



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                                                            
|-- | -----------------------------------------------------------
|5. | Investment and Mortgage-Backed
    Securities  (Continued)

The scheduled contractual maturities on
investment and mortgage-backed securities classified as
available for sale and held to maturity at December 31,
2005, were as follows (dollars in thousands):

|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |         | 
|---------------------------------------------------------------------- | -------------------------- | -------------- | ------ | ------------ |  | -------- | ------ | -------- |  | ----- | ------- | ------- |  | ------- | --------- | -------- |  | -------- | --------- | ------- |  | - | ------ | ----- |  | - | ------ | ------ |  | - | ------- | ------ |  | - | --------- | ------- |  | - | --------- | ------- | 
|                                                                       |                            |                |        |             
|                                                                       |                            | Amortized Cost |        | Market Value
|                                                                       |                            |                |        |             
|                                                                       |                            |                |        | After 1      |  | After 5  |        |          |  |       |         | After 1 |  | After 5 |           |         
|                                                                       |                            |                |        | Year         |  | Years    |        |          |  |       |         | Year    |  | Years   |           |         
|                                                                       |                            | Within         |        | Through      |  | Through  |        | After    |  |       |         | Within  |  | Through |           | Through  |  | After    |           |        
|Description                                                            |                            | 1 Year         |        | 5 Years      |  | 10 Years |        | 10 Years |  | Total |         | 1 Year  |  | 5 Years |           | 10 Years |  | 10 Years |           | Total  
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |        
|Investment securities available for sale:                              |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|                                                                       | Trust preferred securities |                | $      |             |  |          | $      |         |  |       | $       |        |  |         | $         | 33,443   |  |          | $         | 33,443  |  |   | $      |      |  |   | $      |       |  |   | $       |       |  |   | $         | 32,946  |  |   | $         | 32,946  | 
|                                                                       | Federal agency notes       |                |        | 10,000       |  |          |        | 56,718   |  |       |         | 92,937  |  |         |           |         |  |          |           | 159,655 |  |   |        | 9,929 |  |   |        | 56,108 |  |   |         | 89,148 |  |   |           |        |  |   |           | 155,185 | 
|                                                                       | Other                      |                |        | 1,012        |  |          |        |         |  |       |         |        |  |         |           | 10,000   |  |          |           | 11,012  |  |   |        | 1,011 |  |   |        |       |  |   |         |       |  |   |           | 9,900   |  |   |           | 10,911  | 
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total investment securities available for sale                         |                            |                | 11,012 |              |  |          | 56,718 |          |  |       | 92,937  |         |  |         | 43,443    |          |  |          | 204,110   |         |  |   | 10,940 |       |  |   | 56,108 |        |  |   | 89,148  |        |  |   | 42,846    |         |  |   | 199,042   |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Mortgage-backed securities available for sale:                         |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|                                                                       | FNMA                       |                |        |             |  |          |        | 7,081    |  |       |         | 30,426  |  |         |           | 317,628  |  |          |           | 355,135 |  |   |        |      |  |   |        | 6,836  |  |   |         | 29,676 |  |   |           | 307,678 |  |   |           | 344,190 | 
|                                                                       | GNMA                       |                |        |             |  |          |        |         |  |       |         |        |  |         |           | 88,184   |  |          |           | 88,184  |  |   |        |      |  |   |        |       |  |   |         |       |  |   |           | 85,033  |  |   |           | 85,033  | 
|                                                                       | FHLMC                      |                |        |             |  |          |        | 8,082    |  |       |         | 35,419  |  |         |           | 259,039  |  |          |           | 302,540 |  |   |        |      |  |   |        | 7,771  |  |   |         | 34,774 |  |   |           | 249,771 |  |   |           | 292,316 | 
|                                                                       | Other                      |                |        |             |  |          |        |         |  |       |         |        |  |         |           | 202,264  |  |          |           | 202,264 |  |   |        |      |  |   |        |       |  |   |         |       |  |   |           | 197,143 |  |   |           | 197,143 | 
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total mortgage-backed securities available for
    sale                |                            |                |       |              |  |          | 15,163 |          |  |       | 65,845  |         |  |         | 867,115   |          |  |          | 948,123   |         |  |   |       |       |  |   | 14,607 |        |  |   | 64,450  |        |  |   | 839,625   |         |  |   | 918,682   |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total investment and mortgage-backed securities
    available for sale |                            |                | 11,012 |              |  |          | 71,881 |          |  |       | 158,782 |         |  |         | 910,558   |          |  |          | 1,152,233 |         |  |   | 10,940 |       |  |   | 70,715 |        |  |   | 153,598 |        |  |   | 882,471   |         |  |   | 1,117,724 |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Investment securities held to maturity:                                |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|                                                                       | Municipal securities       |                |        |             |  |          |        |         |  |       |         | 1,323   |  |         |           | 224,250  |  |          |           | 225,573 |  |   |        |      |  |   |        |       |  |   |         | 1,395  |  |   |           | 230,884 |  |   |           | 232,279 | 
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Mortgage-backed securities held to maturity:                           |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|                                                                       | FNMA                       |                |        |             |  |          |        |         |  |       |         |        |  |         |           | 5,112    |  |          |           | 5,112   |  |   |        |      |  |   |        |       |  |   |         |       |  |   |           | 4,923   |  |   |           | 4,923   | 
|                                                                       | GNMA                       |                |        |             |  |          |        |         |  |       |         |        |  |         |           | 77,261   |  |          |           | 77,261  |  |   |        |      |  |   |        |       |  |   |         |       |  |   |           | 76,133  |  |   |           | 76,133  | 
|                                                                       | FHLMC                      |                |        |             |  |          |        |         |  |       |         |        |  |         |           | 662      |  |          |           | 662     |  |   |        |      |  |   |        |       |  |   |         |       |  |   |           | 639     |  |   |           | 639     | 
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total mortgage-backed securities held to maturity                      |                            |                |       |              |  |          |       |          |  |       |        |         |  |         | 83,035    |          |  |          | 83,035    |         |  |   |       |       |  |   |       |        |  |   |        |        |  |   | 81,695    |         |  |   | 81,695    |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total investment and mortgage-backed securities
    held to maturity   |                            |                |       |              |  |          |       |          |  |       | 1,323   |         |  |         | 307,285   |          |  |          | 308,608   |         |  |   |       |       |  |   |       |        |  |   | 1,395   |        |  |   | 312,579   |         |  |   | 313,974   |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        
|Total securities                                                       |                            | $              | 11,012 |              |  | $        | 71,881 |          |  | $     | 160,105 |         |  | $       | 1,217,843 |          |  | $        | 1,460,841 |         |  | $ | 10,940 |       |  | $ | 70,715 |        |  | $ | 154,993 |        |  | $ | 1,195,050 |         |  | $ | 1,431,698 |        
|                                                                       |                            |                |        |              |  |          |        |          |  |       |         |         |  |         |           |          |  |          |           |         |  |   |        |       |  |   |        |        |  |   |         |        |  |   |           |         |  |   |           |        

The remaining contractual maturities for
mortgage-backed securities were allocated assuming no
prepayments. Remaining maturities will differ from contractual
maturities since borrowers may have the right to prepay
obligations before underlying mortgages mature.

Approximately $320.9 million and
$311.4 million of investment and mortgage-backed securities
have been pledged to secure borrowings entered into by UCB at
December 31, 2005 and 2004, respectively, more fully
described in Note 14. UCB has also pledged
$460.0 million and $463.2 million of its investment
securities as collateral for public deposits as of
December 31, 2005 and 2004, respectively.

For the year ended December 31, 2005,
proceeds from the sale of available for sale securities totaled
$115.0 million, with gross realized gains of
$1.8 million and gross realized losses of
$1.8 million. For the year ended December 31, 2004,
proceeds from the sale of available for sale securities totaled
$821.8 million, with gross realized gains of
$14.8 million and gross realized losses of
$2.1 million. Proceeds from the sale of available for sale
securities for the year ended December 31, 2003, totaled
$953.3 million, with gross realized gains of
$18.4 million and gross realized losses of $7.4 million

There were no mortgage-backed securities sold
under agreements to repurchase for the years ended
December 31, 2005, 2004 and 2003. When UCB enters into
these transactions, the obligations generally mature within one
year and generally represent agreements to repurchase the same
securities.

88



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

6.     Federal Home
Loan Bank Stock and Other Equity Investments

UCB, along with all financial institutions, must
own stock in the Federal Home Loan Bank (FHLB) to
have access to FHLBs products and services. The stock does
not trade on a stock market, but may be issued, exchanged,
redeemed, and repurchased by the FHLB only at its stated par
value. The stock is redeemable by a shareholder on five
years written notice, subject to certain conditions. The
FHLB can redeem its stock with 15 days written notice and
at quarterly intervals if the member has stock in excess of 115%
of its calculated requirement. Additionally, the FHLB declares
stock or cash dividends each calendar quarter. The
Companys other equity investments consist primarily of CRA
investments (see Note 1).

The components of FHLB stock and other equity
investments as of December 31, 2005 and 2004, were as
follows (dollars in thousands):

|                                        |  |      |        |      |  |   |        | 
|--------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                        |  | 2005 |        | 2004
|                                        |  |      |        |     
|FHLB stock                              |  | $    | 39,070 |      |  | $ | 25,940 | 
|Other equity investments                |  |      | 36,375 |      |  |   | 30,927 | 
|                                        |  |      |        |      |  |   |        | 
|FHLB stock and other equity investments |  | $    | 75,445 |      |  | $ | 56,867 | 
|                                        |  |      |        |      |  |   |        | 

During the three months ended December 31,
2004, the Company recognized a liability of $10.4 million,
and a corresponding increase in CRA investments, for delayed
equity contributions that are unconditional and legally binding
related to affordable housing investments.

7.     Loans Held for
Sale

The components of loans held for sale as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                       |                                         |      |         |         |  |   |         |         | 
|---------------------- | --------------------------------------- | ---- | ------- | ------- |  | - | ------- | ------- | 
|                       |                                         | 2005 |         | 2004   
|                       |                                         |      |         |        
|Commercial:            |                                         |      |         |         |  |   |         |        
|                       | Secured by real estate  nonresidential |      | $       | 154,087 |  |   | $       | 26,882  | 
|                       | Secured by real estate  multifamily    |      |         |        |  |   |         | 295,788 | 
|                       | Business                                |      |         | 2,653   |  |   |         | 3,337   | 
|                       |                                         |      |         |         |  |   |         |        
|Loans held for sale(1) |                                         | $    | 156,740 |         |  | $ | 326,007 |        
|                       |                                         |      |         |         |  |   |         |        



---



|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net unamortized deferred loan fees of
    $372,000 at December 31, 2005, and net unamortized deferred
    loan costs of $535,000 at December 31, 2004.

Significant market changes in 2005 prompted a
comprehensive review of UCBs business strategy in the
multifamily real estate lending business. In response to this
business strategy review, UCB transferred $235.9 million of
multifamily real estate loans from held for sale to held in
portfolio in September 2005.

During September 2005, the Company determined
that the level of its commercial real estate loans was reaching
its internally set informal guidelines for these loans, which is
calculated as a percentage of risk-based capital. As such,
$265.1 million of commercial real estate loans were
transferred from held in portfolio to held for sale.

89



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

8.     Loans Held in
Portfolio and Allowance for Loan Losses

The components of loans held in portfolio as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                            |                                           |      |           |           |  |   |           |           | 
|--------------------------- | ----------------------------------------- | ---- | --------- | --------- |  | - | --------- | --------- | 
|                            |                                           | 2005 |           | 2004     
|                            |                                           |      |           |          
|Commercial:                 |                                           |      |           |           |  |   |           |          
|                            | Secured by real estate  nonresidential   |      | $         | 2,307,381 |  |   | $         | 1,943,868 | 
|                            | Secured by real estate  multifamily      |      |           | 1,506,848 |  |   |           | 866,079   | 
|                            | Construction                              |      |           | 494,841   |  |   |           | 289,936   | 
|                            | Business                                  |      |           | 863,935   |  |   |           | 468,128   | 
|                            |                                           |      |           |           |  |   |           |          
|Total commercial loans      |                                           |      | 5,173,005 |           |  |   | 3,568,011 |          
|                            |                                           |      |           |           |  |   |           |          
|Consumer:                   |                                           |      |           |           |  |   |           |          
|                            | Residential mortgage (one-to-four family) |      |           | 613,988   |  |   |           | 434,423   | 
|                            | Other                                     |      |           | 51,667    |  |   |           | 48,307    | 
|                            |                                           |      |           |           |  |   |           |          
|Total consumer loans        |                                           |      | 665,655   |           |  |   | 482,730   |          
|                            |                                           |      |           |           |  |   |           |          
|Loans held in portfolio (1) |                                           |      | 5,838,660 |           |  |   | 4,050,741 |          
|Allowance for loan losses   |                                           |      | (64,542   | )         |  |   | (56,472   | )        
|                            |                                           |      |           |           |  |   |           |          
|Net loans held in portfolio |                                           | $    | 5,774,118 |           |  | $ | 3,994,269 |          
|                            |                                           |      |           |           |  |   |           |          



---



|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net unamortized deferred loan fees of
    $7.4 million and $7.3 million at December 31,
    2005 and 2004, respectively.

The components of loans held in portfolio by
interest rate type as of December 31, 2005 and 2004, were as
follows (dollars in thousands):

|                               |  |      |           |      |  |   |           | 
|------------------------------ |  | ---- | --------- | ---- |  | - | --------- | 
|                               |  | 2005 |           | 2004
|                               |  |      |           |     
|Adjustable-rate loans          |  | $    | 2,951,945 |      |  | $ | 2,603,889 | 
|Intermediate fixed-rated loans |  |      | 1,711,915 |      |  |   | 881,744   | 
|Fixed-rate loans               |  |      | 1,182,198 |      |  |   | 572,419   | 
|                               |  |      |           |      |  |   |           | 
|Loans held in portfolio (1)    |  | $    | 5,846,058 |      |  | $ | 4,058,052 | 
|                               |  |      |           |      |  |   |           | 



---



|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes net unamortized deferred loan fees of
    $7.4 million and $7.3 million at December 31,
    2005 and 2004, respectively.

As of December 31, 2005 and 2004,
residential mortgage (one-to-four family) and multifamily loans
with a book value and market value of $3.95 billion and
$1.47 billion were pledged to secure FHLB advances,
respectively (see Note 14).

Impaired loans as of December 31, 2005,
2004, and 2003, were as follows (dollars in thousands):

|                                                                 |  |      |        |      |  |      |        |  |  |   |       | 
|---------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ----- | 
|                                                                 |  | 2005 |        | 2004 |  | 2003
|                                                                 |  |      |        |      |  |     
|Impaired loans with a valuation allowance                        |  | $    | 16,267 |      |  | $    | 14,808 |  |  | $ | 4,965 | 
|Impaired loans without a valuation allowance                     |  |      | 8,273  |      |  |      | 136    |  |  |   |      | 
|                                                                 |  |      |        |      |  |      |        |  |  |   |       | 
|Total impaired loans                                             |  | $    | 24,540 |      |  | $    | 14,944 |  |  | $ | 4,965 | 
|                                                                 |  |      |        |      |  |      |        |  |  |   |       | 
|Allowance for impaired loans under SFAS
    No. 114              |  | $    | 3,221  |      |  | $    | 3,592  |  |  | $ | 2,128 | 
|                                                                 |  |      |        |      |  |      |        |  |  |   |       | 
|Interest income recognized on impaired loans
    during the year |  | $    | 183    |      |  | $    |       |  |  | $ |      | 
|                                                                 |  |      |        |      |  |      |        |  |  |   |       | 

90



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



8.     Loans Held in
Portfolio and Allowance for Loan
Losses  (Continued)


Our average recorded investment in impaired loans
for the year ended December 31, 2005 and 2004, was
$32.1 million and $17.4 million, respectively. Except
for two impaired loans that were well secured and in process of
collection, all other impaired loans as of December 31,
2005 and 2004, were included in nonaccrual loans. Loans of
approximately $19.1 million and $12.6 million were on
nonaccrual status at December 31, 2005 and 2004,
respectively.

Loans past due ninety days and still accruing as
of December 31, 2005 and 2004, were $5.4 million and
$3.1 million, respectively.

The activity in the allowance for loan losses and
allowance for losses related to unfunded commitments for the
years ended December 31, 2005, 2004 and 2003, was as
follows (dollars in thousands):

|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |        | 
|------------------------------------------------------- | ----------------------------------------------- | ---- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                                        |                                                 | 2005 |        | 2004   |  | 2003
|                                                        |                                                 |      |        |        |  |     
|Balance at beginning of year:                           |                                                 |      |        |        |  |      |        |        |  |   |        |       
|                                                        | Allowance for loan losses                       |      | $      | 56,472 |  |      | $      | 58,126 |  |   | $      | 48,865 | 
|                                                        | Allowance for losses  unfunded
    commitments |      |        | 3,940  |  |      |        | 2,737  |  |   |        |       | 
|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |       
|Total allowance for losses at beginning of the
    year |                                                 |      | 60,412 |        |  |      | 60,863 |        |  |   | 48,865 |       
|Provision for losses                                    |                                                 |      | 6,091  |        |  |      | 4,202  |        |  |   | 9,967  |       
|Loans charged off                                       |                                                 |      | (1,614 | )      |  |      | (4,798 | )      |  |   | (3,349 | )     
|Recoveries of loans previously charged off              |                                                 |      | 123    |        |  |      | 145    |        |  |   | 1,352  |       
|Adjustment  acquired through business
    combinations |                                                 |      | 2,932  |        |  |      |       |        |  |   | 4,028  |       
|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |       
|Total allowance for losses at end of year               |                                                 | $    | 67,944 |        |  | $    | 60,412 |        |  | $ | 60,863 |       
|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |       
|Allowance for loan losses                               |                                                 | $    | 64,542 |        |  | $    | 56,472 |        |  | $ | 58,126 |       
|Allowance for losses  unfunded
    commitments         |                                                 |      | 3,402  |        |  |      | 3,940  |        |  |   | 2,737  |       
|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |       
|Total allowance for losses at end of year               |                                                 | $    | 67,944 |        |  | $    | 60,412 |        |  | $ | 60,863 |       
|                                                        |                                                 |      |        |        |  |      |        |        |  |   |        |       

9.     Premises and
Equipment

The components of premises and equipment as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                                          |  |      |         |      |  |   |         |  
|----------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                          |  | 2005 |         | 2004
|                                          |  |      |         |     
|Land                                      |  | $    | 9,566   |      |  | $ | 9,126   |  
|Buildings                                 |  |      | 103,591 |      |  |   | 94,254  |  
|Leasehold improvements                    |  |      | 25,685  |      |  |   | 25,656  |  
|Computer software                         |  |      | 8,231   |      |  |   | 7,803   |  
|Equipment, furniture and fixtures         |  |      | 30,968  |      |  |   | 28,251  |  
|                                          |  |      |         |      |  |   |         |  
|Gross premises and equipment              |  |      | 178,041 |      |  |   | 165,090 |  
|Accumulated depreciation and amortization |  |      | (79,752 | )    |  |   | (72,447 | )
|                                          |  |      |         |      |  |   |         |  
|Premises and equipment, net               |  | $    | 98,289  |      |  | $ | 92,643  |  
|                                          |  |      |         |      |  |   |         |  

Total depreciation and amortization expense was
$8.5 million, $6.8 million and $5.8 million for
the years ended December 31, 2005, 2004 and 2003,
respectively.

Rental income is included in occupancy expense in
the consolidated statements of operations and totaled
$7.8 million, $7.7 million and $6.2 million for
the years ended December 31, 2005, 2004 and 2003,

91



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



9.     Premises and
Equipment  (Continued)


respectively. The future noncancelable minimum
lease payment receivables as of December 31, 2005, are as
follows (dollars in thousands):

|                    |  |   |        | 
|------------------- |  | - | ------ | 
|2006                |  | $ | 3,930  | 
|2007                |  |   | 2,733  | 
|2008                |  |   | 2,130  | 
|2009                |  |   | 1,524  | 
|2010                |  |   | 344    | 
|2011 and thereafter |  |   | 454    | 
|                    |  |   |        | 
|Total               |  | $ | 11,115 | 
|                    |  |   |        | 

10.     Goodwill

The activity in goodwill for years ended
December 31, 2005, 2004 and 2003, was as follows (dollars
in thousands):

|                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|---------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------ | -
|                                                                       |  | 2005 |         | 2004 |  | 2003
|                                                                       |  |      |         |      |  |     
|Balance at beginning of year                                           |  | $    | 68,301  |      |  | $    | 87,437  |   |  | $ | 46,052 |  
|Pacifica Bancorp, Inc. acquisition                                     |  |      | 23,277  |      |  |      |        |   |  |   |       |  
|Asian American Bank & Trust Company
    acquisition                    |  |      | 15,070  |      |  |      |        |   |  |   |       |  
|First Continental Bank acquisition                                     |  |      |        |      |  |      |        |   |  |   | 44,248 |  
|First Continental Bank acquisition purchase price
    adjustment       |  |      |        |      |  |      | (19,136 | ) |  |   |       |  
|Bank of Canton of California acquisition purchase
    price adjustment |  |      |        |      |  |      |        |   |  |   | (2,863 | )
|                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|Balance at end of year                                                 |  | $    | 106,648 |      |  | $    | 68,301  |   |  | $ | 87,437 |  
|                                                                       |  |      |         |      |  |      |         |   |  |   |        |  

We performed our annual goodwill impairment
review as of September 30, 2005 and 2004, and the review
determined that no impairment existed.

During the three months ended December 31,
2004, the Company determined that the initial purchase price
calculation related to the acquisition of First Continental Bank
was based on the Companys common stock per share price on
the closing date of the acquisition instead of the proper per
share average stock price at the announcement date. As a result,
goodwill and additional paid-in capital was reduced by
$16.8 million. During the three months ended June 30,
2004, the Company finalized its purchase accounting with respect
to the First Continental Bank acquisition, which resulted in a
$2.3 million reduction to goodwill. Additionally, for the
year ended December 31, 2003, the Company finalized its
purchase accounting with respect to the Bank of Canton of
California acquisition, which resulted in a $2.9 million
reduction to goodwill.

11.     Core Deposit
Intangibles

The gross carrying amount and the associated
accumulated amortization for core deposit intangibles as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                                |  |      |        |      |  |   |        |  
|------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                |  | 2005 |        | 2004
|                                |  |      |        |     
|Core deposit intangibles, gross |  | $    | 19,597 |      |  | $ | 13,100 |  
|Accumulated amortization        |  |      | (4,616 | )    |  |   | (3,271 | )
|                                |  |      |        |      |  |   |        |  
|Core deposit intangibles, net   |  | $    | 14,981 |      |  | $ | 9,829  |  
|                                |  |      |        |      |  |   |        |  

92



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



11.     Core Deposit
Intangibles  (Continued)


Core deposit intangibles were reviewed for
impairment based on actual deposit run-off during the year ended
December 31, 2005, and the reviews determined that there
were impairments of $58,000 and $145,000 at December 31,
2005, and September 30, 2005, respectively. The $203,000
write-down of core deposit intangibles is included in other
general and administrative expenses for the year ended
December 31, 2005. The activity in net core deposit
intangibles for the years ended December 31, 2005, 2004 and
2003, were as follows (dollars in thousands):

|                                                         |  |      |        |      |  |      |        |   |  |   |        |  
|-------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                         |  | 2005 |        | 2004 |  | 2003
|                                                         |  |      |        |      |  |     
|Balance at beginning of period                           |  | $    | 9,829  |      |  | $    | 11,111 |   |  | $ | 10,734 |  
|Pacifica Bancorp, Inc. acquisition                       |  |      | 3,800  |      |  |      |       |   |  |   |       |  
|Asian American Bank & Trust Company
    acquisition      |  |      | 2,900  |      |  |      |       |   |  |   |       |  
|First Continental Bank acquisition                       |  |      |       |      |  |      |       |   |  |   | 2,225  |  
|Broadway National Bank branch acquisition
    adjustment |  |      |       |      |  |      |       |   |  |   | (86    | )
|Amortization                                             |  |      | (1,345 | )    |  |      | (1,282 | ) |  |   | (1,762 | )
|Impairment write-downs                                   |  |      | (203   | )    |  |      |       |   |  |   |       |  
|                                                         |  |      |        |      |  |      |        |   |  |   |        |  
|Balance at end of period                                 |  | $    | 14,981 |      |  | $    | 9,829  |   |  | $ | 11,111 |  
|                                                         |  |      |        |      |  |      |        |   |  |   |        |  

The estimated future amortization expense related
to core deposit intangibles as of December 31, 2005, is as
follows (dollars in thousands):

|                    |  |   |        | 
|------------------- |  | - | ------ | 
|2006                |  | $ | 2,259  | 
|2007                |  |   | 2,259  | 
|2008                |  |   | 2,259  | 
|2009                |  |   | 2,155  | 
|2010                |  |   | 1,635  | 
|2011 and thereafter |  |   | 4,414  | 
|                    |  |   |        | 
|Total               |  | $ | 14,981 | 
|                    |  |   |        | 

12.     Mortgage
Servicing Rights

The gross carrying amount and the associated
accumulated amortization for mortgage servicing rights as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                                 |  |      |        |      |  |   |        |  
|-------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                 |  | 2005 |        | 2004
|                                 |  |      |        |     
|Mortgage servicing rights, gross |  | $    | 14,341 |      |  | $ | 9,149  |  
|Accumulated amortization         |  |      | (3,699 | )    |  |   | (1,402 | )
|                                 |  |      |        |      |  |   |        |  
|Mortgage servicing rights, net   |  | $    | 10,642 |      |  | $ | 7,747  |  
|                                 |  |      |        |      |  |   |        |  

Amortization expense related to mortgage
servicing rights is recorded as a reduction to other fees on the
consolidated statements of operations. Mortgage servicing rights
were reviewed for impairment for the year ended
December 31, 2005, and the review determined no impairment
existed. For the year ended December 31, 2004, UCB
recognized an impairment of $80,000, which is included in
amortization of mortgage servicing rights. Additionally, the
Company determined that it was not recognizing the gain on sale
of such loans pursuant to SFAS No. 140. Accordingly,
the Company recorded a cumulative adjustment during the three
months ended December 31, 2004, to reduce gain on loan
sales and servicing rights by $1.9 million

93



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



12.     Mortgage
Servicing Rights  (Continued)


and the recognition of a tax benefit of $793,000.
The activity in net mortgage servicing rights for the year ended
December 31, 2005, 2004 and 2003, was as follows (dollars
in thousands):

|                               |  |      |        |      |  |      |        |   |  |   |       |  
|------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | -
|                               |  | 2005 |        | 2004 |  | 2003
|                               |  |      |        |      |  |     
|Balance at beginning of period |  | $    | 7,747  |      |  | $    | 4,006  |   |  | $ | 1,631 |  
|Addition/ Capitalization       |  |      | 5,192  |      |  |      | 5,209  |   |  |   | 1,983 |  
|Purchases                      |  |      |       |      |  |      |       |   |  |   | 841   |  
|Amortization                   |  |      | (2,297 | )    |  |      | (1,388 | ) |  |   | (449  | )
|Write-downs                    |  |      |       |      |  |      | (80    | ) |  |   |      |  
|                               |  |      |        |      |  |      |        |   |  |   |       |  
|Balance at end of period       |  | $    | 10,642 |      |  | $    | 7,747  |   |  | $ | 4,006 |  
|                               |  |      |        |      |  |      |        |   |  |   |       |  

Real estate loans being serviced for others
totaled $1.47 billion and $1.11 billion at
December 31, 2005 and 2004, respectively. These loans are
not included in the consolidated balance sheets. In connection
with these loans, UCB held trust funds of approximately
$17.4 million and $14.1 million at December 31,
2005 and 2004, respectively, all of which were segregated in
separate accounts and not included in the accompanying
consolidated balance sheets. Some agreements with investors to
whom UCB has sold loans have representation and warranty
provisions that could require the repurchase of loans under
certain circumstances. Management does not believe that any such
repurchases will be significant, and therefore, no provision for
any repurchase has been recorded.

The fair value of capitalized mortgage servicing
rights along with the sensitivity analysis related to two key
factors, prepayment speed and discount rate, as of
December 31, 2005 and 2004, was as follows (dollars in
thousands):

|                                                                             |  |      |         |      |  |   |         |  
|---------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                                             |  | 2005 |         | 2004
|                                                                             |  |      |         |     
|Fair value of mortgage servicing rights                                      |  | $    | 14,036  |      |  | $ | 10,288  |  
|Expected weighted-average life (in years)                                    |  |      | 4.97    |      |  |   | 3.90    |  
|Range of prepayment speed assumptions (annual CPR)                           |  |      | 10%- 20 | %    |  |   | 12%- 26 | %
|Discount rate assumption                                                     |  |      | 12.85   | %    |  |   | 14.21   | %
|Decrease in fair value from 10% adverse CPR change                           |  | $    | (617    | )    |  | $ | (735    | )
|Decrease in fair value from 20% adverse CPR change                           |  | $    | (1,161  | )    |  | $ | (1,244  | )
|Decrease in fair value from 100 basis point
    adverse discount rate change |  | $    | (355    | )    |  | $ | (237    | )
|Decrease in fair value from 200 basis point
    adverse discount rate change |  | $    | (693    | )    |  | $ | (464    | )

These sensitivity analyses should be used with
caution as the calculations were prepared by varying only one
factor at a time and holding all others constant for purposes of
the analyses. Changes in one factor may result in changes in
other factors and such changes might magnify or counteract the
sensitivities as presented. Additionally, changes in fair value
based on changes in an assumption generally cannot be
extrapolated because the relationship of the change in the
factor to the change in fair value may not be linear.

94



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

13.     Deposits

The components of deposits as of
December 31, 2005 and 2004, were as follows (dollars in
thousands):

|                                        |                     |      |           |           |  |   |           |           | 
|--------------------------------------- | ------------------- | ---- | --------- | --------- |  | - | --------- | --------- | 
|                                        |                     | 2005 |           | 2004     
|                                        |                     |      |           |          
|NOW, checking and money market accounts |                     | $    | 1,784,065 |           |  | $ | 1,427,366 |          
|Savings accounts                        |                     |      | 946,714   |           |  |   | 1,000,489 |          
|Time deposits:                          |                     |      |           |           |  |   |           |          
|                                        | Less than $100,000  |      |           | 1,203,001 |  |   |           | 918,650   | 
|                                        | $100,000 or greater |      |           | 2,330,389 |  |   |           | 1,869,357 | 
|                                        |                     |      |           |           |  |   |           |          
|Total time deposits                     |                     |      | 3,533,390 |           |  |   | 2,788,007 |          
|                                        |                     |      |           |           |  |   |           |          
|Total deposits                          |                     | $    | 6,264,169 |           |  | $ | 5,215,862 |          
|                                        |                     |      |           |           |  |   |           |          

UCB had interest-bearing deposits in foreign
banking offices of $555.5 million and $328.2 million
at December 31, 2005 and 2004, respectively.

The remaining maturities on time deposits as of
December 31, 2005, are as follows (dollars in thousands):

|                    |  |   |           | 
|------------------- |  | - | --------- | 
|2006                |  | $ | 3,446,384 | 
|2007                |  |   | 76,412    | 
|2008                |  |   | 5,330     | 
|2009                |  |   | 3,493     | 
|2010                |  |   | 1,770     | 
|2011 and thereafter |  |   | 1         | 
|                    |  |   |           | 
|Total               |  | $ | 3,533,390 | 
|                    |  |   |           | 

Interest expense on deposits for the years ended
December 31, 2005, 2004 and 2003, was as follows (dollars
in thousands):

|                                        |  |      |         |      |  |      |        |   |  |   |        |  
|--------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                        |  | 2005 |         | 2004 |  | 2003
|                                        |  |      |         |      |  |     
|NOW, checking and money market accounts |  | $    | 20,572  |      |  | $    | 9,295  |   |  | $ | 6,774  |  
|Savings accounts                        |  |      | 9,336   |      |  |      | 8,451  |   |  |   | 7,191  |  
|Time deposits                           |  |      | 93,983  |      |  |      | 49,979 |   |  |   | 55,153 |  
|Less penalties for early withdrawal     |  |      | (574    | )    |  |      | (458   | ) |  |   | (394   | )
|                                        |  |      |         |      |  |      |        |   |  |   |        |  
|Total                                   |  | $    | 123,317 |      |  | $    | 67,267 |   |  | $ | 68,724 |  
|                                        |  |      |         |      |  |      |        |   |  |   |        |  

95



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

14.     Borrowings

Short-term and long-term borrowings outstanding
information for the years ended December 31, 2005, 2004 and
2003, was as follows (dollars in thousands):

|                                                                    |                                                                             |      |   |         |   |      |   |         |   |  |   |         |  
|------------------------------------------------------------------- | --------------------------------------------------------------------------- | ---- | - | ------- | - | ---- | - | ------- | - |  | - | ------- | -
|                                                                    |                                                                             | 2005 |   | 2004    |   | 2003
|                                                                    |                                                                             |      |   |         |   |     
|Short-term borrowings:                                              |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|FHLB of San Francisco advances and other
    short-term borrowings: |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|                                                                    | Average balance outstanding                                                 |      | $ | 301,400 |   |      | $ | 164,964 |   |  | $ | 76,827  |  
|                                                                    | Maximum amount outstanding at any month end period                          |      |   | 566,169 |   |      |   | 300,695 |   |  |   | 234,134 |  
|                                                                    | Balance outstanding at end of period                                        |      |   | 279,425 |   |      |   | 72,310  |   |  |   | 234,134 |  
|                                                                    | Weighted average interest rate during the period                            |      |   | 3.51    | % |      |   | 1.30    | % |  |   | 1.41    | %
|                                                                    | Weighted average interest rate at end of period                             |      |   | 4.09    | % |      |   | 1.22    | % |  |   | 1.00    | %
|                                                                    | Weighted average remaining term to maturity at
    end of period (in years) |      |   |        |   |      |   |        |   |  |   |        |  
|Long-term borrowings:                                               |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|FHLB of San Francisco advances:                                     |                                                                             |      |   |         |   |      |   |         |   |  |   |        
|                                                                    | Average balance outstanding                                                 |      | $ | 361,677 |   |      | $ | 299,253 |   |  | $ | 271,688 |  
|                                                                    | Maximum amount outstanding at any month end period                          |      |   | 562,033 |   |      |   | 335,104 |   |  |   | 274,000 |  
|                                                                    | Balance outstanding at end of period                                        |      |   | 562,033 |   |      |   | 334,952 |   |  |   | 271,408 |  
|                                                                    | Weighted average interest rate during the period                            |      |   | 5.15    | % |      |   | 5.00    | % |  |   | 5.15    | %
|                                                                    | Weighted average interest rate at end of period                             |      |   | 4.76    | % |      |   | 4.89    | % |  |   | 5.12    | %
|                                                                    | Weighted average remaining term to maturity at
    end of period (in years) |      |   | 5.0     |   |      |   | 2.9     |   |  |   | 4.0     |  

The Company maintains a secured credit facility
with the FHLB of San Francisco against which the Company may
take advances. The terms of this credit facility require the
Company to maintain in safekeeping with the FHLB of San
Francisco eligible collateral of at least 100% of outstanding
advances. Included in the long-term borrowings were
$226.0 million and $200.0 million of advances maturing
in 2008 and 2010, respectively, with provisions that allow the
FHLB of San Francisco, at their option, to terminate the
advances at quarterly intervals at specified periods ranging
from three to five years beyond the advance dates. Short-term
borrowings with the FHLB totaled $226.0 million at
December 31, 2005. As of December 31, 2005,
$436.5 million of these advances may be terminated at the
option of the FHLB. At December 31, 2005, the advances were
secured with $287.5 million of mortgage-backed securities
and $3.95 billion of loans, and at December 31, 2004,
$309.8 million of mortgage-backed securities and
$1.47 billion of loans secured the advances. At
December 31, 2005, credit availability under this facility
was approximately $1.85 billion.

UCB recorded certain loan sale transactions as
secured borrowings as of December 31, 2005, since these
transactions did not qualify for sales treatment under SFAS
No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities. The
short-term secured borrowings amounted to $19.1 million at
December 31, 2005. Additionally, UCB recorded certain loan
sale transactions as secured borrowings as of June 30,
2005, since these transactions did not qualify for sales
treatment under SFAS No. 140. The short-term and long-term
secured borrowings amounted to $5.4 million and
$45.1 million, respectively, at June 30, 2005. Subsequently
in August 2005, a portion of the loan sales agreements was
amended to permit loan sale accounting treatment. As a result,
$29.6 million of secured borrowings qualified for sales
treatment, resulting in a gain on sale of loans of $233,000.
Additionally in September 2005, UCB exercised its option to
repurchase the remaining $20.8 million of loans related to
the secured borrowings from the loan participants, which
resulted in a loss on extinguishment from secured borrowings of
$89,000.

96



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



14.     Borrowings  (Continued)


The future payments due on borrowings as of
December 31, 2005, are as follows (dollars in thousands):

|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2006                |  | $ | 280,596 | 
|2007                |  |   | 70,411  | 
|2008                |  |   | 243,425 | 
|2009                |  |   | 245     | 
|2010                |  |   | 40,135  | 
|2011 and thereafter |  |   | 206,646 | 
|                    |  |   |         | 
|Total               |  | $ | 841,458 | 
|                    |  |   |         | 

On December 2, 2005, UCBH entered its third
amendment to the unsecured revolving line of credit agreement
with Wells Fargo Bank, N.A. for $20.0 million. Borrowings
under the agreement bear interest at prime less 1.80% with
outstanding borrowings and interest due on December 1,
2006. The Company has not taken an advance under the agreement.
UCBH maintains the unsecured line of credit for contingency
liquidity.

15.     Subordinated
Debentures

UCBH established special purpose trusts in 1997,
2001, 2002 and 2005 for the sole purpose of issuing guaranteed
preferred beneficial interests in its junior subordinated
debentures (Capital Securities) and investing the
proceeds thereof in junior subordinated debentures issued by
UCBH. Payment of distributions out of the monies held by the
trusts and payments on liquidation of the trusts or the
redemption of the Capital Securities are guaranteed by UCBH to
the extent the trusts have funds available. The obligations of
UCBH under the guarantees and the junior subordinated debentures
are subordinate and junior in right of payment to all
indebtedness of UCBH and will be structurally subordinated to
all liabilities and obligations of UCBHs subsidiaries.

Pursuant to an Indenture dated as of
April 17, 1998, (the Indenture), between UCBH
and Wilmington Trust Company (Wilmington), as
Trustee, UCBH on June 27, 2005, redeemed the entire
$30,928,000 aggregate principal amount of the 9.375% junior
subordinated debentures due May 1, 2028 (the
Debentures), issued by UCBH under the Indenture. The
redemption price consisted of the $30,928,000 aggregate
principal amount plus aggregate unpaid interest of $451,000. The
redemption of the Debentures resulted in a loss of
$1.2 million in 2005 from the write-off of the unamortized
Debenture issuance costs and other legal costs.

On September 22, 2005, UCBH issued
$41.2 million in junior subordinated debentures to a newly
formed Delaware trust subsidiary, UCBH Capital Trust V. The
junior subordinated debentures bear interest at a fixed rate of
5.82% until November 23, 2010, after which date the rate
will automatically convert to a floating rate equal to the three
month London Interbank Offered Rate (LIBOR) plus
1.38% and will adjust quarterly until maturity. The junior
subordinated debentures will mature on November 23, 2035,
but may be redeemed by UCBH at its option in whole or in part at
anytime on or after November 23, 2010. Additionally, UCBH
may redeem the junior subordinated debentures at its option in
whole at anytime upon certain events.

Interest expense related to the Capital
Securities was $9.6 million, $8.4 million and
$8.2 million for the years ended December 31, 2005,
2004 and 2003, respectively.

97



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



15.     Subordinated
Debentures  (Continued)


The outstanding Capital Securities issued by each
special purpose trust and the junior subordinated debentures
issued by UCBH to each trust as of December 31, 2005 and
2004, were as follows (dollars in thousands):

|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |          |         |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|---------------------------------------------- |  | -------- | ---------- | ---------- |  | --------- | ------- | ---------- |  | --------- | ------- | ---------- |  | -------- | ------- | ----------- |  | -------- | ------- | ------ |  | ------------ | ---------- |  |  |  | ---------- |  |  | -------------------------------------------------------- | ----- |  | ----- |  | --- |  | ---------- |  | --- | ----------------------- | --------- |  | --------- | 
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |         
|                                               |  |          |            | 2005       |  | 2004      |         |            |  |           |         |            |  |          |         |             |  |         
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |         
|                                               |  |          |            | Capital    |  | Debenture |         | Capital    |  | Debenture |         | Earliest   |  | Stated   |         |             |  | Current  |         | Rate   |  | Payable     
|                                               |  | Issuance |            | Securities |  | Principal |         | Securities |  | Principal |         | Redemption |  | Maturity |         | Annualized  |  | Interest |         | Change |  | Distribution
|Trust Name                                     |  | Date     |            | Amount     |  | Balance   |         | Amount     |  | Balance   |         | Date       |  | Date     |         | Coupon Rate |  | Rate     |         | Date   |  | Dates       
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |          |         |        |  |             
|UCBH Trust Co.                                 |  |          | 4/17/1998  |            |  | $         |        |            |  | $         |        |            |  | $        | 30,000  |             |  | $        | 30,928  |        |  |              | 5/1/2005   |  |  |  | 5/1/2028   |  |  |                                                          | 9.38% |  |       |  | N/A |  |            |  | N/A |                         |           |  | 5/1, 11/1 | 
|UCBH Capital
    Trust I                       |  |          | 11/28/2001 |            |  |           | 6,000   |            |  |           | 6,186   |            |  |          | 6,000   |             |  |          | 6,186   |        |  |              | 12/8/2006  |  |  |  | 12/8/2031  |  |  | 6-month LIBOR + 3.80%                                    |       |  | 8.42% |  |     |  | 12/6/2005  |  |     |                         | 6/8, 12/8 | 
|UCBH Holdings
    Statutory Trust I            |  |          | 3/26/2002  |            |  |           | 10,000  |            |  |           | 10,310  |            |  |          | 10,000  |             |  |          | 10,310  |        |  |              | 3/26/2007  |  |  |  | 3/26/2032  |  |  | 3-month LIBOR + 3.60%                                    |       |  | 8.12% |  |     |  | 12/24/2005 |  |     | 3/26, 6/26, 9/26, 12/26
|UCBH Holdings
    Statutory Trust II           |  |          | 9/26/2002  |            |  |           | 25,000  |            |  |           | 25,774  |            |  |          | 25,000  |             |  |          | 25,774  |        |  |              | 9/26/2007  |  |  |  | 9/26/2032  |  |  | 3-month LIBOR + 3.40%                                    |       |  | 7.92% |  |     |  | 12/24/2005 |  |     | 3/26, 6/26, 9/26, 12/26
|UCBH Capital Trust II                          |  |          | 10/15/2002 |            |  |           | 20,000  |            |  |           | 20,619  |            |  |          | 20,000  |             |  |          | 20,619  |        |  |              | 11/7/2007  |  |  |  | 11/7/2032  |  |  | 3-month LIBOR + 3.45%                                    |       |  | 7.74% |  |     |  | 11/5/2005  |  |     | 2/7, 5/7, 8/7, 11/7    
|UCBH Capital Trust III                         |  |          | 10/15/2002 |            |  |           | 18,000  |            |  |           | 18,557  |            |  |          | 18,000  |             |  |          | 18,557  |        |  |              | 11/7/2007  |  |  |  | 11/7/2032  |  |  | 3-month LIBOR + 3.66%                                    |       |  | 7.95% |  |     |  | 11/5/2005  |  |     | 2/7, 5/7, 8/7, 11/7    
|UCBH Capital Trust IV                          |  |          | 10/29/2002 |            |  |           | 27,000  |            |  |           | 27,836  |            |  |          | 27,000  |             |  |          | 27,836  |        |  |              | 11/7/2007  |  |  |  | 11/7/2032  |  |  | 3-month LIBOR + 3.45%                                    |       |  | 7.74% |  |     |  | 11/5/2005  |  |     | 2/7, 5/7, 8/7, 11/7    
|UCBH Capital Trust V                           |  |          | 9/22/2005  |            |  |           | 40,000  |            |  |           | 41,238  |            |  |          |        |             |  |          |        |        |  |              | 11/23/2010 |  |  |  | 11/23/2035 |  |  | 5.82% until 11/23/2010, 3-month LIBOR + 1.38% thereafter |       |  | 5.82% |  |     |  | N/A        |  |     | 2/23, 5/23, 8/23, 11/23
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |          |         |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|Total Balance                                  |  |          |            |            |  |           | 146,000 |            |  |           | 150,520 |            |  |          | 136,000 |             |  |          | 140,210 |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|Less: UCBH Holdings, Inc. Investment in Trusts |  |          |            |            |  |           |        |            |  |           | (4,520  | )          |  |          |        |             |  |          | (4,210  | )      |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |          |         |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|Net Balance                                    |  |          |            |            |  | $         | 146,000 |            |  | $         | 146,000 |            |  | $        | 136,000 |             |  | $        | 136,000 |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 
|                                               |  |          |            |            |  |           |         |            |  |           |         |            |  |          |         |             |  |          |         |        |  |              |            |  |  |  |            |  |  |                                                          |       |  |       |  |     |  |            |  |     |                         |           |  |           | 

16.     Minimum
Regulatory Capital Requirements

The Company and UCB (on a consolidated basis) are
subject to various regulatory requirements administered by the
federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory- and possibly
additional discretionary-actions by the banking regulators that,
if undertaken, could have a direct material effect on the
Companys and UCBs financial statements. Under
capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Company and UCB must meet specific
capital guidelines that involve quantitative measures of their
assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The capital
amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings,
and other factors. Prompt Corrective Action provisions are not
applicable to bank holding companies.

Quantitative measures established by regulation
to ensure capital adequacy require the Company and UCB to
maintain minimum amounts and ratios (set forth in the table
below) of total and Tier 1 capital (as

98



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



16.     Minimum
Regulatory Capital
Requirements  (Continued)


defined in the regulations) to risk-weighted
assets (as defined) and of Tier 1 capital (as defined) to
average assets (as defined). Management believes, as of
December 31, 2005 and 2004, that the Company and UCB meet
all capital adequacy requirements to which they are subject.

As of December 31, 2005 and 2004, the most
recent notification from the Federal Deposit Insurance
Corporation categorized UCB as well capitalized under the
regulatory framework for Prompt Corrective Action. To be
categorized as well capitalized, UCB must maintain minimum total
risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set
forth in the following table. There are no conditions or events
since the notification that management believes have changed
UCBs category. The Companys and UCBs actual
capital amounts and ratios as of December 31, 2005 and
2004, are also presented in the following table (dollars in
thousands):

|                                        |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |       |  
|--------------------------------------- | -------------------------------------- | ------ | - | ----------------- |  | ----------------- |  | ----------------- | - | ---------- | - | ------- |  |  |  | ---- | - |  | - | ------- |  |  |  | ----- | -
|                                        |                                        |        |   |                   |  |                   |  |                   |   |           
|                                        |                                        |        |   |                   |  |                   |  |                   |   | To Be Well
|                                        |                                        |        |   |                   |  |                   |  | Capitalized Under
|                                        |                                        |        |   | For Capital       |  | Prompt Corrective
|                                        |                                        | Actual |   | Adequacy Purposes |  | Action Provisions
|                                        |                                        |        |   |                   |  |                  
|                                        |                                        | Amount |   | Ratio             |  | Amount            |  | Ratio             |   | Amount     |   | Ratio  
|                                        |                                        |        |   |                   |  |                   |  |                   |   |            |   |        
|As of December 31, 2005(1)              |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|Total capital to risk-weighted assets:  |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 715,666           |  |                   |  | 11.33             | % |            | $ | 505,223 |  |  |  | 8.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 692,770           |  |                   |  | 10.98             |   |            |   | 504,717 |  |  |  | 8.00 |   |  | $ | 630,897 |  |  |  | 10.00 | %
|Tier 1 capital to risk-weighted assets: |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 647,871           |  |                   |  | 10.26             | % |            | $ | 252,612 |  |  |  | 4.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 624,975           |  |                   |  | 9.91              |   |            |   | 252,359 |  |  |  | 4.00 |   |  | $ | 378,538 |  |  |  | 6.00  | %
|Tier 1 capital to average assets:       |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 647,871           |  |                   |  | 8.56              | % |            | $ | 302,825 |  |  |  | 4.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 624,975           |  |                   |  | 8.26              |   |            |   | 302,643 |  |  |  | 4.00 |   |  | $ | 378,304 |  |  |  | 5.00  | %
|                                       
|As of December 31, 2004                 |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | Total capital to risk-weighted assets: |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |       |  
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 604,805           |  |                   |  | 13.23             | % |            | $ | 365,825 |  |  |  | 8.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 578,529           |  |                   |  | 12.67             |   |            |   | 365,406 |  |  |  | 8.00 |   |  | $ | 456,758 |  |  |  | 10.00 | %
|Tier 1 capital to risk-weighted assets: |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 547,605           |  |                   |  | 11.98             | % |            | $ | 182,912 |  |  |  | 4.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 521,393           |  |                   |  | 11.42             |   |            |   | 182,703 |  |  |  | 4.00 |   |  | $ | 274,055 |  |  |  | 6.00  | %
|Tier 1 capital to average assets:       |                                        |        |   |                   |  |                   |  |                   |   |            |   |         |  |  |  |      |   |  |   |         |  |  |  |      
|                                        | UCBH Holdings, Inc. and subsidiaries   |        | $ | 547,605           |  |                   |  | 8.92              | % |            | $ | 245,672 |  |  |  | 4.00 | % |  |   | N/A     |  |  |  | N/A   |  
|                                        | United Commercial Bank                 |        |   | 521,393           |  |                   |  | 8.49              |   |            |   | 245,518 |  |  |  | 4.00 |   |  | $ | 306,897 |  |  |  | 5.00  | %



---



|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the effects of the acquisitions of
    Pacifica Bancorp, Inc. and Asian American Bank & Trust
    Company during 2005.

99



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



16.     Minimum
Regulatory Capital
Requirements  (Continued)


The reconciliation of capital under GAAP with
regulatory capital at December 31, 2005 and 2004, was as
follows (dollars in thousands):

|                               |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |          |  
|------------------------------ | --------------------------------------------------------------------- | -------------- | ------- | ------------------ | - | -------------- | ------- | ---------- | - | - | ------- | -------- | - | - | ------- | -------- | -
|                               |                                                                       |                |         |                   
|                               |                                                                       | Tier 1 Capital |         | Risk-Based Capital
|                               |                                                                       |                |         |                   
|                               |                                                                       | UCBH           |         |                    |   | UCBH           |         |           
|                               |                                                                       | Holdings, Inc. |         | United             |   | Holdings, Inc. |         | United    
|                               |                                                                       | and            |         | Commercial         |   | and            |         | Commercial
|                               |                                                                       | Subsidiaries   |         | Bank               |   | Subsidiaries   |         | Bank      
|                               |                                                                       |                |         |                    |   |                |         |           
|As of December 31, 2005:       |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|GAAP Capital                   |                                                                       | $              | 603,514 |                    |   | $              | 726,618 |            |   | $ | 603,514 |          |   | $ | 726,618 |         
|Nonallowable components:       |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|                               | Unrealized losses on securities available for sale                    |                |         | 19,986             |   |                |         | 19,986     |   |   |         | 19,986   |   |   |         | 19,986   |  
|                               | Goodwill and other disallowed intangibles                             |                |         | (121,629           | ) |                |         | (121,629   | ) |   |         | (121,629 | ) |   |         | (121,629 | )
|                               | Mortgage servicing rights  excess                                    |                |         |                   |   |                |         |           |   |   |         |         |   |   |         |         |  
|Additional capital components: |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|                               | Subordinated debentures                                               |                |         | 146,000            |   |                |         |           |   |   |         | 146,000  |   |   |         |         |  
|                               | Allowance for loan losses  limited to
    1.25% of risk-based assets |                |         |                   |   |                |         |           |   |   |         | 67,795   |   |   |         | 67,795   |  
|                               |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|Regulatory capital             |                                                                       | $              | 647,871 |                    |   | $              | 624,975 |            |   | $ | 715,666 |          |   | $ | 692,770 |         
|                               |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|As of December 31, 2004:       |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|GAAP Capital                   |                                                                       | $              | 484,012 |                    |   | $              | 593,800 |            |   | $ | 484,012 |          |   | $ | 593,800 |         
|Nonallowable components:       |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|                               | Unrealized losses on securities available for sale                    |                |         | 6,498              |   |                |         | 6,498      |   |   |         | 6,498    |   |   |         | 6,498    |  
|                               | Goodwill and other disallowed intangibles                             |                |         | (78,130            | ) |                |         | (78,130    | ) |   |         | (78,130  | ) |   |         | (78,130  | )
|                               | Mortgage servicing rights  excess                                    |                |         | (775               | ) |                |         | (775       | ) |   |         | (775     | ) |   |         | (775     | )
|Additional capital components: |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|                               | Subordinated debentures                                               |                |         | 136,000            |   |                |         |           |   |   |         | 136,000  |   |   |         |         |  
|                               | Allowance for loan losses  limited to
    1.25% of risk-based assets |                |         |                   |   |                |         |           |   |   |         | 57,200   |   |   |         | 57,136   |  
|                               |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         
|Regulatory capital             |                                                                       | $              | 547,605 |                    |   | $              | 521,393 |            |   | $ | 604,805 |          |   | $ | 578,529 |         
|                               |                                                                       |                |         |                    |   |                |         |            |   |   |         |          |   |   |         |         

Dividends declared by UCB in any calendar year
may not, without the approval of the appropriate regulator,
exceed its net earnings for that year combined with its net
earnings less dividends paid for the preceding two years. At
December 31, 2005, UCB had approximately
$244.9 million available for the payment of dividends under
the foregoing restrictions. Following its initial public
offering in 1998, the UCBH commenced paying dividends in 2000.
For the years ended December 31, 2005, 2004 and 2003, UCBH
declared cash dividends totaling $0.10 per share, $0.08 per
share and $0.06 per share, respectively.

17.     Earnings Per
Share

On January 27, 2005, UCBH declared a
two-for-one stock split in the form of a stock dividend to the
stockholders of record as of March 31, 2005, and
distributed the stock dividend on April 12, 2005.
Accordingly, basic and diluted earnings per share on the
consolidated statements of operations for the years ended
December 31, 2004 and 2003, have been adjusted to reflect
the impact of the stock split. Additionally, the number of
issued and outstanding shares of UCBHs common stock on the
consolidated balance sheet at December 31, 2004, takes into
account the stock split.

100



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                     
|--- | ------------------------------------
|17. | Earnings Per Share 
    (Continued)

The antidilutive outstanding stock options for
2,729,467, 25,574 and 780,000 shares of UCBH common stock for
the years ended December 31, 2005, 2004 and 2003,
respectively, were excluded from the computation of diluted
earnings per share as a result of the stock options
exercise price being greater than the average market price of
the UCBH common stock for the period. The reconciliation of the
numerators and denominators of basic and diluted earnings per
share for the years ended December 31, 2005, 2004 and 2003,
is as follows (dollars in thousands, except shares and per share
amounts):

|                              |  |             |        |               |  |           |            |  |  |   |      | 
|----------------------------- |  | ----------- | ------ | ------------- |  | --------- | ---------- |  |  | - | ---- | 
|                              |  | Income      |        | Shares        |  | Per Share
|                              |  | (Numerator) |        | (Denominator) |  | Amount   
|                              |  |             |        |               |  |          
|Year ended December 31, 2005: |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  basic            |  | $           | 97,826 |               |  |           | 91,934,570 |  |  | $ | 1.06 | 
|Effect of stock options       |  |             |       |               |  |           | 3,765,241  |  |  |   |      | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  diluted          |  | $           | 97,826 |               |  |           | 95,699,811 |  |  | $ | 1.02 | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 
|Year ended December 31, 2004: |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  basic            |  | $           | 85,603 |               |  |           | 90,522,594 |  |  | $ | 0.95 | 
|Effect of stock options       |  |             |       |               |  |           | 4,720,028  |  |  |   |      | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  diluted          |  | $           | 85,603 |               |  |           | 95,242,622 |  |  | $ | 0.90 | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 
|Year ended December 31, 2003: |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  basic            |  | $           | 64,638 |               |  |           | 87,170,432 |  |  | $ | 0.74 | 
|Effect of stock options       |  |             |       |               |  |           | 4,292,110  |  |  |   |      | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 
|Net income  diluted          |  | $           | 64,638 |               |  |           | 91,462,542 |  |  | $ | 0.71 | 
|                              |  |             |        |               |  |           |            |  |  |   |      | 



|    |                       
|--- | ----------------------
|18. | Employee Benefit Plans

Stock Option
Plan

In May 1998, UCBH adopted a Stock Option Plan
(the Plan), which provides for the granting of stock
options to eligible officers, employees and directors of the
Company. Pursuant to amendments under the Plan, as of
December 31, 2005, UCBH had 23,657,648 shares reserved for
issuance. At the time of grant, the stock options are
exercisable for ten years following the option grant date and
vest ratably over a three-year period.

101



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                         
|--- | ----------------------------------------
|18. | Employee Benefit Plans 
    (Continued)

The stock option activity for the years ended
December 31, 2005, 2004 and 2003, was as follows:

|                                                                   |  |           |            |                |  |           |       |                |  |           |            |                |  |   |       |  |  |  |            |   |  |   |       | 
|------------------------------------------------------------------ |  | --------- | ---------- | -------------- |  | --------- | ----- | -------------- |  | --------- | ---------- | -------------- |  | - | ----- |  |  |  | ---------- | - |  | - | ----- | 
|                                                                   |  |           |            |                |  |          
|                                                                   |  | 2005      |            | 2004           |  | 2003     
|                                                                   |  |           |            |                |  |          
|                                                                   |  |           |            | Weighted       |  |           |       | Weighted       |  |           |            | Weighted      
|                                                                   |  | Number of |            | Average        |  | Number of |       | Average        |  | Number of |            | Average       
|                                                                   |  | Shares    |            | Exercise Price |  | Shares    |       | Exercise Price |  | Shares    |            | Exercise Price
|                                                                   |  |           |            |                |  |           |       |                |  |           |            |               
|Options outstanding, beginning of year                             |  |           | 14,042,318 |                |  | $         | 11.23 |                |  |           | 9,910,372  |                |  | $ | 6.54  |  |  |  | 9,976,412  |   |  | $ | 5.02  | 
|Granted                                                            |  |           | 1,552,300  |                |  |           | 19.09 |                |  |           | 5,504,100  |                |  |   | 18.93 |  |  |  | 1,596,900  |   |  |   | 13.81 | 
|Exercised                                                          |  |           | (786,614   | )              |  |           | 4.91  |                |  |           | (1,055,068 | )              |  |   | 5.57  |  |  |  | (1,458,286 | ) |  |   | 3.73  | 
|Canceled                                                           |  |           | (347,878   | )              |  |           | 18.31 |                |  |           | (317,086   | )              |  |   | 17.35 |  |  |  | (204,654   | ) |  |   | 9.47  | 
|Expired                                                            |  |           | (24,106    | )              |  |           | 17.94 |                |  |           |           |                |  |   |      |  |  |  |           |   |  |   |       | 
|                                                                   |  |           |            |                |  |           |       |                |  |           |            |                |  |   |       |  |  |  |            |   |  |   |       | 
|Options outstanding, end of year                                   |  |           | 14,436,020 |                |  |           | 12.23 |                |  |           | 14,042,318 |                |  |   | 11.22 |  |  |  | 9,910,372  |   |  |   | 6.54  | 
|                                                                   |  |           |            |                |  |           |       |                |  |           |            |                |  |   |       |  |  |  |            |   |  |   |       | 
|Shares exercisable end of year                                     |  |           | 14,284,020 |                |  |           | 12.18 |                |  |           | 7,549,084  |                |  |   | 5.68  |  |  |  | 5,955,606  |   |  |   | 4.62  | 
|Weighted average fair value of options granted
    during the year |  |           |            |                |  |           | 7.59  |                |  |           |            |                |  |   | 6.62  |  |  |  |            |   |  |   | 3.85  | 
|Market value of stock at end of year                               |  |           |            |                |  | $         | 17.88 |                |  |           |            |                |  | $ | 22.91 |  |  |  |            |   |  | $ | 19.49 | 

The range of exercise prices for options
outstanding at December 31, 2005, is as follows:

|               |  |             |            |                  |  |                  |       |             |  |                  |      |  |  |  |            |  |  |   |       | 
|-------------- |  | ----------- | ---------- | ---------------- |  | ---------------- | ----- | ----------- |  | ---------------- | ---- |  |  |  | ---------- |  |  | - | ----- | 
|               |  | Options     |            | Weighted Average |  | Weighted Average |       | Options     |  | Weighted Average
|Exercise Price |  | Outstanding |            | Exercise Price   |  | Remaining Life   |       | Exercisable |  | Exercise Price  
|               |  |             |            |                  |  |                  |       |             |  |                 
|$1.88-$2.25    |  |             | 1,562,066  |                  |  | $                | 1.88  |             |  |                  | 2.89 |  |  |  | 1,562,066  |  |  | $ | 1.88  | 
|$2.26-$4.51    |  |             | 244,156    |                  |  |                  | 3.36  |             |  |                  | 2.95 |  |  |  | 244,156    |  |  |   | 3.36  | 
|$4.52-$6.77    |  |             | 3,992,984  |                  |  |                  | 6.15  |             |  |                  | 5.30 |  |  |  | 3,992,984  |  |  |   | 6.15  | 
|$6.78-$9.03    |  |             | 380,076    |                  |  |                  | 7.22  |             |  |                  | 4.40 |  |  |  | 380,076    |  |  |   | 7.22  | 
|$9.04-$11.29   |  |             | 717,201    |                  |  |                  | 10.00 |             |  |                  | 6.55 |  |  |  | 717,201    |  |  |   | 10.00 | 
|$11.30-$13.55  |  |             | 356,154    |                  |  |                  | 12.38 |             |  |                  | 7.06 |  |  |  | 356,154    |  |  |   | 12.38 | 
|$13.56-$15.81  |  |             | 410,831    |                  |  |                  | 14.82 |             |  |                  | 7.49 |  |  |  | 410,831    |  |  |   | 14.82 | 
|$15.82-$18.07  |  |             | 750,203    |                  |  |                  | 17.00 |             |  |                  | 8.70 |  |  |  | 653,203    |  |  |   | 16.96 | 
|$18.08-$20.33  |  |             | 5,282,549  |                  |  |                  | 18.81 |             |  |                  | 8.47 |  |  |  | 5,227,549  |  |  |   | 18.82 | 
|$20.33-$22.59  |  |             | 739,800    |                  |  |                  | 21.25 |             |  |                  | 9.04 |  |  |  | 739,800    |  |  |   | 21.25 | 
|               |  |             |            |                  |  |                  |       |             |  |                  |      |  |  |  |            |  |  |   |       | 
|Total/Average  |  |             | 14,436,020 |                  |  | $                | 12.23 |             |  |                  | 6.67 |  |  |  | 14,284,020 |  |  | $ | 12.18 | 
|               |  |             |            |                  |  |                  |       |             |  |                  |      |  |  |  |            |  |  |   |       | 

United
Commercial Bank Savings Plus Plan

UCB has a 401(k) tax deferred savings plus plan
(the 401(k) Plan) under which eligible employees may
elect to defer a portion of their salary (up to 15%) as a
contribution to the 401(k) Plan. UCB matches the employees
contributions at a rate set by UCBs Board of Directors.
The 401(k) Plan provides for employer contributions of
50 percent of employee contributions for all employees for
the years ended December 31, 2005, 2004 and 2003, with a
maximum contribution limit of $2,000 per participant. The

102



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                         
|--- | ----------------------------------------
|18. | Employee Benefit Plans 
    (Continued)

matching contribution vests ratably over the
first five years of service. For the years ended
December 31, 2005, 2004 and 2003, UCB contributed
$1.3 million, $1.0 million and $899,000, respectively,
to the 401(k) Plan.

In connection with the First Continental Bank and
Bank of Canton of California acquisitions, former First
Continental Bank and Bank of Canton of California employees, who
were eligible to participate, were able to enroll in the 401(k)
Plan as of July 12, 2003 and January 1, 2003,
respectively. In connection with the Pacifica and AABT
acquisitions, former Pacifica and AABT employees, who are
eligible to participate, will be able to enroll in the 401(k)
Plan on July 1, 2006.



|    |                                  
|--- | ---------------------------------
|19. | Federal and State Taxes on Income

The components of income tax expense by
jurisdiction for the years ended December 31, 2005, 2004
and 2003, were as follows (dollars in thousands):

|                                     |         |      |        |        |   |      |        |        |  |   |        |        | 
|------------------------------------ | ------- | ---- | ------ | ------ | - | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                     |         | 2005 |        | 2004   |   | 2003
|                                     |         |      |        |        |   |     
|Current tax expense:                 |         |      |        |        |   |      |        |        |  |   |        |       
|                                     | Federal |      | $      | 40,227 |   |      | $      | 38,115 |  |   | $      | 21,685 | 
|                                     | State   |      |        | 10,817 |   |      |        | 8,001  |  |   |        | 4,238  | 
|                                     |         |      |        |        |   |      |        |        |  |   |        |       
|Total current tax expense            |         |      | 51,044 |        |   |      | 46,116 |        |  |   | 25,923 |       
|                                     |         |      |        |        |   |      |        |        |  |   |        |       
|Deferred tax (benefit) expense:      |         |      |        |        |   |      |        |        |  |   |        |       
|                                     | Federal |      |        | (4,374 | ) |      |        | 2,806  |  |   |        | 10,542 | 
|                                     | State   |      |        | (326   | ) |      |        | 479    |  |   |        | 473    | 
|                                     |         |      |        |        |   |      |        |        |  |   |        |       
|Total deferred tax (benefit) expense |         |      | (4,700 | )      |   |      | 3,285  |        |  |   | 11,015 |       
|                                     |         |      |        |        |   |      |        |        |  |   |        |       
|Income tax expense                   |         | $    | 46,344 |        |   | $    | 49,401 |        |  | $ | 36,938 |       
|                                     |         |      |        |        |   |      |        |        |  |   |        |       

The components of deferred tax liabilities
(assets) at December 31, 2005 and 2004, were as
follows (dollars in thousands):

|                               |                                                    |      |         |         |   |   |         |         |  
|------------------------------ | -------------------------------------------------- | ---- | ------- | ------- | - | - | ------- | ------- | -
|                               |                                                    | 2005 |         | 2004   
|                               |                                                    |      |         |        
|Deferred tax liabilities:      |                                                    |      |         |         |   |   |         |        
|                               | Fixed asset basis differences                      |      | $       | 1,731   |   |   | $       | 1,582   |  
|                               | Deferred loan fees                                 |      |         | 8,246   |   |   |         | 7,248   |  
|                               | FHLB dividends                                     |      |         | 3,554   |   |   |         | 3,149   |  
|                               | Purchase accounting adjustments                    |      |         | 27,378  |   |   |         | 24,692  |  
|                               | Unremitted earnings                                |      |         |        |   |   |         | 4,586   |  
|                               | Other                                              |      |         | 3,733   |   |   |         | 3,743   |  
|                               |                                                    |      |         |         |   |   |         |        
|Total deferred tax liabilities |                                                    |      | 44,642  |         |   |   | 45,000  |        
|                               |                                                    |      |         |         |   |   |         |        
|Deferred tax assets:           |                                                    |      |         |         |   |   |         |        
|                               | Loan and OREO loss allowances                      |      |         | (21,909 | ) |   |         | (21,429 | )
|                               | Market value adjustments on certain securities     |      |         | (904    | ) |   |         | (2,378  | )
|                               | Unrealized losses on available for sale securities |      |         | (10,846 | ) |   |         | (3,499  | )
|                               | State taxes                                        |      |         | (3,705  | ) |   |         | (953    | )
|                               | Compensation and benefits                          |      |         | (2,398  | ) |   |         | (1,204  | )
|                               | Other                                              |      |         | (486    | ) |   |         | (379    | )
|                               |                                                    |      |         |         |   |   |         |        
|Total deferred tax assets      |                                                    |      | (40,248 | )       |   |   | (29,842 | )      
|                               |                                                    |      |         |         |   |   |         |        
|Net deferred tax liabilities   |                                                    | $    | 4,394   |         |   | $ | 15,158  |        
|                               |                                                    |      |         |         |   |   |         |        

103



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                    
|--- | ---------------------------------------------------
|19. | Federal and State Taxes on
    Income  (Continued)

The components for deferred tax liabilities
(assets) by jurisdiction at December 31, 2005 and
2004, were as follows (dollars in thousands):

|                                   |                     |      |       |       |  |   |        |        | 
|---------------------------------- | ------------------- | ---- | ----- | ----- |  | - | ------ | ------ | 
|                                   |                     | 2005 |       | 2004 
|                                   |                     |      |       |      
|Net deferred liabilities (assets): |                     |      |       |       |  |   |        |       
|                                   | Federal income tax  |      | $     | 4,159 |  |   | $      | 13,035 | 
|                                   | State franchise tax |      |       | 235   |  |   |        | 2,123  | 
|                                   |                     |      |       |       |  |   |        |       
|Net deferred tax liabilities       |                     | $    | 4,394 |       |  | $ | 15,158 |       
|                                   |                     |      |       |       |  |   |        |       

The reconciliation of the statutory income tax
rate to the consolidated effective income tax rate for the years
ended December 31, 2005, 2004 and 2003, was as follows:

|                                                                |                                                   |      |      |      |   |      |      |      |   |  |      |      |  
|--------------------------------------------------------------- | ------------------------------------------------- | ---- | ---- | ---- | - | ---- | ---- | ---- | - |  | ---- | ---- | -
|                                                                |                                                   | 2005 |      | 2004 |   | 2003
|                                                                |                                                   |      |      |      |   |     
|Federal income tax rate                                         |                                                   |      | 35.0 | %    |   |      | 35.0 | %    |   |  | 35.0 | %   
|State franchise tax rate, net of federal income
    tax effects |                                                   |      | 7.0  |      |   |      | 7.0  |      |   |  | 7.0  |     
|                                                                |                                                   |      |      |      |   |      |      |      |   |  |      |     
|Statutory income tax rate                                       |                                                   |      | 42.0 |      |   |      | 42.0 |      |   |  | 42.0 |     
|                                                                |                                                   |      |      |      |   |      |      |      |   |  |      |     
|Increase (reduction) in tax rate resulting
    from:            |                                                   |      |      |      |   |      |      |      |   |  |      |     
|                                                                | California and federal tax credits and incentives |      |      | (3.2 | ) |      |      | (3.2 | ) |  |      | (3.8 | )
|                                                                | Tax exempt income                                 |      |      | (2.3 | ) |      |      | (2.3 | ) |  |      | (2.4 | )
|                                                                | Section 965 repatriation                          |      |      | (2.7 | ) |      |      |     |   |  |      |     |  
|                                                                | Other, net                                        |      |      | (1.7 | ) |      |      | 0.1  |   |  |      | 0.6  |  
|                                                                |                                                   |      |      |      |   |      |      |      |   |  |      |     
|Effective income tax rate                                       |                                                   |      | 32.1 | %    |   |      | 36.6 | %    |   |  | 36.4 | %   
|                                                                |                                                   |      |      |      |   |      |      |      |   |  |      |     

The years 2002 through 2004 remain open for
Internal Revenue Service audit purposes and the years 2001
through 2004 remain open for California Franchise Tax Board
purposes. The 2005 Federal and State tax returns have not yet
been filed.

On October 22, 2004, the President of the
United States of America signed into law AJCA. The AJCA allows
companies to repatriate foreign earnings at an effective tax
rate of 5.25% upon satisfaction of certain conditions. Such
repatriations must occur in either an enterprises last
year that began before the enactment date, or the first tax year
that begins during the one-year period beginning on the date of
enactment.

During the three months ended June 30, 2005,
the Company elected to repatriate approximately
$26.7 million in previously unremitted foreign earnings.
During the three months ended December 31, 2005, the
Company repatriated $26.7 million in previously unremitted
foreign earnings. As a result, the Company recorded a current
taxes payable on such previously unremitted foreign earnings of
approximately $703,000. In addition, the Company has recorded a
reduction to deferred tax liabilities of approximately
$4.6 million as a result of the reversal of the deferred
tax liability related to unremitted earnings of its foreign
subsidiary. This results in a net tax benefit of approximately
$3.9 million.

The Company believes it has adequately provided
for income tax issues not yet resolved with federal, foreign,
state and local tax authorities. Although not probable, the most
adverse resolution of these federal, foreign, state and local
issues could result in additional charges to earnings in future
periods in addition to the amount currently provided. Based upon
a consideration of all relevant facts and circumstances, the
Company does not believe the ultimate resolution of tax issues
for all open periods will have a material effect upon results of
operations or financial condition.

104



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                             
|--- | ----------------------------
|20. | Concentration of Credit Risk

Financial instruments that potentially subject
the Company to concentrations of credit risk consist primarily
of loans, investments and certain other derivative and off
balance sheet contracts. At December 31, 2005, UCB had
91.0% of its loans held in portfolio located in California.
Additionally, UCB had 65.3% of its loans held in portfolio in
commercial nonresidential and multifamily real estate loans. No
borrower or obligor accounted for more than 2.0% of loans. At
December 31, 2005, mortgage-backed securities were 70.2% of
UCBs investment portfolio. At December 31, 2005, UCB
had 51.6% and 34.5% of its customer deposits located in Northern
and Southern California, respectively. One state government
entity contributed 6.64% of total deposits at December 31,
2005. No other customer accounted for more than 2.0% of deposits.



|    |                           
|--- | --------------------------
|21. | Related Party Transactions

Several 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
$7.2 million and $38.1 million at December 31,
2005 and 2004, respectively. Additionally, UCB has adopted a
policy that prohibits loans or extensions of credit to Directors
and affiliated persons of the Company, and their related
interests.



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|22. | Derivative Financial Instruments and Financial
    Instruments with Off-Balance-Sheet Risk

UCB is a party to derivative financial
instruments and financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing
needs of its customers and to reduce its own exposure to
fluctuations in interest rates. UCB does not hold or issue
financial instruments for trading purposes. Financial
instruments in the normal course of business include commitments
to extend and purchase credit, forward commitments to sell
loans, letters of credit, foreign exchange contracts, and
interest-rate caps. Those instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of
the amount recognized in the statement of financial position.
The contract or notional amounts of those instruments reflect
the extent of involvement UCB has in particular classes of
financial instruments.

UCBs exposure to credit loss in the event
of nonperformance by the other party to the financial instrument
for commitments to extend credit is represented by the
contractual or notional amount of those instruments. UCB uses
the same credit policies in making commitments and conditional
obligations as it does for on-balance-sheet instruments. For
interest-rate swap and cap transactions and forward commitments
to sell loans, the contract or notional amounts do not represent
exposure to credit loss. UCB manages the credit risk of its
interest-rate swap and cap agreements, foreign exchange
contracts, and forward commitments to sell loans through credit
approvals, limits, and monitoring procedures. UCB does not
require collateral or other security to support interest-rate
swap transactions with credit risk.

105



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|22. | Derivative Financial Instruments and Financial
    Instruments with Off-Balance-Sheet
    Risk  (Continued)

The contractual or notional amounts of derivative
financial instruments and financial instruments with
off-balance-sheet risk as of December 31, 2005 and 2004,
were as follows (dollars in thousands):

|                                                                        |                               |                                           |          |      |         |  |          |   |         | 
|----------------------------------------------------------------------- | ----------------------------- | ----------------------------------------- | -------- | ---- | ------- |  | -------- | - | ------- | 
|                                                                        |                               | 2005                                      |          | 2004
|                                                                        |                               |                                           |          |     
|Financial instruments whose contract amounts
    represent credit risk: |                               |                                           |          |      |         |  |          |  
|                                                                        | Commitments to extend credit: |                                           |          |      |         |  |          |   |        
|                                                                        |                               | Consumer (including residential mortgage) |          | $    | 88,407  |  |          | $ | 75,558  | 
|                                                                        |                               | Commercial (excluding construction)       |          |      | 672,662 |  |          |   | 451,946 | 
|                                                                        |                               | Construction                              |          |      | 539,955 |  |          |   | 260,441 | 
|                                                                        |                               | Letters of credit                         |          |      | 90,595  |  |          |   | 44,752  | 
|Foreign exchange contracts receivable                                   |                               |                                           | (217,827 | )    |         |  | (176,644 | )
|Foreign exchange contracts payable                                      |                               |                                           | 216,892  |      |         |  | 175,954  |  
|Put options to buy                                                      |                               |                                           | 11,269   |      |         |  | 18,683   |  
|Put options to sell                                                     |                               |                                           | (11,269  | )    |         |  | (18,683  | )
|Unfunded CRA investment commitments                                     |                               |                                           | 4,760    |      |         |  | 8,331    |  



| |            
| | -----------
| | Commitments

Commitments to extend credit are agreements to
lend to a customer provided there are no violations of any
conditions established in the contract. Commitments generally
have fixed expiration dates or other termination clauses. UCB
evaluates each customers credit worthiness on a
case-by-case basis. The amount of collateral obtained, if deemed
necessary by UCB upon extension of credit, is based on
managements credit evaluation of the customer. Collateral
held generally includes residential or commercial real estate,
accounts receivable, or other assets.

Letters of credit are conditional commitments
issued by UCB to guarantee the performance of a customer to a
third party. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending
loan facilities to customers. These letters of credit are
usually secured by the customers inventories or by
deposits held at UCB.

Foreign exchange contracts are contracts to
purchase or sell currencies in the over-the-counter market. Such
contracts can be either for immediate or forward delivery.
Entering into foreign exchange contract agreements involves the
risk of dealing with counterparties and their ability to meet
the terms of the contracts. UCB purchases or sells foreign
exchange contracts in order to hedge a balance sheet or
off-balance-sheet foreign exchange position. Additionally, UCB
purchases and sells foreign exchange contracts for customers, as
long as the foreign exchange risk is fully hedged with an
offsetting position.

Interest-rate caps are interest rate protection
instruments that involve the payment from the seller to the
buyer of an interest differential. This differential represents
the difference between current interest rates and an agreed upon
rate applied to a notional principal amount. Entering into
interest-rate cap agreements involves the risk of dealing with
counterparties and their ability to meet the terms of the
contracts. Notional principal amounts often are used to express
the volume of these transactions, but the amounts potentially
subject to credit risk are much smaller. UCB may be a purchaser
of interest-rate caps and swaps. At December 31, 2005 and
2004, no interest-rate caps or swaps were outstanding. For the
years ended December 31, 2005 and 2004, interest-rate caps
and swaps impact to interest income was negligible.

Put options to buy are part of currency-linked
deposits with other financial institutions. At the option of
these third parties, UCB is required to buy a currency at a
predefined exchange rate with another currency.

106



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|22. | Derivative Financial Instruments and Financial
    Instruments with Off-Balance-Sheet
    Risk  (Continued)

Put options to sell are part of currency-linked
deposits that customers have placed with UCB. At the option of
UCB, the customer is obligated to buy a currency at a predefined
exchange rate with another currency. The put options to buy and
put options to sell, along with the related currency-linked
deposits, offset each other.

UCB has CRA investments that may have unfunded
commitments that UCB is obligated to make. Fundings are made
upon request by the underlying investee companies based on
original contractual commitment amounts.



|    |                                           
|--- | ------------------------------------------
|23. | Commitments and Contingent
    Liabilities



| |                  
| | -----------------
| | Lease Commitments

The Company leases various premises and equipment
under noncancellable operating leases, many of which contain
renewal options and some of which contain escalation clauses.
Future minimum rental payments due each year under operating
leases that have initial or remaining noncancellable lease terms
in excess of one year as of December 31, 2005, are as
follows (dollars in thousands):

|                    |       |   |        |        | 
|------------------- | ----- | - | ------ | ------ | 
|2006                |       | $ | 8,744  |       
|2007                |       |   | 8,133  |       
|2008                |       |   | 6,673  |       
|2009                |       |   | 5,035  |       
|2010                |       |   | 4,537  |       
|2011 and thereafter |       |   | 15,607 |       
|                    |       |   |        |       
|                    | Total |   | $      | 48,729 | 
|                    |       |   |        |       

The Company determined that recognition of rent
expense for leases with rent holidays or leases with rent
escalation clauses was not recognized on a straight-line basis.
Accordingly, during the three months ended December 31,
2004, the Company recorded a cumulative adjustment to increase
occupancy expense and deferred rent by $1.2 million and the
recognition of a tax benefit of $490,000. Rent expense was
approximately $10.4 million, $9.1 million and
$6.5 million for the years ended December 31, 2005,
2004 and 2003, respectively.



| |                       
| | ----------------------
| | Contingent Liabilities

The 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 results of
operations or financial condition.



|    |                                    
|--- | -----------------------------------
|24. | Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair
Value of Financial Instrument, requires all entities to
estimate the fair value of all financial instrument assets,
liabilities, and off-balance-sheet transactions. Fair values are
point-in-time estimates that can change significantly based on
numerous factors. Accordingly, management cannot provide any
assurance that the estimated fair values presented below could
actually be realized. The fair value estimates for financial
instruments were determined as of December 31, 2005 and
2004, by application of the described methods and significant
assumptions.

107



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                      
|--- | -----------------------------------------------------
|24. | Fair Value of Financial
    Instruments  (Continued)

The carrying value and estimated fair value of
principal financial instruments at December 31, 2005 and
2004, were as follows (dollars in thousands):

|                                             |                                                                   |          |   |            |   |          |   |            |   |  |   |           |   |  |   |           |  
|-------------------------------------------- | ----------------------------------------------------------------- | -------- | - | ---------- | - | -------- | - | ---------- | - |  | - | --------- | - |  | - | --------- | -
|                                             |                                                                   |          |   |           
|                                             |                                                                   | 2005     |   | 2004      
|                                             |                                                                   |          |   |           
|                                             |                                                                   | Carrying |   | Estimated  |   | Carrying |   | Estimated 
|                                             |                                                                   | Amount   |   | Fair Value |   | Amount   |   | Fair Value
|                                             |                                                                   |          |   |            |   |          |   |           
|Financial assets:                            |                                                                   |          |   |            |   |          |   |            |   |  |   |           |   |  |   |          
|                                             | Cash and due from banks                                           |          | $ | 200,072    |   |          | $ | 200,072    |   |  | $ | 73,864    |   |  | $ | 73,864    |  
|                                             | Federal funds sold                                                |          |   | 2,993      |   |          |   | 2,993      |   |  |   | 134,500   |   |  |   | 134,500   |  
|                                             | Investments and mortgage-backed securities
    available for sale |          |   | 1,117,724  |   |          |   | 1,117,724  |   |  |   | 1,169,140 |   |  |   | 1,169,140 |  
|                                             | Investments and mortgage-backed securities held
    to maturity   |          |   | 308,608    |   |          |   | 313,974    |   |  |   | 325,202   |   |  |   | 331,969   |  
|                                             | Federal Home Loan Bank stock and other
    equity investments     |          |   | 75,445     |   |          |   | 75,445     |   |  |   | 56,867    |   |  |   | 56,867    |  
|                                             | Loans held for sale                                               |          |   | 156,740    |   |          |   | 156,948    |   |  |   | 326,007   |   |  |   | 332,072   |  
|                                             | Loans held in portfolio                                           |          |   | 5,838,660  |   |          |   | 5,814,038  |   |  |   | 4,050,741 |   |  |   | 3,976,425 |  
|                                             | Accrued interest receivable                                       |          |   | 37,750     |   |          |   | 37,750     |   |  |   | 24,507    |   |  |   | 24,507    |  
|                                             | Mortgage servicing rights, net                                    |          |   | 10,642     |   |          |   | 14,036     |   |  |   | 7,747     |   |  |   | 10,288    |  
|                                             | Customers liability on acceptances                               |          |   | 27,133     |   |          |   | 27,133     |   |  |   | 11,704    |   |  |   | 11,704    |  
|Financial liabilities:                       |                                                                   |          |   |            |   |          |   |            |   |  |   |           |   |  |   |          
|                                             | Noninterest bearing deposits                                      |          |   | 558,649    |   |          |   | 558,649    |   |  |   | 428,602   |   |  |   | 428,602   |  
|                                             | Interest bearing deposits                                         |          |   | 5,705,520  |   |          |   | 5,721,494  |   |  |   | 4,787,260 |   |  |   | 4,781,989 |  
|                                             | Short-term borrowings                                             |          |   | 279,425    |   |          |   | 279,780    |   |  |   | 72,310    |   |  |   | 72,282    |  
|                                             | Subordinated debentures                                           |          |   | 146,000    |   |          |   | 146,000    |   |  |   | 136,000   |   |  |   | 140,151   |  
|                                             | Long-term borrowings                                              |          |   | 562,033    |   |          |   | 570,644    |   |  |   | 334,952   |   |  |   | 349,245   |  
|                                             | Accrued interest payable                                          |          |   | 12,582     |   |          |   | 12,582     |   |  |   | 6,110     |   |  |   | 6,110     |  
|                                             | Acceptances outstanding                                           |          |   | 27,133     |   |          |   | 27,133     |   |  |   | 11,704    |   |  |   | 11,704    |  
|Off balance sheet financial
    instruments: |                                                                   |          |   |            |   |          |   |            |   |  |   |           |   |  |   |          
|                                             | Foreign exchange contracts receivable                             |          |   | 408        |   |          |   | 408        |   |  |   | 1,061     |   |  |   | 1,061     |  
|                                             | Foreign exchange contracts payable                                |          |   | (241       | ) |          |   | (241       | ) |  |   | (477      | ) |  |   | (477      | )
|Commitments to extend credit:                |                                                                   |          |   |            |   |          |   |            |   |  |   |           |   |  |   |          
|                                             | Consumer (including residential mortgage)                         |          |   | 88,407     |   |          |   | 88,407     |   |  |   | 75,558    |   |  |   | 75,558    |  
|                                             | Commercial (excluding construction)                               |          |   | 672,662    |   |          |   | 672,662    |   |  |   | 451,946   |   |  |   | 451,946   |  
|                                             | Construction                                                      |          |   | 539,955    |   |          |   | 539,955    |   |  |   | 260,441   |   |  |   | 260,441   |  
|                                             | Letters of credit                                                 |          |   | 90,595     |   |          |   | 90,595     |   |  |   | 44,752    |   |  |   | 44,752    |  

108



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                      
|--- | -----------------------------------------------------
|24. | Fair Value of Financial
    Instruments  (Continued)



| |                                                   
| | --------------------------------------------------
| | Cash and Due from Banks and Federal Funds
    Sold

The fair value of cash and due from banks and
federal funds sold approximates the carrying value.



| |                                              
| | ---------------------------------------------
| | Investment and Mortgage-Backed
    Securities

The fair value of investments and mortgage-backed
securities equals quoted market price, if available. If a quoted
market price is not available, the fair value is estimated using
quoted market prices for similar securities.



| |                                                              
| | -------------------------------------------------------------
| | Federal Home Loan Bank Stock and Other
    Equity Investments

The fair value of Federal Home Loan Bank
stock approximates the carrying value, which is based on the
redemption provisions of the Federal Home Loan Bank. The
fair value of other equity investments is carrying value or
reported value.



| |                    
| | -------------------
| | Loans Held for Sale

The fair value of commercial real estate loans
and multifamily loans held for sale is estimated based on recent
market loan sale pricing of like sales, prevailing market
interest rates, as well as weighted average maturity, weighted
average life, and conditional prepayment rates. SBA loans held
for sale fair value is estimated based on recent historical loan
sales.



| |                        
| | -----------------------
| | Loans Held in Portfolio

The fair value of loans held in portfolio is
estimated by discounting the future cash flows using the current
rates at which similar loans would be made to borrowers with
similar credit ratings at the same remaining maturities. In
addition, the allowance for loan losses was considered a
reasonable adjustment for credit risk for the entire portfolio.



| |                            
| | ---------------------------
| | Accrued Interest Receivable

The fair value of accrued interest receivable
approximates the carrying value.



| |                          
| | -------------------------
| | Mortgage Servicing Rights

The fair value of mortgage servicing rights are
estimated using projected cash flows, adjusted for the effects
of anticipated prepayments, using a market discount rate.



| |         
| | --------
| | Deposits

The fair value of demand deposits, savings
accounts, and certain money market deposits is the amount
payable on demand at the reporting date. The fair value of fixed
maturity certificates of deposit is estimated using the rates
currently offered for deposits of similar remaining maturities.



| |                                                         
| | --------------------------------------------------------
| | Federal Home Loan Bank Advances and Other
    Borrowings

The fair value of Federal Home Loan Bank advances
and other borrowings is estimated using the rates currently
being offered for advances with similar remaining maturities.

109



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                      
|--- | -----------------------------------------------------
|24. | Fair Value of Financial
    Instruments  (Continued)



| |                        
| | -----------------------
| | Subordinated Debentures

The fair value of UCBHs junior subordinated
debentures is estimated using market interest rates currently
being offered for similar unrated debt instruments.



| |                         
| | ------------------------
| | Accrued Interest Payable

The fair value of accrued interest payable
approximates the carrying value.



| |                             
| | ----------------------------
| | Other Assets and Liabilities

The fair value of customer liabilities on
acceptances and acceptances outstanding approximates the
carrying value.



| |                       
| | ----------------------
| | Derivative Instruments

As of December 31, 2005 and 2004, UCB had no
derivative instruments designed as hedges, according to the
relevant accounting criteria. UCBs derivative instruments
are accounted for at fair value in the financial statements,
with any gains or losses reflected in current net income.



| |                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------
| | Commitments to Extend Credit, Commitments
    to Purchase Loans, Securities Sold but not Owned, and Options on
    Interest Rate Futures

The fair value of commitments is estimated using
the fees currently charged to enter into similar agreements,
taking into account the remaining terms of the agreements and
the present creditworthiness of the counterparties. For
fixed-rate commitments, the fair value also considers the
difference between current levels of interest rates and the
committed rates. The fair values for securities sold but not
owned and options on interest rate futures are based on quoted
market prices or dealer quotes. The carrying amounts of such
investments are considered to be substantially equivalent to
fair value.

110



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

25.     Supplemental
Cash Flow Information

The supplemental cash flow information for the
years ended December 31, 2005, 2004 and 2003, was as
follows (dollars in thousands):

|                                                |                                                                                       |                                                        |   |          |        |      |   |         |   |  |   |         |        | 
|----------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------ | - | -------- | ------ | ---- | - | ------- | - |  | - | ------- | ------ | 
|                                                |                                                                                       | 2005                                                   |   | 2004     |        | 2003
|                                                |                                                                                       |                                                        |   |          |        |     
|Cash paid during the period for:                |                                                                                       |                                                        |   |          |        |      |   |         |   |  |   |        
|                                                | Interest                                                                              |                                                        | $ | 155,439  |        |      | $ | 94,602  |   |  | $ | 95,223  |       
|                                                | Income taxes                                                                          |                                                        |   | 35,234   |        |      |   | 36,372  |   |  |   | 37,610  |       
|Noncash investing and financing
    activities: |                                                                                       |                                                        |   |          |        |      |   |         |   |  |   |        
|                                                | Loans securitized                                                                     |                                                        | $ |         |        |      | $ | 146,947 |   |  | $ | 286,049 |       
|                                                | Stock warrants acquired with issuance of
    commercial loans                         |                                                        |   | (129     | )      |      |   |        |   |  |   |        |       
|                                                | Income tax benefit from stock options exercised                                       |                                                        |   | 3,813    |        |      |   | 5,679   |   |  |   | 9,359   |       
|                                                | Common stock issued for:                                                              |                                                        |   |          |        |      |   |         |   |  |   |         |       
|                                                |                                                                                       | Acquisition of Pacifica Bancorp, Inc.                  |   |          | 21,092 |      |   |         |  |  |   |         |       | 
|                                                |                                                                                       | Acquisition of Asian American Bank &
    Trust Company |   |          | 15,624 |      |   |         |  |  |   |         |       | 
|                                                |                                                                                       | Acquisition of First Continental Bank                  |   |          |       |      |   |         |  |  |   |         | 53,207 | 
|                                                | Transfer of multifamily real estate loans from
    held for sale to held in portfolio |                                                        |   | (235,939 | )      |      |   |        |   |  |   |        |       
|                                                | Transfer of commercial real estate loans to held
    for sale from held in portfolio  |                                                        |   | 265,098  |        |      |   |        |   |  |   |        |       

26.     Segment
Information

The 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 and UCBIS. 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. UCBH and the UCB elimination unit
were reclassified from Domestic Banking as of and for the years
ended December 31, 2004 and 2003, to conform to the December 31,
2005 presentation. The Hong Kong operations commenced business
in the last half of 2003 and UCBIS commenced operations during
the first

111



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                      
|--- | -------------------------------------
|26. | Segment
    Information  (Continued)

quarter of 2004. The following is segment
information as of December 31, 2005 and 2004, and for the
years ended December 31, 2005, 2004 and 2003 (dollars in
thousands):

|                              |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |           | 
|----------------------------- | ---------------------------------- | -------- | - | --------- |  | -------- | - | -------------- | - | ------------ | - | ------------ |  |  | - | ------- | - |  | - | -------- | - |  | - | --------- | 
|                              |                                    | Domestic |   |           |  | Total    |   | UCBH Holdings, |   |              |   |             
|                              |                                    | Banking  |   | Other     |  | Segments |   | Inc.           |   | Intersegment |   | Consolidated
|                              |                                    |          |   |           |  |          |   |                |   |              |   |             
|Year ended December 31, 2005: |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |          
|                              | Total interest and dividend income |          | $ | 397,771   |  |          | $ | 7,311          |   |              | $ | 405,082      |  |  | $ |        |   |  | $ | (2,682   | ) |  | $ | 402,400   | 
|                              | Net interest income                |          |   | 244,795   |  |          |   | 5,074          |   |              |   | 249,869      |  |  |   | (9,379  | ) |  |   |         |   |  |   | 240,490   | 
|                              | Net income                         |          |   | 110,881   |  |          |   | 1,321          |   |              |   | 112,202      |  |  |   | 97,826  |   |  |   | (112,202 | ) |  |   | 97,826    | 
|As of December 31, 2005:      |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |          
|                              | Loans held in portfolio            |          |   | 5,554,069 |  |          |   | 284,591        |   |              |   | 5,838,660    |  |  |   |        |   |  |   |         |   |  |   | 5,838,660 | 
|                              | Total assets                       |          |   | 7,819,458 |  |          |   | 378,792        |   |              |   | 8,198,250    |  |  |   | 746,398 |   |  |   | (983,531 | ) |  |   | 7,961,117 | 
|                              | Total deposits                     |          |   | 5,727,843 |  |          |   | 555,526        |   |              |   | 6,283,369    |  |  |   |        |   |  |   | (19,200  | ) |  |   | 6,264,169 | 
|Year ended December 31, 2004: |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |          
|                              | Total interest and dividend income |          |   | 297,222   |  |          |   | 3,034          |   |              |   | 300,256      |  |  |   |        |   |  |   | (192     | ) |  |   | 300,064   | 
|                              | Net interest income (expense)      |          |   | 214,203   |  |          |   | 1,494          |   |              |   | 215,697      |  |  |   | (8,216  | ) |  |   |         |   |  |   | 207,481   | 
|                              | Net income (loss)                  |          |   | 100,706   |  |          |   | (3,820         | ) |              |   | 96,886       |  |  |   | 85,603  |   |  |   | (96,886  | ) |  |   | 85,603    | 
|As of December 31, 2004::     |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |          
|                              | Loans held in portfolio            |          |   | 3,939,559 |  |          |   | 111,182        |   |              |   | 4,050,741    |  |  |   |        |   |  |   |         |   |  |   | 4,050,741 | 
|                              | Total assets                       |          |   | 6,364,226 |  |          |   | 103,442        |   |              |   | 6,467,668    |  |  |   | 606,108 |   |  |   | (758,095 | ) |  |   | 6,315,681 | 
|                              | Total deposits                     |          |   | 4,896,903 |  |          |   | 328,663        |   |              |   | 5,225,566    |  |  |   |        |   |  |   | (9,704   | ) |  |   | 5,215,862 | 
|Year ended December 31, 2003  |                                    |          |   |           |  |          |   |                |   |              |   |              |  |  |   |         |   |  |   |          |   |  |   |          
|                              | Total interest and dividend income |          |   | 259,162   |  |          |   | 1,168          |   |              |   | 260,330      |  |  |   |        |   |  |   | (68      | ) |  |   | 260,262   | 
|                              | Net interest income (expense)      |          |   | 175,474   |  |          |   | 998            |   |              |   | 176,472      |  |  |   | (7,924  | ) |  |   |         |   |  |   | 168,548   | 
|                              | Net income (loss)                  |          |   | 79,171    |  |          |   | (478           | ) |              |   | 78,693       |  |  |   | 64,638  |   |  |   | (78,693  | ) |  |   | 64,638    | 

112



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

27.     Parent
Company

The unconsolidated condensed balance sheets of
UCBH Holdings, Inc. at December 31, 2005 and 2004, are as
follows (dollars in thousands):

CONDENSED BALANCE SHEETS

|                                         |                                            |      |         |         |  |   |         |         | 
|---------------------------------------- | ------------------------------------------ | ---- | ------- | ------- |  | - | ------- | ------- | 
|                                         |                                            | 2005 |         | 2004   
|                                         |                                            |      |         |        
|ASSETS                                  
|Cash and due from banks                  |                                            | $    | 12,542  |         |  | $ | 7,075   |        
|Other equity investments                 |                                            |      | 2,753   |         |  |   |        |        
|Equipment, net                           |                                            |      | 111     |         |  |   | 70      |        
|Investment in subsidiary                 |                                            |      | 726,888 |         |  |   | 593,870 |        
|Other assets                             |                                            |      | 12,065  |         |  |   | 23,548  |        
|                                         |                                            |      |         |         |  |   |         |        
|                                         | Total assets                               |      | $       | 754,359 |  |   | $       | 624,563 | 
|                                         |                                            |      |         |         |  |   |         |        
|                                        
|LIABILITIES AND STOCKHOLDERS
    EQUITY
|Accrued interest payable                 |                                            | $    | 1,113   |         |  | $ | 1,101   |        
|Subordinated debentures                  |                                            |      | 146,000 |         |  |   | 136,000 |        
|Other liabilities                        |                                            |      | 3,732   |         |  |   | 3,450   |        
|                                         |                                            |      |         |         |  |   |         |        
|                                         | Total liabilities                          |      |         | 150,845 |  |   |         | 140,551 | 
|                                         |                                            |      |         |         |  |   |         |        
|Common stock                             |                                            |      | 940     |         |  |   | 456     |        
|Additional paid-in capital               |                                            |      | 247,340 |         |  |   | 203,432 |        
|Retained earnings                        |                                            |      | 375,220 |         |  |   | 286,622 |        
|Accumulated other comprehensive loss     |                                            |      | (19,986 | )       |  |   | (6,498  | )      
|                                         |                                            |      |         |         |  |   |         |        
|                                         | Total stockholders equity                 |      |         | 603,514 |  |   |         | 484,012 | 
|                                         |                                            |      |         |         |  |   |         |        
|                                         | Total liabilities and stockholders equity |      | $       | 754,359 |  |   | $       | 624,563 | 
|                                         |                                            |      |         |         |  |   |         |        

113



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



27.     Parent
Company  (Continued)


The unconsolidated condensed statements of
operations of UCBH Holdings, Inc. for the years ended
December 31, 2005, 2004 and 2003, are as follows (dollars
in thousands):

CONDENSED STATEMENTS OF OPERATIONS

|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |         |        | 
|-------- | ------------------------------------------------------------------------------------------------ | ------------- | - | ------ | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|         |                                                                                                  | 2005          |   | 2004   |        | 2003
|         |                                                                                                  |               |   |        |        |     
|Income:  |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         | Interest income on investment securities                                                         |               | $ |       |        |      | $ |        |        |  | $ |        |       
|         | Dividends from subsidiary                                                                        |               |   | 30,000 |        |      |   |        |        |  |   |        |       
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         |                                                                                                  | Total income  |   |        | 30,000 |      |   |         |       |  |   |         |       | 
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|Expense: |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         | Interest expense on junior subordinated debentures                                               |               |   | 9,353  |        |      |   | 8,185   |        |  |   | 7,924   |       
|         | Loss on extinguishment of subordinated debentures                                                |               |   | 1,196  |        |      |   |        |        |  |   |        |       
|         | Other general and administrative                                                                 |               |   | 6,788  |        |      |   | 4,985   |        |  |   | 3,712   |       
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         |                                                                                                  | Total expense |   |        | 17,337 |      |   |         | 13,170 |  |   |         | 11,636 | 
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         | Income (loss) before income tax benefit and
    equity in undistributed net income of subsidiary |               |   | 12,663 |        |      |   | (13,170 | )      |  |   | (11,636 | )     
|         | Income tax benefit                                                                               |               |   | 5,573  |        |      |   | 4,954   |        |  |   | 4,742   |       
|         | Equity in undistributed net income of subsidiary                                                 |               |   | 79,590 |        |      |   | 93,819  |        |  |   | 71,532  |       
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        
|         |                                                                                                  | Net income    |   | $      | 97,826 |      |   | $       | 85,603 |  |   | $       | 64,638 | 
|         |                                                                                                  |               |   |        |        |      |   |         |        |  |   |        

114



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UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



27.     Parent
Company  (Continued)


The unconsolidated condensed statements of cash
flows of UCBH Holdings, Inc. for the years ended
December 31, 2005, 2004 and 2003, are as follows (dollars
in thousands):

CONDENSED STATEMENTS OF CASH FLOWS

|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |         |        |  
|------------------------------------------------------------------------------------------------ | ------------------------------------------------ | --------------------------------------------------- | ------- | ------- | ------ | ---- | ------ | ------- | ----- | - | ------- | ------- | ------ | -
|                                                                                                 |                                                  | 2005                                                |         | 2004    |        | 2003
|                                                                                                 |                                                  |                                                     |         |         |        |     
|Cash flow from operating activities:                                                             |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Net income                                                                                       |                                                  | $                                                   | 97,826  |         |        | $    | 85,603 |         |       | $ | 64,638  |        
|Adjustments to reconcile net income to net cash
    provided by (used for) operating activities: |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|                                                                                                 | Equity in undistributed net income of subsidiary |                                                     |         | (79,590 | )      |      |        | (93,819 | )     |   |         | (71,532 | )     
|                                                                                                 | Loss on extinguishment of subordinated debenture |                                                     |         | 1,196   |        |      |        |        |       |   |         |        |       
|                                                                                                 | Depreciation expense                             |                                                     |         | 70      |        |      |        | 45      |       |   |         | 38      |       
|                                                                                                 | Amortization of subordinated debenture fees      |                                                     |         | 165     |        |      |        | 173     |       |   |         | 199     |       
|                                                                                                 | Changes in operating assets and liabilities:     |                                                     |         |         |        |      |        |         |       |   |         |         |       
|                                                                                                 |                                                  | Decrease (increase) in other assets                 |         |         | 13,935 |      |        |         | 9,789 |   |         |         | (2,008 | )
|                                                                                                 |                                                  | Increase (decrease) in accrued interest
    payable |         |         | 12     |      |        |         | 121   |   |         |         | (244   | )
|                                                                                                 |                                                  | Increase (decrease) in other liabilities            |         |         | (246   | )    |        |         | 1,214 |   |         |         | 8,317  |  
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Net cash provided by (used in) operating
    activities                                          |                                                  |                                                     | 33,368  |         |        |      | 3,126  |         |       |   | (592    | )      
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Cash flow from investing activities:                                                             |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Capital contribution to subsidiary                                                               |                                                  |                                                     | (30,200 | )       |        |      | (71    | )       |       |   | (11,000 | )      
|Equity investment purchase                                                                       |                                                  |                                                     | (2,753  | )       |        |      |       |         |       |   |        |        
|Purchases of equipment                                                                           |                                                  |                                                     | (111    | )       |        |      | (46    | )       |       |   |        |        
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Net cash used in investing activities                                                            |                                                  |                                                     | (33,064 | )       |        |      | (117   | )       |       |   | (11,000 | )      
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Cash flow from financing activities:                                                             |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Proceeds from stock option exercises                                                             |                                                  |                                                     | 3,863   |         |        |      | 5,824  |         |       |   | 5,432   |        
|Proceeds from issuance of subordinated debentures                                                |                                                  |                                                     | 40,000  |         |        |      |       |         |       |   |        |        
|Redemption of subordinated debenture                                                             |                                                  |                                                     | (30,000 | )       |        |      |       |         |       |   |        |        
|Payment of cash dividend on common stock                                                         |                                                  |                                                     | (8,700  | )       |        |      | (6,779 | )       |       |   | (4,732  | )      
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Net cash provided by (used in) financing
    activities                                          |                                                  |                                                     | 5,163   |         |        |      | (955   | )       |       |   | 700     |        
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Net (decrease) increase in cash and cash
    equivalents                                         |                                                  |                                                     | 5,467   |         |        |      | 2,054  |         |       |   | (10,892 | )      
|Cash and cash equivalents beginning of year                                                      |                                                  |                                                     | 7,075   |         |        |      | 5,021  |         |       |   | 15,913  |        
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        
|Cash and cash equivalents end of year                                                            |                                                  | $                                                   | 12,542  |         |        | $    | 7,075  |         |       | $ | 5,021   |        
|                                                                                                 |                                                  |                                                     |         |         |        |      |        |         |       |   |         |        

115



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##### Table of Contents



UCBH HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                     
|--- | --------------------------------------------------------------------
|28. | Unaudited Quarterly Condensed Consolidated
    Financial Information

The summarized unaudited quarterly supplemental
consolidated financial information for the years ended
December 31, 2005 and 2004, are as follows (dollars in
thousands, except for earnings per share data):

|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |      | 
|--------------------------------------- | ------- | ------------------ | ------- | ------------- |  | -------- | ------- | --------- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                        |         |                   
|                                        |         | Three Months Ended
|                                        |         |                   
|                                        |         | December 31,       |         | September 30, |  | June 30, |         | March 31,
|                                        |         |                    |         |               |  |          |         |          
|2005:                                   |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Total interest and dividend income      |         | $                  | 117,459 |               |  | $        | 104,046 |           |  | $ | 96,873  |      |  | $ | 84,022  |     
|Total interest expense                  |         |                    | (52,097 | )             |  |          | (43,930 | )         |  |   | (37,227 | )    |  |   | (28,656 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Net interest income                     |         |                    | 65,362  |               |  |          | 60,116  |           |  |   | 59,646  |      |  |   | 55,366  |     
|Recovery of (provision for) loan losses |         |                    | (3,231  | )             |  |          | 105     |           |  |   | (1,775  | )    |  |   | (1,190  | )   
|Noninterest income                      |         |                    | 8,407   |               |  |          | 4,563   |           |  |   | 5,668   |      |  |   | 8,046   |     
|Noninterest expense                     |         |                    | (33,301 | )             |  |          | (25,971 | )         |  |   | (30,428 | )    |  |   | (27,213 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Income before income tax expense        |         |                    | 37,237  |               |  |          | 38,813  |           |  |   | 33,111  |      |  |   | 35,009  |     
|Income tax expense                      |         |                    | (12,104 | )             |  |          | (13,290 | )         |  |   | (7,747  | )    |  |   | (13,203 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Net income                              |         | $                  | 25,133  |               |  | $        | 25,523  |           |  | $ | 25,364  |      |  | $ | 21,806  |     
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Earnings per share:                     |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|                                        | Basic   |                    | $       | 0.27          |  |          | $       | 0.28      |  |   | $       | 0.28 |  |   | $       | 0.24 | 
|                                        | Diluted |                    | $       | 0.26          |  |          | $       | 0.27      |  |   | $       | 0.27 |  |   | $       | 0.23 | 
|                                       
|2004:                                   |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Total interest and dividend income      |         | $                  | 81,564  |               |  | $        | 76,550  |           |  | $ | 71,634  |      |  | $ | 70,316  |     
|Total interest expense                  |         |                    | (26,335 | )             |  |          | (23,753 | )         |  |   | (21,719 | )    |  |   | (20,776 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Net interest income                     |         |                    | 55,229  |               |  |          | 52,797  |           |  |   | 49,915  |      |  |   | 49,540  |     
|Recovery of (provision for) loan losses |         |                    | (626    | )             |  |          | (1,644  | )         |  |   | (1,009  | )    |  |   | (2,174  | )   
|Noninterest income                      |         |                    | 8,828   |               |  |          | 9,808   |           |  |   | 5,384   |      |  |   | 6,857   |     
|Noninterest expense                     |         |                    | (27,406 | )             |  |          | (25,981 | )         |  |   | (22,952 | )    |  |   | (22,814 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Income before income tax expense        |         |                    | 37,277  |               |  |          | 34,980  |           |  |   | 31,338  |      |  |   | 31,409  |     
|Income tax expense                      |         |                    | (13,534 | )             |  |          | (13,207 | )         |  |   | (11,070 | )    |  |   | (11,590 | )   
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Net income                              |         | $                  | 23,743  |               |  | $        | 21,773  |           |  | $ | 20,268  |      |  | $ | 19,819  |     
|                                        |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|Earnings per share                      |         |                    |         |               |  |          |         |           |  |   |         |      |  |   |         |     
|                                        | Basic   |                    | $       | 0.26          |  |          | $       | 0.24      |  |   | $       | 0.22 |  |   | $       | 0.22 | 
|                                        | Diluted |                    | $       | 0.25          |  |          | $       | 0.23      |  |   | $       | 0.21 |  |   | $       | 0.21 | 



|    |                  
|--- | -----------------
|29. | Subsequent Events

On January 26, 2006, UCBHs Board of
Directors declared a quarterly cash dividend of $0.03 per share
of common stock. The dividend will be paid on April 12,
2006, to stockholders of record as of March 31, 2006.

On February 17, 2006, GEB notified UCBH that
it had decided to accept a superior proposal, as defined in
Agreement and Plan of Merger between UCBH and GEB dated as of
October 13, 2005 (the GEB Merger Agreement),
from Cathay General Bancorp and enter into the related
definitive agreement. Accordingly, GEB exercised its right to
terminate the GEB Merger Agreement. UCBH notified GEB on
February 21, 2006, that it had elected not to exercise the
right of further negotiation as permitted under the GEB Merger
Agreement, which resulted in the termination of the GEB Merger
Agreement and a break-up fee payment of $5.0 million from
GEB to UCBH which was received on February 21, 2006.

116



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##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

None.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Disclosure Controls and Procedures

UCBH Holdings, Inc. (the Company) has
carried out an evaluation, under the supervision and with the
participation of the Companys management, including the
Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys
disclosure controls and procedures as of December 31, 2005.
As defined in Rule 13a-15(e) under the Securities Exchange
Act of 1934, as amended (the Exchange Act),
disclosure controls and procedures are controls and procedures
designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported on a timely basis. Based upon
that evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that the Companys disclosure
controls and procedures were effective as of December 31,
2005.

Managements Report on Internal Control
over Financial Reporting

Management of the Company is responsible for
establishing and maintaining adequate internal control over
financial reporting. As defined in Rule 13a-15(f) under the
Exchange Act, internal control over financial reporting is a
process designed by or under the supervision of a companys
principal executive and principal financial officers, and
effected by a companys board of directors, management and
other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of
America. It includes those policies and procedures that:



| |   |                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | pertain to the maintenance of records that in
    reasonable detail accurately and fairly reflect the transactions
    and dispositions of the assets of a company;                                                                                                                                                                                                 
|
| |  | provide reasonable assurance that transactions
    are recorded as necessary to permit preparation of financial
    statements in accordance with generally accepted accounting
    principles, and that receipts and expenditures of a company are
    being made only in accordance with authorizations of management
    and board of directors of a company; and
|
| |  | provide reasonable assurance regarding prevention
    or timely detection of unauthorized acquisition, use or
    disposition of a companys assets that could have a
    material effect on its financial statements.                                                                                                                                              

Management of the Company has assessed the
effectiveness of the Companys internal control over
financial reporting as of December 31, 2005. In making its
assessment of internal control, management used the criteria
described in Internal Control  Integrated
Framework issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission.

As a result of its assessment, management has
concluded that the Companys internal control over
financial reporting was effective as of December 31, 2005.

In conducting an assessment of the effectiveness
of the Companys internal control over financial reporting,
the Company has excluded the acquisitions of Pacifica Bancorp,
Inc. and Asian American Bank & Trust Company from
managements report on internal control over financial
reporting. The Pacifica acquisition was completed on
October 31, 2005, and constituted 2.2% of the total assets
and less than 1.0% for both total revenues and net earnings of
the Company as of December 31, 2005. The Asian American
Bank & Trust Company acquisition was completed on
November 28, 2005, and constituted 1.8% of the total assets
and less than 1.0% for both total revenues and net earnings of
the Company as of December 31, 2005.

Because of its inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures
may deteriorate.

117



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##### Table of Contents



Managements assessment of the effectiveness
of the Companys internal control over financial reporting
as of December 31, 2005 has been audited by
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their report incorporated by
reference into Item 8 of this Annual Report on
Form 10-K.

Changes in Internal Control Over Financial
Reporting

The Company has made no change in its internal
control over financial reporting that has materially affected,
or is reasonably likely to materially affect, the Companys
internal control over financial reporting during the quarter
ended December 31, 2005.

We note that during the evaluation of the
controls and procedures as of December 31, 2004, the Chief
Executive Officer and Chief Financial Officer concluded that the
Company did not maintain effective controls over the financial
reporting process because the Company had a shortage of
qualified financial reporting personnel with sufficient depth,
skills and experience to apply generally accepted accounting
principles to the Companys transactions and to prepare
financial statements that comply with accounting principles
generally accepted in the United States of America. As a result
of the strengthening of the finance departments depth,
skills and experience, the Chief Executive Officer and Chief
Financial Officer concluded as of September 30, 2005, that
the Companys material weakness no longer existed. For more
detailed information about remediation of the material weakness
described in this paragraph, please see the discussion under
Item 4. Controls and Procedures contained in
our report on Form 10-Q for the period ended
September 30, 2005.






|         |                  
|-------- | -----------------
|Item 9B. | Other Information

None.

118



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##### Table of Contents



PART III






|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

The information required by this item with
respect to our executive officers, directors, the audit
committee financial expert and the Audit Committee is
incorporated by reference from the information contained in the
section captioned Election of Directors,
Executive Officers and Board Meeting and
Committees  Section 16(a) Beneficial Ownership
Reporting Compliance in the Companys definitive
Proxy Statement for the May 18, 2006, Annual Meeting of
Stockholders.

The information required by this item with
respect to the Companys Code of Conduct is incorporated by
reference from the information contained in the section
captioned Corporate Governance  Code of
Conduct in the Proxy Statement. The Code of Conduct is
publicly available on our web site at www.ucbh.com. If we make
any substantive amendments to the Code of Conduct or grant any
waiver, including any implicit waiver, from a provision of the
code to our Chief Executive Officer, Chief Financial Officer or
Corporate Controller, we will disclose the nature of such
amendment or waiver on that web site.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The information required by this item with
respect to our named executive officers is incorporated by
reference from the information contained in the sections
captioned Board Meetings and Committees 
Executive Compensation, Summary Compensation Table, Employment
and Change in Control Agreements, Option Grants and Executive
Deferred Compensation in the Companys definitive
Proxy Statement for the May 18, 2006, Annual Meeting of
Stockholders.

The information required by this item with
respect to the compensation of our directors is incorporated by
reference from the information contained in the sections
captioned Board Meetings and Committees 
Director Compensation and Director Deferred Compensation
Plan in the Companys definitive Proxy Statement for
the May 18, 2006, Annual Meeting of Stockholders.






|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters

The information required by this item is
incorporated by reference from the information contained in the
sections captioned Board Meetings and Committees -
Security Ownership of Certain Beneficial Owners and
Election of Directors in the Companys
definitive Proxy Statement for the May 18, 2006, Annual
Meeting of Stockholders.






|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

None.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accounting Fees and
    Services

The information required by this item is
incorporated by reference from the information contained in the
sections captioned Ratification of Selection of
Independent Auditors  Independent Auditor Fees
in the Proxy Statement.

119



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##### Table of Contents






PART IV



|         |                                            
|-------- | -------------------------------------------
|Item 15. | Exhibits, Financial Statement
    Schedules

(a) The following documents are filed as
part of this report.



| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. The following consolidated financial
    statements of UCBH Holdings, Inc. and subsidiaries are filed as
    part of this report under Item 8  Financial
    Statements and Supplementary Data:

|                                                                                                                                                                |  |      |    | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                                                                |  | Page
|                                                                                                                                                                |  |     
|Report of Independent Registered Public
    Accounting Firm                                                                                                     |  |      | 67 | 
|Consolidated Balance Sheets as of
    December 31, 2005 and 2004                                                                                                |  |      | 69 | 
|Consolidated Statements of Operations for the
    years ended December 31, 2005, 2004 and 2003                                                                  |  |      | 70 | 
|Consolidated Statements of Changes in
    Stockholders Equity and Comprehensive Income (Loss) for
    each of the years ended December 31, 2005, 2004 and 2003 |  |      | 71 | 
|Consolidated Statements of Cash Flows for each of
    the years ended December 31, 2005, 2004 and 2003                                                          |  |      | 72 | 
|Notes to Consolidated Financial Statements                                                                                                                      |  |      | 73 | 



| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. All other financial schedules are omitted
    due to the required information is not applicable, or contained
    in the Consolidated Financial Statements or the notes thereto.
|
| | 3. Exhibits:                                                                                                                                                                       

Index to Exhibits

|        |   |                     |  |                                                                                                                                                                                                               |  |          |      |         |  |             |           |          |  |  |     |  |  |  |                   |  |  |  |  | 
|------- | - | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ---- | ------- |  | ----------- | --------- | -------- |  |  | --- |  |  |  | ----------------- |  |  |  |  | 
|        |   |                     |  |                                                                                                                                                                                                               |  |         
|        |   |                     |  | Incorporated by Reference                                                                                                                                                                                     |  |         
|Exhibit |   |                     |  |                                                                                                                                                                                                               |  | Filed   
|Number  |   | Exhibit Description |  | Form                                                                                                                                                                                                          |  | File No. |      | Exhibit |  | Filing Date |           | Herewith
|        |   |                     |  |                                                                                                                                                                                                               |  |          |      |         |  |             |           |         
|        | 2 | .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, 2005    |  |  |  |  | 
|        | 2 | .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, 2005  |  |  |  |  | 
|        | 2 | .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, 2005 |  |  |  |  | 
|        | 3 | .1                  |  | Second Amended and Restated Certificate of
    Incorporation of UCBH Holdings, Inc.                                                                                                                           |  |          | 10-Q |         |  |             | 000-24947 |          |  |  | 3.1 |  |  |  | May 10, 2004      |  |  |  |  | 
|        | 3 | .2                  |  | Amended and Restated Bylaws of UCBH Holdings,
    Inc., as amended and restated                                                                                                                               |  |          | 10-Q |         |  |             | 000-24947 |          |  |  | 3.2 |  |  |  | May 10, 2004      |  |  |  |  | 
|        | 3 | .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, 2003  |  |  |  |  | 
|        | 4 | .0                  |  | Form of Stock Certificate of UCBH Holdings, Inc.                                                                                                                                                              |  |          | S-1  |         |  |             | 333-58325 |          |  |  | 4.0 |  |  |  | July 1, 1998      |  |  |  |  | 
|        | 4 | .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, 1998      |  |  |  |  | 

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|        |    |                     |  |                                                                                                                                                                                                                           |  |          |      |         |  |             |           |          |  |  |      |  |  |  |                   |  |  |  |   | 
|------- | -- | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ---- | ------- |  | ----------- | --------- | -------- |  |  | ---- |  |  |  | ----------------- |  |  |  | - | 
|        |    |                     |  |                                                                                                                                                                                                                           |  |         
|        |    |                     |  | Incorporated by Reference                                                                                                                                                                                                 |  |         
|Exhibit |    |                     |  |                                                                                                                                                                                                                           |  | Filed   
|Number  |    | Exhibit Description |  | Form                                                                                                                                                                                                                      |  | File No. |      | Exhibit |  | Filing Date |           | Herewith
|        |    |                     |  |                                                                                                                                                                                                                           |  |          |      |         |  |             |           |         
|        | 4  | .2                  |  | Form of Certificate of Series B Junior
    Subordinated Debenture                                                                                                                                                         |  |          | S-4  |         |  |             | 333-58335 |          |  |  | 4.2  |  |  |  | July 1, 1998      |  |  |  |   | 
|        | 4  | .3                  |  | Certificate of Trust of UCBH Trust Co.                                                                                                                                                                                    |  |          | S-4  |         |  |             | 333-58335 |          |  |  | 4.3  |  |  |  | July 1, 1998      |  |  |  |   | 
|        | 4  | .4                  |  | Amended and Restated Declaration of Trust of UCBH
    Trust Co.                                                                                                                                                           |  |          | S-4  |         |  |             | 333-58335 |          |  |  | 4.4  |  |  |  | July 1, 1998      |  |  |  |   | 
|        | 4  | .5                  |  | Form of Series B Capital Security
    Certificate for UCBH Trust Co.                                                                                                                                                      |  |          | S-4  |         |  |             | 333-58335 |          |  |  | 4.5  |  |  |  | July 1, 1998      |  |  |  |   | 
|        | 4  | .6                  |  | Form of Series B Guarantee of the Company
    relating to the Series B Capital Securities                                                                                                                                 |  |          | S-4  |         |  |             | 333-58335 |          |  |  | 4.6  |  |  |  | July 1, 1998      |  |  |  |   | 
|        | 4  | .7                  |  | Rights Agreement dated as of January 28, 2003                                                                                                                                                                             |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 1    |  |  |  | January 29, 2003  |  |  |  |   | 
|        | 4  | .8                  |  | Indenture of UCBH Holdings, Inc., dated
    September 22, 2005, between UCBH Holdings, Inc. and
    Wilmington Trust Company, as trustee                                                                                  |  |          | 10-Q |         |  |             | 000-24947 |          |  |  | 2.2  |  |  |  | November 9, 2005  |  |  |  |   | 
|        | 10 | .1                  |  | Employment Agreement between UCBH Holdings, Inc.,
    United Commercial Bank and Thomas S. Wu                                                                                                                             |  |          | 10-Q |         |  |             | 000-24947 |          |  |  | 10.1 |  |  |  | November 9, 2004  |  |  |  |   | 
|        | 10 | .2                  |  | Form of Change in Control Agreement among UCBH
    Holdings, Inc., United Commercial Bank and Jonathan H. Downing                                                                                                         |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 10.2 |  |  |  | June 13, 2005     |  |  |  |   | 
|        | 10 | .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, 2004  |  |  |  |   | 
|        | 10 | .4                  |  | Form of Change in Control Agreement among UCBH
    Holdings, Inc., United Commercial Bank and Ka Wah (Tony) Tsui as
    well as certain other Senior Vice Presidents of UCBH Holdings,
    Inc. or United Commercial Bank |  |          | 10-Q |         |  |             | 000-24947 |          |  |  | 10.4 |  |  |  | November 9, 2004  |  |  |  |   | 
|        | 10 | .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, 2005      |  |  |  |   | 
|        | 10 | .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, 2005     |  |  |  |   | 
|        | 10 | .7                  |  | Amended UCBH Holdings, Inc. 1998 Stock Option Plan                                                                                                                                                                        |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 10.1 |  |  |  | May 25, 2005      |  |  |  |   | 
|        | 10 | .8                  |  | Executive Deferred Compensation Plan, as amended                                                                                                                                                                          |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 10.1 |  |  |  | December 20, 2005 |  |  |  |   | 
|        | 10 | .9                  |  | Director Deferred Compensation Plan                                                                                                                                                                                       |  |          | 10-K |         |  |             | 000-24947 |          |  |  | 10.7 |  |  |  | March 17, 2005    |  |  |  |   | 
|        | 10 | .10                 |  | Form of Indemnification Agreement of UCBH
    Holdings, Inc.                                                                                                                                                              |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 10.3 |  |  |  | June 13, 2005     |  |  |  |   | 
|        | 10 | .11                 |  | Form of Indemnification Agreement of United
    Commercial Bank.                                                                                                                                                          |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 10.4 |  |  |  | June 13, 2005     |  |  |  |   | 
|        | 14 | .1                  |  | Code of Conduct, as amended on August 14,
    2004.                                                                                                                                                                       |  |          | 8-K  |         |  |             | 000-24947 |          |  |  | 14.1 |  |  |  | September 1, 2004 |  |  |  |   | 
|        | 21 | .0                  |  | Subsidiaries of UCBH Holdings, Inc.                                                                                                                                                                                       |  |          |      |         |  |             |           |          |  |  |      |  |  |  |                   |  |  |  | ü | 
|        | 23 | .0                  |  | Consent of Independent Registered Public
    Accounting Firm PricewaterhouseCoopers LLP                                                                                                                                   |  |          |      |         |  |             |           |          |  |  |      |  |  |  |                   |  |  |  | ü | 
|        | 31 | .1                  |  | Certificate pursuant to Rule 13a-14(a) of the
    Securities Exchange Act, as amended, signed and dated by Thomas
    S. Wu.                                                                                              |  |          |      |         |  |             |           |          |  |  |      |  |  |  |                   |  |  |  | ü | 
|        | 31 | .2                  |  | Certificate pursuant to Rule 13a-14(a) of the
    Securities Exchange Act, as amended, signed and dated by Dennis
    Wu.                                                                                                 |  |          |      |         |  |             |           |          |  |  |      |  |  |  |                   |  |  |  | ü | 

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|        |    |                     |  |                                                                                                                                                                                   |  |          |  |         |  |             |  |          |  |  |  |  |  |  |  |  |  |  |   | 
|------- | -- | ------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | ------- |  | ----------- |  | -------- |  |  |  |  |  |  |  |  |  |  | - | 
|        |    |                     |  |                                                                                                                                                                                   |  |         
|        |    |                     |  | Incorporated by Reference                                                                                                                                                         |  |         
|Exhibit |    |                     |  |                                                                                                                                                                                   |  | Filed   
|Number  |    | Exhibit Description |  | Form                                                                                                                                                                              |  | File No. |  | Exhibit |  | Filing Date |  | Herewith
|        |    |                     |  |                                                                                                                                                                                   |  |          |  |         |  |             |  |         
|        | 32 | .0                  |  | Certificate pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002, signed and dated by Thomas S. Wu
    and Dennis Wu. |  |          |  |         |  |             |  |          |  |  |  |  |  |  |  |  |  |  | ü | 

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.

Date: March 15, 2006



| |                                                
| | -----------------------------------------------
| | UCBH HOLDINGS, INC.                            
|
| | /s/ Thomas S. Wu                               
| |                                                
| | Thomas S. Wu                                   
| | Chairman, President and Chief Executive Officer
| | (Principal Executive Officer)                  

Date: March 15, 2006



| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | /s/ Dennis Wu                                                                                                  
| |                                                                                                                
| | Dennis Wu                                                                                                      
| | Director, Executive Vice President and Chief
    Financial Officer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                               |  |                                                                                                                 |  |                |  | 
|---------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                               |  |                                                                                                                 |  |               
|Name                                           |  | Title                                                                                                           |  | Date          
|                                               |  |                                                                                                                 |  |               
|                                              
|/s/ Thomas S. WuThomas S. Wu                   |  | Chairman, President and Chief Executive Officer
    (Principal Executive Officer)                               |  | March 15, 2006
|                                              
|/s/ Dennis WuDennis Wu                         |  | Director, Executive Vice President and Chief
    Financial Officer (Principal Financial and Accounting Officer) |  | March 15, 2006
|                                              
|/s/ Anthony Y. ChanAnthony Y. Chan             |  | Director                                                                                                        |  | March 15, 2006
|                                              
|/s/ Joseph J. JouJoseph J. Jou                 |  | Lead Director                                                                                                   |  | March 15, 2006
|                                              
|/s/ Li-Lin KoLi-Lin Ko                         |  | Director                                                                                                        |  | March 15, 2006
|                                              
|/s/ James KwokJames Kwok                       |  | Director                                                                                                        |  | March 15, 2006
|                                              
|/s/ Michael Tun ZanMichael Tun Zan             |  | Director                                                                                                        |  | March 15, 2006
|                                              
|/s/ Richard Li-Chung WangRichard Li-Chung Wang |  | Director                                                                                                        |  | March 15, 2006
|                                              
|/s/ Dr. Godwin WongDr. Godwin Wong             |  | Director                                                                                                        |  | March 15, 2006

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