**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







**FORM
      10-Q**


**(Mark
      One)**




x
            **Quarterly
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**For the quarterly period ended March 31, 2006.**




**OR**




o
            **Transition
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**For
      the transition period from _______  to
      ______**




**Commission
      File Number 000-50923**





**WILSHIRE
      BANCORP, INC.**


(Exact
      name of registrant as specified in its charter)


**California**
            **20-0711133**State
                or other jurisdiction of incorporation or organization
            I.R.S.
                Employer Identification Number**3200
                Wilshire Blvd.****Los
                Angeles, California**
            **90010**Address
                of principal executive offices
            Zip
                Code**(213)
                387-3200**Registrant’s
                telephone number, including area code


Securities
      registered pursuant to Section 12(b) of the Act: **None**




Securities
      registered pursuant to Section 12(g) of the Act: **Common
      Stock, no par value**









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 xNo  o




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   oAccelerated filer   xNon-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  
x




The
      number of shares of Common Stock of the registrant outstanding as of April
      30,
      2006 was 28,739,760.














**FORM
      10-Q**




**INDEX**


**WILSHIRE
      BANCORP, INC.**




FINANCIAL
                    INFORMATION
                
                1**Item
                    1.**
                
                Financial
                    Statements
                
                1**Item
                    2.**
                ****
                Management’s
                    Discussion and Analysis of Financial Condition and Results of
                    Operations
                
                10**Item
                    3.**
                
                Quantitative
                    and Qualitative Disclosures About Market Risk
                
                36**Item
                    4.**
                
                Controls
                    and Procedures
                
                38OTHER
                    INFORMATION
                
                40**Item
                    1.**
                
                Legal
                    Proceedings
                
                40**Item
                    2.**
                
                Unregistered
                    Sales of Equity Securities and Use of Proceeds
                
                40**Item
                    3.**
                
                Defaults
                    Upon Senior Securities
                
                40**Item
                    4.**
                
                Submission
                    of Matters to a Vote of Security Holders
                
                40**Item
                    5.**
                
                Other
                    Information
                
                40**Item
                    6.**
                
                Exhibits
                
                41


i




**FINANCIAL
      INFORMATION**




**Item
                1.****Financial
                Statements********WILSHIRE
                  BANCORP, INC.**
                **CONDENSED
                  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION**
              **(UNAUDITED)****March
                31, 2006**
            ****
            **December31,
                2005****ASSETS:**Cash
                and due from banks
            
            $
            70,031,288
            
            $
            68,205,078Federal
                funds sold and other cash equivalents
            
            
            114,003,071
            
            
            126,002,978Cash
                and cash equivalents
            
            
            184,034,359
            
            
            194,208,056Interest-bearing
                deposits in other financial institutions
            
            
            500,000
            
            
            500,000Securities
                available for sale - at fair value (amortized cost of $173,284,364
                and$140,428,100
                at March 31, 2006 and December 31, 2005, respectively)
            
            
            171,144,128
            
            
            138,650,270Securities
                held to maturity - at amortized cost (fair value of $22,466,549
                and$22,510,961
                at March 31, 2006 and December 31, 2005, respectively)
            
            
            22,847,955
            
            
            22,860,200Interest
                only strip - at fair value (amortized cost of $1,396,584and
                $1,493,344 at March 31, 2006 and December 31, 2005,
                respectively)
            
            
            1,396,584
            
            
            1,501,866Loans
                held for sale, at the lower of cost or market
            
            
            18,191,138
            
            
            21,796,677Loans
                receivable, net of allowance for loan losses of $14,869,581 and
                $13,999,302at
                March, 31, 2006 and December 31, 2005, respectively
            
            
            1,279,527,171
            
            
            1,226,763,867Bank
                premises and equipment, net
            
            
            8,900,036
            
            
            8,955,872Federal
                Home Loan Bank stock, at cost
            
            
            6,254,000
            
            
            6,181,700Accrued
                interest receivable
            
            
            7,555,599
            
            
            6,891,670Other
                real estate owned - net
            
            
            294,400
            
            
            294,400Deferred
                income taxes - net
            
            
            7,406,810
            
            
            8,114,343Servicing
                asset
            
            
            4,880,964
            
            
            4,682,848Due
                from customers on acceptances
            
            
            3,508,966
            
            
            3,220,846Cash
                surrender value of life insurance
            
            
            15,254,829
            
            
            15,098,770Other
                assets
            
            
            6,915,891
            
            
            6,552,033TOTAL
            
            $
            1,738,612,830
            
            $
            1,666,273,418**LIABILITIES
                AND SHAREHOLDERS’ EQUITY**LIABILITIES:Deposits
                :Noninterest-bearing
            
            $
            312,291,631
            
            $
            292,170,888Interest-bearing:Savings
            
            
            22,894,092
            
            
            19,585,805Time
                deposits of $100,000 or more
            
            
            652,525,865
            
            
            630,662,463Other
                time deposits
            
            
            143,350,241
            
            
            142,944,546Money
                markets accounts and other
            
            
            350,175,105
            
            
            324,101,535Total
                deposits
            
            
            1,481,236,934
            
            
            1,409,465,237Federal
                Home Loan Bank borrowings
            
            
            50,000,000
            
            
            61,000,000Junior
                subordinated debentures
            
            
            61,547,000
            
            
            61,547,000Accrued
                interest payable
            
            
            8,728,584
            
            
            6,898,196Acceptances
                outstanding
            
            
            3,508,966
            
            
            3,220,846Other
                liabilities
            
            
            13,444,503
            
            
            11,038,271Total
                liabilities
            
            
            1,618,465,987
            
            
            1,553,169,550COMMITMENTS
                AND CONTINGENCIES (Note 7)**SHAREHOLDERS’
                EQUITY:**Preferred
                stock, no par value; authorized, 1,000,000 shares; issued and outstanding,
                none
            
            
            —
            
            
            —Common
                stock, no par value; authorized, 80,000,000 shares;issued
                and outstanding, 28,739,760 and 28,630,600 shares atMarch
                31, 2006 and December 31, 2005, respectively
            
            
            42,212,838
            
            
            41,340,448Accumulated
                other comprehensive loss
            
            
            (1,241,342
            )
            
            (1,026,202
            )Retained
                earnings
            
            
            79,175,347
            
            
            72,789,622Total
                shareholders’ equity
            
            
            120,146,843
            
            
            113,103,868TOTAL
            
            $
            1,738,612,830
            
            $
            1,666,273,418The
                accompanying notes are an integral part of these unaudited condensed
                consolidated financial statements.




1




**WILSHIRE
        BANCORP, INC**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**
 **(UNAUDITED)**
 
 **Three
                  Months Ended March 31,****2006**
              
              **2005**INTEREST
                INCOME:Interest
                  and fees on loans
              
              $
              27,649,882
              
              $
              18,229,969Interest
                  on investment securities and deposits in other financial
                  institutions
              
              
              1,775,772
              
              
              871,074Interest
                  on federal funds sold and other cash equivalents
              
              
              1,615,502
              
              
              427,209Total
                  interest income
              
              
              31,041,156
              
              
              19,528,252INTEREST
                  EXPENSE:Deposits
              
              
              12,252,883
              
              
              5,110,481Interest
                  on other borrowings
              
              
              1,509,577
              
              
              777,720Total
                  interest expense
              
              
              13,762,460
              
              
              5,888,201NET
                  INTEREST INCOME BEFOREPROVISION
                  FOR LOAN LOSSES
              
              
              17,278,696
              
              
              13,640,051PROVISION
                  FOR LOSSES ON LOANS AND LOAN COMMITMENTS
              
              
              1,060,000
              
              
              500,000NET
                  INTEREST INCOME AFTERPROVISION
                  FOR LOAN LOSSES
              
              
              16,218,696
              
              
              13,140,051NONINTEREST
                  INCOME:Service
                  charges on deposit accounts
              
              
              2,155,158
              
              
              1,719,810Gain
                  on sale of loans
              
              
              2,349,850
              
              
              2,023,077Loan-related
                  servicing income
              
              
              529,081
              
              
              657,798Loan
                  referral fee income
              
              
              47,646
              
              
              100,789Loan
                  packaging fee
              
              
              114,248
              
              
              65,716Income
                  from other earning assets
              
              
              239,876
              
              
              126,879Other
                  income
              
              
              328,168
              
              
              241,886Total
                  noninterest income
              
              
              5,764,027
              
              
              4,935,955NONINTEREST
                  EXPENSES:Salaries
                  and employee benefits
              
              
              5,256,005
              
              
              4,375,363Occupancy
                  and equipment
              
              
              895,722
              
              
              833,231Data
                  processing
              
              
              504,799
              
              
              414,867Loan
                  referral fees
              
              
              342,298
              
              
              262,535Professional
                  fees
              
              
              242,504
              
              
              446,006Directors’
                  fees
              
              
              121,350
              
              
              123,250Office
                  supplies
              
              
              110,913
              
              
              108,523Advertising
              
              
              181,917
              
              
              245,593Communications
              
              
              105,121
              
              
              92,716Deposit
                  insurance premiums
              
              
              42,670
              
              
              37,054Outsourced
                  service for customers
              
              
              340,789
              
              
              321,615Other
                  operating
              
              
              719,630
              
              
              578,422Total
                  noninterest expenses
              
              
              8,863,718
              
              
              7,839,175INCOME
                  BEFORE INCOME TAX PROVISION
              
              
              13,119,005
              
              
              10,236,831INCOME
                  TAX PROVISION
              
              
              5,296,291
              
              
              4,167,000NET
                  INCOME
              
              $
              7,822,714
              
              $
              6,069,831EARNINGS
                  PER SHAREBasic
              
              $
              0.27
              
              $
              0.21Diluted
              
              $
              0.27
              
              $
              0.21




The accompanying notes are an integral part of these unaudited
      condensed consolidated financial statements.






2




**WILSHIRE
                    BANCORP, INC.****CONDENSED
                    CONSOLIDATED STATEMENTS OF COMPREHENSIVE
                    INCOME****(UNAUDITED)**
 
 **Three
                    Months Ended March 31,****2006**
                
                **2005**Net
                    income
                
                $
                7,822,714
                
                $
                6,069,831Other
                    comprehensive income, net of tax:Unrealized
                    losses on securities available for sale and interest-only
                    strip:Unrealized
                    holding losses on securities available for sale arising during
                    period,net
                    of tax benefit of $152,212 for the three months ended March 31,2006
                    andnet
                    of tax benefit of $222,217 for the three months ended March 31,
                    2005
                
                
                (210,197
                )
                
                (306,872
                )Unrealized
                    holding (losses) gains on interest only strips arising during
                    period,net
                    of tax benefit of $3,579 for the three months ended March 31,
                    2006 andnet
                    of tax expense of $97,153 for the three months ended March 31,
                    2005
                
                
                (4,943
                )
                
                134,164Other
                    comprehensive expense, net of tax:
                
                
                (215,140
                )
                
                (172,708
                )Comprehensive
                    income
                
                $
                7,607,574
                
                $
                5,897,123The
                    accompanying notes are an integral part of these condensed consolidated
                    financial statements.






3




**WILSHIRE
                  BANCORP, INC.****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS****(UNAUDITED)**
  **Three
                  Months Ended March 31,****2006**
              
              **2005****CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  income
              
              $
              7,822,714
              
              $
              6,069,831Adjustments
                  to reconcile net income to net cash provided byoperating
                  activities:Amortization
                  and accretion of premiums and discounts
              
              
              13,211
              
              
              17,787Depreciation
                  of premises & equipment
              
              
              278,858
              
              
              224,606Provision
                  for losses on loans and loan commitments
              
              
              1,060,000
              
              
              500,000Deferred
                  tax provision (benefit)
              
              
              863,322
              
              
              10,752Loss
                  (gain) on disposition of bank premises, equipment and
                  securities
              
              
              9,630
              
              
              902Gain
                  on sale of loans
              
              
              (2,349,851
              )
              
              (2,023,077
              )Stock
                  based compensation cost
              
              
              77,076
              
              
              —Origination
                  of loans held for sale
              
              
              (43,681,925
              )
              
              (29,660,698
              )Tax
                  benefit from exercise of stock options
              
              
              —
              
              
              1,724,074Proceeds
                  from sale of loans held for sale
              
              
              49,660,302
              
              
              39,335,780Gain
                  on sale of AFS securities
              
              
              65,685
              
              
              —Change
                  in cash surrender value of life insurance
              
              
              (156,059
              )
              
              (166,656
              )Servicing
                  assets capitalization
              
              
              (612,305
              )
              
              (537,275
              )Servicing
                  assets amortization
              
              
              414,188
              
              
              248,147Increase
                  in interest-only strip
              
              
              31,074
              
              
              (199,041
              )Increase
                  in accrued interest receivable
              
              
              (663,929
              )
              
              (763,618
              )Increase
                  in other assets
              
              
              (436,858
              )
              
              (980,046
              )Dividends
                  of FHLB Stock
              
              
              (72,300
              )
              
              —Increase
                  (decrease) in accrued interest payable
              
              
              1,830,388
              
              
              347,705Increase
                  in other liabilities
              
              
              2,003,474
              
              
              1,431,642Net
                  cash provided by operating activities
              
              
              16,156,695
              
              
              15,580,815**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Purchases
                  of investment securities available for sale
              
              
              (35,390,088
              )
              
              (19,889,491
              )Purchases
                  of investment securities held to maturity
              
              
              -—
              
              
              (1,999,000
              )Proceeds
                  from matured or called securities (AFS)
              
              
              2,517,373
              
              
              13,670,224Proceeds
                  from matured or called securities (HTM)
              
              
              15,485
              
              
              2,138,318Net
                  increase in loans receivable
              
              
              (53,735,297
              )
              
              (32,145,370
              )Purchases
                  of premises and equipment
              
              
              (159,652
              )
              
              (1,674,602
              )Purchase
                  of FHLB stock
              
              
              —
              
              
              53,800Net
                  cash used in investing activities
              
              
              (86,752,179
              )
              
              (39,846,121
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Net
                  increase in deposits
              
              
              71,771,697
              
              
              61,166,871(Decrease)
                  increase in Federal Home Loan Bank borrowing
              
              
              (11,000,000
              )
              
              20,000,000Increase
                  in junior subordinated debentures
              
              
              —
              
              
              20,619,000Payment
                  of cash dividend
              
              
              (1,145,224
              )
              
              —Tax
                  benefit from exercise of stock options
              
              
              688,722
              
              
              —Proceeds
                  from exercise of stock options
              
              
              106,592
              
              
              391,829Net
                  cash provided by financing activities
              
              
              60,421,787
              
              
              102,177,700NET
                  (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              (10,173,697
              )
              
              77,912,394CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD
              
              
              194,208,056
              
              
              98,905,736CASH
                  AND CASH EQUIVALENTS, END OF PERIOD
              
              $
              184,034,359
              
              $
              176,818,130SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:Interest
                  paid
              
              $
              11,932,073
              
              $
              5,540,495Income
                  taxes paid
              
              
              726,400
              
              
              939,500NONCASH
                  INVESTING AND FINANCING ACTIVITIES:Cash
                  dividend declared
              
              
              1,436,988
              
              
              1,142,843Other
                  assets transferred to premises and equipment
              
              
              73,000Transfer
                  of loans to OREO
              
              
              —
              
              
              308,200
  The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  4




**WILSHIRE
        BANCORP, INC.**
  **Notes
        to Condensed Consolidated Financial Statements (Unaudited)**
  **Note
        1.**  **Business
        of Wilshire Bancorp, Inc.**
  Wilshire
        Bancorp, Inc. (the “Company,” “we,” “us,” or “our,” hereafter) succeeded to the
        business and operations of Wilshire State Bank, a California state-chartered
        commercial bank (the “Bank”), upon consummation of the reorganization of the
        Bank into a holding company structure, effective as of August 25, 2004. Wilshire
        State Bank was incorporated under the laws of the State of California on
        May 20,
        1980 and commenced operations on December 30, 1980. The Company was
        incorporated in December 2003 as a wholly owned subsidiary of the Bank for
        the
        purpose of facilitating the issuance of trust preferred securities for the
        Bank
        and eventually serving as the holding company of the Bank. The Bank’s
        shareholders approved a reorganization into a holding company structure at
        a
        meeting held on August 25, 2004. As a result of the reorganization, shareholders
        of the Bank are now shareholders of the Company and the Bank is a direct
        subsidiary of the Company.
  Prior
        to
        the completion of the reorganization, the Bank was subject to the information,
        reporting and proxy statement requirements of the Securities Exchange Act
        of
        1934, as amended, or the Exchange Act, pursuant to the regulations of its
        primary regulator, the Federal Deposit Insurance Corporation, or FDIC.
        Accordingly, the Bank filed annual and quarterly reports, proxy statements
        and
        other information with the FDIC. Pursuant to Rule 12g-3 of the Exchange Act,
        the
        Company has succeeded to the reporting obligations of the Bank and the reporting
        obligations of the Bank to the FDIC have terminated. Filings by the Company
        under the Exchange Act, like this Form 10-Q, are to be made with the Securities
        and Exchange Commission, or the Commission. Although we refer generally to
        the
“Company” throughout this filing, all references to the Company prior to August
        25, 2004, except where otherwise indicated, are to the Bank.
  Our
        Corporate Headquarters and primary banking facilities are located at 3200
        Wilshire Boulevard, Los Angeles, California 90010. In addition , we
        have  16
        full-service Bank branch offices in southern California and Texas. We also
        have
        nine loan production offices utilized primarily for the origination of loans
        under our Small Business Administration (“SBA”) lending program in Georgia,
        Oklahoma, Washington, Texas, Nevada, Colorado, New York and
        California.
  **Note
        2.**  **Basis
        of Presentation**
  The
        financial statements have been prepared in accordance with the Securities
        and
        Exchange Commission (“SEC”) rules and regulations for interim financial
        reporting and therefore do not necessarily include all information and footnote
        disclosures normally included in annual financial statements prepared in
        accordance with accounting principles generally accepted in the United States
        of
        America. The information provided by these interim financial statements reflects
        all adjustments which are, in the opinion of management, necessary for a
        fair
        presentation of the Company’s financial condition as of March 31, 2006 and
        December 31, 2005, the related statements of operations and comprehensive
        income
        for the three months ended March 31, 2006 and 2005, and the statements of
        cash
        flows for the three months ended March 31, 2006 and 2005. Such adjustments
        are
        of a normal recurring nature unless otherwise disclosed in the Form 10-Q.
        Operating results for interim periods are not necessarily indicative of
        operating results for an entire fiscal year.
  The unaudited financial statements should be read in conjunction with the
        audited financial statements and notes thereto included in Bank’s Annual Report
        on Form 10-K for the year ended December 31, 2005. The accounting policies
        used
        in the preparation of these interim financial statements were consistent
        with
        those used in the preparation of the financial statements for the year ended
        December 31, 2005, unless otherwise noted.




5


**Note
        3.**  **Earnings
        per Share** **and Stock Based Compensation**
  Basic
        earnings per share (“EPS”) excludes dilution and is computed by dividing income
        available to common shareholders by the weighted-average number of common
        shares
        outstanding for the period. Diluted EPS reflects the potential dilution that
        could occur if securities or other contracts to issue common stock were
        exercised or converted into common stock or resulted in the issuance of common
        stock that would then share in the earning of the entity. The following table
        provides the basic and diluted EPS computations for the quarter ended March
        31,
        2006 and 2005, respectively.


**For
                  the Quarter Ended**
                **March
                  31****2006**
              
              **2005**Numerator:Net
                  income - numerator for basic earningsper
                  share and diluted earnings per share-income
                  available to common stockholders
              
              $
              7,822,714
              
              $
              6,069,831Denominator:Denominator
                  for basic earnings per share:Weighted-average
                  shares
              
              
              28,714,017
              
              
              28,423,693Effect
                  of dilutive securities:Stock
                  option dilution
              
              
              394,580
              
              
              440,402Denominator
                  for diluted earnings per share:Adjusted
                  weighted-average shares and
                  assumed conversions
              
              
              29,108,597
              
              
              28,864,095Basic
                  earnings per share
              
              $
              0.27
              
              $
              0.21Diluted
                  earnings per share
              
              $
              0.27
              
              $
              0.21






On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standard
      (“SFAS”) 123R, using a modified prospective method. Accordingly, prior period
      amounts have not been restated. In the first quarter of 2006, the adoption
      of
      SFAS 123R resulted in incremental stock-based compensation expense of $77,076.
      The incremental stock-based compensation expense caused income before income
      taxes to decrease by $77,076 and had negligible effect on basic or diluted
      earnings per share to decrease. Cash provided by financing activities increased
      by $688,722 related to excess tax benefits from stock-based payment
      arrangements.




The
      Company has issued stock options to employees under shared-based compensation
      plans. Stock options are issued at the current market price on the date of
      grant. The vesting period and contractual term is determined at the time of
      grant, but the contractual term may not exceed 10 years from the date of grant.
      The grant date fair value of each option award is estimated on the date of
      grant
      using the Black-Scholes option valuation model that uses the assumption noted
      below. The expected life, estimated period of time outstanding, of options
      grant
      was estimated using the simple method in accordance with SFAS 123R. The expected
      volatility was based on historical volatility for a period equal to the stock
      option’s expected life. The risk-free rate is based on the U.S. Treasury yield
      curve in effect at the time of grant. For the first three months of 2006, 15,000
      shares were granted and 173,600 shares in total were granted in the first three
      months of 2005. The weighted average estimated fair value of options was $4.73
      and $1.97 as of March 31, 2006 and 2005, respectively. The fair value was
      estimated on the date of grant using the Black-Scholes option pricing model
      under the following assumptions-dividend yield of 1.17% and 1.16%, expected
      volatility of 33.3% and 24.1%, average expected life of 3.5 years and 2 years,
      and average risk-free interest rate of 4.32% and 2.72% for the first quarters
      of
      2006 and 2005, respectively.




Prior
      to
      the adoption of SFAS 123-R, the Company applied APB 25 to account for its stock
      based awards. The following table details the effect on net income and earnings
      per share had compensation expense for Employee Stock based awards had been
      recorded based on the fair value method under SFAS 123.




Had
      the
      Company determined compensation cost based on the fair value at the grant date
      for stock options exercisable under SFAS No. 123R prior to January 1, 2006,
      the
      company’s results of operations would have been adjusted to the pro forma
      amounts for the period indicated below;





6






**For
                the Quarter Ended**
              **March
                31****2005**Net
                income, as reported
            
            $
            6,069,831Add:Stock-based
                compensation expense included in the reported net income, net of
                taxDeduct:Total
                stock-based compensation expense, determined using fair value Method,
                net
                of tax
            
            
            (21,349
            )Pro
                forma net income
            
            
            6,048,482Earnings
                per share:Basic
                –
                as
                reported
            
            $
            0.21Diluted
                – pro forma
            
            $
            0.21Diluted
                – as reported
            
            $
            0.21Diluted
                – pro forma
            
            $
            0.21




There
      were 130,600 anti-dilutive stock options outstanding for the three months ended
      March 31, 2005 for which the exercise price exceeded the average market price
      of
      the Company’s common stock during the period. No such options were outstanding
      for the three months ended March 31, 2006.




**Note
      4.**  **Goodwill
      and Other Intangible Assets**




In
      July
      2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141, *Business
      Combinations* ,
      and
      SFAS No. 142, *Goodwill
      and Other Intangible Assets.* Under
      these standards, goodwill and other intangible assets deemed to have indefinite
      lives are no longer amortized but are subject to annual impairment tests. Other
      intangible assets will continue to be amortized over their useful
      lives.




The
      Company’s intangible assets that are subject to amortization, loan servicing
      rights, were $4,880,964 and $4,663,103 (net of $1,716,255 and $1,450,567
      accumulated amortization, respectively) as of March 31, 2006 and 2005,
      respectively. Amortization expense for intangible assets subject to amortization
      was $414,188 and $248,146 for the three months ended March 31, 2006 and
      2005, respectively, and it is estimated that it will be approximately $652,000
      annually for the next five fiscal years.




**Note
      5.**  **Business Segment Information**




The
      following disclosure about segments of the Company is made in accordance with
      the requirements of SFAS No. 131, *Disclosures
      about Segments of an Enterprise and Related Information* .
      The
      Company segregates its operations into three primary segments: Banking
      Operations, Trade Finance Services (“TFS”), and Small Business Administration
      Lending Services. The Company determines the operating results of each segment
      based on an internal management system that allocates certain expenses to each
      segment.




*Banking
      Operations* - ** The
      Company provides lending products, including commercial, consumer and real
      estate loans to its customers.




*Trade
      Finance Services* -
      The
      Trade Finance department allows the Company’s import/export customers to handle
      their international transactions. Trade finance products include, among others,
      the issuance and collection of letters of credit, international collection,
      and
      import/export financing.




*Small
      Business Administration Lending Services* -
      The SBA
      department mainly provides customers of the Company access to the U.S.
      SBA-guaranteed lending program.





7




The
      following are the results of operations of the Company’s segments for the
      periods indicated below:




**(Dollars
                in Thousands)**
            
            **Three
                Months Ended March 31, 2006**
            
            **Three
                Months Ended March 31, 2005****Business
                Segment**
            
            **Banking**
              **Operations**
            
            **TFS**
            
            **SBA**
            
            **Company**
            
            **Banking****Operations**
            
            **TFS**
            
            **SBA**
            
            **Company**Net
                interest income
            
            $
            12,488
            
            $
            980
            
            $
            3,811
            
            $
            17,279
            
            $
            10,141
            
            $
            667
            
            $
            2,832
            
            $
            13,640Less
                Provision for loan losses
            
            
            353
            
            
            125
            
            
            582
            
            
            1,060
            
            
            631
            
            
            (88
            )
            
            (43
            )
            
            500Other
                operating income
            
            
            2,698
            
            
            397
            
            
            2,669
            
            
            5,764
            
            
            2,141
            
            
            398
            
            
            2,397
            
            
            4,936Net
                revenue
            
            
            14,833
            
            
            1,252
            
            
            5,898
            
            
            21,983
            
            
            11,651
            
            
            1,153
            
            
            5,272
            
            
            18,076Other
                operating expenses
            
            
            7,010
            
            
            232
            
            
            1,622
            
            
            8,864
            
            
            6,501
            
            
            205
            
            
            1,133
            
            
            7,839Income
                before taxes
            
            $
            7,823
            
            $
            1,020
            
            $
            4,276
            
            $
            13,119
            
            $
            5,150
            
            $
            948
            
            $
            4,139
            
            $
            10,237Total
                assets
            
            $
            1,521,710
            
            $
            56,258
            
            $
            160,645
            
            $
            1,738,613
            
            $
            1,180,164
            
            $
            45,230
            
            $
            151,903
            
            $
            1,377,297




**Note
      6.**  **Stock
      Option Plan**




During
      1997, the Bank established a new stock option plan that provides for the
      issuance of up to 6,499,800 shares of its authorized but unissued common stock
      to managerial employees and directors. In connection with the holding company
      reorganization, the options granted under this plan are exercisable into shares
      of the Company’s common stock. Exercise prices may not be less than the fair
      market value at the date of grant. As of March 31, 2006, 716,792 shares were
      outstanding under this option plan. The outstanding stock options granted under
      the Company’s 1990 plan were transferred to this plan. Options granted before
      2005 under the stock option plan expire not more than 10 years after the date
      of
      grant, but options granted after 2005 expire not more than 5 years after the
      date of grant.




**Note
      7.**  **Commitments
      and Contingencies**




We
      are a
      party to financial instruments with off-balance-sheet risk in the normal course
      of business to meet the financing needs of our customers. These financial
      instruments include commitments to extend credit, standby letters of credit,
      and
      commercial letters of credit. These instruments involve, to varying degrees,
      elements of credit and interest rate risk in excess of the amount recognized
      in
      the statements of financial condition. Our exposure to credit loss in the event
      of nonperformance on commitments to extend credit and standby letters of credit
      is represented by the contractual notional amount of those instruments. We
      use
      the same credit policies in making commitments and conditional obligations
      as we
      do for extending loan facilities to customers. We evaluate each customer’s
      creditworthiness on a case-by-case basis. The amount of collateral obtained,
      if
      deemed necessary upon extension of credit, is based on our credit evaluation
      of
      the counterparty. Collateral held varies but may include accounts receivable;
      inventory; property, plant, and equipment; and income-producing properties.
      Commitments at March 31, 2006 are summarized as follows:




Commitments
                to extend credit
            
            $
            103,713,000Standby
                letters of credit
            
            $
            3,355,000Commercial
                letters of credit
            
            $
            12,088,000




As
      part
      of our asset and liability management strategy, we may engage in derivative
      financial instruments, such as interest rate swaps, with the overall goal of
      minimizing the impact of interest rate fluctuations on our net interest margin.
      Interest rate swaps involve the exchange of fixed-rate and variable-rate
      interest payment obligations without the exchange of the underlying notional
      amounts.




In
      the
      normal course of business, we are involved in various legal claims. We have
      reviewed all legal claims against us with counsel and have taken into
      consideration the views of such counsel as to the outcome of the claims. In
      our
      opinion, the final disposition of all such claims will not have a material
      adverse effect on our financial position and results of operations.





8





**Note
      8.**  **Recent
      Accounting Pronouncements**




In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment
      (“SFAS No. 123R”), which replaces SFAS No. 123, Accounting for Stock-Based
      Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued
      to
      Employees. SFAS No. 123R requires all share-based payments to employees,
      including grants of employee stock options, to be recognized in the financial
      statements based on their fair values. The pro forma disclosures previously
      permitted under SFAS No. 123 no longer are an alternative to financial statement
      recognition. SFAS No. 123R is effective as of the beginning of the first fiscal
      year that begins after June 15, 2005. Thus, we adopted SFAS No. 123R
      effective January 1, 2006. We adopted the new standard effective January 1,
      2006
      using the modified prospective method, the impact of which is shown in Note
      3 to
      these condensed consolidated financial statements.




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. Under the
      provisions of SFAS No. 154, voluntary changes in accounting principles are
      applied retrospectively to prior periods’ financial statements unless it would
      be impractical. SFAS No. 154 supersedes APB Opinion No. 20, which required
      that
      most voluntary changes in accounting principles be recognized by including
      in
      the current period’s net income the cumulative effect of the change. SFAS No.
      154 also makes a distinction between “retrospective application” of a change in
      accounting principle and the “restatement” of financial statements to reflect
      the correction of an error. The provisions of SFAS No. 154 are effective for
      accounting changes made in fiscal years beginning after December 15, 2005.
      The
      adoption of SFAS No. 154 had no material impact on the 2006 consolidated
      financial statements or results of our operations.




In
      November 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 115-1 and FAS
      124-1, *the
      meaning of Other-Than-Temporary Impairment and Its Application to Certain
      Investment* .
      This
      FSP nullified certain requirements of Emerging Issues Tasks Force 03-1, *the
      meaning of Other-Than-Temporary Impairment and its Application to Certain
      Investments* ,
      and
      references existing other than temporary guidance. Furthermore, this FSP creates
      a three step process in determining when an investment is considered impairment,
      whether that impairment is other than temporary, and measurement of an
      impairment loss The implementation of the FSP No. FAS 115-1 and FAS 124-1 is
      not
      expected to have a material impact on our consolidated financial
      statements.




In
      December 2005, the FASB issued FSP Statement of Position (“SOP”) 94-6-1, *Terms
      of Loan Products That May Give Rise to a Concentration of Credit
      Risk* ,
      which
      addresses the circumstances under which the terms of loan products give rise
      to
      such risk and the disclosures or other accounting considerations that apply
      for
      entities that originate, hold, guarantee, service, or invest in loan products
      with terms that may give rise to a concentration of credit risk. The guidance
      under this FSP is effective for interim and annual periods ending after December
      19, 2005 and for loan products that are determined to represent a concentration
      of credit risk, disclosure requirements of SFAS No. 107, *Disclosures
      about Fair Value of Financial Instruments* ,
      should
      be provided for all periods presented. The adoption of this FSP did not have
      a
      significant impact on our consolidated financial statements.




In
      February 2006, the FASB issued SFAS No. 155, *Accounting
      for Certain Hybrid Financial Instruments* ,
      which
      amends SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities* ,
      and
      SFAS No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities* .
      This
      statement also resolves issues addressed in Statement 133 Implementation Issue
      No. D1, *Application
      of Statement 133 to Beneficial Interests in Securitized Financial Assets.* SFAS
      No.
      155 eliminates the exemption from applying SFAS No. 133 to interests in
      securitized financial assets so that similar instruments are accounted for
      similarly regardless of the form of the instruments. SFAS No. 155 also allows
      a
      preparer to elect fair value measurement at acquisition, at issuance, or when
      a
      previously recognized financial instrument is subject to a remeasurement (new
      basis) event, on an instrument-by-instrument basis, in a case in which a
      derivative would otherwise have to be bifurcated. SFAS No. 155 is effective
      for
      all financial instruments acquired or issued after the beginning of an entity’s
      first fiscal year that begins after September 15, 2006. We do not expect the
      adoption SFAS No. 155 to have a material impact on the consolidated financial
      statements or results of our operations.





9




In
      March
      2006, the FASB issued SFAS No. 156, *Accounting
      for Servicing of Financial Assets,* which
      amends the guidance in SFAS No. 140. SFAS No. 156 requires that an entity
      separately recognize a servicing asset or a servicing liability when it
      undertakes an obligation to service a financial asset under a servicing contract
      in certain situations. Such servicing assets or servicing liabilities are
      required to be measured initially at fair value, if practicable. SFAS No. 156
      also allows an entity to measure its servicing assets and servicing liabilities
      subsequently using either the amortization method, which existed under SFAS
      No.
      140, or the fair value measurement method. SFAS No. 156 will be effective for
      the Company in the fiscal year beginning January 1, 2007. The Company is in
      the
      process of evaluating the impact that adoption of this statement will have
      on
      its results of operations or financial condition.




**Note
      9.**  **Subsequent
      Events**




In
      April
      2006, we obtained the final required regulatory approval for our acquisition
      of
      Liberty Bank of New York.




**Note** **10.
      Reclassifications**




Certain
      reclassifications, principally related to components of interest income, were
      made to the prior periods’ presentation to conform to the current year’s
      presentation.




**Item
      2.**  **Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations**




This
      discussion presents management’s analysis of our results of operations and
      financial condition as of and for the three-month periods ended March 31, 2006
      and 2005, respectively, and includes the statistical disclosures required by
      the
      Securities and Exchange Commission Guide 3 (“Statistical Disclosure”) by Bank
      Holding Companies”). All per share amounts and number of shares outstanding in
      this item have been retroactively adjusted and restated to give effect to a
      two-for-one stock split (effected in the form of a 100% stock dividend) in
      December 2004. The discussion should be read in conjunction with our financial
      statements and the notes related thereto which appear elsewhere in this
      Quarterly Report on Form     10-Q.




Statements
      contained in this report that are not purely historical are forward-looking
      statements within the meaning of Section 21E of the Securities Exchange Act
      of
      1934, as amended, including our expectations, intentions, beliefs, or strategies
      regarding the future. Any
      statements in this document about expectations, beliefs, plans, objectives,
      assumptions or future events or performance are not historical facts and are
      forward-looking statements. These statements are often, but not always, made
      through the use of words or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “will continue,”
“anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and
“outlook,” and similar expressions. Accordingly, these statements involve
      estimates, assumptions and uncertainties, which could cause actual results
      to
      differ materially from those expressed in them. Any forward-looking statements
      are qualified in their entirety by reference to the factors discussed throughout
      this document. All
      forward-looking statements concerning economic conditions, rates of growth,
      rates of income or values as may be included in this document are based on
      information available to us on the dates noted, and we assume no obligation
      to
      update any such forward-looking statements. It is important to note that our
      actual results may differ materially from those in such forward-looking
      statements due to fluctuations in interest rates, inflation, government
      regulations, economic conditions, customer disintermediation and competitive
      product and pricing pressures in the geographic and business areas in which
      we
      conduct operations, including our plans, objectives, expectations and intentions
      and other factors discussed under the section entitled “Risk Factors,” in our
      Annual Report on Form 10-K for the year ended December 31, 2005, including
      the
      following:




·
            If
                a significant number of clients fail to perform under their loans,
                our
                business, profitability, and financial condition would be adversely
                affected.




·
            Our
                current level of interest rate spread may decline in the future.




·
            The
                holders of recently issued debentures have rights that are senior
                to those
                of our shareholders.




·
            Adverse
                changes in domestic or global economic conditions, especially in
                California, could have a material adverse effect on our business,
                growth,
                and profitability.







10




·
            Maintaining
                or increasing our market share depends on market acceptance and regulatory
                approval of new products and
                services.




·
            Significant
                reliance on loans secured by real estate may increase our vulnerability
                to
                downturns in the California real estate market and other variables
                impacting the value of real estate.




·
            If
                we fail to retain our key employees, our growth and profitability
                could be
                adversely affected.




·
            We
                may be unable to manage future
                growth.




·
            Increases
                in our allowance for loan lossescould
                materially adversely affect our earnings.




·
            We
                could be liable for breaches of security in our online banking services.
                Fear of security breaches could limit the growth of our online services.




·
            Our
                directors and executive officers beneficially own a significant portion
                of
                our outstanding common stock.




·
            The
                market for our common stock is limited, and potentially subject to
                volatile changes in price.




·
            Additional
                shares of our Common Stock issued in the future could have a dilutive
                effect.




·
            Shares
                of our preferred stock issued in the future could have dilutive and
                other
                effects.




·
            We
                face substantial competition in our primary market
                area.




·
            The
                profitability of Wilshire Bancorp will be dependent on the profitability
                of the Bank.




·
            Wilshire
                Bancorp relies heavily on the payment of dividends from the Bank.




·
            Anti-takeover
                provisions of our charter documents may have the effect of delaying
                or
                preventing changes in control or management.




·
            We
                are subject to significant government regulation and legislation
                that
                increases the cost of doing business and inhibits our ability to
                compete.




·
            We
                could be negatively impacted by downturns in the South Korean
                economy.




These
      factors and the risk factors referred to in our Annual Report on Form 10-K
      for
      the year ended December 31, 2005 could cause actual results or outcomes to
      differ materially from those expressed in any forward-looking statements made
      by
      us, and you should not place undue reliance on any such forward-looking
      statements. Any forward-looking statement speaks only as of the date on which
      it
      is made and we do not undertake any obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time, and it is not possible for us
      to
      predict which will arise. In addition, we cannot assess the impact of each
      factor on our business or the extent to which any factor, or combination of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.




11


**Selected
      Financial Data**




The
      following table presents selected historical financial information (unaudited)
      as of and for the three months ended March 31, 2006 and 2005. In the opinion
      of
      our management, the information presented reflects all adjustments considered
      necessary for a fair presentation of the results of such periods. The operating
      results for the interim periods are not necessarily indicative of our future
      operating results.


**(Dollars
                  in thousands, except per share data)****As
                  of and for the Three Months Ended**
              
              **March
                  31, 2006**
              
              **March
                  31, 2005**Net
                  income
              
              $
              7,823
              
              $
              6,070Net
                  income per share, basic
              
              
              0.27
              
              
              0.21Net
                  income per share, diluted
              
              
              0.27
              
              
              0.21Net
                  interest income
              
              
              17,279
              
              
              13,640**Average
                  balances:**Assets
              
              
              1,703,524
              
              
              1,298,900Cash
                  and cash equivalents
              
              
              203,344
              
              
              120,167Investment
                  debt securities
              
              
              170,643
              
              
              104,605Net
                  loans
              
              
              1,266,976
              
              
              1,026,188Total
                  deposits
              
              
              1,444,595
              
              
              1,105,393Shareholders’
                  equity
              
              
              118,469
              
              
              92,349**Performance
                  Ratios:**Annualized
                  return on average assets
              
              
              1.84%
              
              
              1.87%Annualized
                  return on average equity
              
              
              26.41%
              
              
              26.29%Net
                  interest margin
              
              
              4.37%
              
              
              4.54%Efficiency
                  ratio1
              
              
              38.47%
              
              
              42.20%**Capital
                  Ratios:**Tier
                  1 capital to adjusted total assets
              
              
              9.39%
              
              
              9.81%Tier
                  1 capital to risk-weighted assets
              
              
              11.60%
              
              
              11.74%Total
                  capital to risk-weighted assets
              
              
              14.41%
              
              
              14.08%
  **Period-end
                  balances as of:**
              
              **March
                  31, 2006**
              
              **December
                  31, 2005**
              
              **March
                  31, 2005**Total
                  assets
              
              $
              1,738,613
              
              $
              1,666,273
              
              $
              1,377,297Investment
                  securities
              
              
              193,992
              
              
              161,510
              
              
              120,508Total
                  loans, net of unearned income
              
              
              1,312,588
              
              
              1,262,560
              
              
              1,044,964Total
                  deposits
              
              
              1,481,237
              
              
              1,409,465
              
              
              1,159,872Junior
                  subordinated debentures
              
              
              61,547
              
              
              61,547
              
              
              46,083FHLB
                  borrowings
              
              
              50,000
              
              
              61,000
              
              
              61,000Shareholders’
                  equity
              
              
              120,147
              
              
              113,104
              
              
              95,178**Asset
                  Quality Ratios:**Net
                  (recoveries) charge-off to average total loans for the
                  quarter
              
              
              0.01%
              
              
              0.03%
              
              
              (0.01)%Nonperforming
                  loans to total loans
              
              
              0.17%
              
              
              0.20%
              
              
              0.21%Nonperforming
                  assets to total loans and other real estate owned
              
              
              0.19%
              
              
              0.22%
              
              
              0.24%Allowance
                  for loan losses to total loans
              
              
              1.13%
              
              
              1.11%
              
              
              1.12%Allowance
                  for loan losses to nonperforming loans
              
              
              668%
              
              
              567%
              
              
              521%
  **Executive
          Overview**
  **Introduction**
  Wilshire
          Bancorp, Inc. (the “Company,” “we,” “us,” or “our,” hereafter) succeeded to the
          business and operations of Wilshire State Bank (the “Bank”) upon consummation of
          the reorganization of the Bank into a holding company structure, effective
          as of
          August 25, 2004. Prior to the completion of the reorganization, the Bank
          was
          subject to the information, reporting and proxy statement requirements
          of the
          Exchange Act, pursuant to the regulations of its primary regulator, the
          Federal
          Deposit Insurance Corporation, or FDIC. Accordingly, the Bank filed annual
          and
          quarterly reports, proxy statements and other information with the FDIC.
          Pursuant to Rule 12g-3 of the Exchange Act, the Company has succeeded to
          the
          reporting obligations of the Bank and the reporting obligations of the
          Bank to
          the FDIC have terminated. Filings by the Company under the Exchange Act,
          like
          this Form 10-Q, are to be made with the SEC. Note that while we refer generally
          to the “Company” throughout this filing, all references to the Company prior to
          August 25, 2004, except where otherwise indicated, are to the Bank.
  1Represents the ratio of noninterest expense to the sum of net interest
            income
            before provision for loan losses and noninterest income.
  12




We
        operate community banks in the general commercial banking business, with
        our
        primary market encompassing the multi-ethnic population of the Los Angeles
        Metropolitan area. Our full-service offices are located primarily in areas
        where
        a majority of the businesses are owned by Korean-speaking immigrants, with
        many
        of the remaining businesses owned by Hispanic and other minority
        groups.
  At
        March
        31, 2006, we had approximately $1.74 billion in assets, $1.31 billion in
        total
        loans, and $1.48 billion in deposits.
  We
        also
        have expanded and diversified our business by focusing on the continued
        development of our commercial and consumer lending divisions. Over the past
        several years, our network of branches and loan production offices has been
        expanded geographically. We currently maintain sixteen branch offices and
        nine
        loan production offices. In 2005 we opened two branch offices in our niche
        market and four loan production offices in four different states. Our expansion
        in these areas complements our multi-ethnic small business focus. We intend
        to
        continue our growth strategy in future years through the opening of additional
        branches and loan production offices as our needs and resources
        permit.
  In
        December 2002, the Bank issued $10 million of the 2002 Junior Subordinated
        Debentures. Subsequently, the Company, as a wholly-owned subsidiary in 2003
        and
        as a parent company of the Bank in 2005, issued a total of $51,547,000 of
        Junior
        Subordinated Debentures in connection with a $50,000,000 trust preferred
        securities issuance by statutory trusts wholly-owned by the Company. We believe
        that the supplemental capital raised in connection with the issuance of these
        debentures allowed us to achieve and maintain status as a well-capitalized
        institution and sustained our continued loan growth.
  As
        evidenced by our past several years of operations, we have experienced
        significant balance sheet growth. We have implemented a strategy of building
        our
        core banking foundation by focusing on commercial loans and business transaction
        accounts. Our management believes that this strategy has created recurring
        revenue streams, diversified our product portfolio and enhanced shareholder
        value.
  **First
        Quarter 200** **6
        Key Performance Indicators**
  We
        believe the following were key indicators of our performance for operations
        during the first quarter of 2006:
  ·
            our
                total assets grew to $1.74 billion at the end of the first quarter
                of
                2006, or an increase of 4.3% from $1.67 billion at the end of
                2005.  ·
            our
                total deposits grew to $1.48 billion at the end of the first quarter
                of
                2006, or an increase of 5.1% from $1.41 billion at the end of
                2005.  ·
            our
                total loans grew to $1.31 billion at the end of the first quarter
                of 2006,
                or an increase of 4.0% from $1.26 billion at the end of
                2005.  ·
            our
                nonperforming assets decreased to $2.5 million at the end of the
                first
                quarter of 2006 from $2.7 million at the end of 2005. The ratio of
                total
                non-performing loans to total loans improved to 0.17% at the end
                of the
                first quarter of 2006 from 0.20% at the end of
                2005.  ·
            our
                depositors’ preference for high-cost time deposits over
                noninterest-bearing checking accounts and the stiff competition in
                our
                niche market reduced our net interest margin to 4.37% in the first
                quarter
                of 2006 as compared with 4.54% in the same quarter of 2005.  ·
            total
                noninterest income increased to $5.8 million in the first quarter
                of 2006,
                or an increase of 16.8% from $4.9 million in the first quarter of
                2005.
                Such increase was primarily attributable to the growth of overall
                business.   13
 ·
              total
                  noninterest expense increased to $8.9 million in the first quarter
                  of 2006
                  from $7.8 million in the first quarter of 2005, reflecting the
                  expanded
                  personnel and premises associated with our business growth. Due
                  to
                  continuing efforts to minimize operating expenses, noninterest
                  expenses as
                  a percentage of average assets were lowered to 0.52% in the first
                  quarter
                  of 2006 from 0.60% in the first quarter of 2005. Management believes
                  that
                  its efforts in cost-cutting and revenue diversification have improved
                  our
                  operational efficiency, as evidenced by the improvement in our
                  efficiency
                  ratio (the ratio of noninterest expense to the sum of net interest
                  income
                  before provision for loan losses and total noninterest income)
                  from 42.20%
                  in the first quarter of 2005 to 38.47% in the first quarter of
                  2006.  These
          items, as well as other factors, contributed to the increase in net income
          for
          the first quarter of 2006 to $7.8 million or $0.27 per diluted common share,
          from $6.1 million, or $0.21 per diluted common share, in the first quarter
          of
          2005 and are discussed in further detail throughout “Management’s Discussion and
          Analysis of Financial Condition and Results of Operations.”
  **200** **6
          Outlook**
  As
          we
          look ahead to the remainder of 2006, we anticipate continued good financial
          performance. We will continue to pursue opportunities for growth in our
          existing
          markets, as well as opportunities to expand into new markets through *de
          novo* branching and regional loan production offices. An extension of such growth
          strategy is the pending acquisition of Liberty Bank of New York. We now
          have
          obtained the regulatory approvals for the transaction, and anticipate that
          the
          transaction will close in the second quarter of 2006. The closing of this
          transaction would add two branches in the New York metropolitan area and
          expanding our business into the east coast market of the United States.
          Further,
          we expect that our portfolio of unsecured business loans and consumer loans
          will
          continue to grow as a result of targeted marketing efforts in these
          areas.
  We
          intend
          to continue our focus on loan and deposit growth and our net interest margin
          management, while improving efficient operations to control operating expenses
          so that our expenses grow more slowly than our business operations.
  Although
          the increase of our deposit costs decreased our net interest margin in
          the first
          quarter of 2006, our focus on core deposits marketing currently controls
          the
          rate of increase of expensive time-deposits. The increase of our time deposits
          was limited to approximately $22.3 million in the first three months of
          2006
          whereas our total deposits increased by $71.8 million.
  The
          economies and real estate markets in our primary market areas will continue
          to
          be significant determinants of the quality of our assets in future periods
          and,
          thus, our results of operations, liquidity and financial condition. Current
          economic indicators suggest that the national economy and the economies
          in our
          primary market areas are still expanding.
  For
          the
          remainder of 2006, management will be focused on the above challenges and
          opportunities and other factors affecting the business similar to the factors
          driving the results of the first quarter of 2006, as discussed in “Management’s
          Discussion and Analysis of Financial Condition and Results of
          Operations.”
  **Critical
          Accounting Policies**
  The
          discussion and analysis of our financial condition and results of operations
          is
          based upon our financial statements, which have been prepared in accordance
          with
          accounting principles generally accepted in the United States of America.
          The
          preparation of these financial statements requires management to make estimates
          and judgments that affect the reported amounts of assets and liabilities,
          revenues and expenses, and related disclosures of contingent assets and
          liabilities at the date of our financial statements. Actual results may
          differ
          from these estimates under different assumptions or conditions.
  14
 Various
            elements of our accounting policies, by their nature, are inherently
            subject to
            estimation techniques, valuation assumptions and other subjective assessments.
            In particular, we have identified six accounting policies that, due to
            judgments, estimates and assumptions inherent in those policies are critical
            to
            an understanding of our consolidated financial statements. These policies
            relate
            to the classification and valuation of investment securities, the methodologies
            that determine our allowance for loan losses, the treatment of non-accrual
            loans, the valuation of properties acquired through foreclosure, the
            valuation
            of retained interests and mortgage servicing assets related to the sales
            of
            Small Business Administration loans, and the treatment and valuation
            of
            stock-based compensation.
  In
            each
            area, we have identified the variables most important in the estimation
            process.
            We have used the best information available to make the estimation necessary
            to
            value the related assets and liabilities. Actual performance that differs
            from
            our estimates and future changes in the key variables could change future
            valuation and impact net income.
  Our
            significant accounting policies are described in greater detailed in
            our 2005
            Annual Report on Form 10-K in the “Critical Accounting Policies” section of
            Management’s Discussion and Analysis and in Note 1 to the Consolidated Financial
            Statements-”Significant Accounting Policies” which are essential to
            understanding Management’s Discussion and Analysis of Results of Operations and
            Financial Condition. There has been no material modification to these
            policies
            during the quarter ended March 31, 2006, other than disclosed in note
            3 to the
            March 31, 2006 condensed consolidated interim financial statements.
  **Results
            of Operations**
  **Net
            Interest Income and Net Interest Margin**
  Our
            primary source of revenue is net interest income, which is the difference
            between interest and fees derived from earning assets and interest paid
            on
            liabilities obtained to fund those assets. Our net interest income is
            affected
            by changes in the level and mix of interest-earning assets and interest-bearing
            liabilities, referred to as volume changes. Our net interest income is
            also
            affected by changes in the yields earned on assets and rates paid on
            liabilities, referred to as rate changes. Interest rates charged on our
            loans
            are affected principally by the demand for such loans, the supply of
            money
            available for lending purposes and competitive factors. Those factors
            are, in
            turn, affected by general economic conditions and other factors beyond
            our
            control, such as federal economic policies, the general supply of money
            in the
            economy, legislative tax policies, governmental budgetary matters and
            the
            actions of the Federal Reserve Board (“FRB”).
  Average
            interest-earning assets increased by 31.6% to $1.6 billion in the first
            quarter
            of 2006, as compared with $1.2 billion in the same quarter of 2005. **** Average
            net loans also increased by 23.5% to $1.27 billion in the first quarter
            of 2006,
            as compared with $1.03 billion in the same quarter of 2005. The FRB has
            raised
            the Fed Fund target rate by a total of 3.75% since June 2004, giving
            us
            additional benefits on yields on our earning assets, most of which bear
            variable
            interest rates. The average yields on interest-earning assets increased
            to 7.85%
            for the first quarter of 2006, as compared with 6.50% for the prior year’s same
            period. This increase in interest-earning assets and their yields significantly
            increased our total interest income by 59.0% to $31.0 million for the
            first
            quarter of 2006, as compared with $19.5 million for the prior year’s same
            period.
  Average
            interest-bearing liabilities increased by 37.3% to $1.16 billion in the
            first
            quarter of 2006, as compared with $842.2 million in the same quarter
            of 2005. We
            also increased other borrowings over the last 12 months (see “Deposits and Other
            Sources of Funds” below). Due to the increase in interest-bearing liabilities
            and overall funding costs, the average interest rate we paid for
            interest-bearing liabilities for the first quarter of 2006 increased
            to 4.23%
            from 2.53% in the same quarter a year ago. The volume increase of
            interest-bearing liabilities together with the rate increase significantly
            increased our total interest expense by $7.9 million to $13.8 million
            for the
            first quarter of 2006, as compared with $5.9 million for the prior year’s same
            period.
  The
            combined result of our growth and the interest rate increases was an
            increase in
            net interest income. Net interest income increased by $3.6 million (26.7%)
            to
            $17.3 million in the first quarter of 2006 from $13.6 million in the
            same
            quarter a year ago. Despite the positive impact of FRB’s rate increases on our
            asset-sensitive position, our net interest margin decreased to 4.37%
            for the
            first quarter of 2006, as compared with 4.54% for the prior year’s same period
            due mainly to the overall increase in market interest rates which was
            accelerated by depositors shifting funds into interest bearing deposits
            from non
            interest-bearing deposits. The net interest spread also decreased in
            the first
            quarter of 2006 to 3.53% from 3.97% for the prior year’s same period.
            Management’s current focus on increasing core deposits and limiting the increase
            in expensive time-deposits resulted in time deposits increasing only
            $22.3
            million during the first three months of 2006, representing only 31%
            of the
            increase of our total deposits ($71.8 million) for the same period. Management
            also believes that our proposed acquisition and expansion into the New
            York
            market will help control our fund cost and eventually help improve our
            margins,
            as the fund costs of Liberty Bank of New York appear lower than our current
            fund
            costs.
 15
  Since
          June 30, 2004, the FRB raised its overnight lending rate eight times by
          an
          aggregate of 3.75% to 4.75%. The Wall Street Journal Prime Rate was
          correspondingly increased to 7.75% at March 28, 2006. We are in an
          asset-sensitive position, meaning that these rate increases positively
          affected
          our net interest margin, because more earning assets were immediately re-priced
          than interest-bearing liabilities. Although we price deposits competitively
          with
          the goal of continuing to fund our growing loan portfolio, our models indicate
          that our margin should expand in a rising interest rate
          environment.
  The
          following table sets forth, for the periods indicated, our average balances
          of
          assets, liabilities and shareholders’ equity, in addition to the major
          components of net interest income and net interest margin (all yields were
          calculated without the consideration of tax effects, if any):
  **Distribution,
          Yield and Rate Analysis of Net Interest Income**
  **For
                    the Quarter Ended March 31,****2006**
                
                **2005****(Dollars
                    in Thousands)**
                
                **Average**
                  **Balance**
                
                **Interest
                    Income/ Expense**
                
                **Annualized
                    Average Rate/Yield**
                
                **Average**
                  **Balance**
                
                **Interest
                    Income/ Expense**
                
                **Annualized
                    Average Rate/Yield****Assets:**Interest-earning
                    assets:Net
                    loans1
                
                $
                1,266,976
                
                $
                27,650
                
                
                8.73%
                
                $
                1,026,188
                
                $
                18,230
                
                
                7.11%Securities
                    of U.S. government enterprises
                
                
                154,308
                
                
                1,583
                
                
                4.10%
                
                
                99,767
                
                
                792
                
                
                3.18%Other
                    investment securities
                
                
                16,335
                
                
                188
                
                
                4.59%
                
                
                4,838
                
                
                58
                
                
                4.82%Overnight
                    investments and other cash
                
                
                143,052
                
                
                1,615
                
                
                4.52%
                
                
                66,850
                
                
                428
                
                
                2.56%Money
                    market preferred securities
                
                
                —
                
                
                —
                
                
                —
                
                
                3,911
                
                
                20
                
                
                2.08%Interest-earning
                    deposits
                
                
                500
                
                
                5
                
                
                4.19%
                
                
                2
                
                
                0
                
                
                0.00%Total
                    interest-earning assets
                
                
                1,581,171
                
                
                31,041
                
                
                7.85%
                
                
                1,201,554
                
                
                19,528
                
                
                6.50%Cash
                    and due from banks
                
                
                60,292
                
                
                
                
                
                
                
                
                53,319Other
                    assets
                
                
                62,061
                
                
                
                
                
                
                
                
                44,027Total
                    assets
                
                $
                1,703,524
                
                
                
                
                
                
                
                $
                1,298,900**Liabilities
                    and Shareholders’ Equity:**Interest-bearing
                    liabilities:Money
                    market deposits
                
                $
                315,852
                
                $
                3,114
                
                
                3.94%
                
                $
                218,640
                
                $
                1,113
                
                
                2.04%Super
                    NOW deposits
                
                
                21,719
                
                
                60
                
                
                1.10%
                
                
                21,204
                
                
                40
                
                
                0.75%Savings
                    deposits
                
                
                21,663
                
                
                48
                
                
                0.89%
                
                
                23,753
                
                
                43
                
                
                0.73%Time
                    certificates of deposit in denominations of $100,000 or
                    more
                
                
                649,306
                
                
                7,483
                
                
                4.61%
                
                
                466,728
                
                
                3,188
                
                
                2.73%Other
                    time deposits
                
                
                147,485
                
                
                1,548
                
                
                4.20%
                
                
                111,900
                
                
                726
                
                
                2.60%Other
                    borrowings
                
                
                117,036
                
                
                1,509
                
                
                5.16%
                
                
                87,678
                
                
                778
                
                
                3.55%Total
                    interest-bearing liabilities
                
                
                1,273,061
                
                
                13,762
                
                
                4.32%
                
                
                929,903
                
                
                5,888
                
                
                2.53%Demand
                    deposits
                
                
                288,570
                
                
                
                
                
                
                
                
                263,168Other
                    liabilities
                
                
                23,406
                
                
                
                
                
                
                
                
                13,480Shareholders’
                    equity
                
                
                118,469
                
                
                
                
                
                
                
                
                92,349Total
                    liabilities and shareholders’ equity
                
                $
                1,703,524
                
                
                
                
                
                
                
                $
                1,298,900Net
                    interest income
                
                
                
                
                $
                17,279
                
                
                
                
                
                
                
                $
                13,640Net
                    interest spread2
                
                
                
                
                
                
                
                
                3.53%
                
                
                
                
                
                
                
                
                3.97%Net
                    interest margin3
                
                
                
                
                
                
                
                
                4.37%
                
                
                
                
                
                
                
                
                4.54%
  
 (1)  Net
          loan
          fees have been included in the calculation of interest income. Loan fees
          were
          approximately $1,379,000 and $945,000 for the quarters ended March 31,
          2006 and
          2005, respectively. Loans are net of the allowance for loan losses, deferred
          fees, unearned income, and related direct costs, but includes those placed
          on
          non-accrual status.
 (2)  Represents
          the average rate earned on interest-earning assets less the average rate
          paid on
          interest-bearing liabilities.
 (3)  Represents
          net interest income as a percentage of average interest-earning
          assets.
  16




The
      following table sets forth, for the periods indicated, the dollar amount of
      changes in interest earned and paid for interest-earning assets and
      interest-bearing liabilities and the amount of change attributable to changes
      in
      average daily balances (volume) or changes in average daily interest rates
      (rate). All yields were calculated without the consideration of tax effects,
      if
      any, and the variances attributable to both the volume and rate changes have
      been allocated to volume and rate changes in proportion to the relationship
      of
      the absolute dollar amount of the changes in each:




**Rate/Volume
      Analysis of Net Interest Income**




****
            
            **For
                the Quarter Ended March 31,**
              **2006
                vs. 2005****(Dollars
                in Thousands)**
            
            **Increase
                (Decrease) Due to Change In******
            
            **Volume**
            
            **Rate**
            
            **Total**Interest
                income:Net
                loans1
            
            $
            4,773
            
            $
            4,647
            
            $
            9,420Securities
                of government sponsored enterprises
            
            
            516
            
            
            275
            
            
            791Other
                investment securities
            
            
            133
            
            
            (3
            )
            
            130Overnight
                investments
            
            
            710
            
            
            477
            
            
            1,187Money
                market preferred securities
            
            
            (20
            )
            
            0
            
            
            (20
            )Interest-earning
                deposits
            
            
            5
            
            
            0
            
            
            5Total
                interest income
            
            
            6,117
            
            
            5,396
            
            
            11,513Interest
                expense:Money
                market deposits
            
            $
            644
            
            $
            1,357
            
            $
            2,001Super
                NOW deposits
            
            
            1
            
            
            19
            
            
            20Savings
                deposits
            
            
            (4
            )
            
            9
            
            
            5Time
                certificates of deposit in denominations of $100,000 or
                more
            
            
            1,558
            
            
            2,737
            
            
            4,295Other
                time deposits
            
            
            280
            
            
            542
            
            
            822Other
                borrowings
            
            
            310
            
            
            421
            
            
            731Total
                interest expense
            
            
            2,789
            
            
            5,085
            
            
            7,874Change
                in net interest income
            
            $
            3,328
            
            $
            311
            
            $
            3,639





(1)
      Net
      loan fees have been included in the calculation of interest income. Net loan
      fees were approximately $1,379,000 and $945,000 for the quarters ended March
      31,
      2006 and 2005, respectively. Loans are net of the allowance for loan losses,
      deferred fees, unearned income, and related direct costs, but includes those
      placed on non-accrual status.




17


**Provision
      for Losses on Loan and Loan Commitments**





In
      anticipation of credit risk inherent in our lending business, we set aside
      allowances through charges to earnings. Such charges were not made only for
      our
      outstanding loan portfolio, but also for off-balance sheet items, such as
      commitments to extend credits or letters of credit. The charges made for our
      outstanding loan portfolio were credited to allowance for loan losses, whereas
      charges for off-balance sheet items were credited to reserve for off-balance
      sheet items, which are presented as a component of other liabilities.




We
      respond to potential loan losses proactively by identifying problem loans in
      a
      timely manner and by taking immediate actions to successfully curb increases
      in
      the level of non-performing assets (see “Nonperforming Assets” below for further
      discussion). Despite our low level of nonperforming assets and recoveries of
      previously charged-off loans, our provision for loan losses and loan commitments
      increased to $1.0 million in the first quarter of 2006 as a result of growth
      in
      loan portfolio as compared with $500,000 for the prior year’s same quarter.
      Included in such provision was a $111,000 provision to the reserve for
      off-balance-sheet items in the first quarter of 2006, as compared with the
      reversal of $2,000 for the prior year’s same quarter. The procedures for
      monitoring the adequacy of the allowance for loan losses, as well as detailed
      information concerning the allowance itself, are described in the section
      entitled “Allowance for Loan Losses” below.




**Noninterest
      Income**




Total
      noninterest income increased to $5.8 million in the first quarter of 2006,
      as
      compared with $4.9 million in the same period of 2005, representing an increase
      of 16.8% during the comparable periods. Noninterest income as a percentage
      of
      average assets was 0.34% and 0.38% in the first quarter of 2006 and 2005,
      respectively. We currently earn non-interest income from various sources,
      including an income stream provided by bank owned life insurance in the form
      of
      an increase in cash surrender value and gains on sales of residential mortgage
      loans.




The
      following table sets forth the various components of our noninterest income
      for
      the periods indicated:




**Noninterest
      Income**


**(Dollars
      in thousands)**


**For
                  the Quarter Ended March 31,**
              
              **2006**
              
              **2005****(Amount)**
              
              **(%)**
              
              **(Amount)**
              
              **(%)**Gain
                  on sale of loans
              
              $
              2,350
              
              
              40.8%
              
              $
              2,023
              
              
              41.0%Service
                  charges on deposit accounts
              
              
              2,155
              
              
              37.4%
              
              
              1,720
              
              
              34.9%Loan
                  related servicing income
              
              
              529
              
              
              9.2%
              
              
              658
              
              
              13.3%Referral
                  fee income
              
              
              48
              
              
              0.8%
              
              
              101
              
              
              2.0%Loan
                  packaging fee
              
              
              114
              
              
              2.0%
              
              
              66
              
              
              1.3%Income
                  from other earning assets
              
              
              240
              
              
              4.1%
              
              
              127
              
              
              2.6%Other
                  income
              
              
              328
              
              
              5.7%
              
              
              241
              
              
              4.9%Total
              
              $
              5,764
              
              
              100.0%
              
              $
              4,936
              
              
              100.0%Average
                  assets
              
              $
              1,703,524
              
              
              
              
              $
              1,298,900Noninterest
                  income as a % of average assets
              
              
              
              
              
              0.34%
              
              
              
              
              
              0.38%




Our
      largest source of noninterest income in the first quarter of 2006 was the gain
      on the sale of loans, which increased to $2.4 million in the first quarter
      of
      2006 from $2.0 million in the prior year’s same quarter. The ratio of this
      income as a percentage of total noninterest income was 40.8% in the first
      quarter of 2006, compared to 41.0% during the first quarter of 2005. This
      non-interest income is derived primarily from the sale of the guaranteed portion
      of SBA loans. We sell the guaranteed portion of SBA loans in government
      securities secondary markets and retain servicing rights. SBA loan production
      levels were $39.6 million and $23.9 million at March 31, 2006 and 2005
      respectively. As a result, the sales gains on the guaranteed portions of SBA
      loans increased to $2.3 million in the first quarter of 2006 as compared with
      $1.9 million in the first quarter of 2005. We generally earn this source of
      non-interest income from the sale of the unguaranteed portion of SBA loans
      and
      residential mortgage loans. Gain on sales of residential mortgage loans was
      $53,000 and $103,000, respectively, in the first quarter of 2006 and 2005.
      However, the sale of the unguaranteed portion of SBA loans is not considered
      a
      stable source of income and we had no such sales in the first quarter of 2006
      and 2005.




18




Our
      second largest source of noninterest income was service charge income on deposit
      accounts, representing 37.4% and 34.9% of total noninterest income in the first
      quarter of 2006 and 2005, respectively. This income source increased 25.3%
      in
      the first quarter of 2006 to $2.2 million, from $1.7 million in the first
      quarter of 2005. This increase was due primarily to an increase in our number
      of
      transactional accounts. We imposed more rigid requirements on money service
      business (“MSB”) accounts and more closely monitored their transactions. As
      a result, the transactions in the MSB accounts were reduced and fee income
      therefrom was also reduced, limiting the increase of this revenue source
      relative to the increase of transactional accounts. We constantly review service
      charge rates to maximize service charge income while maintaining a competitive
      position.




The
      third
      largest source of noninterest income was loan-related financing fees and
      servicing income. These fee incomes consist of trade-financing fees and
      servicing fees on SBA loans sold. With the expansion of our trade financing
      activities and the growth of our servicing loan portfolio, this fee income
      source historically has increased. However, it decreased to $529,000 in the
      first quarter of 2006 from $658,000 for the prior year’s same period. Such
      decrease was mainly caused by the significant reversals of servicing assets
      on
      sold SBA loans which were paid off before their maturities. The servicing fees
      on sold SBA loans are credited when we collect the monthly payments on the
      sold
      loans we are servicing, and are charged by the monthly amortization of servicing
      assets that we capitalize upon sale of the related loan. Such servicing assets
      are also reversed and charged against the fee income account when the sold
      loans
      are paid off before the related servicing assets are fully amortized. For the
      first three months of 2006, $284,000 of servicing assets were charged back
      to
      this income account by the early pay-offs as compared to $95,000 for the prior
      year’s same period. In light of our increasing emphasis on trade financing
      activities and the continuing growth of our servicing loan portfolio (the
      servicing portfolio increased to $293.4 million at March 31, 2006 from $252.5
      million a year ago), management believes that this income source should continue
      to increase as prepayments on SBA loans slow down. However, there can be no
      assurance that this will be the case.




Our
      loan
      referral fee income source includes income derived from our referring to other
      financial institutions loans that did not meet our lending requirements for
      various reasons, including size, availability of funds, credit criteria and
      others. Our referral fee income was $48,000 in the first quarter of 2006 and
      $101,000 in the same period of 2005, representing 0.8% and 2.0% of total
      noninterest income in the first quarter of 2006 and 2005, respectively. This
      source of revenue may continue to decrease because loan referrals do not
      represent our core banking business and fee income therefrom is not a
      predictable source of revenue.




Loan
      packaging fee income represents charges to borrowers for mostly SBA loan
      processing. The increased volume of loan production increased income from this
      source to $114,000 in the first quarter of 2006 from $66,000 for the prior
      year’s same quarter. The heightened competition for loans in our lending market
      often requires us to waive the packaging fees and such a practice may decrease
      this fee income in future periods.




Income
      on
      other earning assets represented income from earning assets other than
      interest-earning assets, such as dividend income from Federal Home Loan Bank
      (the “FHLB”) stock ownership and the increase in cash surrender value of bank
      owned life insurance. Such income was $240,000 and $127,000 for the first
      quarter of 2006 and 2005, respectively. This increase was primarily attributable
      to an additional purchase of $3 million in bank owned life insurance in the
      second quarter of 2005 and the increased acquisition of FHLB stock as required
      by the new Capital Plan of the Federal Home Loan Bank of San Francisco that
      went
      into effect on April 1, 2004.




Other
      income represented income from miscellaneous sources, such as check book sales
      income and operating recoveries, and generally increases as our business
      activities grow. Other income increased to $328,000 in the first quarter of
      2006
      from $241,000 in the first quarter of 2005.




**Noninterest
      Expense**




Total
      noninterest expense increased to $8.9 million in the first quarter of 2006
      from
      $7.8 million in the same period of 2005. This increase can be attributed to
      the
      expanded personnel and premises associated with our business growth, including
      the openings of new offices. However, due to continuing efforts to minimize
      operating expenses, noninterest expenses as a percentage of average assets
      decreased to 0.52% in the first quarter of 2006 from 0.60% in the same period
      of
      2005. Management believes that its efforts in cost-cutting and revenue
      diversification have improved our operational efficiency, as evidenced by the
      decrease in our efficiency ratio (the ratio of noninterest expense to the sum
      of
      net interest income before provision for loan losses and total noninterest
      income) from 42.2% in the first quarter of 2005 to 38.47% in the same period
      of
      2006.


19




The
      following table sets forth a summary of noninterest expenses for the periods
      indicated:




**Noninterest
      Expense**


**(Dollars
      in thousands)**




**For
                  the Quarter Ended March 31,**
              
              **2006**
              
              **2005****(Amount)**
              
              **(%)**
              
              **(Amount)**
              
              **(%)**Salaries
                  and employee benefits
              
              $
              5,256
              
              
              59.3%
              
              $
              4,375
              
              
              55.8%Occupancy
                  and equipment
              
              
              896
              
              
              10.1%
              
              
              833
              
              
              10.6%Data
                  processing
              
              
              505
              
              
              5.7%
              
              
              415
              
              
              5.3%Loan
                  referral fee
              
              
              342
              
              
              3.9%
              
              
              263
              
              
              3.3%Professional
                  fees
              
              
              242
              
              
              2.7%
              
              
              446
              
              
              5.7%Directors’
                  fees
              
              
              121
              
              
              1.4%
              
              
              123
              
              
              1.6%Office
                  supplies
              
              
              111
              
              
              1.2%
              
              
              108
              
              
              1.4%Advertising
                  and promotional expenses
              
              
              182
              
              
              2.1%
              
              
              246
              
              
              3.1%Communications
              
              
              105
              
              
              1.2%
              
              
              93
              
              
              1.2%Deposit
                  insurance premium
              
              
              43
              
              
              0.5%
              
              
              37
              
              
              0.5%Outsourced
                  service for customer(s)
              
              
              341
              
              
              3.8%
              
              
              322
              
              
              4.1%Investor
                  relation expenses
              
              
              45
              
              
              0.5%
              
              
              155
              
              
              2.0%Other
              
              
              675
              
              
              7.6%
              
              
              423
              
              
              5.4%Total
              
              $
              8,864
              
              
              100.0%
              
              $
              7,839
              
              
              100.0%Average
                  assets
              
              $
              1,703,524
              
              
              
              
              $
              1,298,900Noninterest
                  expenses as a % of average assets
              
              
              
              
              
              0.52%
              
              
              
              
              
              0.60%




Salaries
      and employee benefits increased by 20.1% to $5.3 million or 59.3% of total
      noninterest expenses in the first quarters of 2006, as compared with $4.4
      million, or 55.8% for the prior year’s same quarter. Such increase was the
      result of overall compensation increase caused by stiff competition for
      qualified bankers in our niche market in addition to our new office openings
      and
      business growth in the past 12 months that requires additional staffing. Our
      efforts to promote efficient operations limited the increase of these expenses
      lower than the growth rate of quarterly average-assets (31.2%) between those
      two
      periods in comparison. The number of full-time equivalent employees was 298
      as
      of March 31, 2006, compared with 247 as of March 31, 2005 and assets per
      employee increased to $5.8 million at March 31, 2006 from $5.6 million at March
      31, 2005.




Occupancy
      and equipment expenses totaled $896,000 and $833,000, in the first quarters
      of
      2006 and 2005, respectively, and represented approximately 10% of total
      noninterest expenses. This increase was attributable primarily to the expansion
      of our office network.




Data
      processing expenses, office supplies, and communication expenses in the
      aggregate represented approximately 8% of total noninterest expenses and
      increased to $505,000, $111,000, and $105,000, respectively, in the first
      quarters of 2006. They were $415,000, $108,000, and $93,000, respectively,
      for
      the prior year’s same quarter. The increases in these expenses are attributable
      to the growth of our business.




Loan
      referral fees are paid to brokers who refer loans, mostly SBA loans, to us.
      Although we also paid referral fees for qualified commercial loans beginning
      in
      2004, the referral fee increases were mainly the result of increases in our
      SBA
      loan production, since SBA loans are broker-driven loans. Due to the growth
      of
      SBA loan production, these referral fees increased to $342,000 in the first
      quarter of 2006, from $263,000 in the same period of 2005. SBA loan production
      increased to $39.6 million in the first quarter of 2006, from $23.9 million
      in
      the same quarter of the prior year.




20


Professional
      fees generally may increase as we grow and were $242,000 and $446,000, or 2.7%
      and 5.7% of total noninterest expenses, in the first quarters of 2006 and 2005,
      respectively. The professional fees in the first quarter of 2005 were
      exceptionally high because of the legal and accounting fees incurred to comply
      with the enhanced legal and accounting requirements of the Sarbanes-Oxley Act
      (“SOX”), especially the implementation of the annual certification requirement
      (“SOX 404 requirement”) in connection with our transition to a bank holding
      company structure. We have been able to reduce our professional expenses
      following the initial transition period. However, we expect these expenditures
      will continue to be significant as we address the enhanced SEC and NASDAQ
      corporate governance requirements and the local regulation of the states into
      which we recently commenced business operations.




Advertising
      and promotional expense decreased from $246,000 in the first quarter of 2005
      to
      $182,000 in the same period of 2006. The advertising and promotional activities
      in the first quarter of 2005 were higher than first quarter 2006 expenses
      because of media advertisements and promotional gifts for customers of newly
      opened offices, especially new loan production offices opened in the 2005
      quarter.




Outsourced
      service costs for customers are payments made to third parties who provide
      services that were traditionally provided by banks to their customers, such
      as
      armored car services or bookkeeping services. These expenses are recouped from
      the earnings credits earned by the respective depositors on their balances
      maintained with us. Due mainly to the increase in service activities and the
      increase in depositors demanding such services, such as escrow accounts and
      brokerage accounts, these expenses increased from $322,000 in the first quarter
      of 2005 to $341,000 in the same period of 2006.




Investor
      relations expenses represent costs for providing services to our existing or
      prospective shareholders, such as NASDAQ listing fees, fees for an outside
      investor relations company and various promotional material costs. These
      expenses have decreased from $155,000 in the first quarter of 2005 to $45,000
      in
      the same period of 2006. These expenses in the first quarter of 2005 were
      exceptionally high because of the payment of Nasdaq stock market listing and
      annual fee for the additional shares issued in relation with the stock split
      declared in December 2004.




Noninterest
      expense other than the categories specifically addressed above, such as
      directors’ fees and other miscellaneous expenses, increased to $839,000 in total
      in the first quarter of 2006 as compared with $583,000 for the prior year’s same
      quarter. Such increase was caused by the impairment charges on intangible assets
      ($66,000) in the first quarter of 2006 in addition to normal increases in
      connection with our business growth.




Generally,
      noninterest expense has increased in recent years as a result of rapid asset
      growth and expansion of our office network and products, all requiring
      substantial increases in staff, as well as additional occupancy and data
      processing costs. Management anticipates that noninterest expense will continue
      to increase as we continue to grow. However, management remains committed to
      cost-control and operational efficiency, and we expect to keep these increases
      to a minimum relative to our rate of growth.




21




**Provision
      for Income Taxes**




For
      the
      quarter ended March 31, 2006, we made a provision for income taxes of $5.3
      million on pretax net income of $13.1 million, representing an effective tax
      rate of 40.4%, as compared with a provision for income taxes of $4.2 million
      on
      pretax net income of $10.2 million, representing an effective tax rate of 40.7%
      for the prior year’s same period.




The
      effective tax rates in the first quarter of 2006 were reasonably consistent
      with
      those for the prior year’s same quarter. Our effective tax rates were one to two
      percentage points lower than statutory rates due to state tax benefits derived
      from doing business in an Enterprise Zone (“EZ”), our purchase of bank owned
      life insurance policies, and low income housing tax credit funds (see “Other
      Earning Assets” for further discussion). Generally, income tax expense is the
      sum of two components: current tax expense and deferred tax expense (benefit).
      Current tax expense is calculated by applying the current tax rate to taxable
      income. Deferred tax expense accounts for the change in deferred tax assets
      (liabilities) from year to year. Deferred income tax assets and liabilities
      represent the tax effects, based on current tax law, of future deductible or
      taxable amounts attributable to events that have been recognized in the
      financial statements. Because we traditionally recognize substantially more
      expenses in our financial statements than we have been allowed to deduct for
      taxes, we generally have a net deferred tax asset. At March 31, 2006 and
      December 31, 2005 we had net deferred tax assets of $7.4 million and $8.1
      million, respectively.




We
      believe that we have adequately provided or paid for income tax issues not
      yet
      resolved with federal, state and foreign tax authorities. Based upon
      consideration of all relevant facts and circumstances, we do not believe the
      ultimate resolution of tax issues for all open tax periods will have a
      materially adverse effect upon our results of operations or financial
      condition.




**Financial
      Condition**




**Loan
      Portfolio**




Total
      loans net of unearned income increased by $50.0 million, or 4.0%, to $1.31
      billion at March 31, 2006, as compared with $1.26 billion at December 31, 2005.
      Total loans net of unearned income as a percentage of total assets as of March
      31, 2006 and December 31, 2005 were 75.5% and 75.8%, respectively.




The
      following table sets forth the amount of total loans outstanding (excluding
      unearned income) and the percentage distributions in each category, as of the
      dates indicated:




**Distribution
      of Loans and Percentage Composition of Loan Portfolio**




**Amount
                Outstanding****(Dollars
                in Thousands)****March
                31, 2006**
            
            **December
                31, 2005**Construction
            
            $
            24,011
            
            $
            17,366Real
                estate secured
            
            
            1,041,912
            
            
            1,011,513Commercial
                and industrial
            
            
            198,051
            
            
            190,796Consumer
            
            
            48,614
            
            
            42,885Total
                loans, excluding unearned income
            
            $
            1,312,588
            
            $
            1,262,560Participation
                loans sold and serviced by the Company
            
            $
            290,075
            
            $
            273,876Construction
            
            
            1.8%
            
            
            1.4%Real
                estate secured
            
            
            79.4%
            
            
            80.1%Commercial
                and industrial
            
            
            15.1%
            
            
            15.1%Consumer
            
            
            3.7%
            
            
            3.4%Total
                loans, excluding unearned income
            
            
            100.0%
            
            
            100.0%


22


Real
      estate secured loans consist primarily of commercial real estate loans and
      are
      extended to finance the purchase and/or improvement of commercial real estate
      and/or businesses thereon. The properties may be either user owned or for
      investment purposes. Our loan policy adheres to the real estate loan guidelines
      set forth by the FDIC. The policy provides guidelines including, among other
      things, fair review of appraisal value, limitation on loan-to-value ratio and
      minimum cash flow requirements to service debt. Loans secured by real estate
      equaled $1.04 billion and $1.01 billion as of March 31, 2006 and December 31,
      2005, respectively. The real estate secured loans as a percentage of total
      loans
      were 79.4% and 80.1% at March 31, 2006 and December 31, 2005, respectively.
      Since 2003, we have been actively involved in residential mortgage lending.
      We
      offer different types of home mortgage loans, sometimes with unconventional
      terms, such as interest only mortgages or option adjustable rate mortgages.
      However, we usually sell most of the production, especially mortgage loans
      with
      unconventional terms, and only retain some portion of conventional mortgage
      loans on our books. Therefore, total mortgage loan portfolio outstanding was
      $43.3 million at December 31, 2005 and $45.2 million at March 31, 2006, and
      we
      have deemed its effect on our credit risk profile to be immaterial. The home
      mortgage loans with unconventional terms such as interest only mortgages and
      option adjustable rate mortgages at the same periods were $8.0 million and
      $6.5
      million, respectively, that were held for sale by us before sales or refinance.
      The robust California real estate market in the past few years and our increased
      involvement in the residential mortgage loan market have further increased
      the
      composition of real estate secured loans.




Commercial
      and industrial loans include revolving lines of credit, as well as term business
      loans. This category also includes the retained portion of commercial SBA loans.
      With the success of our strategy to reduce reliance on SBA loans and place
      an
      increased emphasis on non-SBA commercial loans, SBA loans no longer represent
      the majority of our commercial and industrial loans. Commercial and industrial
      loans at March 31, 2006 slightly increased to $198.1 million, as compared with
      $190.8 million at December 31, 2005. Commercial and industrial loans as a
      percentage of total loans were at approximately the same percentage of 15.1%
      at
      March 31, 2006 and December 31, 2005.




Consumer
      loans have historically represented less than 5% of our total loan portfolio.
      The majority of consumer loans are concentrated in automobile loans, which
      we
      formerly provided as a service only to existing customers. However, in 2003,
      we
      initiated a business plan to increase our consumer loan portfolio, and
      introduced an Auto Loan Center. Consumer loans continue to increase since we
      initiated the program. The outstanding portfolio was $42.9 million at December
      31, 2005 and $48.6 million at March 31, 2006. Management anticipates further
      increases in consumer loans going forward, although no assurance can be given
      that this increase will occur.




Construction
      loans generally have represented 5% or less of our total loan portfolio and
      are
      extended as a temporary financing vehicle only. In the third quarter of 2004,
      we
      formed a construction loan department by appointing a construction loan
      specialist as its manager under the guidance of the Commercial Loan Center.
      We
      expect to expand our construction lending activities with this specialized
      capacity.




Our
      loan
      terms vary according to loan type. Commercial term loans have typical maturities
      of three to five years and are extended to finance the purchase of business
      entities, business equipment and leasehold improvements, or to provide permanent
      working capital. SBA guaranteed loans usually have longer maturities (8 to
      25
      years). We generally limit real estate loan maturities to five to eight years.
      Lines of credit, in general, are extended on an annual basis to businesses
      that
      need temporary working capital and/or import/export financing. We generally
      seek
      diversification in our loan portfolio, and our borrowers are diverse as to
      industry, location, and their current and target markets.




The
      following table shows the contractual maturity distribution and repricing
      intervals of the outstanding loans in our portfolio as of March 31, 2006. In
      addition, the table shows the distribution of such loans between those with
      variable or floating interest rates and those with fixed or predetermined
      interest rates. The table excludes the gross amount of non-accrual loans of
      $5.0
      million, and includes unearned income and deferred fees totaling $10.8 million
      at March 31, 2006:




23




**Loan
      Maturities and Repricing Schedule**




**At
                March 31, 2006,****0
                –
                1
                year**
            
            **1 –
                5 years**
            
            **After****5 Years**
            
            **Total****(Dollars
                in Thousands)**Construction
            
            $
            20,659
            
            $
            —
            
            $
            —
            
            $
            20,659Real
                estate secured
            
            
            862,068
            
            
            137,111
            
            
            44,420
            
            
            1,043,599Commercial
                and industrial
            
            
            205,305
            
            
            399
            
            
            79
            
            
            205,783Consumer
            
            
            20,692
            
            
            27,242
            
            
            346
            
            
            48,280Total
                loans, net of unearned income
            
            $
            1,108,724
            
            $
            164,752
            
            $
            44,845
            
            $
            1,318,321Loans
                with variable (floating) interest rates
            
            $
            1,072,057
            
            $
            40,653
            
            $
            2,237
            
            $
            1,114,947Loans
                with predetermined (fixed) interest rates
            
            $
            36,667
            
            $
            124,099
            
            $
            42,608
            
            $
            203,374




The
      majority of the properties taken as collateral are located in Southern
      California. The loans generated by our loan production offices, which are
      located outside of our main geographical market, are generally collateralized
      by
      property in close proximity to those offices. We employ strict guidelines
      regarding the use of collateral located in less familiar market areas. Since
      a
      major real estate recession during the first part of the 1990’s, property values
      in Southern California, where most of our loan collateral is located, have
      generally increased. However, no assurance can be given that this trend will
      continue or that property values will not significantly decrease.




**Nonperforming
      Assets**




Nonperforming
      assets consist of loans on non-accrual status, loans 90 days or more past due
      and still accruing interest, loans restructured, where the terms of repayment
      have been renegotiated resulting in a reduction or deferral of interest or
      principal, and other real estate owned (“OREO”).




Loans
      are
      generally placed on non-accrual status when they become 90 days past due, unless
      management believes the loan is adequately collateralized and in the process
      of
      collection. The past due loans may or may not be adequately collateralized,
      but
      collection efforts are continuously pursued. Loans may be restructured by
      management when a borrower has experienced some changes in financial status,
      causing an inability to meet the original repayment terms, and where we believe
      the borrower will eventually overcome those circumstances and repay the loan
      in
      full. OREO consists of properties acquired by foreclosure or similar means
      and
      which management intends to offer for sale.




Our
      nonperforming loans decreased to $2.23 million at the end of the first quarter
      of 2006 from $2.47 million and $2.24 million at December 31, 2005 and March
      31,
      2005, respectively, despite the growth of our loan portfolio. Management’s
      continued emphasis on asset quality control has resulted in decreases in
      nonperforming loans in recent years. The significant loan growth, together
      with
      the decrease of nonperforming loans, has caused the ratio of nonperforming
      loans
      over total loans to improve to 0.17% at March 31, 2006, as compared with 0.20%
      at December 31, 2005 and 0.21% at March 31, 2005.




At
      March
      31, 2006, OREO was $294,400, which consisted of three properties foreclosed
      in
      2005. We have already secured offers for these properties and management
      believes that we can sell them without a significant loss in 2006. Together
      with
      OREO, the ratio of nonperforming assets as a percentage of total loans and
      OREO
      improved to 0.19% at March 31, 2006, as compared with 0.22% at December 31,
      2005
      and 0.24% at March 31, 2005.




Management
      believes that the reserve provided for nonperforming loans, together with the
      tangible collateral, were adequate as of March 31, 2006. See “Allowance for Loan
      Losses” below for further discussion. Except as disclosed above, as of March 31,
      2006, management was not aware of any material credit problems of borrowers
      that
      would cause it to have serious doubts about the ability of a borrower to comply
      with the present loan payment terms. However, no assurance can be given that
      credit problems may exist that may not have been brought to the attention of
      management.




24


The
      following table provides information with respect to the components of our
      nonperforming assets as of the dates indicated (the figures in the table are
      net
      of the portion guaranteed by the U.S. Government):




**Nonperforming
      Assets**


**(Dollars
      in Thousands)**




**March
                31, 2006**
            
            **December
                31, 2005**
            
            **March
                31, 2005****Nonaccrual
                loans:****1**Real
                estate secured
            
            $
            1,190
            
            $
            1,171
            
            $
            1,767Commercial
                and industrial
            
            
            310
            
            
            341
            
            
            375Consumer
            
            
            290
            
            
            292
            
            
            —Total
            
            
            1,790
            
            
            1,804
            
            
            2,142**Loans
                90 days or more past due and still accruing (as to principal****or****interest):**Construction
            
            
            —
            
            
            —
            
            
            —Real
                estate secured
            
            
            361
            
            
            554
            
            
            —Commercial
                and industrial
            
            
            77
            
            
            111
            
            
            15Consumer
            
            
            —
            
            
            -—
            
            
            81Total
            
            
            438
            
            
            665
            
            
            96**Restructured
                loans:****2**Real
                estate secured
            
            
            —
            
            
            —
            
            
            —Commercial
                and industrial
            
            
            —
            
            
            —
            
            
            —Consumer
            
            
            —
            
            
            —
            
            
            —TotalTotal
                nonperforming loans
            
            
            2,228
            
            
            2,469
            
            
            2,238Other
                real estate owned
            
            
            294
            
            
            294
            
            
            308Total
                nonperforming assets
            
            $
            2,522
            
            $
            2,763
            
            $
            2,546Nonperforming
                loans as a % of total loans Nonperforming assets
            
            
            0.17%
            
            
            0.20%
            
            
            0.21%as
              a
              % of total loans and OREO
            
            
            0.19%
            
            
            0.22%
            
            
            0.24%Allowance
                for loan losses as a % of nonperforming loans
            
            
            667.63%
            
            
            567.15%
            
            
            521.38%





(1)
      During
      the three months ended March 31, 2006, no interest income related to these
      loans
      was included in net income. Additional interest income of approximately $120,000
      would have been recorded during the three months ended March 31, 2006, if these
      loans had been paid in accordance with their original terms and had been
      outstanding throughout the three months ended March 31, 2006 or, if not
      outstanding throughout the three months ended March 31, 2006, since
      origination.




(2)
      A
“restructured loan” is one the terms of which were renegotiated to provide a
      reduction or deferral of interest or principal because of deterioration in
      the
      financial position of the borrower.





**Allowance
      for Loan Losses**




In
      anticipation of credit risk inherent in our lending business, we set aside
      allowances through charges to earnings. Such charges were not only made for
      the
      outstanding loan portfolio, but also for off-balance sheet items, such as
      commitments to extend credit or letters of credit. The charges made for the
      outstanding loan portfolio were credited to the allowance for loan losses,
      whereas charges for off-balance sheet items were credited to the reserve for
      off-balance sheet items, which is presented as a component of other liabilities.
      The rapid growth of our loan portfolio has required more reserves for possible
      loan losses. The provision for loan losses is discussed in the section entitled
      “Provision for Losses on Loan and Loan Commitments” above.




The
      allowance for loan losses increased by 6.22%, or $870,000, to $14.9 million
      at
      March 31, 2006, as compared with $14.0 million at December 31, 2005, which
      previously increased from $11.7 million at March 31, 2005. Although management
      believes the allowance, at March 31, 2006, was adequate to absorb losses from
      any known and inherent risks in the portfolio, no assurance can be given that
      economic conditions which may adversely affect our service areas or other
      variables will not result in increased losses in the loan portfolio in the
      future. Management’s continued emphasis on asset quality control has maintained
      the lower level of net loan charge-offs. We had a net charge-off of $78,000
      in
      the first quarter of 2006. In the first quarter of 2005, we had a $383,000
      net
      charge-off and a net recovery of $56,000.




25


As
      of
      March 31, 2006 and December 31, 2005, our allowance for loan losses consisted
      of
      amounts allocated from three phases of our methodology for assessing loan loss
      allowances, as follows (see details of methodology for assessing allowance
      for
      loan losses in the section entitled “Critical Accounting
      Policies”):




**Phase
                      of Methodology**
                  
                  **As
                      of:**
                    **March
                      31, 2006**
                  
                  **As
                      of:**
                    **December
                      31, 2005**Specific
                      review of individual loans
                  
                  $
                  400,675
                  
                  $
                  392,380Review
                      of pools of loans with similar characteristics
                  
                  
                  11,779,549
                  
                  
                  11,345,551Judgmental
                      estimate based on various qualitative factors
                  
                  
                  2,689,357
                  
                  
                  2,261,371Total
                      allowance for loan losses
                  
                  $
                  14,869,581
                  
                  $
                  13,999,302







The
      table
      below summarizes, for the periods indicated, loan balances at the end of each
      period, the daily averages during the period, changes in the allowance for
      loan
      losses arising from loans charged off, recoveries on loans previously charged
      off, additions to the allowance and certain ratios related to the allowance
      for
      loan losses:




**Allowance
      for Loan Losses**


**(Dollars
      in thousands)**





**As
                of and for the quarter ended**
            
            **March
                31, 2006**
            
            **December
                31, 2005**
            
            **March
                31, 2005****Balances:**Average
                total loans outstanding during period
            
            $
            1,281,303
            
            $
            1,132,829
            
            $
            1,037,623Total
                loans (net of unearned income)
            
            $
            1,312,588
            
            $
            1,262,560
            
            $
            1,044,964**Allowance
                for loan losses:****Balances
                at beginning of period**
            
            $
            13,999
            
            $
            11,111
            
            $
            11,111**Actual
                charge-offs:**Real
                estate secured
            
            
            —
            
            
            127
            
            
            24Commercial
                and industrial
            
            
            110
            
            
            866
            
            
            48Consumer
            
            
            70
            
            
            107
            
            
            —Total
                charge-offs
            
            
            180
            
            
            1,100
            
            
            72**Recoveries
                on loans previously charged off:**Real
                estate secured
            
            
            —
            
            
            30
            
            
            1Commercial
                and industrial
            
            
            99
            
            
            708
            
            
            126Consumer
            
            
            3
            
            
            37
            
            
            1Total
                recoveries
            
            
            102
            
            
            775
            
            
            128Net
                loan charge-offs (recoveries)
            
            
            78
            
            
            324
            
            
            (56
            )**Provision
                for loan losses**
            
            
            1,060
            
            
            3,350
            
            
            500**Less:
                Provision for losses in off-balance sheet items**
            
            
            111
            
            
            137
            
            
            (2
            )**Balances
                at end of period**
            
            $
            14,870
            
            $
            13,999
            
            $
            11,669**Ratios:**Net
                loan charge-offs to average total loans
            
            
            0.01%
            
            
            0.03%
            
            
            -0.01%Allowance
                for loan losses to total loans at period-end
            
            
            1.16%
            
            
            1.11%
            
            
            1.12%Net
                loan charge-offs to allowance for loan losses
            
            
            0.53%
            
            
            2.32%
            
            
            -0.48%Net
                loan charge-offs to provision for loan losses
            
            
            7.43%
            
            
            9.68%
            
            
            -11.20%


26




The
      table
      below summarizes, for the periods indicated, the balance of allowance for loan
      losses and the percentage of such balance for each type of loan as of the dates
      indicated: ****




**Distribution
                and Percentage Composition of Allowance for Loan
                Losses**
              **(Dollars
                in thousands)****Balance
                as of**
            
            **March
                31, 2006**
            
            **December
                31, 2005**Applicable
                to:
            
            **Reserve**
              **Amount**
            
            **Total**
              **Loans**
            
            **(%)**
            
            **Reserve**
              **Amount**
            
            **Total**
              **Loans**
            
            **(%)**Construction
                loans
            
            $
            170
            
            $
            20,659
            
            
            0.82%
            
            $
            152
            
            $
            15,322
            
            
            1.00%Real
                estate secured
            
            $
            8,746
            
            $
            1,046,621
            
            
            0.84%
            
            $
            9,751
            
            $
            1,015,055
            
            
            0.96%Commercial
                and industrial
            
            $
            5,118
            
            $
            207,451
            
            
            2.47%
            
            $
            3,742
            
            $
            199,581
            
            
            1.87%Consumer
            
            $
            836
            
            $
            48,614
            
            
            1.72%
            
            $
            354
            
            $
            42,885
            
            
            0.83%Total
                Allowance
            
            $
            14,870
            
            $
            1,323,344
            
            
            1.12%
            
            $
            13,999
            
            $
            1,272,843
            
            
            1.10%




**Contractual
      Obligations**




The
      following table represents our aggregate contractual obligations (principal
      and
      interest) to make future payments as of March 31, 2006:




**(Dollars
                in thousands)**
            
            **One
                Yearor Less**
            
            **Over
                OneYear To Three Years**
            
            **Over
                Three Years To FiveYears**
            
            **Over
                FiveYears**
            
            **Total**FHLB
                borrowings
            
            $
            30,464
            
            $
            21,319
            
            $
            —
            
            $
            —
            
            $
            51,783Junior
                subordinated debenture
            
            
            4,283
            
            
            7,197
            
            
            2,650
            
            
            61,547
            
            
            75,677Operating
                leases
            
            
            1,849
            
            
            3,205
            
            
            2,246
            
            
            2,669
            
            
            9,969Time
                deposits
            
            
            795,225
            
            
            26,125
            
            
            23
            
            
            25
            
            
            821,398Total
            
            $
            831,821
            
            $
            57,846
            
            $
            4,919
            
            $
            64,241
            
            $
            958,827




**Off-Balance
      Sheet Arrangements**




During
      the ordinary course of business, we provide various forms of credit lines to
      meet the financing needs of our customers. These commitments, which represent
      a
      credit risk to us, are not represented in any form on our balance sheets.




As
      of
      March 31, 2006 and December 31, 2005, we had commitments to extend credit of
      $103.7 million and $104.3 million, respectively. Obligations under standby
      letters of credit were $3.4 million and $2.5 million at March 31, 2006 and
      December 31, 2005, respectively, and the obligations under commercial letters
      of
      credit were $12.1 million and $11.4 million at such dates, respectively. The
      effect on our revenues, expenses, cash flows and liquidity from the unused
      portion of the commitments to provide credit cannot be reasonably predicted
      because there is no guarantee that the lines of credit will be used.




As
      part
      of our asset and liability management strategy, we may engage in derivative
      financial instruments, such as interest rate swaps, with the overall goal of
      minimizing the impact of interest rate fluctuations on our net interest margin.
      Interest rate swaps involve the exchange of fixed-rate and variable-rate
      interest payment obligations without the exchange of the underlying notional
      amounts. As of March 31, 2006, we were not party to any interest rate swap
      agreements.




27


In
      the
      normal course of business, we are involved in various legal claims. We have
      reviewed all legal claims against us with counsel and have taken into
      consideration the views of counsel as to the outcome of the claims. In our
      opinion, the final disposition of all such claims will not have a material
      adverse effect on our financial position and results of operations.




**Investment
      Activities**




Investments
      are one of our major sources of interest income and are acquired in accordance
      with a written comprehensive investment policy addressing strategies, types
      and
      levels of allowable investments. This investment policy is reviewed at least
      annually by the Board of Directors. Management of our investment portfolio
      is
      set in accordance with strategies developed and overseen by our Asset/Liability
      Committee. Investment balances, including cash equivalents and interest-bearing
      deposits in other financial institutions, are subject to change over time based
      on our asset/liability funding needs and interest rate risk management
      objectives. Our liquidity levels take into consideration anticipated future
      cash
      flows and all available sources of credits and are maintained at levels
      management believes are appropriate to assure future flexibility in meeting
      anticipated funding needs.




*Cash
      Equivalents and Interest-bearing Deposits in other Financial
      Institutions*




We
      sell
      federal funds, purchase securities under agreements to resell and high-quality
      money market instruments, and deposit interest-bearing accounts in other
      financial institutions to help meet liquidity requirements and provide temporary
      holdings until the funds can be otherwise deployed or invested. As of March
      31,
      2006 and December 31, 2005, we had $114 million and $126 million, respectively,
      in federal funds sold and repurchase agreements, and $500,000 at each of March
      31, 2006 and December 31, 2005 in interest bearing deposits in other financial
      institutions.




*Investment
      Securities*




Management
      of our investment securities portfolio focuses on providing an adequate level
      of
      liquidity and establishing an interest rate-sensitive position, while earning
      an
      adequate level of investment income without taking undue risk. We classify
      our
      investment securities as “held-to-maturity” or “available-for-sale.” Investment
      securities that we intend to hold until maturity are classified as
      held-to-maturity securities, and all other investment securities are classified
      as available-for-sale. The carrying values of available-for-sale investment
      securities are adjusted for unrealized gains or losses as a valuation allowance
      and any gain or loss is reported on an after-tax basis as a component of other
      comprehensive income.




28


The
      following table summarizes the book value and market value and distribution
      of
      our investment securities as of the dates indicated:




**Investment
      Securities Portfolio**


**(Dollars
      in Thousands)**




**As
                of March 31, 2006**
            
            **As
                of December 31, 2005****Amortized**
              **Cost**
            
            **Market
                Value**
            
            **Amortized**
              **Cost**
            
            **Market
                Value**Held
                to Maturity:Securities
                of government sponsored enterprises
            
            $
            19,996
            
            $
            19,660
            
            $
            19,993
            
            $
            19,684Collateralized
                mortgage obligation.
            
            
            233
            
            
            213
            
            
            248
            
            
            229Municipal
                securities
            
            
            2,619
            
            
            2,594
            
            
            2,619
            
            
            2,598Corporate
                securities
            
            
            —
            
            
            —
            
            
            —
            
            
            —Available
                for Sale:Securities
                of government sponsored enterprises
            
            
            104,907
            
            
            103,876
            
            
            77,882
            
            
            76,981Mortgage
                backed securities
            
            
            21,875
            
            
            21,582
            
            
            23,451
            
            
            23,158Collateralized
                mortgage obligation
            
            
            28,377
            
            
            27,852
            
            
            26,302
            
            
            25,870Corporate
                securities
            
            
            13,465
            
            
            13,278
            
            
            8,132
            
            
            8,047Municipal
                securities
            
            
            4,660
            
            
            4,556
            
            
            4,661
            
            
            4,594Total
                investment securities
            
            $
            196,132
            
            $
            193,611
            
            $
            163,288
            
            $
            161,161






The
      following table summarizes the maturity and repricing schedule of our investment
      securities at their carrying values and their weighted average yields (without
      the consideration of tax effects, if any) at March 31, 2006:




**Investment
      Maturities and Repricing Schedule**


**(Dollars
      in Thousands)**




Within
                One Year
            
            After
                One But
              Within
                Five Years
            
            After
                Five But
              Within
                Ten Years
            
            After
                Ten Years
            
            TotalAmount
            
            Yield
            
            Amount
            
            Yield
            
            Amount
            
            Yield
            
            Amount
            
            Yield
            
            Amount
            
            Yield**Held
                to Maturity:**Securities
                of government sponsored enterprises
            
            $
            5,997
            
            
            3.51%
            
            $
            11,999
            
            
            3.77%
            
            
            2,000
            
            
            3.97%
            
            
            —
            
            
            —
            
            $
            19,996
            
            
            3.71%Collateralized
                mortgage obligation.
            
            
            —
            
            
            —
            
            
            233
            
            
            3.97%
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            233
            
            
            3.97%Municipal
                securities
            
            
            2,000
            
            
            4.03%
            
            
            619
            
            
            4.12%
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            2,619
            
            
            4.05%Corporate
                securities
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —**Available-for-sale:**Securities
                of government sponsored enterprises
            
            
            50,661
            
            
            4.31%
            
            
            53,215
            
            
            4.19%
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            103,876
            
            
            4.25%Mortgage
                backed securities
            
            
            9,446
            
            
            4.18%
            
            
            12,136
            
            
            3.87%
            
            
            —
            
            
            —
            
            
            —
            
            
            —-
            
            
            21,582
            
            
            4.00%Collateralized
                mortgage obligation
            
            
            —
            
            
            
            
            
            27,852
            
            
            4.93%
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            27,852
            
            
            4.93%Corporate
                securities
            
            
            982
            
            
            4.20%
            
            
            10,405
            
            
            5.23%
            
            
            1,891
            
            
            4.46%
            
            
            —
            
            
            —
            
            
            13,278
            
            
            5.04%Municipal
                securities
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            916
            
            
            3.82%
            
            
            3,640
            
            
            3.73%
            
            
            4,556
            
            
            3.75%Total
                investment securities
            
            $
            69,086
            
            
            4.21%
            
            
            116,459
            
            
            4.38%
            
            $
            4,807
            
            
            4.14%
            
            $
            3,640
            
            
            3.73%
            
            $
            193,992
            
            
            4.30%


29


Our
      investment securities holdings increased by $32.5 million, or 20.11%, to $194.0
      million at March 31, 2006, compared to holdings of $161.5 million at December
      31, 2005. Total investment securities as a percentage of total assets were
      11.2%
      and 9.8% at March 31, 2006 and December 31, 2005, respectively. As of March
      31,
      2006, investment securities having a carrying value of $134.6 million were
      pledged to secure certain deposits.




As
      of
      March 31, 2006, held-to-maturity securities, which are carried at their
      amortized costs, slightly decreased to $22.8 million from $22.9 million at
      December 31, 2005. Available-for-sale securities, which are stated at their
      fair
      market values, increased to $171.1 million at March 31, 2006 from $138.7 million
      at December 31, 2005. These increases reflect a strategy of improving our
      liquidity level using available-for-sale securities, in addition to immediately
      available funds, the majority of which are maintained in the form of overnight
      investments.




The
      following table shows our investments’ gross unrealized losses and fair value,
      aggregated by investment category and length of time that individual securities
      have been in a continuous unrealized loss position, at March 31,
      2006:




**As
                  of March 31, 2006**
              
              **(Dollars
                  in thousands)****Less
                  than 12 months**
              
              **12
                  months or longer**
              
              **Total**Description
                  of Securities
              
              **Fair
                  Value**
              
              **Gross
                  Unrealized Losses**
              
              **Fair
                  Value**
              
              **Gross
                  Unrealized Losses**
              
              **Fair
                  Value**
              
              **Gross
                  Unrealized Losses**Securities
                  of government sponsored enterprises
              
              $
              60,460
              
              $
              (466
              )
              $
              55,075
              
              $
              (902
              )
              $
              115,535
              
              $
              (1,368
              )Collateralized
                  mortgage obligation
              
              
              25,108
              
              
              (371
              )
              
              2,957
              
              
              (174
              )
              
              28,065
              
              
              (545
              )Mortgage
                  backed securities
              
              
              7,946
              
              
              (145
              )
              
              7,395
              
              
              (160
              )
              
              15,341
              
              
              (305
              )Corporate
                  securities
              
              
              5,067
              
              
              (65
              )
              
              2,874
              
              
              (122
              )
              
              7,941
              
              
              (187
              )Municipal
                  securities
              
              
              6,984
              
              
              (125
              )
              
              166
              
              
              (5
              )
              
              7,150
              
              
              (130
              )$
              105,565
              
              $
              (1,172
              )
              $
              68,467
              
              $
              (1,363
              )
              $
              174,032
              
              $
              (2,535
              )




As
      of
      March 31, 2006, the total unrealized losses less than 12 months old were $1.17
      million, and total unrealized losses more than 12 months old were $1.36 million.
      The aggregate related fair value of investments with unrealized losses less
      than
      12 months old was $105.6 million at March 31, 2006, and those with unrealized
      losses more than 12 months old were $68.5 million. As of March 31, 2005, the
      total unrealized losses less than 12 months old were $1.10 million and total
      unrealized losses more than 12 months old were $246,000. The aggregate related
      fair value of investments with unrealized losses less than 12 months old was
      $83.5 million at March 31, 2005, and those with unrealized losses more than
      12
      months old were $8.8 million.




Declines
      in the fair value of held-to-maturity and available-for-sale securities below
      their cost that are deemed to be other than temporary are reflected in earnings
      as realized losses. In estimating other-than-temporary impairment losses, we
      consider, among other things, (i) the length of time and the extent to which
      the
      fair value has been less than cost, (ii) the financial condition and near-term
      prospects of the issuer, and (iii) our intent and ability to retain our
      investment in the issuer for a period of time sufficient to allow for any
      anticipated recovery in fair value.




We
      have
      the ability and intent to hold the securities classified as held to maturity
      until they mature, at which time we expect to receive full value for the
      securities. As of March 31, 2006, we also had the ability and intent to hold
      the
      securities classified as available for sale for a period of time sufficient
      for
      a recovery of cost. The unrealized losses were largely due to increases in
      market interest rates over the yields available at the time the underlying
      securities were purchased. The fair value is expected to recover as the bonds
      approach their maturity date or repricing date or if market yields for such
      investments decline. We do not believe any of the securities are impaired due
      to
      reasons of credit quality. Accordingly, as of March 31, 2006, we believe the
      impairments detailed in the table above were temporary, and no impairment loss
      has been realized in our consolidated statement of operations.




30




**Other
      Earning Assets**




For
      various business purposes, we make investments in earning assets other than
      the
      interest-earning securities discussed above. Before 2003, the only other earning
      assets held by us were insignificant amounts of Federal Home Loan Bank stock
      and
      the cash surrender value on the bank owned life insurances
      (“BOLI”).




In
      an
      effort to provide additional benefits aimed at retaining key employees, while
      generating a tax-exempt noninterest income stream, we purchased $10.5 million
      in
      2003 in BOLI from insurance carriers rated AA or above. In 2005, we purchased
      $3
      million more in BOLI from the same insurance carriers. We are the owner and
      the
      primary beneficiary of the life insurance policies and recognize the increase
      of
      the cash surrender value of the policies as tax-exempt other
      income.




In
      2003,
      we invested in two low-income housing tax credit funds (“LIHTCF”) to promote our
      participation in CRA activities. We committed to invest, over two to three
      years, a total of $3 million to two different LIHTCF - $1 million in Apollo
      California Tax Credit Fund XXII, LP, and $2 million in Hudson Housing Los
      Angeles Revitalization Fund, LP. We anticipate receiving the return following
      this two to three-year period in the form of tax credits and tax deductions
      over
      the next fifteen years.




In
      February 2006, we committed to invest an additional $1MM in another LIHTCF
      - WNC
      Institutional Tax Credit Fund XXI to promote our CRA activities in the Dallas,
      Texas assessment area.




The
      balances of other earning assets as of March 31, 2006 and December 31, 2005
      were
      as follows:




**Type**
            
            Balance
                as of
              March
                31, 2006
            
            Balance
                as of
              December
                31, 2005BOLI
            
            $
            15,255,000
            
            $
            15,099,000LIHTCF
            
            $
            2,438,000
            
            $
            2,350,000Federal
                Home Loan Bank Stock
            
            $
            6,254,000
            
            $
            6,182,000




**Deposits
      and Other Sources of Funds**




*Deposits*




Deposits
      are our primary source of funds. Total deposits at March 31, 2006 and December
      31, 2005, were $1.48 billion and $1.41 billion, respectively, representing
      an
      increase of $71.8 million, or 5.1% in the first three months of 2006.




In
      2005,
      our niche market depositor’s preference in time deposits bearing relatively high
      interest rates decreased the level of deposits in transactional accounts. Our
      deposits in transactional accounts in 2005 decreased to 45.3% of total deposits
      on an annual average basis, as compared with 47.4% in 2004. In order to support
      our loan growth, we have increased our reliance on time deposits. As a result,
      the percentage of the average time deposits over the average total deposits
      in
      the first quarter of 2006 was increased to 55.2% from 52.3% for the prior year’s
      same quarter. However, our continuing strategic emphasis on core deposits,
      which
      is defined as total deposits less time deposits in denominations of $100,000
      or
      more, helped our core deposits increase by 6.4% to $828.7 million at March
      31,
      2006 from $778.8 million at the end of 2005, faster than total deposits, which
      increased by 5.1% during the same period and also lowered our time deposit
      reliance level to 53.7% at March 31, 2006, as compared with 54.8% at December
      31, 2005. We believe that our regional diversification into Texas and New York
      markets will also help reduce our time deposit reliance level going
      forward.




The
      average rate paid on time deposits in denominations of $100,000 or more for
      the
      first quarter of 2006 increased to 4.61%, as compared with 2.73% for the prior
      year’s same quarter. See “Net Interest Income and Net Interest Margin” for
      further discussion.




31


The
      following tables summarize the distribution of average daily deposits and the
      average daily rates paid for the periods indicated:




**Average
      Deposits**


**(Dollars
      in Thousands)**





**For
                the quarters ended:**
            
            **March
                31, 2006**
            
            **December
                31, 2005**
            
            **March
                31,2005****Average**
              **Balance**
            
            **Average**
              **Rate**
            
            **Average
                Balance**
            
            **Average**
              **Rate**
            
            **Average
                Balance**
            
            **Average**
              **Rate**Demand,
                noninterest-bearing
            
            $
            288,570
            
            
            
            
            $
            286,966
            
            
            
            
            $
            263,168Money
                market
            
            
            315,852
            
            
            3.94%
            
            
            247,313
            
            
            2.93%
            
            
            218,640
            
            
            2.04%Super
                NOW
            
            
            21,719
            
            
            1.10%
            
            
            21,446
            
            
            0.87%
            
            
            21,204
            
            
            0.75%Savings
            
            
            21,663
            
            
            0.89%
            
            
            22,878
            
            
            0.73%
            
            
            23,753
            
            
            0.73%Time
                certificates of deposit in
              denominations
                of $100,000 or more
            
            
            649,306
            
            
            4.61%
            
            
            532,207
            
            
            3.49%
            
            
            466,728
            
            
            2.73%Other
                time deposits
            
            
            147,485
            
            
            4.20%
            
            
            116,698
            
            
            3.20%
            
            
            111,900
            
            
            2.60%Total
                deposits
            
            $
            1,444,595
            
            
            3.39%
            
            $
            1,227,508
            
            
            2.44%
            
            $
            1,105,393
            
            
            1.85%




The
      scheduled maturities of our time deposits in denominations of $100,000 or
      greater at March 31, 2006 are, as follows:




**Maturities
      of Time Deposits of $100,000 or More, at March 31, 200** **6**


**(Dollars
      in Thousands)**




Three
                months or less
            
            $
            297,587Over
                three months through six months
            
            
            170,943Over
                six months through twelve months
            
            
            181,640Over
                twelve months
            
            
            2,356Total
            
            $
            652,526




Because
      our client base is comprised primarily of commercial and industrial accounts,
      individual account balances are generally higher than those of consumer-oriented
      banks. A number of clients carry deposit balances of more than 1% of our total
      deposits, but the California State Treasury was the only depositor which had
      a
      deposit balance of more than 5% of total deposits at March 31, 2006 and December
      31, 2005.




We
      accept
      brokered deposits on a selective basis at reasonable interest rates to augment
      deposit growth. We have reduced these deposits to $6.5 million at March 31,
      2006
      from $23.0 million at December 31, 2005 in order to limit our reliance on
      non-core funding sources. Most of the brokered deposits will mature within
      one
      year. Since brokered deposits are generally less stable forms of deposits,
      we
      closely monitor growth from this non-core funding source.




*FHLB
      Borrowings*




Although
      deposits are the primary source of funds for our lending and investment
      activities and for general business purposes, we may obtain advances from the
      FHLB as an alternative to retail deposit funds. Since 2002, we have increased
      borrowings from FHLB in order to take advantage of the flexibility of the
      program and its reasonably low cost. See “Liquidity Management” below for the
      details on the FHLB borrowings program.




32




The
      following table is a summary of FHLB borrowings for the quarters indicated
      (dollars in thousands):




**For
                the Quarter ended**
            
            **March
                31, 2006**
            
            **December
                31, 2005**Balance
                at quarter-end
            
            $
            50,000
            
            $
            61,000Average
                balance during the quarter
            
            $
            55,489
            
            $
            56,151Maximum
                amount outstanding at any month-end
            
            $
            56,000
            
            $
            61,000Average
                interest rate during the quarter
            
            
            3.62%
            
            
            3.13%Average
                interest rate at quarter-end
            
            
            3.81%
            
            
            3.51%




*Junior
      Subordinated Debentures; Trust Preferred Securities*




In
      December 2002, the Bank issued $10 million of the 2002 Junior Subordinated
      Debentures. Subsequently, the Company, as a wholly-owned subsidiary in 2003
      and
      as a parent company of the Bank in 2005, issued a total of $51,547,000 of Junior
      Subordinated Debentures in connection with a $50,000,000 trust preferred
      securities issuance by statutory trusts wholly-owned by the Company.




2002
      Bank Level Junior Subordinated Debenture .
      In
      December 2002, the Bank issued a $10 million Junior Subordinated Debenture
      (the
“2002 debenture”). The interest rate payable on the 2002 debenture was 8.06% at
      March 31, 2006, which rate adjusts quarterly to the three-month LIBOR plus
      3.10%. The 2002 debenture will mature on December 26, 2012. Interest on the
      2002
      debenture is payable quarterly and no scheduled payments of principal are due
      prior to maturity. The Bank may redeem the 2002 debenture in whole or in part
      prior to maturity on or after December 26, 2007.




The
      2002
      debenture is treated as Tier 2 capital for Bank regulatory capital purposes.
      Likewise, on a consolidated basis, the 2002 debenture also is treated as Tier
      2
      capital for Company-level capital purposes under current FRB capital guidelines.




2003
      Junior Subordinated Debenture; Trust Preferred Securities
      Issuance .
      In
      December 2003, Wilshire Bancorp was formed as a wholly-owned subsidiary of
      the
      Bank, in order to raise additional capital funds through the issuance of trust
      preferred securities. Prior to the completion of the August 2004 bank holding
      company reorganization, Wilshire Bancorp organized its wholly owned subsidiary,
      Wilshire Statutory Trust I, which issued $15 million in trust preferred
      securities. Wilshire Bancorp then purchased all of the common interest in the
      Wilshire Statutory Trust I ($464,000) and issued the 2003 Junior Subordinated
      Debenture (the “2003 debenture”) in the amount of approximately $15.5 million to
      the Wilshire Statutory Trust I with terms substantially similar to the 2003
      trust preferred securities in exchange for the proceeds from the issuance of
      the
      Wilshire Statutory Trust I’s 2003 trust preferred securities and common
      securities. Wilshire Bancorp subsequently deposited the proceeds from the 2003
      debenture in a depository account at the Bank and infused $14.5 million as
      additional equity capital to the Bank immediately following the holding company
      reorganization. The rate of interest on the 2003 debenture and related trust
      preferred securities was 7.77% at March 31, 2006, which adjusts quarterly to
      the
      three-month LIBOR plus 2.85%. The 2003 debenture and related trust preferred
      securities will mature on December 17, 2033. The interest on both the 2003
      debenture and related trust preferred securities is payable quarterly and no
      scheduled payments of principal are due prior to maturity. Wilshire Bancorp
      may
      redeem the 2003 debenture (and in turn the trust preferred securities) in whole
      or in part prior to maturity on or after December 17, 2008.




March
      2005 Junior Subordinated Debenture; Trust Preferred Securities
      Issuance .
      In
      March 2005, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire
      Statutory Trust II, which issued $20 million in trust preferred securities.
      Wilshire Bancorp then purchased all of the common interest in the Wilshire
      Statutory Trust II ($619,000) and issued the 2005 Junior Subordinated Debenture
      (the “March 2005 debenture”) in the amount of $20.6 million to the Wilshire
      Statutory Trust II with terms substantially similar to the March 2005 trust
      preferred securities in exchange for the proceeds from the issuance of the
      Wilshire Statutory Trust II’s March 2005 trust preferred securities and common
      securities. Wilshire Bancorp subsequently deposited the proceeds from the March
      2005 debenture in a depository account at the Bank and infused $14 million
      as
      additional equity capital to the Bank. The rate of interest on the March 2005
      debenture and related trust preferred securities was 6.71% at March 31, 2006,
      which adjusts quarterly to the three-month LIBOR plus 1.79%. The March 2005
      debenture and related trust preferred securities will mature on March 17, 2035.
      The interest on both the March 2005 debenture and related trust preferred
      securities are payable quarterly and no scheduled payments of principal are
      due
      prior to maturity. Wilshire Bancorp may redeem the March 2005 debenture (and
      in
      turn the trust preferred securities) in whole or in part prior to maturity
      on or
      after March 17, 2010.




33




September
      2005 Junior Subordinated Debenture; Trust Preferred Securities
      Issuance .
      In
      September 2005, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire
      Statutory Trust III (“Wilshire Trust III”), which issued $15 million in trust
      preferred securities.   Wilshire Statutory Trust III, a subsidiary of
      Wilshire Bancorp, purchased $15.5 million of Wilshire Bancorp’s Junior
      Subordinated Debt Securities (the “September 2005 debenture”), payable in 2035.
      Until September 15, 2010, the securities will be fixed at a 6.07% annual
      interest rate, thereafter converting to a floating rate of three-month LIBOR
      plus 1.40%, resetting quarterly. Wilshire Bancorp may defer the payment of
      interest at any time for a period up to twenty consecutive quarters, provided
      the deferral period does not extend past the stated maturity. Except upon the
      occurrence of certain events resulting in a change in the capital treatment
      or
      tax treatment of the Subordinated Debentures or resulting in Wilshire Trust
      being deemed to be an investment company required to register under the
      Investment Company Act of 1940, we may not redeem the Subordinated Debentures
      until after September 15, 2010.




Payments
      of distributions on the trust preferred securities and payments on redemption
      of
      the trust preferred securities are guaranteed by Wilshire Bancorp. The junior
      subordinated debentures are senior to our shares of common stock. As a result,
      we must make payments on the junior subordinated debentures before any dividends
      can be paid on our common stock and in the event of our bankruptcy, dissolution
      or liquidation, the holder of the junior subordinated debentures must be
      satisfied before any distributions can be made to the holders of our common
      stock. We have the right to defer distributions on the junior subordinated
      debentures and related trust preferred securities for up to five years, during
      which time no dividends may be paid to holders of our common stock.




On
      March
      1, 2005, the Federal Reserve Board adopted a final rule that allows continued
      inclusion of trust preferred securities in the Tier 1 capital of bank holding
      companies, subject to stricter quantitative limits. Under the final rule, bank
      holding companies may include trust preferred securities in Tier 1 capital
      in an
      amount (together with other restricted core capital elements) equal to 25%
      of
      the sum of core capital elements (including restricted core capital elements)
      net of goodwill less any associated deferred tax liability. Amounts in excess
      of
      these limits will generally be included in Tier 2 capital. For purposes of
      this
      rule, restricted core capital elements are generally to be comprised of
      qualifying cumulative perpetual preferred stock and related surplus, minority
      interest related to qualifying cumulative perpetual preferred stock directly
      issued by a consolidated U.S. depository institution or foreign bank subsidiary,
      minority interest related to qualifying common stock or qualifying cumulative
      perpetual preferred stock directly issued by a consolidated subsidiary that
      is
      neither a U.S. depository institution or a foreign bank and qualifying trust
      preferred securities.




The
      final
      rule provides a transition period for bank holding companies to come into
      compliance with these new capital restrictions. Accordingly, while the final
      rule became effective on April 11, 2005, for practical purposes, bank holding
      companies will have until September 30, 2009 (an extension of the September
      30,
      2007 transition period under the proposed rule) to come into compliance with
      the
      final rule’s capital restrictions due to the transition period. In extending the
      transition period to 2009, the Federal Reserve noted that the extended period
      will provide bank holding companies with existing trust preferred securities
      with call features after the first five years an opportunity to restructure
      their capital elements in order to conform to the limitations of the final
      rule.




Under
      the
      final rule, as of March 31, 2006, Wilshire Bancorp counted $40.5 million of
      total trust preferred securities as Tier 1 capital, leaving $9.5 million as
      Tier
      2 capital.




**Asset/Liability
      Management**




Management
      seeks to ascertain optimum and stable utilization of available assets and
      liabilities as a vehicle to attain our overall business plans and objectives.
      In
      this regard, management focuses on measurement and control of liquidity risk,
      interest rate risk and market risk, capital adequacy, operation risk and credit
      risk. See further discussion on these risks on “Risk Factors” in our Annual
      Report on Form 10-K for the year ended December 31, 2005. Information concerning
      interest rate risk management is set forth under “Item 3 - Quantitative and
      Qualitative Disclosures about Market Risk.”




34




**Liquidity
      Management**




Maintenance
      of adequate liquidity requires that sufficient resources be available at all
      time to meet our cash flow requirements. Liquidity in a banking institution
      is
      required primarily to provide for deposit withdrawals and the credit needs
      of
      its customers and to take advantage of investment opportunities as they arise.
      Liquidity management involves our ability to convert assets into cash or cash
      equivalents without incurring significant loss, and to raise cash or maintain
      funds without incurring excessive additional cost. For this purpose, we maintain
      a portion of our funds in cash and cash equivalents, deposits in other financial
      institutions and loans and securities available for sale. Our liquid assets
      at
      March 31, 2006 and December 31, 2005 totaled approximately $373.9 million and
      $355.2 million, respectively. Our liquidity level measured as the percentage
      of
      liquid assets to total assets was 21.5% and 21.3% at March 31, 2006 and December
      31, 2005, respectively.




As
      a
      secondary source of liquidity, we rely on advances from the FHLB to supplement
      our supply of lendable funds and to meet deposit withdrawal requirements.
      Advances from the FHLB are typically secured by our mortgage loans and stock
      issued by the FHLB. Advances are made pursuant to several different programs.
      Each credit program has its own interest rate and range of maturities. Depending
      on the program, limitations on the amount of advances are based either on a
      fixed percentage of an institution’s net worth or on the FHLB’s assessment of
      the institution’s creditworthiness. While this fund provides flexibility and low
      cost, we limit our use to 70% of borrowing capacity, as such borrowing does
      not
      qualify as core funds. As of March 31, 2006, our borrowing capacity from the
      FHLB was about $388.2 million and the outstanding balance was $50 million,
      or
      approximately 13% of our borrowing capacity. As of March 31, 2006, we also
      maintained a guideline to purchase up to $25 million and $10 million in federal
      funds with Bank of the West and Union Bank of California,
      respectively.




**Capital
      Resources and Capital Adequacy Requirements**




Historically,
      our primary source of capital has been internally generated operating income
      through retained earnings. In order to ensure adequate levels of capital, we
      conduct ongoing assessments of projected sources and uses of capital in
      conjunction with projected increases in assets and level of risks. We have
      considered, and we will continue to consider, additional sources of capital
      as
      the need arises, whether through the issuance of additional equity, debt or
      hybrid securities.




We
      are
      subject to various regulatory capital requirements administered by federal
      banking agencies. Under capital adequacy guidelines and the regulatory framework
      for prompt corrective action, we must meet specific capital guidelines that
      rely
      on quantitative measures of our assets, liabilities and certain
      off-balance-sheet items as calculated under regulatory accounting practices.
      Failure to meet minimum capital requirements can trigger regulatory actions
      under the prompt corrective action rules that could have a material adverse
      effect on our financial condition and operations. Prompt corrective action
      may
      include regulatory enforcement actions that restrict dividend payments, require
      the adoption of remedial measures to increase capital, terminate FDIC deposit
      insurance, and mandate the appointment of a conservator or receiver in severe
      cases. In addition, failure to maintain a well-capitalized status may adversely
      affect the evaluation of regulatory applications for specific transactions
      and
      activities, including acquisitions, continuation and expansion of existing
      activities, and commencement of new activities, and could adversely affect
      our
      business relationships with our existing and prospective clients. The
      aforementioned regulatory consequences for failing to maintain adequate ratios
      of Tier 1 and Tier 2 capital could have a material adverse effect on our
      financial condition and results of operations. Our capital amounts and
      classification are also subject to qualitative judgments by regulators about
      components, risk weightings, and other factors. (See Part I, Item 1 “Description
      of Business -- Regulation and Supervision -- Capital Adequacy Requirements” in
      our Annual Report on Form 10-K for the year ended December 31, 2005 for
      additional information regarding regulatory capital requirements.)




At
      March
      31, 2006, total shareholders’ equity increased to $120.1 million from $113.1
      million at December 31, 2005, representing an increase of $7.0 million,
      primarily from internally generated operating income ($7.8 million), increased
      by stock option exercises ($106,592 proceeds from stock option exercises and
      the
      $688,722 tax benefits therefrom) and decreased by the cash dividend of $1.44
      million, which was declared during the first quarter of 2006 to be paid on
      April
      14, 2006.




35




As
      of
      March 31, 2006 and December 31, 2005, we were qualified as a “well capitalized
      institution” under the regulatory framework for prompt corrective action. The
      following table presents the regulatory standards for well-capitalized
      institutions, compared to our capital ratios as of the dates specified for
      Wilshire Bancorp, Inc. and Wilshire State Bank:




**Wilshire
                Bancorp, Inc.**
            
            
            
            
            
            **Actual
                ratios for the Company as of:****Regulatory**
              **Well-**
              **Capitalized
                Standards**
            
            **Regulatory**
                **Adequately-Capitalized
                  Standards**
            
            **March
                31, 2006**
            
            **December
                31, 2005**
            
            **March
                31, 2005**Total
                capital to risk-weighted assets
            
            
            10%
            
            
            8%
            
            
            14.43%
            
            
            14.41%
            
            
            14.08%Tier
                I capital to risk-weighted assets
            
            
            6%
            
            
            4%
            
            
            11.84%
            
            
            11.60%
            
            
            11.74%Tier
                I capital to adjusted average assets
            
            
            5%
            
            
            4%
            
            
            9.47%
            
            
            9.39%
            
            
            9.81%




**Wilshire
                State Bank**
            
            
            
            
            
            **Actual
                ratios for the Bank as of:****Regulatory**
              **Well-**
              **Capitalized
                Standards**
            
            **Regulatory**
              **Adequately-Capitalized
                Standards**
            
            **March
                31, 2006**
            
            **December
                31, 2005**
            
            **March
                31, 2005**Total
                capital to risk-weighted assets
            
            
            10%
            
            
            8%
            
            
            13.20%
            
            
            13.05%
            
            
            13.43%Tier
                I capital to risk-weighted assets
            
            
            6%
            
            
            4%
            
            
            11.32%
            
            
            11.15%
            
            
            11.38%Tier
                I capital to adjusted average assets
            
            
            5%
            
            
            4%
            
            
            9.06%
            
            
            9.04%
            
            
            9.50%




For
      the
      regulatory capital ratio computation purpose, Junior Subordinated Debentures
      of
      $61.5 million we hold in relation with the issuance of $50 million trust
      preferred securities is counted as additional capital. As of December 31, 2005,
      Wilshire Bancorp accounted for $38.0 million of such securities as Tier 1
      capital, leaving $12.0 million, as Tier 2 capital. As of March 31, 2006, the
      portion qualified for Tier 1 capital increased to $40.5 million, reducing the
      portion for Tier 2 capital to $9.5 million. For the Bank level, only $10 million
      debenture issued by the Bank in 2002 is treated as Tier 2 capital. See “Deposits
      and Other Sources of Funds” for further discussion regarding the capital
      treatment of subordinated debentures and the trust preferred securities.




**Item
      3.** **Quantitative
      and Qualitative Disclosures About Market Risk**




Market
      risk is the risk of loss from adverse changes in market prices and rates. Our
      market risk arises primarily from interest rate risk inherent in lending,
      investing and deposit taking activities. Management evaluates market risk
      pursuant to policies reviewed and approved annually by our Board of Directors.
      The Board delegates responsibility for market risk management to the Asset
&
Liability Management Committee (“ALCO”), which reports monthly to the Board on
      activities related to market risk management. As part of the management of
      our
      market risk, ALCO may direct changes in the mix of assets and liability and
      the
      use of derivatives. To that end, management actively monitors and manages its
      interest rate risk exposures.




Interest
      rate risk management involves development, analysis, implementation and
      monitoring of earnings to provide stable earnings and capital levels during
      periods of changing interest rates. In the management of interest rate risk,
      we
      utilize monthly gap analysis and quarterly simulation modeling to determine
      the
      sensitivity of net interest income and economic value sensitivity of the balance
      sheet. These techniques are complementary and are used together to provide
      a
      more accurate measurement of interest rate risk.




Gap
      analysis measures the repricing mismatches between assets and liabilities.
      The
      interest rate sensitivity gap is determined by subtracting the amount of
      liabilities from the amount of assets that reprice in a particular time
      interval. If repricing assets exceed repricing liabilities in any given time
      period, we would be deemed to be “asset-sensitive” for that period. Conversely,
      if repricing liabilities exceed repricing assets in a given time period, we
      would be deemed to be “liability-sensitive” for that period.




We
      normally seek to maintain a balanced position over the period of one year to
      ensure net interest margin stability in times of volatile interest rates. This
      is accomplished by maintaining a similar level of loans and investment
      securities and deposits available to be repriced within one year. At March
      31,
      2006, we were asset-sensitive, with a positive cumulative one-year gap of $56.2
      million or 3.23% of total assets. In general, based upon our mix of deposits,
      loans and investments, increases in interest rates would be expected to increase
      our net interest margin. Decreases in interest rates would be expected to have
      the opposite effect, which was the case in a few years prior to June, 2004.
      We
      intentionally maintain a significant three-month positive gap of $323 million
      or
      18.6% of total assets. This positive gap is strategically planned to meet any
      unanticipated funding needs by maintaining a large portion of funds obtained
      from non-interest bearing deposits in overnight investments and other cash
      equivalents.




36


The
      change in net interest income may not always follow the general expectations
      of
      an “asset-sensitive” or a “liability-sensitive” balance sheet during periods of
      changing interest rates. This possibility results from interest rates earned
      or
      paid changing by differing increments and at different time intervals for each
      type of interest-sensitive asset and liability. The interest rate gaps reported
      in the tables arise when assets are funded with liabilities having different
      repricing intervals. Since these gaps are actively managed and change daily
      as
      adjustments are made in interest rate views and market outlook, positions at
      the
      end of any period may not reflect our interest rate sensitivity in subsequent
      periods. We attempt to balance longer-term economic views against prospects
      for
      short-term interest rate changes.




Although
      the interest rate sensitivity gap is a useful measurement and contributes to
      effective asset and liability management, it is difficult to predict the effect
      of changing interest rates based solely on that measure. As a result, the ALCO
      also regularly uses simulation modeling as a tool to measure the sensitivity
      of
      earnings and net portfolio value (“NPV”) to interest rate changes. The NPV is
      defined as the net present value of an institution’s existing assets,
      liabilities and off-balance sheet instruments. The simulation model captures
      all
      assets, liabilities and off-balance sheet financial instruments accounting
      for
      significant variables, that are believed to be affected by interest rates.
      These
      include prepayment speeds on loans, cash flows of loans and deposits, principal
      amortization, call options on securities, balance sheet growth assumptions
      and
      changes in rate relationships as various rate indices react differently to
      market rates.




The
      following table sets forth the interest rate sensitivity of our interest-earning
      assets and interest-bearing liabilities as of March 31, 2006 using the interest
      rate sensitivity gap ratio. For purposes of the following table, an asset or
      liability is considered rate-sensitive within a specified period when it can
      be
      repriced or matures within its contractual terms. Actual payment patterns may
      differ from contractual payment patterns:




**Interest
      Rate Sensitivity Analysis**




**At
                March 31, 2006****Amounts
                Subject to Repricing Within****0-3
                months**
            
            **3-12
                months**
            
            **1-5
                years**
            
            **After
                5 years**
            
            **Total****(Dollars
                in Thousands)**Interest-earning
              assets:Gross
                loans 1
            
            $
            1,080,691
            
            $
            28,033
            
            $
            164,751
            
            $
            44,846
            
            $
            1,318,321Investment
                securities
            
            
            9,870
            
            
            59,216
            
            
            116,459
            
            
            8,447
            
            
            193,992Federal
                funds sold and cash equivalents
            
            
            114,003
            
            
            —
            
            
            —
            
            
            —
            
            
            114,003Interest-earning
                deposits
            
            
            —
            
            
            500
            
            
            —
            
            
            —
            
            
            500Total
            
            $
            1,204,564
            
            $
            87,749
            
            $
            281,210
            
            $
            53,293
            
            $
            1,626,816Interest-bearing
                liabilities:Savings
                deposits
            
            
            22,894
            
            
            —
            
            
            —
            
            
            —
            
            
            22,894Time
                deposits of $100,000 or more
            
            
            373,570
            
            
            276,600
            
            
            2,356
            
            
            **—**
            
            
            652,526Other
                time deposits
            
            
            63,835
            
            
            72,933
            
            
            6,566
            
            
            16
            
            
            143,350Other
                interest-bearing deposits
            
            
            350,175
            
            
            —
            
            
            —
            
            
            —
            
            
            350,175Other
                borrowings
            
            
            71,083
            
            
            5,000
            
            
            35,464
            
            
            —
            
            
            111,547Total
            
            $
            881,557
            
            $
            354,533
            
            $
            44,386
            
            $
            16
            
            $
            1,280,492Interest
                rate sensitivity gap
            
            $
            323,007
            
            
            ($266,784
            )
            $
            236,824
            
            $
            53,277
            
            $
            346,324Cumulative
                interest rate sensitivity gap
            
            $
            323,007
            
            $
            56,223
            
            $
            293,047
            
            $
            346,324Cumulative
                interest rate sensitivity gap ratio (based on total
                assets)
            
            
            18.58%
            
            
            3.23%
            
            
            16.86%
            
            
            19.92%







1
      Excludes the gross amount of non-accrual loans of approximately $5.0 million
      at
      March 31, 2006




37




The
      following table sets forth our estimated net interest income over a 12-month
      period and NPV based on the indicated changes in market interest rates as of
      March 31, 2006. All assets presented in this table are held-to-maturity or
      available-for-sale. At March 31, 2006, we had no trading securities:




**(Dollars
                in Thousands****)****Change****(in
                Basis Points**)
            
            **Net
                  Interest Income****(next
                twelve months)**
            
            **%
                Change**
            
            **NPV**
            
            **%
                Change**+200
            
            $
            104,137
            
            
            17.9%
            
            $
            253,501
            
            
            11.2%+100
            
            $
            95,906
            
            
            8.6%
            
            $
            241,739
            
            
            6.1%0
            
            $
            88,290
            
            
            —
            
            $
            227,906
            
            
            —-100
            
            $
            84,698
            
            
            -4.1%
            
            $
            210,615
            
            
            -7.6%-200
            
            $
            76,996
            
            
            -12.8%
            
            $
            189,332
            
            
            -16.9%




Although
      the simulation measures the volatility of net interest income and net portfolio
      value under immediate rising or falling market interest rate scenarios in 100
      basis point increments, our main concern is the negative effect for the
      reasonably possible worst scenario. The ALCO policy prescribes that, for the
      worst possible rate drop scenario, the possible reduction of net interest income
      and NPV, should not exceed 20% of the base net interest income and 25% of the
      base NPV.




As
      indicated above, the net interest income increases (decreases) as market
      interest rates rise (fall), since we are positively gapped by $56.2 million
      for
      a time horizon of one year. This is also due to the fact that a substantial
      portion of the interest earning assets reprice immediately after the rate
      change, that interest-bearing liabilities reprice slower than interest-earning
      assets and that interest-bearing liabilities do not reprice to the same degree
      as interest earning assets, given a stated change in the interest rate. The
      NPV
      increases (decreases) as the interest income increases (decreases) since the
      change in the cash flows has a greater impact on the change in the NPV than
      does
      the change in the discount rate.




Management
      believes that the assumptions used by it to evaluate the vulnerability of our
      operations to changes in interest rates approximate actual experience and
      considers them reasonable; however, the interest rate sensitivity of our assets
      and liabilities and the estimated effects of changes in interest rates on our
      net interest income and NPV could vary substantially if different assumptions
      were used or actual experience differs from the historical experience on which
      they are based.




Our
      strategies in protecting both net interest income and economic value of equity
      from significant movements in interest rates involve restructuring our
      investment portfolio and using FHLB advances. We also permit the purchase of
      rate caps and floors, and engaging in interest rate swaps, although we have
      not
      yet engaged in either of these activities, other than an interest rate swap
      agreement arranged in September 2003 on the notional amount of $3 million and
      subsequently terminated without any gain or loss by mutual agreement between
      us
      and a brokerage company in January 2004.




**Item
      4.** **Controls
      and Procedures** ****




**Controls
      and Procedures**




As
      of
      March 31, 2006, we carried out an evaluation, under the supervision and with
      the
      participation of our management, including our chief executive officer and
      chief
      financial officer, of the effectiveness of the design and operation of our
      “disclosure controls and procedures,” as such term is defined under Exchange Act
      Rules 13a-15(e) and 15d-15(e).




Based
      on
      this evaluation, our chief executive officer and chief financial officer
      concluded that, as of March 31, 2006, such disclosure controls and procedures
      were effective to ensure that information required to be disclosed by us in
      the
      reports we file or submit under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the rules and
      forms
      of the Securities and Exchange Commission, and accumulated and communicated
      to
      our management, including our chief executive officer and chief financial
      officer, as appropriate to allow timely decisions regarding required disclosure.




38




In
      designing and evaluating the disclosure controls and procedures, our management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives and in reaching a reasonable level of assurance our management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures.




There
      were no changes in our internal controls over financial reporting during the
      quarter ended March 31, 2006 that materially effected, or are reasonably likely
      to materially effect, our internal controls over financial
      reporting.




39




**OTHER
      INFORMATION**




Item
      1.  **Legal
      Proceedings**




Not
      applicable.




Item
      2.  **Unregistered
      Sales of Equity****Securities and Use of Proceeds**




None.




Item
      3.  **Defaults
      Upon Senior Securities**




Not
      applicable.




Item
      4.  **Submission
      of Matters to a Vote of Security Holders**





None.




Item
      5.  **Other
      Information**





Not
      applicable.




40




Item
      6.  Exhibits




**Exhibit
        Table**


**Reference
                Number**
            
            **Item**3.1
            
            Articles
                of Incorporation, as amended and estated12
            
            Bylaws,
                as amended and restated24.1
            
            Specimen
                of Common Stock Certificate34.2
            
            Indenture
                of Subordinated Debentures44.3
            
            Indenture
                by and between Wilshire Bancorp, Inc. and U.S. Bank National Association
                dated as of December 17, 2003511
            
            Statement
                Regarding Computation of Net Earnings per Share631.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200231.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200232
            
            Certifications
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002





1.  Incorporated
      herein by reference to Exhibit 3.1 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on June 15, 2004.


2.  Incorporated
      herein by reference to Exhibit 3.2 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on June 15, 2004.


3.  Incorporated
      herein by reference to Exhibit 4.1 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


4.  Incorporated
      herein by reference to Exhibit 4.2 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


5.  Incorporated
      herein by reference to Exhibit 4.3 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


6.  The
      information required by this Exhibit is incorporated by
      reference from Note [3] of the Company’s Financial Statements included
      herein.


41




**SIGNATURES**




Pursuant
      to the requirement 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.




**WILSHIRE
              BANCORP, INC.**Date: May
              10,
              2006
            By:
            /s/ Brian
              E.
              ChoBrian E. Cho
              Executive Vice President and Chief Financial
                Officer
              (Principal Financial and Accounting
                Officer)


42




**INDEX
      TO EXHIBITS**




**Exhibit
      Table**





**Reference
                Number**
            
            **Item**3.1
            
            Articles
                of Incorporation, as amended and restated13.2
            
            Bylaws,
                as amended and restated24.1
            
            Specimen
                of Common Stock Certificate34.2
            
            Indenture
                of Subordinated Debentures44.3
            
            Indenture
                by and between Wilshire Bancorp, Inc. and U.S. Bank National Association
                dated as of December 17, 2003511
            
            Statement
                Regarding Computation of Net Earnings per Share631.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200231.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200232
            
            Certifications
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002





1.  Incorporated
      herein by reference to Exhibit 3.1 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on June 15, 2004.


2.  Incorporated
      herein by reference to Exhibit 3.2 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on June 15, 2004.


3.  Incorporated
      herein by reference to Exhibit 4.1 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


4.  Incorporated
      herein by reference to Exhibit 4.2 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


5.  Incorporated
      herein by reference to Exhibit 4.3 in the Registration Statement on Form S-4
      filed with the Securities and Exchange Commission on April 1, 2004.


6. The
      information required by this Exhibit is incorporated by reference from Note
      [3]
      of the Company’s Financial Statements included herein


43