**UNITED
        STATES**
 **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 June 30, 2005.**
  **OR**
  ** ̈**
              **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 codeSecurities
                  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
x No
o
  Indicate
        by check mark whether the registrant is an accelerated filer (as defined
        in Rule
        12b-2 of the Exchange Act).  Yes
x   
        No
o
  The
        number of shares of Common Stock of the registrant outstanding as of July
        31,
        2005 was 28,585,640.
  
   **FORM
        10-Q**
  **INDEX**
  **WILSHIRE
        BANCORP, INC.**
  **Pa****rt
                  I. FINANCIAL INFORMATION**
              **1****Item
                  1. Financial Statements**
              1**Item
                  2. Management’s Discussion and Analysis of Financial Condition and Results
                  of****Operations**
              9**Item
                  3. Quantitative and Qualitative Disclosures About Market
                  Risk**
              34**Item
                  4. Controls and Procedures**
              36**Pa****rt
                  II. OTHER INFORMATION**
              37**Item
                  1. Legal Proceedings**
              37**Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds**
              37**Item
                  3. Defaults Upon Senior Securities**
              37**Item
                  4. Submission of Matters to a Vote of Security
                  Holders**
              37**Item
                  5. Other Information**
              37**Item
                  6. Exhibits**
              38**SI****GNATURES**
              39
 
  i
  **Part
          I.   **FINANCIAL
          INFORMATION****
  **Item
          1.** **Financial
          Statements******
  **WILSHIRE
            BANCORP, INC.**
 **CONDENSED
            CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION**
 **(UNAUDITED)**
 **June
                      30,2005**
                  
                  **December
                      31,2004****ASSETS**Cash
                      and due from banks
                  
                  $
                  59,110,985
                  
                  $
                  53,903,163Federal
                      funds sold and other cash equivalents
                  
                  
                  60,000,000
                  
                  
                  45,000,000Commercial
                      paper
                  
                  
                  17,985,427Cash
                      and cash equivalents
                  
                  
                  137,096,412
                  
                  
                  98,903,163Interest-bearing
                      deposits in other financial institutions
                  
                  
                  2,937
                  
                  
                  2,573Securities
                      available for sale - at fair value (amortized cost of $121,708,363
                      and$86,121,349
                      at June 30, 2005 and December 31, 2004, respectively)
                  
                  
                  121,138,859
                  
                  
                  85,712,485Securities
                      held to maturity - at amortized cost (fair value of $24,991,645
                      and$29,161,100
                      at June 30, 2005 and December 31, 2004, respectively)
                  
                  
                  25,099,697
                  
                  
                  29,262,188Interest
                      only strip - at fair value (amortized cost of $1,701,965and
                      $1,550,444 at June 30, 2005 and December 31, 2004,
                      respectively)
                  
                  
                  1,694,444
                  
                  
                  1,494,176Loans
                      held for sale, at the lower of cost or market
                  
                  
                  18,816,691
                  
                  
                  21,144,128Loans
                      receivable, net of allowance for loan losses of $12,450,111
                      and
                      $11,111,092at
                      June, 30, 2005 and December 31, 2004, respectively
                  
                  
                  1,099,567,541
                  
                  
                  988,468,142Bank
                      premises and equipment, net
                  
                  
                  8,451,645
                  
                  
                  5,479,776Federal
                      Home Loan Bank stock, at cost
                  
                  
                  6,052,400
                  
                  
                  4,371,500Accrued
                      interest receivable
                  
                  
                  4,989,518
                  
                  
                  3,867,005Deferred
                      income taxes - net
                  
                  
                  5,841,575
                  
                  
                  4,839,346Servicing
                      asset
                  
                  
                  4,632,904
                  
                  
                  4,373,974Due
                      from customers on acceptances
                  
                  
                  2,841,253
                  
                  
                  2,041,023Cash
                      surrender value of life insurance
                  
                  
                  14,820,391
                  
                  
                  11,536,476Other
                      assets
                  
                  
                  5,979,196
                  
                  
                  4,145,368TOTAL
                  
                  $
                  1,457,025,463
                  
                  $
                  1,265,641,323**LIABILITIES
                      AND SHAREHOLDERS’ EQUITY**LIABILITIES:DepositsNoninterest-bearing
                  
                  $
                  302,122,411
                  
                  $
                  273,940,106Interest-bearing:Savings
                  
                  
                  22,496,189
                  
                  
                  22,946,077Time
                      deposits of $100,000 or more
                  
                  
                  529,582,761
                  
                  
                  448,526,610Other
                      time deposits
                  
                  
                  105,768,063
                  
                  
                  115,728,483Money
                      markets and nows
                  
                  
                  284,043,666
                  
                  
                  237,564,098Total
                      deposits
                  
                  
                  1,244,013,090
                  
                  
                  1,098,705,374Federal
                      Home Loan Bank borrowings
                  
                  
                  51,000,000
                  
                  
                  41,000,000Junior
                      subordinated debentures
                  
                  
                  46,083,000
                  
                  
                  25,464,000Accrued
                      interest payable
                  
                  
                  4,029,428
                  
                  
                  2,891,707Acceptances
                      outstanding
                  
                  
                  2,841,253
                  
                  
                  2,041,023Other
                      liabilities
                  
                  
                  8,127,994
                  
                  
                  7,231,601Total
                      liabilities
                  
                  
                  1,356,094,765
                  
                  
                  1,177,333,705COMMITMENTS
                      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, 28,585,640 and 28,142,470 shares atJune
                      30, 2005 and December 31, 2004, respectively
                  
                  
                  41,079,050
                  
                  
                  38,926,430Accumulated
                      other comprehensive loss
                  
                  
                  (288,604
                  )
                  
                  (223,703
                  )Retained
                      earnings
                  
                  
                  60,140,252
                  
                  
                  49,604,891Total
                      shareholders’ equity
                  
                  
                  100,930,698
                  
                  
                  88,307,618TOTAL
                  
                  $
                  1,457,025,463
                  
                  $
                  1,265,641,323
  The
            accompanying notes are an integral part of these unaudited condensed
            consolidated financial statements.
  1
   **WILSHIRE
                      STATE BANK**
                    **CONDENSED
                        CONSOLIDATED STATEMENTS OF OPERATIONS**
                  **(UNAUDITED)****Three
                    Months Ended June 30,**
                
                **Six
                    Months Ended June 30,****INTEREST
                    INCOME:**
                
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**Interest
                    and fees on loans
                
                $
                20,779,577
                
                $
                12,764,443
                
                $
                39,009,546
                
                $
                24,612,047Interest
                    on investment securities and deposits in other financial
                    institutions
                
                
                1,147,444
                
                
                697,456
                
                
                2,019,000
                
                
                1,387,872Interest
                    on federal funds sold and other cash equivalents
                
                
                544,797
                
                
                143,293
                
                
                971,523
                
                
                258,158Interest
                    on commercial paper
                
                
                67,133
                
                
                —
                
                
                67,133
                
                
                —Total
                    interest income
                
                
                22,538,951
                
                
                13,605,192
                
                
                42,067,202
                
                
                26,258,077**INTEREST
                    EXPENSE:**Deposits
                
                
                6,535,943
                
                
                3,656,776
                
                
                11,646,424
                
                
                6,837,642Interest
                    on other borrowings
                
                
                1,034,971
                
                
                410,040
                
                
                1,812,691
                
                
                777,146Total
                    interest expense
                
                
                7,570,914
                
                
                4,066,816
                
                
                13,459,115
                
                
                7,614,788NET
                    INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
                
                
                14,968,037
                
                
                9,538,376
                
                
                28,608,087
                
                
                18,643,289PROVISION
                    FOR LOSSES ON LOANS AND LOAN COMMITMENTS
                
                
                720,000
                
                
                670,000
                
                
                1,220,000
                
                
                1,566,711NET
                    INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
                
                
                14,248,037
                
                
                8,868,376
                
                
                27,388,087
                
                
                17,076,578**NONINTEREST
                    INCOME:**Service
                    charges on deposit accounts
                
                
                1,814,596
                
                
                1,834,034
                
                
                3,534,406
                
                
                3,656,562Gain
                    on sale of loans
                
                
                1,488,854
                
                
                2,033,501
                
                
                3,511,931
                
                
                4,171,114Loan-related
                    servicing income
                
                
                472,952
                
                
                668,006
                
                
                1,130,750
                
                
                1,173,313Loan
                    referral fee income
                
                
                17,428
                
                
                27,500
                
                
                118,217
                
                
                99,520Loan
                    packaging fee
                
                
                132,049
                
                
                137,573
                
                
                197,766
                
                
                260,043Income
                    from other earning assets
                
                
                285,585
                
                
                144,045
                
                
                412,464
                
                
                301,089Other
                    income
                
                
                405,691
                
                
                343,807
                
                
                647,577
                
                
                598,120Total
                    noninterest income
                
                
                4,617,155
                
                
                5,188,466
                
                
                9,553,111
                
                
                10,259,761**NONINTEREST
                    EXPENSES:**Salaries
                    and employee benefits
                
                
                4,317,462
                
                
                3,296,592
                
                
                8,692,826
                
                
                6,739,423Occupancy
                    and equipment
                
                
                769,618
                
                
                676,489
                
                
                1,602,848
                
                
                1,285,064Data
                    processing
                
                
                543,351
                
                
                404,274
                
                
                958,218
                
                
                773,401Loan
                    referral fees
                
                
                306,653
                
                
                313,528
                
                
                569,188
                
                
                603,624Professional
                    fees
                
                
                108,583
                
                
                175,688
                
                
                554,589
                
                
                419,634Directors’
                    fees
                
                
                114,100
                
                
                105,050
                
                
                237,350
                
                
                208,550Office
                    supplies
                
                
                134,087
                
                
                133,172
                
                
                242,610
                
                
                245,574Advertising
                    and promotional
                
                
                142,961
                
                
                79,193
                
                
                388,554
                
                
                202,725Communications
                
                
                113,896
                
                
                80,369
                
                
                206,612
                
                
                162,551Deposit
                    insurance premiums
                
                
                38,269
                
                
                32,626
                
                
                75,323
                
                
                62,379Outsourced
                    service for customers
                
                
                335,084
                
                
                319,597
                
                
                656,699
                
                
                624,563Other
                    operating
                
                
                607,133
                
                
                426,897
                
                
                1,185,555
                
                
                817,618Total
                    noninterest expenses
                
                
                7,531,197
                
                
                6,043,475
                
                
                15,370,372
                
                
                12,145,106INCOME
                    BEFORE INCOME TAX PROVISION
                
                
                11,333,995
                
                
                8,013,367
                
                
                21,570,826
                
                
                15,191,233INCOME
                    TAX PROVISION
                
                
                4,582,196
                
                
                3,190,000
                
                
                8,749,196
                
                
                6,023,000NET
                    INCOME
                
                $
                6,751,799
                
                $
                4,823,367
                
                $
                12,821,630
                
                $
                9,168,233EARNINGS
                    PER SHAREBasic
                
                $
                0.24
                
                $
                0.17
                
                $
                0.45
                
                $
                0.34Diluted
                
                $
                0.23
                
                $
                0.17
                
                $
                0.44
                
                $
                0.32
   The
          accompanying notes are an integral part of these unaudited condensed
          consolidated financial statements.
  2
  **WILSHIRE
                      STATE BANK**
 **CONDENSED
                        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**
 **(UNAUDITED)**
 **Three
                                Months Ended June 30,**
                            
                            
                            **Six
                                Months ended June 30,****2005**
                            
                            
                            **2004**
                            
                            
                            **2005**
                            
                            
                            **2004**Net
                                income
                            
                            $
                            6,751,799
                            
                            $
                            4,823,367
                            
                            $
                            12,821,630
                            
                            $
                            9,168,233Other
                                comprehensive income, net of tax:Unrealized
                                gains (losses) on securities available for sale and
                                interest-only
                                strip:Unrealized
                                holding gains (losses) on securities available for
                                sale arising during
                                period, net
                                of tax expense of $154,749 for the three months ended
                                June 30,2005 and net
                                of tax benefit of $685,192 for the three months ended
                                June 30, 2004,net
                                of tax benefit of $67,469 for the six months ended
                                June 30,2005 andnet
                                of tax benefit of $222,217 for the three months ended
                                June 30, 2004
                            
                            
                            213,700
                            
                            
                            (946,214
                            )
                            
                            (93,171
                            )
                            
                            (692,146
                            )Unrealized
                                holding gains (losses) on interest only strips arising
                                during period,net
                                of tax benefit of $76,679 for the three months ended
                                June 30, 2005 and net
                                of tax benefit of $51,967 for the three months ended
                                June 30, 2004,net
                                of tax expense of $20,474 for the six months ended
                                June 30, 2005 andnet
                                of tax benefit of $66,189 for the six months ended
                                June 30, 2004
                            
                            
                            (105,891
                            )
                            
                            (71,763
                            )
                            
                            28,273
                            
                            
                            (91,403
                            )Unrealized
                                holding gains on interest of SWAP arising during
                                period,net
                                of tax benefit of $0 for the six months ended June
                                30, 2005 andnet
                                of tax expense of $25,308 for the six months ended
                                June 30,
                                2004
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            37,962Other
                                comprehensive income (loss), net of tax:
                            
                            
                            107,809
                            
                            
                            (1,017,977
                            )
                            
                            (64,898
                            )
                            
                            (745,587
                            )Comprehensive
                                income
                            
                            $
                            6,859,608
                            
                            $
                            3,805,390
                            
                            $
                            12,756,732
                            
                            $
                            8,422,646
 The
                      accompanying notes are an integral part of these unaudited
                      condensed
                      consolidated financial
                      statements.
   3
  
 **WILSHIRE
                      BANCORP, INC.**
                    **CONDENSED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS**
                    **(UNAUDITED)****Six
                      Months Ended June 30,****2005**
                  
                  **2004****CASH
                      FLOWS FROM OPERATING ACTIVITIES:**Net
                      income
                  
                  $
                  12,821,630
                  
                  $
                  9,168,233Adjustments
                      to reconcile net income to net cash provided byoperating
                      activities:Amortization
                      and accretion of premiums and discounts
                  
                  
                  38,622
                  
                  
                  174,430Depreciation
                      of premises & equipment
                  
                  
                  450,585
                  
                  
                  375,879Provision
                      for losses on loans and loan commitments
                  
                  
                  1,220,000
                  
                  
                  1,566,711Deferred
                      tax provision (benefit)
                  
                  
                  (955,235
                  )
                  
                  (412,044
                  )Loss
                      (gain) on disposition of bank premises, equipment and
                      securities
                  
                  
                  902
                  
                  
                  (3,785
                  )Gain
                      on sale of loans
                  
                  
                  (3,511,931
                  )
                  
                  (4,171,114
                  )Origination
                      of loans held for sale
                  
                  
                  (70,668,403
                  )
                  
                  (40,856,887
                  )Proceeds
                      from sale of loans held for sale
                  
                  
                  76,507,771
                  
                  
                  40,587,682Gain
                      on sale of AFS securities
                  
                  
                  —
                  
                  
                  (4,980
                  )Loss
                      on sale of other real estate owned
                  
                  
                  8,607
                  
                  
                  3,967Tax
                      benefit from exercise of stock options
                  
                  
                  1,724,074
                  
                  
                  8,377,268Change
                      in cash surrender value of life insurance
                  
                  
                  (283,915
                  )
                  
                  (228,935
                  )Servicing
                      assets capitalization
                  
                  
                  (913,463
                  )
                  
                  (868,700
                  )Servicing
                      assets amortization
                  
                  
                  654,533
                  
                  
                  464,203Increase
                      in interest-only strip
                  
                  
                  (151,520
                  )
                  
                  (496,921
                  )Increase
                      in accrued interest receivable
                  
                  
                  (1,122,513
                  )
                  
                  (530,907
                  )Increase
                      in other assets
                  
                  
                  (1,833,828
                  )
                  
                  (5,390,820
                  )Increase
                      in accrued interest payable
                  
                  
                  1,137,721
                  
                  
                  482,745Decrease
                      in other liabilities
                  
                  
                  (277,002
                  )
                  
                  (4,118,524
                  )Net
                      cash provided by operating activities
                  
                  
                  14,846,635
                  
                  
                  4,117,501**CASH
                      FLOWS FROM INVESTING ACTIVITIES:**Net
                      (increase) decrease in interest-bearing deposits in other financial
                      institutions
                  
                  
                  (364
                  )
                  
                  98,954Purchases
                      of investment securities available for sale
                  
                  
                  (52,746,527
                  )
                  
                  (29,047,464
                  )Purchases
                      of investment securities held to maturity
                  
                  
                  (1,999,000
                  )
                  
                  (6,987,338
                  )Proceeds
                      from sales of securities (AFS)
                  
                  
                  —
                  
                  
                  8,000,000Proceeds
                      from matured securities and principal repayment (AFS)
                  
                  
                  17,108,875
                  
                  
                  8,688,172Proceeds
                      from principal repayment, matured or called securities
                      (HTM)
                  
                  
                  6,173,506
                  
                  
                  4,796,188Net
                      increase in loans receivable
                  
                  
                  (112,597,630
                  )
                  
                  (169,108,844
                  )Proceeds
                      from sale of other loans
                  
                  
                  —
                  
                  
                  3,048,285Proceeds
                      from sale of other real estate owned
                  
                  
                  299,593
                  
                  
                  373,233Purchases
                      of premises and equipment
                  
                  
                  (3,423,357
                  )
                  
                  (680,349
                  )Proceeds
                      from sale of FHLB stock
                  
                  
                  (1,680,900
                  )
                  
                  (2,719,600
                  )Purchases
                      of Bank Owned Life Insurance
                  
                  
                  (3,000,000
                  )
                  
                  —Net
                      cash used in investing activities
                  
                  
                  (151,865,804
                  )
                  
                  (183,538,763
                  )**CASH
                      FLOWS FROM FINANCING ACTIVITIES:**Net
                      increase in deposits
                  
                  
                  145,307,716
                  
                  
                  183,412,190Increase
                      in Federal Home Loan Bank borrowing
                  
                  
                  10,000,000
                  
                  
                  21,000,000Payment
                      of cash dividend
                  
                  
                  (1,142,843
                  )
                  
                  —Increase
                      in junior subordinated debentures
                  
                  
                  20,619,000
                  
                  
                  —Proceeds
                      from exercise of stock options
                  
                  
                  428,545
                  
                  
                  1,577,417Net
                      cash provided by financing activities
                  
                  
                  175,212,418
                  
                  
                  205,989,607NET
                      INCREASE IN CASH AND CASH EQUIVALENTS
                  
                  
                  38,193,249
                  
                  
                  26,568,345CASH
                      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                  
                  
                  98,903,163
                  
                  
                  120,486,069CASH
                      AND CASH EQUIVALENTS, END OF PERIOD
                  
                  $
                  137,096,412
                  
                  $
                  147,054,414SUPPLEMENTAL
                      DISCLOSURES OF CASH FLOW INFORMATION:Interest
                      paid
                  
                  $
                  12,321,394
                  
                  $
                  7,132,043Income
                      taxes paid
                  
                  $
                  9,544,500
                  
                  $
                  2,545,000NONCASH
                      INVESTING AND FINANCING ACTIVITIESCash
                      dividend declared
                  
                  $
                  1,143,426Transfer
                      of loans to OREO
                  
                  $
                  308,200
  The
        accompanying notes are an integral part of these unaudited 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
        wholly
        owned 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  14
        full-service Bank branch offices in southern California and one branch office
        in
        Texas. We also have nine loan production offices utilized primarily for the
        origination of loans under our Small Business Administration (“SBA”) lending
        program in Oklahoma City, Seattle, San Antonio, Las Vegas, the San Jose area
        (Milpitas, California), Atlanta, Houston, Denver, and New York.
  **Note
        2.**  **Basis
        of Presentation**
  The
        accompanying unaudited condensed consolidated financial statements include
        the
        accounts of the Company (the Bank for periods prior to August 25, 2004) and
        its
        wholly owned subsidiary. 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 June 30, 2005 and December 31, 2004, the related statements
        of
        operations and comprehensive income for the three months and six months ended
        June 30, 2005 and 2004, and the statements of cash flows for the six months
        ended June 30, 2005 and 2004. 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 the Company’s Annual Report
        on Form 10-K for the year ended December 31, 2004. 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, 2004, unless otherwise noted.
  **Note
        3.**  **Earnings
        per Share**
  Basic
        earnings per share (“EPS”) exclude dilution and are computed by dividing
        earnings available to common shareholders by the weighted-average number
        of
        common shares outstanding for the period. Diluted EPS reflects the potential
        dilution of securities that could share in the earnings. There was a two-for-one
        stock split of the Company’s common shares for the shareholders of record at the
        close of business on December 3, 2004, which was effective on December 14,
        2004.
        All basic and diluted earnings per share in this report have been retroactively
        restated for the stock split.
  5
 The
        following is a reconciliation of the numerators and denominators of the basic
        and diluted per share computations for the specified periods **.**
  ******Three
                    months ended June 30, 2005**
                
                ******Three
                    months ended June 30, 2004**Income
                  (Numerator)
                
                Shares
                  (Denominator)
                
                Per
                    ShareAmount
                
                Income
                  (Numerator)
                
                Shares
                  (Denominator)
                
                Per
                    Share
                  AmountBasic
                    EPS
                
                $
                6,751,799
                
                
                28,574,385
                
                $
                0.24
                
                $
                4,823,367
                
                
                27,840,519
                
                $
                0.17Effect
                    of dilution
                
                
                —
                
                
                350,074
                
                
                (0.01
                )
                
                —
                
                
                762,158
                
                
                (0.00
                )Diluted
                    EPS
                
                $
                6,751,799
                
                
                28,924,459
                
                $
                0.23
                
                $
                4,823,367
                
                
                28,602,677
                
                $
                0.17
  **Six
                      months ended June 30,
                      2005**
                  
                  
                  **Six
                      months ended June 30,
                      2004**Income
                    (Numerator)
                  
                  
                  Shares
                    (Denominator)
                  
                  
                  Per
                      ShareAmount
                  
                  
                  Income
                    (Numerator)
                  
                  
                  Shares
                    (Denominator)
                  
                  
                  Per
                      ShareAmountBasic
                      EPS
                  
                  $
                  12,821,630
                  
                  
                  28,499,455
                  
                  $
                  0.45
                  
                  $
                  9,168,233
                  
                  
                  27,158,132
                  
                  $
                  0.34Effect
                      of dilution
                  
                  
                  —
                  
                  
                  395,538
                  
                  
                  (0.01
                  )
                  
                  —
                  
                  
                  1,143,951
                  
                  
                  (0.02
                  )Diluted
                      EPS
                  
                  $
                  12,821,630
                  
                  
                  28,894,993
                  
                  $
                  0.44
                  
                  $
                  9,168,233
                  
                  
                  28,302,083
                  
                  $
                  0.32
  There
        were 146,850 anti-dilutive stock options outstanding for the three months
        and
        six months ended June 30, 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 and six months ended June 30, 2004.
  **Note
        4.**  **Goodwill
        and Other Intangible Assets**
  In
        July
        2001, the Financial Accounting Standards Board (“FASB”) issued Statement of
        Financial Accounting Standards (“SFAS”) No. 141, *Business
        Combinations* ,
        and
        SFAS No. 142, *Goodwill
        and Other Intangible Assets.* Under
        this rule, 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 adopted the new rules on accounting for goodwill and other intangible
        assets on January 1, 2002. At adoption and as of June 30, 2005, the Company
        does
        not have any material intangible assets that will be subject to annual
        impairment testing in accordance with these Statements. The Company’s intangible
        assets that continue to be subject to amortization, loan servicing rights,
        were
        $4,632,904 and $3,687,180 (net of $1,514,842 and $1,229,601 accumulated
        amortization, respectively) as of June 30, 2005 and 2004, respectively.
        Amortization expense for intangible assets subject to amortization was $406,388
        and $204,436 for the three months ended June 30, 2005 and 2004, respectively,
        and it is estimated that it will be approximately $1,625,552 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 with access to the U.S. SBA guaranteed
        lending program.
  6
 The
        following are the results of operations of the Company’s segments for the
        periods indicated below:
 **(Dollars
                      in Thousands)**
                  
                  
                  **Three
                      Months Ended June 30, 2005**
                  
                  
                  **Three
                      Months Ended June 30, 2004****Business
                      Segment**
                  
                  
                  **Banking**
                    **Operations**
                  
                  
                  **TFS**
                  
                  
                  **SBA**
                  
                  
                  **Bank**
                  
                  
                  **Banking****Operations**
                  
                  
                  **TFS**
                  
                  
                  **SBA**
                  
                  
                  **Bank**Net
                      interest income
                  
                  $
                  10,992
                  
                  $
                  725
                  
                  $
                  3,251
                  
                  $
                  14,968
                  
                  $
                  7,047
                  
                  $
                  445
                  
                  $
                  2,046
                  
                  $
                  9,538Less
                      provision for loan losses
                  
                  
                  725
                  
                  
                  (116
                  )
                  
                  111
                  
                  
                  720
                  
                  
                  576
                  
                  
                  383
                  
                  
                  (289
                  )
                  
                  670Other
                      operating income
                  
                  
                  2,577
                  
                  
                  475
                  
                  
                  1,566
                  
                  
                  4,618
                  
                  
                  2,350
                  
                  
                  502
                  
                  
                  2,337
                  
                  
                  5,189Net
                      revenue
                  
                  
                  12,844
                  
                  
                  1,316
                  
                  
                  4,706
                  
                  
                  18,866
                  
                  
                  8,821
                  
                  
                  564
                  
                  
                  4,672
                  
                  
                  14,057Other
                      operating expenses
                  
                  
                  6,337
                  
                  
                  245
                  
                  
                  950
                  
                  
                  7,532
                  
                  
                  5,075
                  
                  
                  200
                  
                  
                  769
                  
                  
                  6,044Income
                      before taxes
                  
                  $
                  6,507
                  
                  $
                  1,071
                  
                  $
                  3,756
                  
                  $
                  11,334
                  
                  
                  3,746
                  
                  
                  364
                  
                  
                  3,903
                  
                  
                  8,013Business
                      segment assets
                  
                  $
                  1,255,181
                  
                  $
                  45,379
                  
                  $
                  156,465
                  
                  $
                  1,457,025
                  
                  $
                  1,012,649
                  
                  $
                  44,278
                  
                  $
                  145,603
                  
                  $
                  1,202,530
  ****(Dollars
                        in Thousands)****
                    
                    
                    **Six
                        Months Ended June 30, 2005**
                    
                    
                    **Six
                        Months Ended June 30, 2004****Business
                        Segment**
                    
                    
                    **Banking****Operations**
                    
                    
                    **TFS**
                    
                    
                    **SBA**
                    
                    
                    **Bank**
                    
                    
                    **Banking****Operations**
                    
                    
                    **TFS**
                    
                    
                    **SBA**
                    
                    
                    **Bank**Net
                        interest income
                    
                    $
                    21,133
                    
                    $
                    1,392
                    
                    $
                    6,083
                    
                    $
                    28,608
                    
                    $
                    13,513
                    
                    $
                    805
                    
                    $
                    4,325
                    
                    $
                    18,643Less
                        provision for loan losses
                    
                    
                    1,356
                    
                    
                    (204
                    )
                    
                    68
                    
                    
                    1,220
                    
                    
                    1,584
                    
                    
                    393
                    
                    
                    (410
                    )
                    
                    1,567Other
                        operating income
                    
                    
                    4,718
                    
                    
                    873
                    
                    
                    3,963
                    
                    
                    9,554
                    
                    
                    4,619
                    
                    
                    922
                    
                    
                    4,719
                    
                    
                    10,260Net
                        revenue
                    
                    
                    24,495
                    
                    
                    2,469
                    
                    
                    9,978
                    
                    
                    36,942
                    
                    
                    16,548
                    
                    
                    1,334
                    
                    
                    9,454
                    
                    
                    27,336Other
                        operating expenses
                    
                    
                    12,838
                    
                    
                    450
                    
                    
                    2,083
                    
                    
                    15,371
                    
                    
                    10,135
                    
                    
                    354
                    
                    
                    1,656
                    
                    
                    12,145Income
                        before taxes
                    
                    $
                    11,657
                    
                    $
                    2,019
                    
                    $
                    7,895
                    
                    $
                    21,571
                    
                    
                    6,413
                    
                    
                    980
                    
                    
                    7,798
                    
                    
                    15,191Business
                        segment assets
                    
                    $
                    1,255,181
                    
                    $
                    45,379
                    
                    $
                    156,465
                    
                    $
                    1,457,025
                    
                    $
                    1,012,649
                    
                    $
                    44,278
                    
                    $
                    145,603
                    
                    $
                    1,202,530
  **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 addition, the outstanding stock
        options granted under the Bank’s 1990 stock option plan were transferred to this
        new plan. 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 June 30, 2005, 855,512 shares were outstanding under this option
        plan. Options granted under the stock option plans expire not more than 10
        years
        after the date of grant.
  For
        the
        second quarter of 2005, options to purchase 55,000 shares in total were granted,
        whereas no stock options
        were granted in the same period of 2004. The average estimated fair value
        of
        options was $1.98. The fair value
        was
        estimated on the date of grant using the Black−Scholes option pricing model
        under the following assumptions−dividend
        yield of 1.16%, expected volatility of 25.6%, average expected life of 2
        years
        and average risk
        free
        interest rate of 2.91%. Had compensation costs for the Company’s stock option
        plan been determined based on the fair values at the grant dates for awards
        under the plan consistent with the fair value method of SFAS No. 123, the
        company’s net income and earnings per share for the three and six months ended
        June 30 would have been reduced to the pro forma amounts indicated below:
  **Three
                  months ended June 30,**
              
              **Six
                  months ended June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004****Net
                  income - as reported**
              
              $
              6,751,799
              
              $
              4,823,367
              
              $
              12,821,630
              
              $
              9,168,233**Deduct:**Total stock-based employeecompensationexpenses
                  determined under fair value-based method for all awards - net of
                  related
                  tax effects
              
              
              (34,651
              )
              
              (32,873
              )
              
              (65,565
              )
              
              (65,745
              )Pro
                  forma net income
              
              $
              6,717,148
              
              $
              4,790,494
              
              $
              12,756,065
              
              $
              9,102,488**Earnings
                  per share:**Basic
                  - as reported
              
              $
              0.24
              
              $
              0.17
              
              $
              0.45
              
              $
              0.34Basic
                  - pro forma
              
              $
              0.24
              
              $
              0.17
              
              $
              0.45
              
              $
              0.34Diluted
                  - as reported
              
              $
              0.23
              
              $
              0.17
              
              $
              0.44
              
              $
              0.32Diluted
                  - pro forma
              
              $
              0.23
              
              $
              0.17
              
              $
              0.44
              
              $
              0.32
  7
  **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 June 30, 2005 are summarized as follows:
  Commitments
                  to extend credit
              
              $
              84,210,000Standby
                  letters of credit
              
              $
              2,370,000Commercial
                  letters of credit
              
              $
              11,703,000
  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.
  **Note
        8.**  **Recent
        Accounting Pronouncements**
  In
        December 2004, the Financial Accounting Standards Board (“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 will be 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, the Company is required to adopt SFAS No.
        123R
        effective January 1, 2006. In adopting SFAS No. 123R, the Company may apply
        the
“modified prospective application” method, which requires that compensation
        expense be recorded for all unvested stock options and restricted stock at
        the
        beginning of the first quarter of adoption of SFAS No. 123R. In addition,
        the
        Company may apply “modified retrospective application,” which would require the
        recording of compensation expense for all unvested stock options beginning
        with
        the first period restated. The Company does not expect the adoption of SFAS
        No.
        123R to result in amounts that are materially different from the current
        pro
        forma disclosures under SFAS No. 123.
  **Note** **9.**  **Subsequent
        Event**
  On
        August
        1, 2005, we entered into a stock purchase agreement with the shareholders
        of Liberty Bank of New York (“Liberty Bank”) to acquire all of the outstanding
        stock of Liberty Bank for approximately $15.7 million subject to adjustment
        immediately prior to closing.  The agreement contemplates that the
        purchase
        price will be payable 60% in cash and 40% in our restricted
        common stock.
  8
 The
        transactions contemplated by the agreement are anticipated
        to close in
        the fourth quarter of 2005 and will be subject to certain conditions, including
        regulatory approvals from the Federal Deposit Insurance Corporation, the
        Board
        of Governors of the Federal Reserve, and the California Department of Financial
        Institutions. The agreement contemplates that Liberty Bank will
        be
        merged into Wilshire State Bank, our wholly-owned subsidiary.
  **Note** **10.**  **Reclassifications**
  Certain
        reclassifications 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 for the
        three-month and six-month periods ended June 30, 2005 and 2004, and our
        financial condition as of December 31, 2004 and June 30, 2005. 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. This 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,” “expect,” “anticipate,” “seek,” “estimate,”
“intend,” “plan,” “projection,”
        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, 2004, 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.
  ·
              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.
  ·
              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.
  9
  ·
              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.
  ·
              Our
                  profitability is dependent on the profitability of the Bank.
  ·
              We
                  rely 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, 2004 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.
  10
  **Selected
        Financial Data**
  The
        following table presents selected historical financial information (unaudited)
        as of and for the three and six months ended June 30, 2005 and 2004. All
        per
        share amounts 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. 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 operations results of the interim periods are
        not
        necessarily indicative of our future operating results.
  ******Three
                  months ended June 30,**
              
              ******Six
                  months ended June 30,****(Dollars
                  in thousands, except per share data)****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                  income
              
              $
              6,752
              
              $
              4,823
              
              $
              12,822
              
              $
              9,168Net
                  income per share, basic
              
              
              0.24
              
              
              0.17
              
              
              0.45
              
              
              0.34Net
                  income per share, diluted
              
              
              0.23
              
              
              0.17
              
              
              0.44
              
              
              0.32Net
                  interest income
              
              
              14,968
              
              
              9,538
              
              
              28,608
              
              
              18,643**Average
                  balances:**Assets
              
              
              1,405,638
              
              
              1,117,806
              
              
              1,352,564
              
              
              1,051,954Cash
                  and cash equivalents
              
              
              138,280
              
              
              107,732
              
              
              129,273
              
              
              100,096Investment
                  debt securities
              
              
              127,228
              
              
              82,578
              
              
              115,979
              
              
              80,810Net
                  loans
              
              
              1,085,961
              
              
              878,496
              
              
              1,056,240
              
              
              827,999Total
                  deposits
              
              
              1,192,119
              
              
              958,591
              
              
              1,148,995
              
              
              905,805Shareholders’
                  equity
              
              
              99,306
              
              
              75,398
              
              
              95,847
              
              
              69,329**Performance
                  Ratios:**Annualized
                  return on average assets
              
              
              1.92
              %
              
              1.73
              %
              
              1.90
              %
              
              1.74
              %Annualized
                  return on average equity
              
              
              27.20
              %
              
              25.59
              %
              
              26.75
              %
              
              26.45
              %Net
                  interest margin
              
              
              4.61
              %
              
              3.74
              %
              
              4.58
              %
              
              3.88
              %Efficiency
                  ratio1
              
              
              38.45
              %
              
              41.04
              %
              
              40.28
              %
              
              42.02
              %**Capital
                  Ratios:**Tier
                  1 capital to adjusted total assets
              
              
              9.59
              %
              
              6.94
              %Tier
                  1 capital to risk-weighted assets
              
              
              11.29
              %
              
              8.00
              %Total
                  capital to risk-weighted assets
              
              
              13.33
              %
              
              11.74
              %**Period-end
                  balances as of:**
              
              
              **June
                  30, 2005**
              
              **December
                  31, 2004**
              
              
              **June
                  30, 2004**Total
                  assets
              
              $
              1,457,025
              
              $
              1,265,641
              
              $
              1,202,530Investment
                  securities
              
              
              146,239
              
              
              114,975
              
              
              93,610Total
                  loans, net of unearned income
              
              
              1,130,834
              
              
              1,020,723
              
              
              927,179Total
                  deposits
              
              
              1,244,013
              
              
              1,098,973
              
              
              1,039,928Junior
                  subordinated debentures
              
              
              46,083
              
              
              25,464
              
              
              25,464FHLB
                  borrowings
              
              
              51,000
              
              
              41,000
              
              
              50,000Shareholders’
                  equity
              
              
              100,931
              
              
              88,307
              
              
              77,119**Asset
                  Quality Ratios:**Net
                  charge-off (recoveries) to average total loans for the
                  quarter
              
              
              (0.01
              %)
              
              0.05
              %
              
              (0.01
              %)Nonperforming
                  loans to total loans
              
              
              0.32
              %
              
              0.26
              %
              
              0.39
              %Nonperforming
                  assets to total loans and other real estate owned
              
              
              0.32
              %
              
              0.26
              %
              
              0.39
              %Allowance
                  for loan losses to total loans
              
              
              1.10
              %
              
              1.09
              %
              
              1.11
              %Allowance
                  for loan losses to nonperforming loans
              
              
              339
              %
              
              412
              %
              
              281
              %
 1 Represents
          the ratio of noninterest expense to the sum of net interest income before
          provision for loan losses and noninterest income.
  **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.
   11
  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
        June
        30, 2005, we had approximately $1.46 billion in assets, $1.13 billion in
        total
        loans, and $1.24 billion in deposits.
  We
        also
        have expanded and diversified our business growth 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 15 branch offices and nine
        loan
        production offices. In the first half of 2005, we opened four loan production
        offices in Atlanta, Georgia, Houston, Texas, the Denver area (Aurora, Colorado),
        and New York, New York. We also converted the loan production office in Dallas,
        Texas into a full service branch office and opened a new branch office in
        Torrance, California. In 2004, we opened two branch offices in downtown Los
        Angeles and the City of Buena Park, California, and three loan production
        offices in Oklahoma City, Oklahoma, Las Vegas, Nevada and San Antonio, Texas.
        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.
  The
        Bank
        issued a $10 million Junior Subordinated Debenture in December 2002 and in
        December 2003 and March 2005, we issued additional Junior Subordinated
        Debentures in an amount of $15.5 million and $20.6 million, respectively,
        to the
        Wilshire Statutory Trusts (Wilshire Statutory Trust I and Wilshire Statutory
        Trust II), our wholly owned subsidiaries, which in turn issued trust preferred
        securities of $15.0 million and $20.0 million, respectively. We believe that
        the
        supplemental capital raised in connection with the issuance of these debentures
        and trust preferred securities has 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. We believe that this strategy has created recurring revenue streams,
        diversified our product portfolio and enhanced shareholder value.
  **Second
        Quarter 2005 Key Performance Indicators**
  We
        believe the following were key indicators of our performance during the second
        quarter of 2005:
  ·
              Our
                  total assets grew to $1.46 billion at the end of the second quarter
                  of
                  2005, an increase of 15.1% from $1.27 billion at the end of
                  2004.
  ·
              Our
                  total deposits grew to $1.24 billion at the end of the second quarter
                  of
                  2005, an increase of 13.2% from $1.10 billion at the end of
                  2004.
  ·
              Our
                  total loans grew to $1.13 billion at the end of the second quarter
                  of
                  2005, an increase of 10.8% from $1.02 billion at the end of
                  2004.
  ·
              Our
                  ratio of total non-performing loans to total loans increased to
                  0.32% at
                  the end of the second quarter of 2005 from 0.26% at the end of
                  2004.
  ·
              Total
                  noninterest income decreased to $4.6 million in the second quarter
                  of
                  2005, a decrease of 11.0% from $5.2 million in the second quarter
                  of 2004.
                  Such decrease was primarily attributable to the fact that we had
                  no sales
                  of unguaranteed SBA loans in the second quarter of 2005, compared
                  to a
                  gain of $304,000 on such sales in the second quarter of 2004.
  ·
              Total
                  noninterest expense increased from $6.0 million in the second quarter
                  of
                  2004 to $7.5 million in the second 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 0.54% in both the second
                  quarter of
                  2005 and in the second quarter of 2004. We believe that our 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 41.04%
                  in the
                  second quarter of 2004 to 38.45% in the second quarter of
                  2005.
  12
  These
        items, as well as other factors, contributed to the increase in net income
        for
        the second quarter of 2005 to $6.8 million, or $0.23 per diluted common share,
        from $4.8 million, or $0.17 per diluted common share, in the second quarter
        of
        2004.
  **2005
        Outlook**
  As
        we
        look ahead to the remainder of 2005, 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. On August 1, 2005 we entered
        into a definitive stock purchase agreement with the shareholders of Liberty
        Bank
        of New York to acquire all of the stock of Liberty Bank for approximately
        $15.7
        million. The stock purchase is expected to be completed in the fourth quarter
        of
        2005, and will increase our assets by approximately $55 million. See “Item 5.
        Additional Information” for further discussion regarding our acquisition of
        Liberty Bank.
  We
        seek
        additional growth
        in our portfolio of unsecured business loans and consumer loans by utilizing
        target marketing efforts in these areas . Further,
        we intend to
        continue our focus on loan and deposit growth and managing our net interest
        margin, while attempting to control expenses and credit losses to achieve
        our
        net income and other objectives. We will continue to strive to be more efficient
        and focus on controlling the growth of other operating expenses relative
        to the
        growth of our business.
  Although
        interest rates decreased in 2003, 2002 and 2001, compressing our interest
        margins, we continued to exhibit growth in net interest income. As interest
        rates increased in 2004, our yield on earning assets increased. Should interest
        rates increase further, our yield on earning assets will likely increase
        further
        although we cannot be certain as to the extent of such increases, if any.
        If
        interest rates continue to increase, we will decide whether to increase the
        interest rates we pay on our deposit accounts or change our
        promotional or other interest rates on new deposits in certain marketing
        programs to attempt to achieve a desirable net interest margin. Any increases
        in
        the rates we charge our customers could have an adverse effect on our efforts
        to
        attract new customers and grow loans, particularly with the continuing
        competition in the commercial and consumer lending industry. 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 improving from the downturn experienced in the past few
        years.
  Finally,
        we completed our reorganization into a holding company structure during the
        third quarter of 2004. We believe operating within a holding company structure,
        among other things:
  ·
              allows
                  us to use the portion of proceeds from the issuance of our trust
                  preferred
                  securities as Tier 1 capital (within regulatory
                  guidelines).
  ·
              provides
                  greater operating flexibility;
  ·
              facilitates
                  the acquisition of related businesses as opportunities
                  arise;
  ·
              improves
                  our ability to diversify;
  ·
              enhances
                  our ability to remain competitive in the future with other companies
                  in
                  the financial services industry that are organized in a holding
                  company
                  structure; and
  ·
              enhances
                  our ability to raise capital to support
                  growth.
  **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.
  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.
  13
 Our
        significant accounting policies are described in greater detail in our 2004
        Annual Report on Form 10-K in the “Critical Accounting Policies” section of
        "Management’s Discussion and Analysis of Financial Condition and Results of
        Operations" 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 June 30, 2005.
  **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, or FRB.
  Average
        interest-earning assets increased by 27.2% to $1.3 billion in the second
        quarter
        of 2005, as compared with $1.0 billion in the same quarter of 2004. **** Average
        net loans also increased by 23.6% to $1.1 billion in the second quarter of
        2005,
        as compared with $878.5 million in the same quarter of 2004. For the first
        six
        months of 2005, average interest-earning assets and average net loans also
        increased to $1.2 billion and $1.1 billion, respectively, as compared with
        $961.5 million and $828.0 million for the prior year’s same period. The FRB has
        raised the Fed Fund target rate by an aggregate 225 basis points 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 6.95% for the second quarter of 2005, as compared with
        5.34%
        for the prior year’s same period. This increase of interest-earning assets and
        their yields significantly increased our total interest income by 65.7% to
        $22.5
        million for the second quarter of 2005, as compared with $13.6 million for
        the
        prior year’s same period. For the first six months of 2005, total interest
        income increased to $42.1 million from $26.3 million for the prior year’s same
        period and average yields on interest-earning assets increased to 6.73% for
        the
        first six months of 2005, as compared with 5.46% for the prior year’s same
        period.
  Average
        interest-bearing liabilities increased by 29.5% to $1.0 billion in the second
        quarter of 2005, as compared with $781.0 million in the same quarter of 2004.
        Our average interest-bearing deposit portfolio also increased by 28.6% to
        $911.6
        million in the second quarter of 2005, as compared with $708.7 million in
        the
        same quarter of 2004. For the first six months of 2005, average interest-bearing
        liabilities and our average interest-bearing deposit portfolio also increased
        to
        $971.1 million and $877.1 million, respectively, as compared with $732.9
        million
        and $666.6 million for the prior year’s same period. We also increased other
        borrowings over the last 12 months (see “Financial Condition-Deposits and Other
        Sources of Funds” below). Due to the volume increase of interest-bearing
        liabilities together with the rate increase, total interest expense increased
        to
        $7.6 million for the second quarter of 2005 and to $13.5 million for the
        first
        six months of 2005, as compared with $4.1 million and $7.6 million for the
        prior
        year’s same periods. Due to the increase in the overall cost of funds, the
        average interest rate we paid for interest-bearing liabilities increased
        to
        2.99% for the second quarter of 2005 and 2.77% for the first six months of
        2005
        from 2.08% for the prior year’s same periods.
  Since
        June 30, 2004, the FRB raised its overnight lending rate seven times by an
        aggregate 225 basis points to 3.25%. The Wall Street Journal Prime Rate
        correspondingly increased to 6.25%. We are in an asset-sensitive position,
        meaning that these rate increases positively affected our net interest income
        because more earning assets were immediately re-priced than interest-bearing
        deposits. Although we price deposits competitively with the goal to continue
        to
        fund our growing loan portfolio, our models indicate that our margin should
        expand in a rising interest rate environment.
  The
        combined result of our growth and the interest rate increases was an increase
        in
        our net interest income. Net interest income increased to $15.0 million in
        the
        second quarter of 2005 and to $28.6 million for the first six months of 2005
        as
        compared with $9.5 million and $18.6 million for the prior year’s same periods,
        representing an increase of 56.9% and 53.5%, respectively. Due mainly to
        the
        positive impact of FRB’s rate increases on our asset-sensitive position, our net
        interest margin significantly increased to 4.61% and 4.58%, respectively,
        for
        the second quarter and the first six months of 2005, as compared with 3.74%
        and
        3.88%, respectively, for the prior year’s same periods. The net interest spread
        also improved to 3.95% and 3.96% for the second quarter and first six months
        of
        2005, respectively, from 3.25% and 3.38%, respectively, for the prior year’s
        same periods.
  14
 The
          following tables set 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 June 30,****2005**
                    
                    
                    
                    
                    
                    
                    
                    
                    **2004****(****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
                    
                    $
                    1,085,961
                    
                    $
                    20,780
                    
                    
                    7.65
                    %
                    $
                    878,496
                    
                    $
                    12,764
                    
                    
                    5.81
                    %Securities
                        of U.S. government agencies
                    
                    
                    120,819
                    
                    
                    1,084
                    
                    
                    3.59
                    %
                    
                    67,180
                    
                    
                    493
                    
                    
                    2.93
                    %Other
                        investment securities
                    
                    
                    6,410
                    
                    
                    63
                    
                    
                    3.96
                    %
                    
                    15,398
                    
                    
                    192
                    
                    
                    5.00
                    %Commercial
                        paper
                    
                    
                    7,964
                    
                    
                    67
                    
                    
                    3.37
                    %
                    
                    —
                    
                    
                    —
                    
                    
                    0.00
                    %Overnight
                        investments
                    
                    
                    71,948
                    
                    
                    508
                    
                    
                    2.82
                    %
                    
                    54,987
                    
                    
                    143
                    
                    
                    1.04
                    %Money
                        market preferred securities
                    
                    
                    4,506
                    
                    
                    37
                    
                    
                    3.29
                    %
                    
                    3,758
                    
                    
                    12
                    
                    
                    1.24
                    %Interest-earning
                        deposits
                    
                    
                    3
                    
                    
                    —
                    
                    
                    0.00
                    %
                    
                    103
                    
                    
                    1
                    
                    
                    1.99
                    %Total
                        interest-earning assets
                    
                    
                    1,297,611
                    
                    
                    22,539
                    
                    
                    6.95
                    %
                    
                    1,019,922
                    
                    
                    13,605
                    
                    
                    5.34
                    %Cash
                        and due from banks
                    
                    
                    58,367
                    
                    
                    
                    
                    
                    
                    
                    
                    52,745Other
                        assets
                    
                    
                    49,660
                    
                    
                    
                    
                    
                    
                    
                    
                    45,139Total
                        assets
                    
                    $
                    1,405,638
                    
                    
                    
                    
                    
                    
                    
                    $
                    1,117,806**Liabilities
                        and Shareholders’ Equity:**Interest-bearing
                        liabilities:Money
                        market deposits
                    
                    $
                    252,181
                    
                    $
                    1,695
                    
                    
                    2.69
                    %
                    $
                    187,984
                    
                    $
                    865
                    
                    
                    1.84
                    %Super
                        NOW deposits
                    
                    
                    21,397
                    
                    
                    40
                    
                    
                    0.74
                    %
                    
                    21,185
                    
                    
                    41
                    
                    
                    0.76
                    %Savings
                        deposits
                    
                    
                    23,375
                    
                    
                    42
                    
                    
                    0.72
                    %
                    
                    27,882
                    
                    
                    52
                    
                    
                    0.75
                    %Time
                        certificates of deposit in
                      denominations
                        of $100,000 or more
                    
                    
                    507,513
                    
                    
                    3,989
                    
                    
                    3.14
                    %
                    
                    352,442
                    
                    
                    1,910
                    
                    
                    2.17
                    %Other
                        time deposits
                    
                    
                    107,162
                    
                    
                    770
                    
                    
                    2.88
                    %
                    
                    119,209
                    
                    
                    789
                    
                    
                    2.65
                    %Total
                        interest bearing deposits
                    
                    
                    911,628
                    
                    
                    6,536
                    
                    
                    2.87
                    %
                    
                    708,702
                    
                    
                    3,657
                    
                    
                    2.06
                    %Other
                        borrowings
                    
                    
                    100,160
                    
                    
                    1,035
                    
                    
                    4.13
                    %
                    
                    72,390
                    
                    
                    410
                    
                    
                    2.27
                    %Total
                        interest-bearing liabilities
                    
                    
                    1,011,788
                    
                    
                    7,571
                    
                    
                    2.99
                    %
                    
                    781,092
                    
                    
                    4,067
                    
                    
                    2.08
                    %Non-interest
                        bearing deposits
                    
                    
                    280,490
                    
                    
                    
                    
                    
                    
                    
                    
                    249,890
  Total
                      Deposits
                    
                    
                    1,292,278
                    
                    
                    
                    
                    
                    2.19
                    %
                    
                    1,030,982
                    
                    
                    
                    
                    
                    1.53
                    %Other
                        liabilities
                    
                    
                    14,054
                    
                    
                    
                    
                    
                    
                    
                    
                    11,426Shareholders’
                        equity
                    
                    
                    99,306
                    
                    
                    
                    
                    
                    
                    
                    
                    75,398Total
                        liabilities and shareholders’ equity
                    
                    $
                    1,405,638
                    
                    
                    
                    
                    
                    
                    
                    $
                    1,117,806Net
                        interest income
                    
                    
                    
                    
                    $
                    14,968
                    
                    
                    
                    
                    
                    
                    
                    $
                    9,538Net
                        interest spread2
                    
                    
                    
                    
                    
                    
                    
                    
                    3.95
                    %
                    
                    
                    
                    
                    
                    
                    
                    3.25
                    %Net
                        interest margin3
                    
                    
                    
                    
                    
                    
                    
                    
                    4.61
                    %
                    
                    
                    
                    
                    
                    
                    
                    3.74
                    %
 1
          Loan fees have been included in the calculation of interest income. Loan
          fees
          were approximately $1,240,000 and $525,000 for the quarters ended June
          30, 2005
          and 2004, respectively, and approximately $2,185,000 and $1,372,000 for
          the six
          months ended June 30, 2005 and 2004, respectively. Net loans are net of
          the
          allowance for loan losses, deferred fees, unearned income, and related
          direct
          costs, but includes those loans 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.
   15
  **Distribution,
        Yield and Rate Analysis of Net Interest Income**
 **For
                    the Six Months Ended June 30,****2005**
                
                
                
                
                
                **2004****(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
                
                $
                1,056,240
                
                $
                39,010
                
                
                7.39
                %
                $
                827,999
                
                $
                24,612
                
                
                5.94
                %Securities
                    of U.S. government agencies
                
                
                110,351
                
                
                1,897
                
                
                3.44
                %
                
                65,158
                
                
                963
                
                
                2.96
                %Other
                    investment securities
                
                
                5,628
                
                
                121
                
                
                4.30
                %
                
                15,652
                
                
                398
                
                
                5.09
                %Commercial
                    paper
                
                
                4,004
                
                
                67
                
                
                3.35
                %
                
                0
                
                
                0
                
                
                0.00
                %Overnight
                    Investments
                
                
                69,412
                
                
                915
                
                
                2.63
                %
                
                48,866
                
                
                258
                
                
                1.06
                %Money
                    market preferred securities
                
                
                4,210
                
                
                57
                
                
                2.71
                %
                
                3,703
                
                
                25
                
                
                1.33
                %Interest-earning
                    deposits
                
                
                3
                
                
                0
                
                
                0.00
                %
                
                124
                
                
                2
                
                
                2.43
                %Total
                    interest-earning assets
                
                
                1,249,848
                
                
                42,067
                
                
                6.73
                %
                
                961,502
                
                
                26,258
                
                
                5.46
                %Cash
                    and due from banks
                
                
                55,857
                
                
                
                
                
                
                
                
                51,231Other
                    assets
                
                
                46,859
                
                
                
                
                
                
                
                
                39,221Total
                    assets
                
                $
                1,352,564
                
                
                
                
                
                
                
                $
                1,051,954**Liabilities
                    and Shareholders’ Equity:**Interest-bearing
                    liabilities:Money
                    market deposits
                
                $
                235,503
                
                $
                2,808
                
                
                2.39
                %
                $
                168,434
                
                $
                1,508
                
                
                1.79
                %Super
                    NOW deposits
                
                
                21,301
                
                
                80
                
                
                0.75
                %
                
                20,384
                
                
                77
                
                
                0.76
                %Savings
                    deposits
                
                
                23,563
                
                
                85
                
                
                0.72
                %
                
                27,167
                
                
                102
                
                
                0.75
                %Time
                    certificates of deposit in
                  denominations
                    of $100,000 or more
                
                
                487,233
                
                
                7,177
                
                
                2.95
                %
                
                334,936
                
                
                3,681
                
                
                2.20
                %Other
                    time deposits
                
                
                109,518
                
                
                1,496
                
                
                2.73
                %
                
                115,706
                
                
                1,470
                
                
                2.54
                %Total
                    interest bearing deposits
                
                
                877,118
                
                
                11,646
                
                
                2.66
                %
                
                666,627
                
                
                6,838
                
                
                2.05
                %Other
                    borrowings
                
                
                93,954
                
                
                1,813
                
                
                3.86
                %
                
                66,317
                
                
                777
                
                
                2.34
                %Total
                    interest-bearing liabilities
                
                
                971,072
                
                
                13,459
                
                
                2.77
                %
                
                732,944
                
                
                7,615
                
                
                2.08
                %Non-interest
                    bearing deposits
                
                
                271,877
                
                
                
                
                
                
                
                
                239,177Total
                    Deposits
                
                
                1,242,949
                
                
                
                
                
                2.03
                %
                
                972,121
                
                
                
                
                
                1.51
                %Other
                    liabilities
                
                
                13,768
                
                
                
                
                
                
                
                
                10,504Shareholders’
                    equity
                
                
                95,847
                
                
                
                
                
                
                
                
                69,329Total
                    liabilities and shareholders’ equity
                
                $
                1,352,564
                
                
                
                
                
                
                
                $
                1,051,954Net
                    interest income
                
                
                
                
                $
                28,608
                
                
                
                
                
                
                
                $
                18,643Net
                    interest spread2
                
                
                
                
                
                
                
                
                3.96
                %
                
                
                
                
                
                
                
                3.38
                %Net
                    interest margin3
                
                
                
                
                
                
                
                
                4.58
                %
                
                
                
                
                
                
                
                3.88
                %
 
 1
          Loan fees have been included in the calculation of interest income. Loan
          fees
          were approximately $1,240,000 and $525,000 for the quarters ended June
          30, 2005
          and 2004, respectively, and approximately $2,185,000 and $1,372,000 for
          the six
          months ended June 30, 2005 and 2004, respectively. Loans are net of the
          allowance for loan losses, deferred fees, unearned income, and related
          direct
          costs, but includes those loans placed on non-accrual status.
 2
          Represents the average rate earned on interest-earning assets less the
          average
          rate paid
 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**
 **(Dollars
        in Thousands)**
  **Three
                  Months Ended June 30,**
                **2005
                  vs. 2004**
              
              **Six
                  Months Ended June 30,**
                **2005
                  vs. 2004****Increase
                  (Decrease)Due to Change In**
              
              **Increase
                  (Decrease)Due to Change In**Volume
              
              Rate
              
              Total
              
              Volume
              
              Rate
              
              Total**Interest
                income:**Net
                  loans1
              
              $
              3,423
              
              
              4,593
              
              $
              8,016
              
              $
              7,660
              
              $
              6,738
              
              $
              14,398Securities
                  of U.S. government agencies
              
              
              461
              
              
              130
              
              
              591
              
              
              757
              
              
              177
              
              
              934Other
                  investment securities
              
              
              (95
              )
              
              (34
              )
              
              (129
              )
              
              (224
              )
              
              (53
              )
              
              (277
              )Commercial
                  paper
              
              
              67
              
              
              —
              
              
              67
              
              
              67
              
              
              0
              
              
              67Overnight
                  Investments
              
              
              56
              
              
              309
              
              
              365
              
              
              144
              
              
              512
              
              
              656Money
                  market preferred securities
              
              
              3
              
              
              22
              
              
              25
              
              
              4
              
              
              28
              
              
              32Interest-earning
                  deposits
              
              
              (1
              )
              
              —
              
              
              (1
              )
              
              (3
              )
              
              2
              
              
              (1
              )Total
                  interest income
              
              
              3,914
              
              
              5,020
              
              
              8,934
              
              
              8,405
              
              
              7,404
              
              
              15,809**Interest
                  expense:**Money
                  market deposits
              
              $
              353
              
              $
              477
              
              $
              830
              
              $
              709
              
              $
              591
              
              $
              1,300Super
                  NOW deposits
              
              
              1
              
              
              (1
              )
              
              0
              
              
              3
              
              
              (1
              )
              
              2Savings
                  deposits
              
              
              (8
              )
              
              (2
              )
              
              (10
              )
              
              (13
              )
              
              (3
              )
              
              (16
              )Time
                  certificates of deposit indenominations
                  of $100,000 or more
              
              
              1,027
              
              
              1,051
              
              
              2,078
              
              
              2,000
              
              
              1,496
              
              
              3,496Other
                  time deposits
              
              
              (84
              )
              
              65
              
              
              (19
              )
              
              (81
              )
              
              107
              
              
              26Other
                  borrowings
              
              
              199
              
              
              426
              
              
              625
              
              
              406
              
              
              630
              
              
              1,036Total
                  interest expense
              
              
              1,488
              
              
              2,016
              
              
              3,504
              
              
              3,024
              
              
              2,820
              
              
              5,844Change
                  in net interest income
              
              $
              2,426
              
              $
              3,004
              
              $
              5,430
              
              $
              5,381
              
              $
              4,584
              
              $
              9,965
 
 1
          Loan fees have been included in the calculation of interest income. Loan
          fees
          were approximately $1,240,000 and $525,000 for the quarters ended June
          30, 2005
          and 2004, respectively, and approximately $2,185,000 and $1,372,000 for
          the six
          months ended June 30, 2005 and 2004, respectively. Net loans are net of
          the
          allowance for loan losses, unearned income and related direct
          costs.
 **P** **rovision
        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
        our
        outstanding loan portfolio, but also for off-balance sheet items, such as
        commitments to extend credit or letters of credit. The charges made for our
        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.
  Even
        though the economy has improved since 2004, we continue to 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 “Financial Condition-Nonperforming Assets” below for
        further discussion) and reduced net charge-offs. **** The
        provision for loan losses increased to $720,000 in the second quarter of
        2005
        from $670,000 for the prior year’s same quarter to keep pace with the continued
        growth in our loan portfolio. However, the provision for loan losses in the
        first half of 2004 was $1.6 million, as compared to $1.2 million in the first
        half of 2005, due to the one-time adjustment to the reserve for
        off-balance-sheet items caused by the application of the higher calculated
        loss
        migration ratio to off-balance-sheet items since the first quarter of 2004.
        We
        provided a $387,000 reserve for the credit risk of off-balance sheet items
        in
        the first half of 2004, as compared with $30,000 in the first half of 2005.
        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 “Financial Condition-Allowance for Loan Losses”
        below.
  17
 **Noninterest
        Income**
  Total
        noninterest income slightly decreased to $4.6 million in the second quarter
        of
        2005 and $9.6 million for the first six months of 2005, as compared with
        $5.2
        million and $10.3 million, respectively, for the prior year’s same periods.
        Noninterest income as a percentage of average assets decreased to 0.33% and
        0.71%, respectively, for the second quarter and the first half of 2005 from
        0.46% and 0.98% for the prior year’s same periods. These decreases were
        primarily due to the decrease in gains from loan sales discussed below. We
        currently earn non-interest income from various sources, including an income
        stream provided by BOLI in the form of an increase in cash surrender value.
  The
        following table sets forth the various components of our noninterest income
        for
        the periods indicated:
  **Noninterest
        Income**
 **(Dollars
        in thousands)**
  **For
                    Three Months Ended June 30,**
                
                ******2005**
                
                ******2004****(Amount)**
                
                **(%)**
                
                **(Amount)**
                
                **(%)**Service
                    charges on deposit accounts
                
                $
                1,815
                
                
                39.3
                %
                $
                1,834
                
                
                35.3
                %Gain
                    on sale of loans
                
                
                1,489
                
                
                32.2
                %
                
                2,033
                
                
                39.2
                %Loan-related
                    servicing income
                
                
                473
                
                
                10.2
                %
                
                668
                
                
                12.9
                %Loan
                    referral fee income
                
                
                17
                
                
                0.4
                %
                
                27
                
                
                0.5
                %Loan
                    packaging fee
                
                
                132
                
                
                2.9
                %
                
                138
                
                
                2.7
                %Income
                    from other earning assets
                
                
                285
                
                
                6.2
                %
                
                144
                
                
                2.8
                %Other
                    income
                
                
                406
                
                
                8.8
                %
                
                344
                
                
                6.6
                %Total
                
                $
                4,617
                
                
                100.0
                %
                $
                5,188
                
                
                100.0
                %Average
                    assets
                
                $
                1,405,638
                
                
                
                
                $
                1,117,806Noninterest
                    income as a % of average assets
                
                
                
                
                
                0.33
                %
                
                
                
                
                0.46
                %
  **For
                    Six Months Ended June 30,**
                  
                  
                  **2005**
                  
                  
                  **2004****(Amount)**
                  
                  
                  **(%)**
                  
                  
                  **(Amount)**
                  
                  
                  **(%)**Service
                      charges on deposit accounts
                  
                  $
                  3,534
                  
                  
                  37.0
                  %
                  $
                  3,657
                  
                  
                  35.6
                  %Gain
                      on sale of loans
                  
                  
                  3,512
                  
                  
                  36.8
                  %
                  
                  4,171
                  
                  
                  40.7
                  %Loan-related
                      servicing income
                  
                  
                  1,131
                  
                  
                  11.8
                  %
                  
                  1,173
                  
                  
                  11.4
                  %Loan
                      referral fee income
                  
                  
                  118
                  
                  
                  1.2
                  %
                  
                  100
                  
                  
                  1.0
                  %Loan
                      packaging fee
                  
                  
                  198
                  
                  
                  2.1
                  %
                  
                  260
                  
                  
                  2.5
                  %Income
                      from other earning assets
                  
                  
                  412
                  
                  
                  4.3
                  %
                  
                  301
                  
                  
                  2.9
                  %Other
                      income
                  
                  
                  648
                  
                  
                  6.8
                  %
                  
                  598
                  
                  
                  5.9
                  %Total
                  
                  $
                  9,553
                  
                  
                  100.0
                  %
                  $
                  10,260
                  
                  
                  100.0
                  %Average
                      assets
                  
                  $
                  1,352,564
                  
                  
                  
                  
                  $
                  1,051,954Noninterest
                      income as a % of average assets
                  
                  
                  
                  
                  
                  0.71
                  %
                  
                  
                  
                  
                  0.98
                  %
 Our
        largest noninterest income source for the second quarter of 2005 was service
        charge income on deposit accounts, generally representing over 35% of our
        total
        noninterest income. This income source slightly decreased by $19,000 in the
        second quarter of 2005 and by $123,000 in the first half of 2005 from $1.8
        million and $3.7 million, respectively, for the prior year’s same periods
        despite an increase in the number of transactional accounts over the past
        12
        months. Such decrease was due primarily to our efforts to comply with the
        Bank
        Secrecy Act and protect us from potential loss. For such purposes, we imposed
        more rigid requirements on money service business (“MSB”)  accounts
        and more closely monitored their transactions. As a result, the number of
        MSB
        accounts was reduced and fee income therefrom was also reduced. We constantly
        review service charge rates and the manager’s authority to waive them to
        maximize service charge income while maintaining a competitive
        position.
  Our
        second largest noninterest income source for the second quarter of 2005 was
        the
        gain on the sale of loans, representing over 32% of our total noninterest
        income. Income in this category includes sales gains on residential mortgage
        loans and unguaranteed portions of SBA loans in addition to sales gains on
        the
        guaranteed portion of SBA loans. Sales gains on the guaranteed portions of
        SBA
        loans which is the main source of this income, increased to $3.3 million
        in the
        first half of 2005 as compared with $3.1 million for the same period a year
        ago.
        Since the inception of our Home Loan Center in the fourth quarter of 2003,
        the
        sales of residential mortgage loans have become a stable noninterest income
        source and gain on such sales increased to $112,000 and $215,000, respectively,
        for the second quarter and the first half of 2005 as compared with $52,000
        and
        $159,000, respectively, for the prior year’s same periods. However, the gain on
        sales of the unguaranteed portion of SBA loans is not considered stable and
        we
        had no such sales in 2005, as compared with realized gains of $900,000 in
        the
        first half of 2004, including $304,000 for the second quarter of 2004. Such
        absence of sales gains on unguaranteed SBA loans was more than offset by
        the
        increases in the gains on sales of residential mortgage loans and the guaranteed
        portions of SBA loans. The combined gain on sale of loans was $1.5 million
        and
        $2.0 million in the second quarters of 2005 and 2004, respectively, and $3.5
        million and $4.2 million in the first half of 2005 and 2004,
        respectively.
  18
  The
        third
        largest source of noninterest income for the second quarter of 2005 was
        loan-related servicing income. This fee income consists 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 generally has increased, but it decreased to $473,000 and $1.1 million,
        respectively, in the second quarter and the first half of 2005 as compared
        with
        $668,000 and $1.2 million for the prior year’s same periods. Such decrease was
        mainly caused by the significant reversals of servicing assets on sold 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
        half
        of 2005, $454,000 of servicing assets were charged back to this income account
        by the early pay-offs as compared to $239,000 for the prior year’s same period.
        Considering our continued expansion of SBA activities (the assets increased
        to
        $251.4 million at June 30, 2005 from $203.1 million a year ago), we believe
        this
        income source will increase.
  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 $17,000 and $118,000, respectively, in
        the
        second quarter and the first half of 2005 as compared with $27,000 and $100,000
        for the prior year’s same periods. We cannot assure you that this source of
        revenue will increase because loan referrals do not represent our core banking
        business and fee income therefrom is not a stable source of revenue.
  Loan
        packaging fee income represents charges to borrowers for loan processing.
        Due
        mainly to heightened competition, which often results in packaging fee waivers,
        the income from this source decreased to $132,000 and $198,000, respectively,
        in
        the second quarter and the first half of 2005 from $138,000 and $260,000
        for the
        prior year’s same periods.
  Income
        from other earning assets represented income from earning assets other than
        interest-earning assets, such as dividend income on Federal Home Loan Bank
        (the
“FHLB”) stock ownership and the increase in cash surrender value of BOLI. Such
        income increased to $285,000 and $412,000, respectively, in the second quarter
        and the first half of 2005 as compared with $144,000 and $301,000 for the
        prior
        year’s same periods. These increases were attributable primarily to the fact
        that we bought an additional $3 million of BOLI in the second quarter of
        2005
        and increased our FHLB stock ownership over the past 12 months.
  Other
        income represents income from miscellaneous sources, such as gain on sale
        of
        investment securities and the excess of insurance proceeds over the carrying
        value of an insured loss. Other income slightly increased to $406,000 and
        $648,000 in the second quarter and first half of 2005, respectively, as
        compared with $344,000 and $598,000 for the prior year’s same periods. Such
        increases were mainly caused by the collection of $65,000 in 2005 for an
        operation loss we expensed in 2004.
  **Noninterest
        Expense**
  Total
        noninterest expense increased to $7.5 million and $15.4 million in the second
        quarter and the first half of 2005, respectively, as compared with $6.0 million
        and $12.1 million in the prior year’s same periods, representing an increase of
        24.6% and 26.6%, respectively. These increases can be attributed to the expanded
        personnel and premises associated with our business growth, including the
        recent
        openings of new offices and departments such as the construction loan
        department. However, due to continuing efforts to minimize operating expenses,
        noninterest expenses as a percentage of average assets decreased to 1.14%
        in the
        first half of 2005 from 1.15% in the same period of 2004. We believe that
        our
        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) to 38.5% and 40.3%
        in
        the second quarter and the first half of 2005, respectively, as compared
        with 41.1% and 42.0%, respectively, in the prior year’s same
        periods.
  19
 The
        following table sets forth a summary of noninterest expenses for the periods
        indicated:
  **Noninterest
        Expense**
 **(Dollars
        in thousands)**
  **For
                  the Quarter Ended June 30,**
                
                **2005**
                
                
                
                **2004****(Amount)**
                
                **(%)**
                
                **(Amount)**
                
                **(%)**Salaries
                    and employee benefits
                
                $
                4,317
                
                
                57.3
                %
                $
                3,297
                
                
                54.6
                %Occupancy
                    and equipment
                
                
                770
                
                
                10.2
                %
                
                676
                
                
                11.2
                %Data
                    processing
                
                
                543
                
                
                7.2
                %
                
                404
                
                
                6.7
                %Loan
                    referral fee
                
                
                307
                
                
                4.1
                %
                
                314
                
                
                5.2
                %Professional
                    fees
                
                
                109
                
                
                1.4
                %
                
                176
                
                
                2.9
                %Directors’
                    fees
                
                
                114
                
                
                1.5
                %
                
                105
                
                
                1.7
                %Office
                    supplies
                
                
                134
                
                
                1.8
                %
                
                133
                
                
                2.2
                %Advertising
                
                
                143
                
                
                1.9
                %
                
                79
                
                
                1.3
                %Communications
                
                
                114
                
                
                1.5
                %
                
                80
                
                
                1.3
                %Deposit
                    insurance premium
                
                
                38
                
                
                0.5
                %
                
                33
                
                
                0.5
                %Outsourced
                    service for customer
                
                
                335
                
                
                4.5
                %
                
                320
                
                
                5.3
                %Investor
                    relation expenses
                
                
                74
                
                
                1.0
                %
                
                84
                
                
                1.4
                %Other
                    operating
                
                
                533
                
                
                7.1
                %
                
                342
                
                
                5.7
                %Total
                
                $
                7,531
                
                
                100.0
                %
                $
                6,043
                
                
                100.0
                %Average
                    assets
                
                $
                1,405,638
                
                
                
                
                $
                1,117,806Noninterest
                    expenses as a % of average assets
                
                
                
                
                
                0.54
                %
                
                
                
                
                0.54
                %
  **For
                    the Six Months Ended June 30,**
                  
                  
                  **2005**
                  
                  
                  
                  
                  
                  **2004****(Amount)**
                  
                  
                  **(%)**
                  
                  
                  **(Amount)**
                  
                  
                  **(%)**Salaries
                      and employee benefits
                  
                  $
                  8,693
                  
                  
                  56.6
                  %
                  $
                  6,739
                  
                  
                  55.5
                  %Occupancy
                      and equipment
                  
                  
                  1,603
                  
                  
                  10.4
                  %
                  
                  1,285
                  
                  
                  10.6
                  %Data
                      processing
                  
                  
                  958
                  
                  
                  6.2
                  %
                  
                  773
                  
                  
                  6.4
                  %Loan
                      referral fee
                  
                  
                  569
                  
                  
                  3.7
                  %
                  
                  604
                  
                  
                  5.0
                  %Professional
                      fees
                  
                  
                  555
                  
                  
                  3.6
                  %
                  
                  420
                  
                  
                  3.5
                  %Directors’
                      fees
                  
                  
                  237
                  
                  
                  1.6
                  %
                  
                  208
                  
                  
                  1.7
                  %Office
                      supplies
                  
                  
                  243
                  
                  
                  1.6
                  %
                  
                  245
                  
                  
                  2.0
                  %Advertising
                  
                  
                  388
                  
                  
                  2.5
                  %
                  
                  203
                  
                  
                  1.7
                  %Communications
                  
                  
                  207
                  
                  
                  1.3
                  %
                  
                  163
                  
                  
                  1.3
                  %Deposit
                      insurance premium
                  
                  
                  75
                  
                  
                  0.5
                  %
                  
                  62
                  
                  
                  0.5
                  %Outsourced
                      service for customer
                  
                  
                  657
                  
                  
                  4.3
                  %
                  
                  624
                  
                  
                  5.1
                  %Investor
                      relation expenses
                  
                  
                  229
                  
                  
                  1.5
                  %
                  
                  135
                  
                  
                  1.1
                  %Other
                      operating
                  
                  
                  956
                  
                  
                  6.2
                  %
                  
                  684
                  
                  
                  5.6
                  %Total
                  
                  $
                  15,370
                  
                  
                  100.0
                  %
                  $
                  12,145
                  
                  
                  100.0
                  %Average
                      assets
                  
                  $
                  1,352,564
                  
                  
                  
                  
                  $
                  1,051,954Noninterest
                      expenses as a % of average assets
                  
                  
                  
                  
                  
                  1.14
                  %
                  
                  
                  
                  
                  1.15
                  %
 Salaries
        and employee benefits represented approximately 57% of total noninterest
        expenses in the second quarter and first half of 2004. For the second quarter
        and first half of 2005, salaries and employee benefits totaled $4.3 million
        and
        $8.7 million, respectively, as compared with $3.3 million and $6.7 million
        for
        the prior year’s same periods, representing an increase of 30.9% and 29.0%,
        respectively, from the comparable periods. Such increases were the result
        of our
        new office openings, including the Dallas branch, and significant asset growth
        in the past 12 months that increased the number of full-time equivalent
        employees to 270 as of June 30, 2005 from 229 as of June 30, 2004. However,
        our
        efforts to promote efficient operations increased assets per employee to
        $5.4
        million at June 30, 2005 from $4.6 million at June 30, 2004.
  Occupancy
        and equipment expenses totaled $770,000 and $1.6 million, respectively, for
        the
        second quarter and first half of 2005 as compared with $676,000 and $1.3
        million
        for the prior year’s same periods, representing an increase of 13.9% and 24.7%,
        respectively, from the comparable periods. These increases were attributable
        primarily to the expansion of our branch network, including loan production
        offices. Occupancy and equipment expenses represented approximately 10% to
        11%
        of total noninterest expenses, respectively, for the second quarter of 2005.
  20
 Data
        processing expenses were $543,000 and $958,000, respectively, for the second
        quarter and the first half of 2005, as compared with $404,000 and $773,000
        for
        the prior year’s same periods, representing an increase of 34.4% and 23.9%,
        respectively, from the comparable periods. The increase corresponds to the
        growth of our business.
  Loan
        referral fees generally are paid to brokers who refer loans to us. These
        loans
        are SBA loans in most cases, although we also pay referral fees for qualified
        commercial loans. Despite the comparable level of SBA loan production, these
        referral fees slightly decreased to $307,000 and $569,000 in the second quarter
        and first half of 2005, respectively, from $314,000 and $604,000 in the prior
        year’s same periods. Such decrease was primarily attributable to the fact that
        more SBA loans in the second quarter of 2005 were referred from outside of
        Los
        Angeles. We pay a higher referral fee for loan referrals in Los Angeles due
        to
        the increased competition in the area.
  For
        the
        second quarter of 2005, professional fees were $109,000, which were lower
        than
        the $176,000 recorded for the same quarter in 2004, but increased to $555,000
        in
        the first half of 2005 compared to $420,000 in the prior year. This increase
        was
        attributable to our efforts to comply with the additional legal and accounting
        requirements imposed on us by the Sarbanes-Oxley Act (“SOX”), especially the
        annual certification requirements of SOX 404. We expect that expenditures
        in
        this area will continue to be significant, as we address the enhanced SEC
        regulations and Nasdaq corporate governance requirements.
  Advertising
        expense significantly increased to $143,000 and $388,000 in the second quarter
        and the first half of 2005, respectively, as compared with $79,000 and $203,000
        for the prior year’s same periods. These increases can be attributed to expanded
        marketing activities, such as media advertisements and promotional gifts
        for
        customers of newly opened offices, especially for the Dallas branch and new
        loan
        production offices.
  Outsourced
        service costs for customers are paid to outside parties who provide services
        that were traditionally provided by banks to their customers, such as armored
        car services or bookkeeping services, and are recouped from the earnings
        credits
        earned by the respective depositors on their balances maintained with us.
        Due
        mainly to the increase in service fees, these expenses slightly increased
        to
        $335,000 and $657,000 in the second quarter and the first half of 2005,
        respectively, as compared with $320,000 and $624,000 for the prior year’s same
        periods.
  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 were $74,000 in the second quarter of 2005, comparable to $84,000
        in
        the same quarter of 2004. For the first half of 2005, such expenses increased
        to
        $229,000 from $135,000 in the same period of 2004. Such increases were mainly
        the result of increased activities in this area and to Nasdaq listing fees
        for
        additional shares issued in connection with the December 2004 stock
        split.
  Noninterest
        expenses other than the categories specifically addressed above, such as
        office
        supplies and communication expenses, increased to $933,000 and $1.7 million
        in
        the second quarter and the first half of 2005, respectively, as compared
        with
        $693,000 and $1.4 million for the prior year’s same periods, representing an
        increase of 34.5% and 26.2%, respectively, from the comparable periods. Such
        increase corresponds to 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. We anticipate that noninterest expense will continue to
        increase as we continue to grow. However, we remain committed to cost-control
        and efficiency, and we expect to keep these increases to a minimum relative
        to
        growth.
  **Provision
        for Income Taxes**
  For
        the
        quarter ended June 30, 2005, we made a provision for income taxes of $4.6
        million on pretax net income of $11.3 million, representing an effective
        tax
        rate of 40.4%, as compared with a provision for income taxes of $3.2 million
        on
        pretax net income of $8.0 million, representing an effective tax rate of
        39.8%,
        for the same quarter of 2004. For the first half of 2005, we made a provision
        for income taxes of $8.7 million on pretax net income of $21.6 million,
        representing an effective tax rate of 40.6%, as compared with a provision
        for
        income taxes of $6.0 million on pretax net income of $15.2 million, representing
        an effective tax rate of 39.7%, for the same period of 2004.
  21
 The
        effective tax rates in the second quarter and the first half of 2005 were
        reasonably consistent with those for the prior year’s same periods. 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
        and
        our ownership of BOLI and Low Income Housing Tax Credit Funds (see “Financial
        Condition -- 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 June 30, 2005 and
        December 31, 2004, we had net deferred tax assets of $5.8 million and $4.8
        million, respectively.
  We
        believe that we have adequately provided for income tax issues not yet resolved
        with federal, state and foreign tax authorities. In March 2005, we prepaid
        $515,000 to the California Franchise Tax Board for unresolved tax matters
        in
        order to avoid the new potential penalty imposed by the State of California
        for
        any tax balances owed for years prior to 2003. Such prepayment was made from
        the
        reserve we previously accrued, the balance of which was $532,000 at December
        31,
        2004. Based upon a 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 material adverse effect upon our results of operations or financial
        condition.
   **Financial
        Condition**
  **Loan
        Portfolio**
  Total
        loans net of unearned income increased by $110.1 million, or 10.8%, to $1.13
        billion at June 30, 2005, as compared with $1.02 billion at December 31,
        2004.
        Total loans net of unearned income as a percentage of total assets as of
        June
        30, 2005 and December 31, 2004 were 77.6% and 80.6%, respectively.
  Real
        estate secured loans consist primarily of commercial real estate loans and
        are
        extended to finance the purchase or improvement of commercial real estate
        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 in 1993. 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 $928.0 million and $859.0 million as of June 30, 2005 and December
        31,
        2004, respectively. The robust California real estate market in the last
        few
        years and our increased involvement in the residential mortgage loan market
        have
        increased our composition of real estate secured loans. Total loans and real
        estate secured loans as a percentage of total loans were 82.1% and 84.2%
        at June
        30, 2005 and December 31, 2004, respectively.
  Commercial
        and industrial loans include revolving lines of credit, as well as term business
        loans. Commercial and industrial loans at June 30, 2005 increased to $162.9
        million, as compared with $135.9 million at December 31, 2004. Commercial
        and
        industrial loans as a percentage of total loans also increased to 14.4% at
        June
        30, 2005, from 13.3% at December 31, 2004.
  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 almost doubled from $18.8
        million
        at December 31, 2004 to $34.7 million at June 30, 2005. **** We **** anticipate
        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 in the Commercial Loan Center and
        appointed a construction loan specialist as its manager. We expect to expand
        our
        construction loans with the specialized capacity under the guidance of the
        Commercial Loan Center.
  22
 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, 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
        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 previous decade,
        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.
  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)****June
                  30, 2005**
              
              **December
                  31, 2004**Construction
              
              $
              5,261
              
              $
              6,972Real
                  estate secured
              
              
              927,982
              
              
              858,998Commercial
                  and industrial
              
              
              162,916
              
              
              135,943Consumer
              
              
              34,675
              
              
              18,810Total
                  loans, net of unearned income
              
              $
              1,130,834
              
              $
              1,020,723Participation
                  loans sold and serviced by the Company
              
              $
              251,411
              
              $
              235,534Construction
              
              
              0.5
              %
              
              0.7
              %Real
                  estate secured
              
              
              82.0
              %
              
              84.2
              %Commercial
                  and industrial
              
              
              14.4
              %
              
              13.3
              %Consumer
              
              
              3.1
              %
              
              1.8
              %Total
                  loans, net of unearned income
              
              
              100.0
              %
              
              100.0
              %
   The
        following table shows the contractual maturity distribution and repricing
        intervals of the outstanding loans in our portfolio, as of June 30, 2005.
        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 $7.8
        million, and includes unearned income and deferred fees totaling $10.1 million
        at June 30, 2005:
 **Loan
          Maturities and Repricing Schedule**
 **At
                    June 30, 2005,****Within**
                  **One
                    Year**
                
                **After
                    One**
                  **But
                    Within**
                  **Five
                    Years**
                
                **After**
                  **Five
                    Years**
                
                **Total****(Dollars
                    in Thousands)**Construction
                
                $
                5,261
                
                $
                0
                
                $
                0
                
                $
                5,261Real
                    estate secured
                
                
                856,806
                
                
                22,627
                
                
                44,656
                
                
                924,089Commercial
                    and industrial
                
                
                168,972
                
                
                92
                
                
                92
                
                
                169,156Consumer
                
                
                17,055
                
                
                17,426
                
                
                191
                
                
                34,672Total
                    loans, net of unearned income
                
                $
                1,048,094
                
                $
                40,145
                
                $
                44,939
                
                $
                1,133,178Loans
                    with variable (floating) interest rates
                
                $
                1,014,648
                
                $
                0
                
                $
                0
                
                $
                1,014,648Loans
                    with predetermined (fixed) interest rates ...
                
                $
                33,446
                
                $
                40,145
                
                $
                44,939
                
                $
                118,530
 
 23
 **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.
  Despite
        the significant growth of our loan portfolio, our continued emphasis on asset
        quality control enabled us to maintain a very low level of nonperforming
        loans.
        Our nonperforming loans at June 30, 2005 were $3.7 million or 0.32% of total
        loans, comparable to the level at June 30, 2004, which was $3.7 million,
        or
        0.39% of total loans, but higher than the level at December 31, 2004, which
        was
        $2.7 million, or 0.26% of total loans. We did not own any OREO at the end
        of the
        second quarter of 2005 and 2004 and the year ended December 31, 2004. We
        believe
        that our reserve for nonperforming loans, together with tangible collateral,
        was
        adequate as of June 30, 2005. See “Allowance for Loan Losses” below for further
        discussion. Except as disclosed above, as of June 30, 2005, we were not aware
        of
        any material credit problems of borrowers that would cause us to have serious
        doubts about the ability of a borrower to comply with present loan payment
        terms. However, no assurance can be given that credit problems do
        not
        exist that may not have been brought to the attention of
        management.
  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)**
 **June
                      30,**
                    **2005**
                  
                  **December
                      31,**
                    **2004**
                  
                  **June
                      30,**
                    **2004****Nonaccrual
                      loans:**1Real
                      estate secured
                  
                  $
                  2,655
                  
                  $
                  2,242
                  
                  $
                  2,931Commercial
                      and industrial
                  
                  
                  610
                  
                  
                  401
                  
                  
                  698Consumer
                  
                  
                  3
                  
                  
                  —
                  
                  
                  —Total
                  
                  
                  3,268
                  
                  
                  2,643
                  
                  
                  3,629**Loans
                      90 days or more past due and still accruing (as to principal****or****interest):**Construction
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Real
                      estate secured
                  
                  
                  205
                  
                  
                  —
                  
                  
                  —Commercial
                      and industrial
                  
                  
                  150
                  
                  
                  —
                  
                  
                  —Consumer
                  
                  
                  47
                  
                  
                  42
                  
                  
                  6Total
                  
                  
                  402
                  
                  
                  42
                  
                  
                  6**Restructured
                      loans:**2Real
                      estate secured
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Commercial
                      and industrial
                  
                  
                  —
                  
                  
                  14
                  
                  
                  18Consumer
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Total
                  
                  
                  —
                  
                  
                  14
                  
                  
                  18Total
                      nonperforming loans
                  
                  
                  3,670
                  
                  
                  2,699
                  
                  
                  3,653Other
                      real estate owned
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Total
                      nonperforming assets
                  
                  $
                  3,670
                  
                  $
                  2,699
                  
                  $
                  3,653Nonperforming
                    loans as a percentage of total loans
                  
                  
                  0.32
                  %
                  
                  0.26
                  %
                  
                  0.39
                  %Nonperforming assets
                      as a percentage of total loans
                    and
                      other real estate owned
                  
                  
                  0.32
                  %
                  
                  0.26
                  %
                  
                  0.39
                  %Allowance
                      for loan losses as a percentage of
                    nonperforming
                      loans
                  
                  
                  339.28
                  %
                  
                  411.63
                  %
                  
                  280.61
                  %
 
 1During
          the six months ended June 30, 2005, no interest income related to these
          loans
          was included in net income. Additional interest income of approximately
          $196,000
          would have been recorded during the six months ended June 30, 2005, if
          these
          loans had been paid in accordance with their original terms and had been
          outstanding throughout the three months ended June 30, 2005 or, if not
          outstanding, throughout the three months ended June 30, 2005, since
          origination.
 2A
          “restructured loan” is one in which the terms have been renegotiated to provide
          a reduction or deferral of interest or principal because of deterioration
          in the
          financial position of the borrower.
  24
 **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
        a
        commitment to extend credits or letters of credit. The charge made for our
        outstanding loan portfolio was credited to allowance for loan losses, whereas
        the charge for off-balance sheet items was credited to 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 “Results of Operations -
        Provision for Loan Losses” above.
  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 period of**
              
              **Three
                  months ended June 30,**
              
              **Six
                  months ended June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004****Balances:**Average
                  total loans outstanding during period
              
              $
              1,098,018
              
              $
              888,195
              
              $
              1,067,987
              
              $
              837,566Total
                  loans (net of unearned income)
              
              $
              1,130,834
              
              $
              927,179
              
              $
              1,130,834
              
              $
              927,179**Allowance
                  for loan losses:****Balances
                  at beginning of period**
              
              $
              11,669
              
              $
              9,487
              
              $
              11,111
              
              $
              9,011**Actual
                  charge-offs:**Real
                  estate secured
              
              
              —
              
              
              —
              
              
              24
              
              
              —Commercial
                  and industrial
              
              
              101
              
              
              9
              
              
              149
              
              
              16Consumer
              
              
              52
              
              
              38
              
              
              52
              
              
              70Total
                  charge-offs
              
              
              153
              
              
              47
              
              
              225
              
              
              86**Recoveries
                  on loans previously charged off:**Real
                  estate secured
              
              
              22
              
              
              —
              
              
              23
              
              
              —Commercial
                  and industrial
              
              
              199
              
              
              97
              
              
              325
              
              
              135Consumer
              
              
              25
              
              
              4
              
              
              26
              
              
              11Total
                  recoveries
              
              
              246
              
              
              101
              
              
              374
              
              
              146Net
                  charge-offs (net recoveries)
              
              
              (93
              )
              
              (54
              )
              
              (149
              )
              
              (60
              )**Provision
                  for loan losses**
              
              
              720
              
              
              670
              
              
              1,220
              
              
              1,567**Less:
                  provision for off-balance sheet credit losses**
              
              
              32
              
              
              (40
              )
              
              30
              
              
              387**Balances
                  at end of period**
              
              $
              12,450
              
              $
              10,251
              
              $
              12,450
              
              $
              10,251**Ratios:**Net
                  charge-offs (net recoveries) to average total loans
              
              
              (0.01
              %)
              
              (0.01
              %)
              
              (0.01
              %)
              
              (0.01
              %)Allowance
                  for loan losses to total loans at period-end
              
              
              1.10
              %
              
              1.11
              %
              
              1.10
              %
              
              1.11
              %Net
                  charge-offs (net recoveries) to allowance for loan losses
              
              
              (0.75
              %)
              
              (0.53
              %)
              
              (1.20
              %)
              
              (0.60
              %)Net
                  charge-offs (net recoveries) to provision for loan losses
              
              
              (12.92
              %)
              
              (8.06
              %)
              
              (12.21
              %)
              
              (3.89
              %)
  25
 The
        allowance for loan losses increased by 12.1%, or $1.3 million, to $12.5 million
        at June 30, 2005, as compared with $11.1 million at December 31, 2004, which
        increased from $10.3 million at June 30, 2004. Although we believe the
        allowance, at June 30, 2005, 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. Our
        continued emphasis on asset quality control has maintained a lower level
        of loan
        charge-offs and actually expanded net recoveries to $93,000 and $149,000,
        respectively, in the second quarter and the first half of 2005, as compared
        with
        net recoveries of $54,000 and $61,000 in the same periods of the prior year.
  As
        of
        June 30, 2005 and December 31, 2004, our allowance for loan losses consisted
        of
        amounts allocated to three phases of our methodology for assessing loan loss
        allowances, as follows:
  **Phase
                  of Methodology**
              
              **As
                  of:**
              
              **As
                  of:****June
                  30,2005**
              
              **December
                  31, 2004**Specific
                  review of individual loans
              
              $
              714,549
              
              $
              541,261Review
                  of pools of loans with similar characteristics
              
              
              9,739,993
              
              
              8,954,465Judgmental
                  estimate based on various subjective factors
              
              
              1,995,569
              
              
              1,615,366Total
                  allowance for loan losses
              
              $
              12,450,111
              
              $
              11,111,092
  The
        table
        below summarizes, for the end of the periods indicated, the balance of allowance
        for loan losses and its percent of such loan balance for each type of
        loan:****
  **Distribution
                  and Percentage Composition of Allowance for Loan
                  Losses****(Dollars
                  in thousands)****Balance
                  as of**
              
              **June
                  30, 2005**
              
              **December
                  31, 2004**Applicable
                  to:
              
              **Reserve**
                **Amount**
              
              **Total**
                **Loans**
              
              **(%)**
              
              **Reserve**
                **Amount**
              
              **Total**
                **Loans**
              
              **(%)**Construction
                  loans
              
              $
              48
              
              $
              5,261
              
              
              0.91
              %
              $
              66
              
              $
              6,972
              
              
              0.95
              %Real
                  estate secured
              
              $
              8,621
              
              $
              927,982
              
              
              0.93
              %
              $
              8,081
              
              $
              858,998
              
              
              0.94
              %Commercial
                  and industrial
              
              $
              3,521
              
              $
              162,916
              
              
              2.16
              %
              $
              2,796
              
              $
              135,943
              
              
              2.06
              %Consumer
              
              $
              261
              
              $
              34,675
              
              
              0.75
              %
              $
              168
              
              $
              18,810
              
              
              0.89
              %Total
                  Allowance
              
              $
              12,450
              
              $
              1,130,834
              
              
              1.10
              %
              $
              11,111
              
              $
              1,020,723
              
              
              1.09
              %
  **Contractual
        Obligations**
  The
        following table represents our aggregate contractual obligations to make
        future
        payments as of June 30, 2005:
  **(Dollars
                  in thousands)**
              
              **One
                  Year****or Less**
              
              **Over
                  One Year****To
                  Three Years**
              
              **Over
                  Three Years To Five****Years**
              
              **Over**
                **Five****Years**
              
              **Total**FHLB
                  borrowings
              
              $
              27,147
              
              $
              26,150
              
              
              —
              
              
              —
              
              $
              53,297Junior
                  subordinateddebentures
              
              
              2,676
              
              
              5,011
              
              
              2,254
              
              
              46,083
              
              
              56,024Operating
                  leases
              
              
              1,676
              
              
              2,896
              
              
              2,366
              
              
              2,962
              
              
              9,900Time
                  deposits
              
              
              634,184
              
              
              14,228
              
              
              115
              
              
              7
              
              
              648,534Total
              
              $
              665,683
              
              $
              48,285
              
              $
              4,735
              
              $
              49,052
              
              $
              767,755
  **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
        June 30, 2005 and December 31, 2004, we had commitments to extend credit
        of
        $84.2 million and $69.5 million, respectively. Obligations under standby
        letters
        of credit were $2.4 million and $2.8 million at June 30, 2005 and December
        31,
        2004, respectively, and our obligations under commercial letters of credit
        were
        $11.7 million and $9.3 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.
  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.
  26
 **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 June 30, 2005 and December
        31, 2004, we had $60 million and $45 million, respectively, in federal funds
        sold and repurchase agreements,
        and $3,000 at each of June 30, 2005 and December 31, 2004 in interest-bearing
        deposits in other financial
        institutions. As of June 30, 2005, we also had $18 million in commercial
        paper.
  *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 and are able 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. At June 30, 2005 and December 31, 2004, we had $10.0
        million in money market preferred stock (“MMPS”), which is classified as
        available-for-sale securities. MMPS is a form of equity security having
        characteristics similar to money market instruments and offers attractive
        tax-equivalent yields with a 70% dividend received deduction. MMPS is
        re-auctioned every 49 or 90 days.
  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 June 30, 2005**
                  
                  **As
                      of December 31, 2004****Amortized
                      Cost**
                  
                  
                  **Market
                      Value**
                  
                  
                  **Amortized
                      Cost**
                  
                  
                  **Market
                      Value****Held
                      to Maturity****:**
                    Securities
                      of government sponsoredenterprises
                  
                  $
                  21,985
                  
                  $
                  21,880
                  
                  $
                  28,073
                  
                  $
                  27,976Collateralized
                      mortgage obligation
                  
                  
                  305
                  
                  
                  294
                  
                  
                  379
                  
                  
                  371Corporate
                      securities
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Other
                      debt securities
                  
                  
                  2,810
                  
                  
                  2,818
                  
                  
                  810
                  
                  
                  814**Available-for-Sale****:**
                    Securities
                      of government sponsoredenterprises
                  
                  
                  66,837
                  
                  
                  66,527
                  
                  
                  39,945
                  
                  
                  39,732Mortgage
                      backed securities
                  
                  
                  28,408
                  
                  
                  28,332
                  
                  
                  27,794
                  
                  
                  27,740Collateralized
                      mortgage obligation
                  
                  
                  13,474
                  
                  
                  13,331
                  
                  
                  4,389
                  
                  
                  4,291Corporate
                      Securities
                  
                  
                  2,989
                  
                  
                  2,949
                  
                  
                  3,994
                  
                  
                  3,950Money
                      market preferred stock
                  
                  
                  10,000
                  
                  
                  10,000
                  
                  
                  10,000
                  
                  
                  10,000Total
                      investment securities
                  
                  $
                  146,808
                  
                  $
                  146,131
                  
                  $
                  115,384
                  
                  $
                  114,874
   27
  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 June 30, 2005:
 **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**
              
              **Total****Amount**
              
              **Yield**
              
              **Amount**
              
              **Yield**
              
              **Amount**
              
              **Yield**
              
              **Amount**
              
              **Yield**
              
              **Amount**
              
              **Yield****Held
                to Maturity:**Securities
                  of government
                sponsored
                  enterprises
              
              $
              5,998
              
              
              2.85
              %
              $
              15,987
              
              
              3.35
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              $
              21,985
              
              
              3.21
              %Collateralized
                  mortgage
                obligation
              
              
              —
              
              
              —
              
              
              305
              
              
              3.93
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              305
              
              
              3.93
              %Corporate
                  securities
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Other
                  debt Securities
              
              
              —
              
              
              —
              
              
              2,810
              
              
              4.06
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              2,810
              
              
              4.06
              %**Available-for-sale:**Securities
                  of government
                sponsored
                  enterprises
              
              
              15,964
              
              
              3.62
              %
              
              50,563
              
              
              3.58
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              66,527
              
              
              3.58
              %Mortgage
                  backed securities
              
              
              13,737
              
              
              3.46
              %
              
              27,926
              
              
              4.14
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              41,663
              
              
              3.91
              %Corporate
                  securities
              
              
              
              
              
              —
              
              
              989
              
              
              4.20
              %
              
              1,960
              
              
              4.46
              %
              
              —
              
              
              —
              
              
              2,949
              
              
              4.37
              %Money
                  market preferred stock
              
              
              10,000
              
              
              3.23
              %
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              
              
              
              
              
              
              10,000
              
              
              3.23
              %Total
                  investment securities
              
              $
              45,699
              
              
              3.39
              %
              $
              98,580
              
              
              3.72
              %
              $
              1,960
              
              
              4.46
              %
              
              —
              
              
              —
              
              $
              146,239
              
              
              3.62
              %
  Our
        investment securities holdings increased by $31.2 million, or 27.1%, to $146.2
        million at June 30, 2005, compared to holdings of $115.0 million at December
        31,
        2004. Total investment securities as a percentage of total assets were 10.0%
        and
        9.1% at June 30, 2005 and December 31, 2004, respectively. As of June 30,
        2005,
        investment securities having a carrying value of $117.8 million were pledged
        to
        secure certain deposits.
  As
        of
        June 30, 2005, held-to-maturity securities, which are carried at their amortized
        costs, decreased to $25.1 million from $29.3 million at December 31, 2004.
        Available-for-sale securities, which are stated at their fair market values,
        increased to $121.1 million at June 30, 2005 from $85.7 million at December
        31,
        2004. 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 June 30,
        2005:
  **(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
              
              $
              51,620
              
              $
              (331
              )
              $
              12,877
              
              $
              (125
              )
              $
              64,497
              
              $
              (456
              )Collateralized
                  mortgage
                obligation
              
              
              3,147
              
              
              (43
              )
              
              3,790
              
              
              (116
              )
              
              6,937
              
              
              (159
              )Mortgage
                  backed securities
              
              
              8,085
              
              
              (59
              )
              
              8,243
              
              
              (130
              )
              
              16,328
              
              
              (189
              )Municipal
                  securities
              
              
              224
              
              
              (1
              )
              
              —
              
              
              —
              
              
              224
              
              
              (1
              )Corporate
                  securities
              
              
              989
              
              
              (10
              )
              
              1,960
              
              
              (30
              )
              
              2,949
              
              
              (40
              )$
              64,065
              
              $
              (444
              )
              $
              26,870
              
              $
              (401
              )
              $
              90,935
              
              $
              (845
              )
  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.
  28
  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. Furthermore, as of June 30, 2005, 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 June 30, 2005, we believe
        the impairments detailed in the table above are temporary, and no impairment
        loss has been realized in our consolidated statements of
        operations.
  **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 BOLI.
  During
        2003, 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 BOLI from insurance carriers rated AA or above. 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 the second quarter of 2005, we purchased an additional $3.0 million
        of BOLI.
  We
        also
        invested in two low-income housing tax credit funds (“LIHTCF”) to promote our
        participation in CRA activities. We committed to invest, over the next two
        to
        three years, a total of $3.0 million to two different LIHTCF: $1.0 million
        in
        Apollo California Tax Credit Fund XXII, LP, and $2.0 million in Hudson Housing
        Los Angeles Revitalization Fund, LP. We anticipate receiving the return
        following a two-to three-year period in the form of tax credits and tax
        deductions over the next 15 years.
  The
        balances of other earning assets as of June 30, 2005 and December 31, 2004
        were
        as follows:
  **Type**
              
              **Balance
                  as of**
                **June
                  30, 2005**
              
              **Balance
                  as of**
                **December
                  31, 2004**BOLI
              
              $
              14,820,000
              
              $
              11,536,000LIHTCF
              
              $
              1,717,000
              
              $
              1,784,000Federal
                  Home Loan Bank Stock
              
              $
              6,052,000
              
              $
              4,372,000
  **Deposits
        and Other Sources of Funds**
  *Deposits*
  Deposits
        are our primary source of funds. Total deposits at June 30, 2005 and December
        31, 2004, were $1.24 billion and $1.10 billion, respectively, representing
        an
        increase of $145.3 million, or 13.2%, over the first six- month period of
        2005.
  Due
        to
        the heightened competition for core deposits, our time deposit reliance level
        increased and the percentage of the average time deposit over the average
        total
        deposit in the second quarter of 2005 was increased to 51.9% from 49.8% for
        the
        prior year’s same quarter. The average time deposits for the quarter ended June
        30, 2005 increased by $146.2 million, or 32.4%, to $596.8 million from $450.6
        million a year ago, while the average total deposits increased by $243.2
        million, or 26.8%, to $1.15 billion for the quarter ended June 30, 2005,
        from
        $950.8 million for the quarter ended June 30, 2004.
  The
        average rate paid on time deposits in denominations of $100,000 or more for
        the
        second quarter and the first half of 2005 increased to 3.14% and 2.95%,
        respectively, as compared with 2.17% and 2.20%, respectively, for the same
        periods in the prior year. See “Net Interest Income and Net Interest Margin” for
        further discussion.
  29
  The
        following tables summarize the distribution of average daily deposits and
        the
        average daily rates paid for
        the
        quarters indicated:
  **Average
        Deposits**
 **(Dollars
        in Thousands)**
  **For
                  the quarters ended:**
                
                
                **June
                    30, 2005**
                
                
                **December
                    31, 2004**
                
                
                **June
                    30, 2004****Average
                    Balance**
                
                
                **Average**
                  **Rate**
                
                
                **Average
                    Balance**
                
                
                **Average**
                  **Rate**
                
                
                **Average
                    Balance**
                
                
                **Average**
                  **Rate**Demand,
                    noninterest-bearing
                
                $
                280,490
                
                
                
                
                $
                268,559
                
                
                
                
                $
                249,890Money
                    market
                
                
                252,181
                
                
                2.69
                %
                
                212,207
                
                
                1.87
                %
                
                187,984
                
                
                1.84
                %Super
                    NOW
                
                
                21,397
                
                
                0.74
                %
                
                22,877
                
                
                0.77
                %
                
                21,185
                
                
                0.77
                %Savings
                
                
                23,375
                
                
                0.72
                %
                
                23,913
                
                
                0.75
                %
                
                27,882
                
                
                0.75
                %Time
                    certificates of deposit in
                  denominations
                    of $100,000 or more
                
                
                507,513
                
                
                3.14
                %
                
                425,900
                
                
                2.33
                %
                
                352,442
                
                
                2.17
                %Other
                    time deposits
                
                
                107,162
                
                
                2.88
                %
                
                118,296
                
                
                2.54
                %
                
                119,209
                
                
                2.65
                %Total
                    deposits
                
                $
                1,192,118
                
                
                2.87
                %
                $
                1,071,752
                
                
                1.59
                %
                $
                958,592
                
                
                2.06
                %
  The
        scheduled maturities of our time deposits in denominations of $100,000 or
        greater at June 30, 2005 were as follows:
  **Maturities
        of Time Deposits of $100,000 or More, at June 30, 2005**
  **(Dollars
        in Thousands)**
  Three
                  months or less
              
              $
              286,470Over
                  three months through six months
              
              
              97,625Over
                  six months through twelve months
              
              
              143,876Over
                  twelve months
              
              
              1,612Total
              
              $
              529,583
  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 only two customers, including the California State Treasury,
        had a
        deposit balance of more than 3% of total deposits at June 30, 2005 and December
        31, 2004.
  In
        order
        to take advantage of historically low funding costs, in the past few years
        we
        also accepted brokered deposits on a selective basis at reasonable interest
        rates to augment deposit growth. The brokered deposits have grown to $47.3
        million at December 31, 2004 from $4.2 million at the end of 2001. However,
        we
        have controlled their growth and reduced these deposits to $38.5 million
        at June
        30, 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
        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
        details relating to the FHLB borrowings program.
  The
        following table is a summary of our FHLB borrowings for the quarters
        indicated:
  **For
                  the Quarter ended**
              
              **June
                  30, 2005**
              
              **December
                  31, 2004**Balance
                  at quarter-end
              
              $
              51,000,000
              
              $
              41,000,000Average
                  balance during the quarter
              
              $
              54,076,923
              
              $
              41,184,783Maximum
                  amount outstanding at any month-end
              
              $
              51,000,000
              
              $
              41,000,000Average
                  interest rate during the quarter
              
              
              3.00
              %
              
              2.05
              %Average
                  interest rate at quarter-end
              
              
              3.02
              %
              
              2.08
              %
  30
 *Junior
        Subordinated Debentures; Trust Preferred Securities*
  The
        Bank
        issued a $10 million Junior Subordinated Debenture in December 2002, and
        in
        December 2003 and March 2005, we issued additional Junior Subordinated
        Debentures in an amount of $15.46 million and $20.62 million, respectively,
        to
        the Wilshire Statutory Trusts (Wilshire Statutory Trust I and Wilshire Statutory
        Trust II), our wholly owned subsidiaries, which in turn issued trust preferred
        securities of $15 million and $20 million, respectively.
  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 6.57% at
        June 30, 2005, 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, the Company 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, the Company organized its wholly owned subsidiary,
        Wilshire Statutory Trust I, which issued $15 million in trust preferred
        securities. The Company 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 $15.46 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. The
        Company 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 6.27% at June 30, 2005, 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. The Company 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.
  2005
        Junior Subordinated Debenture; Trust Preferred Securities
        Issuance .
        In
        March 2005, the Company organized its wholly owned subsidiary, Wilshire
        Statutory Trust II, which issued $20 million in trust preferred securities.
        The
        Company then purchased all of the common interest in the Wilshire Statutory
        Trust ($619,000) and issued the 2005 Junior Subordinated Debenture (the “2005
        debenture”) in the amount of $20.6 million to the Wilshire Statutory Trust II
        with terms substantially similar to the 2005 trust preferred securities in
        exchange for the proceeds from the issuance of the Wilshire Statutory Trust
        II’s
        2005 trust preferred securities and common securities. The Company subsequently
        deposited the proceeds from the 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 2005 debenture and related trust preferred securities
        was
        5.21% at June 30, 2005, which adjusts quarterly to the three-month LIBOR
        plus
        1.79%. The 2005 debenture and related trust preferred securities will mature
        on
        March 17, 2035. The interest on both the 2005 debenture and related trust
        preferred securities are payable quarterly and no scheduled payments of
        principal are due prior to maturity. The Company may redeem the 2005 debenture
        (and in turn the trust preferred securities) in whole or in part prior to
        maturity on or after March 17, 2010.
  Payments
        of distributions on the trust preferred securities and payments on redemption
        of
        the trust preferred securities are guaranteed by the Company. 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.
  31
 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 June 30, 2009 (an extension of the June 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 June 30, 2005, Wilshire Bancorp would have been able to
        count
        $33.7 million of total trust preferred securities as Tier 1 capital, leaving
        $1.3 million as Tier 2 capital.
  **Asset/Liability
        Management**
  We
        seek
        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, we focus 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 in the “Risk Factors” section of our Annual
        Report on Form 10-K for the year ended December 31, 2004. Information concerning
        interest rate risk management is set forth under “Item 3. Quantitative and
        Qualitative Disclosures about Market Risk.”
  **Liquidity
        Management**
  Maintenance
        of adequate liquidity requires that sufficient resources be available at
        all
        times 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
        June 30, 2005 and December 31, 2004 totaled approximately $277.1 million
        and
        $205.8 million, respectively. Our liquidity level measured as the percentage
        of
        liquid assets to total assets was 19.0% and 16.3% at June 30, 2005 and December
        31, 2004, 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 June 30, 2005, our borrowing capacity from the
        FHLB
        was about $331.4 million and the outstanding balance was $51 million, or
        approximately 15.4% of our borrowing capacity. We also maintain a guideline
        to
        purchase up to $10 million in federal funds with Union Bank of
        California.
  32
 **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 securities, debt
        or
        otherwise.
  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, 2004 for additional information regarding regulatory capital
        requirements.
  At
        June
        30, 2005, total shareholders’ equity increased to $100.9 million from $88.3
        million at December 31, 2004, representing an increase of $12.6 million,
        primarily from internally generated operating income ($12.8 million), increased
        by stock option exercises ($429,000 proceeds from stock option exercises
        and the
        $ 1.7 million in tax benefits therefrom) and decreased by the cash dividend
        of
        $2.3 million, which was declared during the first half of 2005.
  In
        addition, during the first quarter of 2005, we issued $20.6 million in Junior
        Subordinated Debentures to Wilshire Statutory Trust II, our wholly owned
        subsidiary, which in turn issued the trust preferred securities of $20 million
        and we subsequently infused $14 million as additional equity capital to the
        Bank. As a result, our Tier I capital and Tier 2 capital increased further
        by
        $18.7 million and $1.3 million. For the Bank level, the Tier 1 capital also
        increased by $14 million with the capital infusion. See “Deposits and Other
        Sources of Funds” for further discussion regarding the subordinated debentures
        and the trust preferred securities.
  As
        of
        June 30, 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 capital
        ratios as of the dates specified for the Company and the Bank:
  **Actual
                      ratios for the Company as of:****Wilshire
                      Bancorp, Inc.**
                  
                  **Regulatory**
                    **Well-**
                    **Capitalized
                      Standards**
                  ****
                  **Regulatory
                      Adequately- Capitalized Standards**
                  ****
                  **June
                      30, 2005**
                  ****
                  **December
                      31, 2004**
                  ****
                  **June
                      30, 2004**Total
                      capital to risk-weighted assets
                  
                  
                  10
                  %
                  
                  8
                  %
                  
                  13.33
                  %
                  
                  11.95
                  %
                  
                  11.74
                  %Tier
                      I capital to risk-weighted assets
                  
                  
                  6
                  %
                  
                  4
                  %
                  
                  11.29
                  %
                  
                  9.87
                  %
                  
                  8.00
                  %Tier
                      I capital to adjusted average assets
                  
                  
                  5
                  %
                  
                  4
                  %
                  
                  9.59
                  %
                  
                  8.35
                  %
                  
                  6.94
                  %
  **Actual
                      ratios for the Company as of:****Wilshire
                      State Bank**
                  
                  
                  **Regulatory
                      Well-Capitalized Standards**
                  
                  
                  **Regulatory
                      Adequately-Capitalized Standards**
                  ****
                  ****
                  **June
                      30, 2005**
                  ****
                  ****
                  **December
                      31,2004**
                  ****
                  ****
                  **June
                      30, 2004**Total
                      capital to risk-weighted assets
                  
                  
                  10
                  %
                  
                  8
                  %
                  
                  12.89
                  %
                  
                  11.92
                  %
                  
                  11.74
                  %Tier
                      I capital to risk-weighted assets
                  
                  
                  6
                  %
                  
                  4
                  %
                  
                  10.95
                  %
                  
                  9.84
                  %
                  
                  8.00
                  %Tier
                      I capital to adjusted average assets
                  
                  
                  5
                  %
                  
                  4
                  %
                  
                  9.29
                  %
                  
                  8.33
                  %
                  
                  6.94
                  %
 33
  **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. We evaluate 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 liabilities. To that end,
        we
        actively monitor and manage 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 June
        30,
        2005, we were asset-sensitive, with a positive cumulative one-year gap of
        $171.1
        million, or 11.7% 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 the past three years. At June
        30,
        2005, we intentionally maintained a three-month positive gap of $378.1 million,
        or 26.0% 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.
  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 June 30, 2005 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:
  34
  Interest
        Rate Sensitivity Analysis
 (Dollars
        in Thousands)
  **At
                  June 30, 2005****Amounts
                  Subject to Repricing Within****Interest-earning
                  assets:**
              
              **0-3
                  months**
              
              **3-12
                  months**
              
              **Over
                  1 to 5 years**
              
              **After
                  5 years**
              
              **Total**Gross
                  loans1
              
              $
              1,032,584
              
              $
              15,510
              
              $
              40,145
              
              $
              44,939
              
              $
              1,133,178Investment
                  securities
              
              
              19,834
              
              
              25,865
              
              
              98,580
              
              
              1,960
              
              
              146,239Federal
                  funds sold and cash equivalentsagreement
                  to resell
              
              
              77,986
              
              
              —
              
              
              —
              
              
              —
              
              
              77,986Interest-earning
                  deposits
              
              
              3
              
              
              —
              
              
              —
              
              
              —
              
              
              3Total
              
              $
              1,130,407
              
              $
              41,375
              
              $
              138,725
              
              $
              46,899
              
              $
              1,357,406**Interest-bearing
                  liabilities:**Savings
                  deposits
              
              
              22,496
              
              
              —
              
              
              —
              
              
              —
              
              
              22,496Time
                  deposits of $100,000 or more
              
              
              341,992
              
              
              185,979
              
              
              1,612
              
              
              —
              
              
              529,583Other
                  time deposits
              
              
              42,650
              
              
              51,420
              
              
              11,692
              
              
              6
              
              
              105,768Other
                  interest-bearing deposits
              
              
              284,044
              
              
              —
              
              
              —
              
              
              —
              
              
              284,044Other
                  borrowingsdemand
                  deposits
              
              
              15,000
              
              
              11,000
              
              
              25,000
              
              
              —
              
              
              51,000Subordinated
                  debentures
              
              
              46,083
              
              
              —
              
              
              —
              
              
              —
              
              
              46,083Total
              
              $
              752,265
              
              $
              248,399
              
              $
              38,304
              
              $
              6
              
              $
              1,038,974Interest
                  rate sensitivity gap
              
              $
              378,142
              (
              $
              207,023
              )
              $
              100,420
              
              $
              46,893
              
              $
              318,432Cumulative
                  interest rate sensitivity gap
              
              $
              378,142
              
              $
              171,118
              
              $
              271,538
              
              $
              318,432Cumulative
                  interest rate sensitivity gap ratio
                (based
                  on total assets)
              
              
              25.95
              %
              
              11.74
              %
              
              18.64
              %
              
              21.85
              %
 
 1Excludes
          the gross amount of non-accrual loans of approximately $7.8 million at
          June 30,
          2005.
 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
        June 30, 2005. All assets presented in this table are held-to-maturity or
        available-for-sale. At June 30, 2005, we had no trading securities:
  **(Dollars
                        in Thousands)**
                      **Change****(in
                      Basis
                      Points)**
                
                **Net
                      Interest Income****(next
                    twelve months)**
                
                **%
                    Change**
                
                **NPV**
                
                **%
                    Change**+200
                
                83,112
                
                15.3%
                
                221,864
                
                13.2%+100
                
                76,511
                
                6.1%
                
                209,971
                
                7.2%0
                
                72,098
                
                —
                
                195,931
                
                —-100
                
                68,399
                
                -5.1%
                
                177,684
                
                -9.3%-200
                
                61,663
                
                -14.5%
                
                157,035
                
                -19.9%
 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 were positively gapped by $171.1 million
        for a time horizon of one year, as of June 30, 2005. 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.
  We
        believe that the assumptions used to evaluate the vulnerability of our
        operations to changes in interest rates approximate actual experience and
        consider 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.
  35
  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 engage 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 $3.0 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********
  As
        of
        June 30, 2005, 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 June 30, 2005, 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.
  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 June 30, 2005 that materially affected, or are reasonably likely
        to materially affect, our internal controls over financial
        reporting.
   36
 **Part
          II.  **OTHER
          INFORMATION****
  **Item
          1. **Legal
          Proceedings****
  None.
  **Item
          2. **Unregistered
          Sales of Equity****Securities and Use of Proceeds****
  In
        March
        2005, the Company organized its wholly owned subsidiary, Wilshire Statutory
        Trust II, which issued $20 million in trust preferred securities. The Company
        then purchased all of the common interest in the Wilshire Statutory Trust
        ($619,000) and issued the 2005 Junior Subordinated Debenture (the “2005
        debenture”) in the amount of $20.6 million to the Wilshire Statutory Trust II
        with terms substantially similar to the 2005 trust preferred securities in
        exchange for the proceeds from the issuance of the Wilshire Statutory Trust
        II’s
        2005 trust preferred securities and common securities. The Company subsequently
        deposited the proceeds from the 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 2005 debenture and related trust preferred securities
        was
        5.21% at June 30, 2005, which adjusts quarterly to the three-month LIBOR
        plus
        1.79%. The 2005 debenture and related trust preferred securities will mature
        on
        March 17, 2035. The interest on both the 2005 debenture and related trust
        preferred securities are payable quarterly and no scheduled payments of
        principal are due prior to maturity. The Company may redeem the 2005 debenture
        (and in turn the trust preferred securities) in whole or in part prior to
        maturity on or after March 17, 2010. The issuance of the trust preferred
        securities and the 2005 debenture was made in private placement in reliance
        upon
        the exemption from compliance with the registration requirements of the
        Securities Act contained in Section 4(2) of the Securities Act and
        applicable state securities law exemptions.
  **Item
        3.**  **Defaults
        Upon Senior Securities**
  None.
  **Item
          4. **Submission
          of Matters to a Vote of Security
          Holders****
  At
        our
        Annual Meeting of Shareholders held May 25, 2005, the following persons were
        elected as our Class I directors to serve three year terms expiring at the
        2008
        Annual Meeting of Shareholders or until their successors are duly elected
        and
        qualified:
  •
                Steven
                    Koh (23,563,416 votes in favor; 423,158 votes withheld)•
                Gapsu
                    Kim (23,531,407 votes in favor; 455,167 votes withheld)•
                Fred
                    Mautner (23,442,944 votes in favor; 543,630 votes
                    withheld)•
                Donald
                    Byun (23,447,113 votes in favor; 539,461 votes
                    withheld)
 In
        addition to the foregoing, the terms of the following directors continued
        after
        the Annual Meeting:
  *Class
        II*
  •
                Mel
                    Elliot•
                Richard
                    Lim•
                Harry
                    Siafaris
  Class
        III
 •
                Soo
                    Bing Min•
                Larry
                    Greenfield, M.D.•
                Kyu-Kyun
                    Kim
 •
              Young
                  Hi Pak
 **Item
          5. **Other
          Information****
  On
        August
        1, 2005, we entered into a stock purchase agreement with the shareholders
        of Liberty Bank of New York (“Liberty Bank”) to acquire all of the outstanding
        stock of Liberty Bank for approximately $15.7 million subject to adjustment
        immediately prior to closing.  The agreement contemplates that the
        purchase
        price will be payable 60% in cash and 40% in our restricted
        common stock .
        However, prior to closing, at our option, we may modify the form of
        consideration so that a higher percentage (up to 100%) of the purchase price
        may
        be paid in cash. Under the terms of the agreement, in no event will the number
        of shares of our common stock issued as consideration exceed 650,000 shares.
        The
        value of the shares of our common stock, if any, comprising the purchase
        price
        will be based on the average
        closing sales prices of our common stock as reported by the NASDAQ National
        Market System for the 20 consecutive trading days ending on the last business
        day prior to the closing date.
  37
 The
        definitive purchase price will be increased or decreased to the extent the
        shareholders’ equity of Liberty Bank immediately prior to closing is greater or
        less than $8,800,000, respectively. In addition, the purchase price will
        be
        decreased to the extent any increase in the allowance of loan and lease losses
        on the books of Liberty Bank is deemed appropriate by the Superintendent
        of
        Banks of the State of New York Banking Department or the FDIC, but in no
        event
        will such adjustment be less than the amount required to increase the allowance
        to $600,000.
  The
        transactions contemplated by the agreement are anticipated
        to close in
        the fourth quarter of 2005 and will be subject to certain conditions, including
        regulatory approvals from the Federal Deposit Insurance Corporation, the
        Board
        of Governors of the Federal Reserve, and the California Department of Financial
        Institutions. The agreement contemplates that Liberty Bank will
        be
        merged into Wilshire State Bank, our wholly-owned subsidiary.
  The
        shares to be issued pursuant to the agreement will be issued
        as
        restricted securities under an exemption pursuant to Section 4(2)
        under the Securities Act of 1933.
  **Item
                  6.**
              **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 isincorporatedby
                  reference from Note [3] of the Company’s Financial Statements included
                  herein.
   38
  **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:
                August
                9, 2005
              By:
              /s/ Brian
                E. ChoBrian
                E. ChoExecutive
                  Vice President and Chief Financial Officer
                (Principal
                  Financial and Accounting Officer)
  39
 
 **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
 40