UCBH Holdings, Inc. Reports Fourth Quarter Results

UCBH Holdings, Inc. (NASDAQ: UCBH), the holding company of United Commercial Bank (UCB™), today reported net income of $20.1 million for the fourth quarter ended December 31, 2007. This represents a decrease of $6.3 million, or 24.0%, compared with net income of $26.5 million for the quarter ended December 31, 2006. The decrease in net income in 2007 reflects the writedown of two collateralized debt obligations ("CDOs”) and a larger loan loss provision in the fourth quarter of 2007. UCBH has very limited CDO exposure. The two CDOs, which were purchased in 2005, were downgraded in late December 2007 by one of three rating agencies, and one of which was downgraded to below investment grade. The Company is comfortable with the current value of the two CDOs written down in December, unless market conditions deteriorate significantly. UCBH does not intend to sell the CDOs. The larger loan loss provision in the fourth quarter of 2007 reflects an addition to the allowance for loan losses during the quarter to strengthen the balance sheet in consideration of current economic conditions and in anticipation of worsening of the U.S. economy, changes in the loan mix and the loan growth during the fourth quarter of the year. Net income for the year ended December 31, 2007, was $106.2 million, an increase of $5.3 million, or 5.3%, from $100.9 million for the year ended December 31, 2006. The diluted earnings per common share were $0.19 for the fourth quarter of 2007, compared with $0.27 for the corresponding period of 2006. The diluted earnings per common share were $1.01 for the year ended December 31, 2007, compared with $1.03 for the year ended December 31, 2006. Chairman, President and Chief Executive Officer, Thomas S. Wu said, "We are not pleased with our financial results for this period, which were adversely impacted by current economic conditions. "That being said, our core business competencies positioned us to satisfactorily grow our net interest income and noninterest income during the fourth quarter and full year 2007 and to achieve strong loan growth while maintaining solid credit quality. "In the fourth quarter, we announced the completion of our acquisition of Business Development Bank, which will significantly enhance our business platform and allow us to expand our commercial lending and trade finance business in the U.S. and in Greater China. Also, during this period, we announced our strategic alliance with China Minsheng Banking Corp., Ltd., which will further enhance our Greater China platform and our ability to gain market share in the United States. "In light of the current uncertain economic environment, we provided an additional loan loss allowance during the fourth quarter even though the credit quality in our loan portfolio continues to be strong. We believe this prudent action will further strengthen our balance sheet, and we anticipate a record year in 2008,” concluded Mr. Wu. Fourth Quarter and Full Year 2007 Operating Results Net interest income before provision for loan losses for the quarter ended December 31, 2007, increased by $19.9 million, or 30.1%, to $86.1 million, compared with $66.2 million for the same period of 2006. Net interest income before provision for loan losses for the year ended December 31, 2007, increased by $58.7 million, or 22.2%, to $322.6 million, compared with $263.9 million for the year 2006. This increase was due to organic balance sheet growth and the acquisitions of The Summit National Bank ("Summit”) in December 2006 and The Chinese American Bank ("CAB”) in May 2007. The net interest margin was 3.39% for the quarter ended December 31, 2007, a 5 basis point decrease from the 3.44% net interest margin for the third quarter of 2007. This compares with a net interest margin of 3.34% for the fourth quarter of 2006. The increase in the net interest margin in the fourth quarter of 2007, when compared with the fourth quarter of 2006, reflects the effect of an 8 basis point increase in loan yields, and a 3 basis point decrease in the funding cost. The average cost of deposits during the fourth quarter of 2007 was 3.65%, compared with 3.76% for the fourth quarter ended December 31, 2006. The 11 basis point decrease in the average cost of deposits reflects the changes in market interest rates. The cost of deposits at December 31, 2007, decreased to 3.40%, reflecting management’s continued diligence in deposit pricing. The provision for loan losses was $8.1 million for the fourth quarter of 2007, compared with $1.4 million for the corresponding quarter of 2006. The larger loan loss provision in the fourth quarter of 2007 reflects an addition to the allowance for loan losses during the quarter to strengthen the balance sheet in consideration of current economic conditions, changes in the loan mix and the loan growth during the fourth quarter of the year. The provision for loan losses was $14.2 million for the full year 2007, compared with $3.8 million in 2006. The ratio of provision for loan losses to net loan charge-offs for 2007 was 1.87. Net loan charge-offs were $2.2 million for the quarter ended December 31, 2007, or 0.12% annualized, compared with net loan charge-offs of $2.6 million, or 0.18% annualized, in the fourth quarter of 2006. Net loan charge-offs were $7.6 million for the full year 2007, or 0.11%, compared with net charge-offs of $10.2 million, or 0.17%, in 2006. Our noninterest income (loss) was ($2.5) million for the quarter ended December 31, 2007, compared with $12.0 million for the corresponding quarter of 2006. Included in noninterest income in the fourth quarter of 2007 was an $11.6 million charge, representing the aforementioned writedowns on the two CDOs. Gain on sale of multifamily and commercial real estate loans was $748,000 in the fourth quarter of 2007, compared with $4.5 million in the fourth quarter of 2006 due to a decrease in the volume of loan sales. Commercial banking fees increased by 13.7% to $4.8 million in the fourth quarter of 2007, compared with $4.3 million in the fourth quarter of 2006, reflecting the growth in the commercial business of the Bank. Service charges on deposit accounts increased by 79.3% to $1.9 million in the fourth quarter of 2007, compared with $1.1 million in the fourth quarter of 2006, reflecting the strong growth in deposit accounts organically and the acquisitions of Summit, CAB and Business Development Bank ("BDB”). The growth in these components of noninterest income reflects the ongoing expansion of the Company’s commercial banking platform. Gain on sale of securities was $1.5 million in the fourth quarter of 2007. There were no gains on sales of securities in the fourth quarter of 2006. Noninterest income was $30.7 million in the full year 2007, compared with noninterest income of $47.1 million in 2006. The $16.5 million decrease reflects the CDO writedowns and the decreased volume of gain on sale of loans, partially offset by increases in commercial banking fees, deposit account fees and gain on sales of securities. Commercial banking fees increased by $4.5 million, or 29.3%, to $20.0 million in 2007, from $15.4 million in 2006, reflecting the growth in our commercial banking business. Service charges on deposit accounts increased by 87.2% in 2007 to $7.0 million from $3.7 million in 2006, reflecting the growth in deposit accounts during the year. Gain on sale of securities was $5.3 million in 2007, compared with $206,000 in 2006. Included in noninterest income in 2006 was $5.0 million, representing an acquisition termination fee. There was no such fee in 2007. Gains on sale of commercial real estate and multifamily loans were $5.7 million in 2007, compared with $17.8 million in 2006. This decrease reflects a reduction in the volume of loan sales in 2007, when compared with 2006. Noninterest expense for the fourth quarter of 2007 increased by $8.8 million, or 23.0%, to $46.9 million, from $38.1 million in the corresponding quarter of 2006. This increase was primarily the result of increased personnel costs and occupancy expenses related to the acquisitions of Summit in December 2006 and CAB in May 2007, as well as the additional staffing required for the growth of the Bank’s commercial banking business, and the expansion of the Bank’s infrastructure to support a larger and growing organization. Noninterest expense totaled $177.2 million in 2007, an increase of 14.0%, from $155.4 million in 2006, also primarily as a result of increases in personnel costs and occupancy expenses. The effective tax rate was 29.6% for the fourth quarter ended December 31, 2007, compared with 31.5% for the corresponding period of 2006. The effective tax rate was 34.4% for the full year 2007 and was 33.6% for the full year 2006. The lower provision in the fourth quarter of 2007 as compared with the fourth quarter of 2006 reflects a tax tru-up in the latter part of 2007. Net income was $20.1 million for the quarter ended December 31, 2007, compared with $26.5 million for the corresponding quarter of the prior year. The annualized return on average assets ("ROA”) for the quarter ended December 31, 2007, was 0.72%, and the annualized return on average equity ("ROE”) for the quarter ended December 31, 2007, was 8.42%. The ROA and ROE for the fourth quarter of 2006 were 1.25% and 15.35%, respectively. The efficiency ratio was 56.1% for the fourth quarter of 2007, compared with 48.78% for the corresponding period of 2006. The ROA and ROE for the year ended December 31, 2007, was 1.01% and 11.99%, respectively, compared with 1.23% and 15.59%, respectively for 2006. The efficiency ratio for the year ended December 31, 2007, was 50.16%, compared with an efficiency ratio of 49.96% for the year ended December 31, 2006. Excluding the CDO writedowns, the efficiency ratio was 49.27% for the fourth quarter of 2007 and 48.56% for the full year 2007. Balance Sheet Highlights Total loans increased by $1.23 billion, or 18.2%, to $8.01 billion at December 31, 2007, from $6.78 billion at December 31, 2006, following the securitization of $400.0 million of commercial real estate loans and $176.0 million of multifamily loans and the sales of $331.9 million of commercial and multifamily real estate loans. The securitized loans are included in the available-for-sale securities as of December 31, 2007. Excluding the loan securitizations, the loan growth was $1.80 billion, or 26.6%, for the year. The increase in loans reflects strong loan originations in 2007 and the acquisitions of CAB and BDB, which closed in May and December of 2007, respectively. Organic loan growth excluding the securitizations was $1.4 billion, or 20.7%, during 2007. Commercial business loans increased by $615.2 million, or 42.1%, to $2.08 billion at December 31, 2007, from $1.46 billion at December 31, 2006. Organic commercial business loan growth was $350.1 million, or 23.9%. Construction loans increased by $612.2 million, or 58.1%, to $1.67 billion at December 31, 2007, from $1.05 billion at December 31, 2006. Commercial real estate loans increased by $9.7 million, or 0.4%, to $2.49 billion at December 31, 2007, from $2.48 billion at December 31, 2006. Excluding the commercial real estate loan securitization, the commercial real estate loans increased by $405.2 million, or 16.3%, during the year. Organic commercial real estate loan growth excluding the securitization was $290.1 million, or 11.7%. Multifamily real estate loans decreased by $89.4 million, or 7.0%, to $1.19 billion at December 31, 2007, from $1.28 billion at December 31, 2006. Excluding the multifamily loan securitization, the multifamily real estate loans increased by $87.5 million, or 6.9%, during the year. New loan commitments of $1.01 billion for the fourth quarter of 2007 were comprised of $970.2 million of commercial loans and $44.6 million of consumer loans. Commercial business loan originations were $360.5 million in the fourth quarter of 2007, compared with $287.6 million in the fourth quarter of 2006. Construction loan commitments of $336.6 million in the fourth quarter of 2007 are compared with $276.8 million in the fourth quarter of 2006. Commercial real estate loan originations were $197.0 million in the fourth quarter of 2007, compared with $281.1 million in the fourth quarter of 2006. With strong loan commitments in the fourth quarter, coupled with a loan pipeline of $2.48 billion as of December 31, 2007, we project loan growth will remain strong in the first quarter of 2008. The average loan yield improved to 7.75% for the quarter ended December 31, 2007, from 7.67% for the quarter ended December 31, 2006, as we continue to improve our loan mix to increase profitability. For the full year 2007, total loan commitments increased by $602.0 million, or 17.1%, to $4.11 billion, from $3.51 billion in 2006. Total nonperforming assets as of December 31, 2007, were $46.6 million, or 0.39%, reflecting management’s continued focus on credit quality. This is compared with total nonperforming assets of $36.9 million, or 0.33%, at September 30, 2007. Net loan charge-offs were $2.2 million for the quarter ended December 31, 2007, compared with net loan charge-offs of $2.6 million for the corresponding quarter of the prior year. Annualized net loan charge-offs for the fourth quarter of 2007 were 0.12%, compared with 0.18% for the corresponding quarter of 2006 and 0.12% for the third quarter of 2007. Net loan charge-offs were $7.6 million for the full year 2007, compared with net loan charge-offs of $10.2 million for 2006. Net loan charge-offs for 2007 were 0.11%, compared with 0.17% for 2006. The loan delinquency ratio was 1.45% at December 31, 2007, compared with 0.84% at December 31, 2006 and 1.06% at September 30, 2007. The ratio of allowance for loan losses to loans held in portfolio was 0.95% at December 31, 2007, compared with 0.93% at December 31, 2006, and increased 0.06% from 0.89% at September 30, 2007. The ratio of the allowance for loan losses and the reserve for unfunded commitments to loans held in portfolio excluding cash secured loans was 1.05% at December 31, 2007, compared with 0.99% at September 30, 2007 and 1.09% at December 31, 2006. The securities portfolio, including available for sale and held to maturity, was $2.46 billion at December 31, 2007, compared with $2.44 billion at December 31, 2006. Included in the securities portfolio at December 31, 2007, was $400.0 million of internally securitized commercial real estate loans and $176.0 million of internally securitized multifamily loans. The securities portfolio was 20.8% of total assets at December 31, 2007, compared with 23.6% of total assets at December 31, 2006. Excluding the securitized loans held in the portfolio, the securities portfolio was 16.0% of total assets at December 31, 2007. Total deposits increased by $578.4 million, or 8.0%, to $7.78 billion at December 31, 2007, from $7.20 billion at December 31, 2006. Organic deposit growth during this period was $248.0 million, or 3.4%. Noninterest-bearing checking accounts increased by $92.6 million, or 12.1%, to $860.3 million, from $767.7 million at year-end 2006. Organic noninterest-bearing checking accounts increased by $22.8 million during 2007. NOW, checking and money market accounts increased by $130.9 million, or 9.2%, to $1.56 billion at December 31, 2007, from $1.43 billion at December 31, 2006. Organic NOW, checking, and money market account growth was $100.1 million, or 7.0%, in 2007. CDs increased by $310.9 million, or 7.6%, to $4.38 billion at December 31, 2007, from $4.07 billion at December 31, 2006. Organic CD growth was $119.7 million, or 2.9%, in 2007. The average cost of deposits for the quarter ended December 31, 2007, was 3.65%, a decrease of 15 basis points, from 3.80% for the quarter ended September 30, 2007. The cost of deposits at December 31, 2007, was 3.40%, reflecting management’s continued focus on disciplined deposit pricing. The average cost of deposits for the full year of 2007 was 3.73%, compared with 3.37% in 2006. Stockholders’ equity increased by $184.3 million, or 23.4%, to $970.3 million at December 31, 2007, from $786.1 million at December 31, 2006. The growth in equity resulted from the acquisition of CAB, which closed in May 2007, and the retention of earnings. The Tier I leverage capital ratio of the Bank was 7.46% at December 31, 2007, compared with 9.30% at December 31, 2006. The higher Tier I leverage ratio as of December 31, 2006, reflected the acquisition of Summit, which was completed on December 29, 2006. The total risk-based capital ratio of the Bank was 10.66% as of December 31, 2007, compared with 10.53% at December 31, 2006. The Bank’s capital ratios exceed regulatory requirements, and the Bank continues to be categorized as "well capitalized.” The Company’s capital ratios approximate those of the Bank, and the Company is also categorized as "well capitalized.” The Board of Directors of UCBH approved a $0.01 increase in the quarterly dividend from $0.03 to $0.04 for 2008. Fourth Quarter Earnings Teleconference and Webcast UCBH will hold a conference call and audio webcast on January 25, 2008, at 8:00 a.m. Pacific Time to discuss the financial results for the Company’s fourth quarter and fiscal 2007, as well as its outlook for 2008. The webcast will be available through a link on the Investor Relations page of the Company’s web site at www.ucbh.com. If you are unable to listen to the webcast live, a replay will be available at www.ucbh.com. About UCBH Holdings, Inc. UCBH Holdings, Inc., with $11.80 billion in assets as of December 31, 2007, is the holding company for United Commercial Bank, a state-chartered commercial bank, which is a leading bank in the United States serving the Chinese communities and American companies doing business in Greater China. The Bank has 51 California branches/offices located in the San Francisco Bay Area, Sacramento, Stockton, Los Angeles and Orange counties, eight branches in New York, five branches in metropolitan Atlanta, three branches in New England, two branches in the Pacific Northwest, a branch in Houston, branches in Hong Kong, Shanghai and Shantou, China, and representative offices in Beijing, Guangzhou and Shenzhen, China, and Taipei, Taiwan. UCB, with headquarters in San Francisco, provides commercial banking services to small- and medium-sized businesses and professionals in a variety of industries, as well as consumer and private banking services to individuals. The Bank offers a full range of lending activities, including commercial real estate and construction loans, commercial credit facilities, international trade finance, cash management, private client services, loans guaranteed by the U.S. Small Business Administration, residential mortgages, home equity lines of credit, and online banking services for businesses and consumers. For additional information, visit the web site for United Commercial Bank at www.ibankUNITED.com or the web site for UCBH Holdings, Inc. at www.ucbh.com. Forward-Looking Statements Certain statements contained in this release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions that may or may not prove correct. Forward-looking statements are also subject to known and unknown risks, uncertainties and other factors relating to the Company’s and the Bank’s operations and business environment, all of which are difficult to predict, and many of which are beyond the control of the Company and the Bank. The factors include, among others: economic and business conditions in the areas and markets in which the Company and the Bank operate, particularly those affecting loans secured by real estate; deterioration or improvement in the ability of the Bank’s borrowers to pay their debts to the Bank; market fluctuations such as those affecting interest and foreign exchange rates and the value of securities in which the Bank invests; competition from other financial institutions, whether banks, investment banks, insurance companies or others; the ability of the Bank to assimilate acquisitions, enter new markets and lines of business, and open new branches, successfully; changes in business strategies; changes in tax law and governmental regulation of financial institutions; demographic changes; and other risks and uncertainties, including those discussed in the documents the Company files with the Securities and Exchange Commission ("SEC”). The foregoing may cause the actual results and performance of the Company and the Bank to be materially different from the results and performance indicated or suggested by the forward-looking statements. Further description of the risks and uncertainties are included in detail in the Company’s current, quarterly and annual reports, as filed with the SEC. UCBH Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Dollars in Thousands, Except Share and Par Value Amounts) (Unaudited)     December 31,   December 31, 2007 2006   ASSETS Noninterest bearing cash $ 117,141 $ 112,343 Interest bearing cash 202,258 92,049 Federal funds sold   26,028     150,027   Cash and cash equivalents   345,427     354,419     Securities purchased under agreements to resell 150,000 175,000 Investment and mortgage-backed securities available for sale, at fair value 2,188,355 2,149,456 Investment and mortgage-backed securities held to maturity, at cost (fair value of $276,286 and $295,446 at December 31, 2007, and December 31, 2006, respectively) 271,485 290,673 Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments 138,877 110,775 Loans held for sale, net of valuation allowance 177,137 142,861   Loans held in portfolio 7,832,150 6,635,660 Allowance for loan losses   (74,648 )   (62,015 ) Loans held in portfolio, net   7,757,502     6,573,645     Accrued interest receivable 61,111 50,803 Premises and equipment, net 144,630 115,610 Goodwill 436,606 226,780 Core deposit intangibles, net 22,526 28,325 Mortgage servicing rights, net 12,783 13,273 Other assets   96,596     114,794   Total assets $ 11,803,035   $ 10,346,414     LIABILITIES AND STOCKHOLDERS’ EQUITY Noninterest bearing deposits $ 860,338 $ 767,714 Interest bearing deposits   6,920,902     6,435,131   Total deposits   7,781,240     7,202,845     Securities sold under agreements to repurchase 650,000 401,600 Federal funds purchased 78,000 - Short-term borrowings 414,532 654,636 Subordinated debentures 406,615 240,549 Accrued interest payable 28,169 21,018 Long-term borrowings 1,372,190 906,651 Other liabilities   101,947     133,044   Total liabilities   10,832,693     9,560,343     Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued and outstanding - - Common stock, $0.01 par value, 180,000,000 shares authorized at December 31, 2007, and December 31, 2006; 104,397,988 and 99,448,181 shares issued and outstanding at December 31, 2007, and December 31, 2006, respectively 1,044 994 Additional paid-in capital 426,835 341,616 Retained earnings 558,446 464,616 Accumulated other comprehensive loss   (15,983 )   (21,155 ) Total stockholders’ equity   970,342     786,071   Total liabilities and stockholders’ equity $ 11,803,035   $ 10,346, 414   UCBH Holdings, Inc. and Subsidiaries Condensed Consolidated Statement of Operations (Dollars in Thousands, Except Share and Per Share Amounts) (Unaudited)     Three Months Ended Dec. 31,   Twelve Months Ended Dec. 31, 2007   2006 2007   2006 Interest and dividend income: Loans $ 149,310 $ 116,724 $ 575,805 $ 448,650 Federal funds sold and deposits with banks 4,609 1,787 13,135 5,707 Securities purchased under agreements to resell 2,799 3,276 10,633 4,515 Investment and mortgage-backed securities: Taxable 23,412 17,523 88,043 62,418 Nontaxable 4,695 2,655 14,907 10,717 FHLB Stock   1,111     698     3,825     3,006     Total interest and dividend income   185,936     142,663     706,348     535,013     Interest expense: Deposits 69,629 59,262 276,331 210,059 Short-term borrowings and federal funds purchased 3,564 2,011 16,557 10,178 Securities sold under agreements to repurchase 4,996 2,484 15,308 5,313 Subordinated debentures 7,391 3,261 23,333 12,106 Long-term borrowings   14,258     9,466     52,231     33,424     Total interest expense   99,838     76,484     383,760     271,080     Net interest income 86,098 66,179 322,588 263,933 Provision for loan losses   8,090     1,350     14,246     3,842     Net interest income after provision for loan losses   78,008     64,829     308,342     260,091     Noninterest income: Commercial banking fees 4,832 4,251 19,972 15,444 Service charges on deposits 1,908 1,064 6,969 3,722 Gain (loss) on sale of securities, net 1,541 - 5,321 206 Gain on sale of SBA loans, net 235 624 2,500 2,930 Gain on sale of multifamily and commercial real estate loans, net 748 4,451 5,702 17,812 Lower of cost or market adjustment on loans held for sale (189 ) (74 ) (303 ) 76 Realized loss on available for sale securities (11,593 ) - (11,593 ) - Equity loss in other equity investments (859 ) (345 ) (3,023 ) (1,106 ) Acquisition termination fee - - - 5,000 Other fees   855     1,998     5,125     3,059     Total noninterest income   (2,522 )   11,969     30,670     47,143     Noninterest expense: Personnel 25,467 22,244 97,410 88,616 Occupancy 5,674 4,374 21,209 16,189 Data processing 2,526 2,306 9,173 9,890 Furniture and equipment 2,114 1,803 8,644 7,100 Professional fees and contracted services 1,754 1,632 7,369 9,855 Deposit insurance 646 184 1,800 784 Communication 776 283 3,074 1,071 Core deposit intangible amortization 1,245 652 4,566 2,342 Loss (gain) on extinguishment of subordinated debentures and borrowings - - - (360 ) Other general and administrative   6,688     4,644     23,937     19,933     Total non-interest expense   46,890     38,122     177,182     155,420     Income before income tax expense 28,596 38,676 161,830 151,814 Income tax expense   8,476     12,194     55,644     50,937     Net income $ 20,120   $ 26,482   $ 106,186   $ 100,877     Earnings per share: Basic $ 0.19 $ 0.28 $ 1.04 $ 1.07 Diluted $ 0.19 $ 0.27 $ 1.01 $ 1.03   Dividends declared per share $ 0.030 $ 0.030 $ 0.12 $ 0.12   Average Shares Outstanding: Basic 104,338,808 94,753,288 102,372,008 94,457,063 Diluted 106,954,957 98,182,131 105,351,355 98,028,977 UCBH Holdings, Inc. and Subsidiaries Supplemental Data (Dollars in Thousands) (Unaudited)     Three Months Ended December 31,   Twelve Months Ended December 31, 2007   2006 2007   2006   Operating Ratios and Other Data: Return on average assets 0.72 % 1.25 % 1.01 % 1.23 % Return on average equity 8.42 15.35 11.99 15.59 Efficiency ratio (1) 56.10 48.78 50.16 49.96 Non-interest expense to average assets 1.67 1.79 1.68 1.89 Average equity to average assets 8.52 8.11 8.41 7.88 Dividend payout ratio (2) 15.79 11.11 11.88 11.65 Net loan charge-offs to average loans held in portfolio 0.12 0.18 0.11 0.17   New Loan Commitments: Commercial: Secured by real estate – nonresidential 196,966 281,057 1,053,878 903,337 Secured by real estate – multifamily 76,111 76,627 380,287 241,067 Construction 336,562 276,809 1,292,327 1,064,113 Business   360,539     287,591     1,186,812     1,176,155     Total commercial loans   970,178     922,084     3,913,304     3,384,672     Consumer: Residential mortgage (one-to-four family) 32,005 20,904 159,250 94,818 Other   12,641     9,391     42,713     33,768     Total consumer loans   44,646     30,295     201,963     128,586     Total loan commitments (3) $ 1,014,824   $ 952,379   $ 4,115,267   $ 3,513,258     Average Loan Balances: Commercial: Secured by real estate - nonresidential $ 2,562,803 $ 2,109,792 $ 2,616,853 $ 2,263,751 Secured by real estate - multifamily 1,293,361 1,317,903 1,324,373 1,449,774 Construction 1,511,471 947,051 1,288,453 720,555 Business   1,769,855     1,217,589     1,597,892     1,035,812     Total commercial loans   7,137,490     5,592,335     6,827,571     5,469,892     Consumer: Residential mortgage (one-to-four family) 508,331 440,948 476,311 554,970 Other   64,879     53,500     59,553     54,712     Total consumer loans   573,210     494,448     535,864     609,682     Total loans $ 7,710,700   $ 6,086,783   $ 7,363,435   $ 6,079,574     (1) Represents noninterest expense divided by the total of our net interest income before provision for loan losses and our noninterest income. (2) Represents dividends declared per share as a percentage of diluted earnings per share. (3) Excludes commitments related to loan participations. UCBH Holdings, Inc. & Subsidiaries Average Yields Earned/Rates Paid (Dollars in Thousands) (Unaudited)     Three Months Ended December 31, 2007   Three Months Ended December 31, 2006 Average   Interest Income/   Average Yields Earned/ Average   Interest Income/   Average Yields Earned/ Balance Expense Rates Paid Balance Expense Rates Paid Nontaxable equivalent basis: Interest-earning assets Loans (1)(2) $ 7,710,700 $ 149,310 7.75 % $ 6,086,783 $ 116,724 7.67 % Taxable securities (3) 1,789,360 23,412 5.23 1,439,444 17,523 4.87 Nontaxable securities (3) 386,005 4,695 4.87 222,508 2,655 4.77 FHLB stock 77,390 1,111 5.74 48,288 698 5.78 Securities purchased under resale agreements 166,304 2,799 6.73 175,000 3,276 7.49 Other   312,954   4,609 5.89     136,312   1,787 5.24     Total interest-earning assets 10,442,713 185,936 7.12 8,108,335 142,663 7.04 Non-interest-earning assets   776,472   -   397,368   -   Total assets $ 11,219,185 $ 185,936 $ 8,505,703 $ 142,663   Interest-bearing liabilities: Deposits: NOW, checking and money market accounts $ 1,574,179 $ 12,541 3.19 $ 1,308,808 $ 11,534 3.53 Savings accounts 755,218 1,633 0.86 690,607 2,760 1.60 Time deposits   4,480,567   55,455 4.95     3,734,486   44,968 4.82     Total interest-bearing deposits 6,809,964 69,629 4.09 5,733,901 59,262 4.13 Securities sold under agreements to repurchase 589,674 4,996 3.39 301,104 2,484 3.30 Short-term borrowings and Federal funds purchased 357,349 3,564 3.99 161,797 2,011 4.97 Long-term borrowings 1,218,023 14,258 4.68 770,906 9,466 4.91 Subordinated debentures   406,630   7,391 7.27     161,304   3,261 8.09     Total interest-bearing liabilities 9,381,640 99,838 4.26 7,129,012 76,484 4.29 Non-interest-bearing deposits 828,341 - 578,178 - Other non-interest-bearing liabilities 52,866 - 108,423 - Stockholders’ equity   956,338   -   690,090   -   Total liabilities and stockholders’ equity $ 11,219,185 $ 99,838 $ 8,505,703 $ 76,484   Net interest-earning assets/net interest income/net interest rate spread (4) $ 1,061,073 $ 86,098 2.86 % $ 979,323 $ 66,179 2.75 %   Net interest margin (5) 3.30 % 3.26 %   Ratio of interest-earning assets to interest-bearing liabilities 1.11x 1.14x   Tax equivalent basis: Total interest-earning assets (6) $ 10,442,713 $ 188,463 7.22 % $ 8,108,335 $ 144,093 7.11 % Total interest-bearing liabilities   9,381,640   99,838 4.26     7,129,012   76,484 4.29     Net interest-earning assets/net interest income/net interest rate spread (4) $ 1,061,073 $ 88,625 2.96 % $ 979,323 $ 67,609 2.82 %   Net interest margin (5) 3.39 % 3.34 %   Average cost of deposits: Total interest-bearing deposits $ 6,809,964 $ 69,629 4.09 % $ 5,733,901 $ 59,262 4.13 % Noninterest-bearing deposits   828,341   -   578,178   -   Total deposits $ 7,638,305 $ 69,629 3.65 % $ 6,312,079 $ 59,262 3.76 %   (1) Non-accrual loans are included in the table for computation purposes; however, interest for such loans is recognized on a cash basis. (2) Average loans include loans held for sale. (3) Average yield on investment securities is computed using historical cost balances; the yield information does not give effect to changes in fair value that are reflected as a component of stockholders’ equity. (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (5) Net interest margin represents net interest income divided by average interest-earning assets. (6) Interest income from nontaxable securities has been adjusted to a tax equivalent basis using a statutory Federal income tax rate of 35.0%. Interest income from nontaxable investment securities calculated on a tax equivalent basis was $7.2 million and $4.1 million for the three months ended December 31, 2007 and 2006, respectively. UCBH Holdings, Inc. and Subsidiaries Average Yields Earned/Rates Paid (Dollars in Thousands) (Unaudited)     Twelve Months Ended December 31, 2007 Twelve Months Ended December 31, 2006 Average   Interest Income/   Average Yields Earned/ Average   Interest Income/   Average Yields Earned/ Balance Expense Rates Paid Balance Expense Rates Paid Nontaxable equivalent basis: Interest-earning assets Loans (1)(2) $ 7,363,435 $ 575,805 7.82 % $ 6,079,574 $ 448,650 7.38 % Taxable securities (3) 1,727,075 88,043 5.10 1,296,231 62,418 4.82 Nontaxable securities (3) 304,342 14,907 4.90 224,295 10,717 4.78 FHLB Stock 72,820 3,825 5.25 48,645 3,006 6.18 Securities purchased under resale agreements 159,657 10,633 6.66 60,822 4,515 7.42 Other   214,651   13,135 6.12     117,096   5,707 4.87     Total interest-earning assets 9,841,980 706,348 7.18 7,826,663 535,013 6.84 Non-interest-earning assets   688,180   -   382,187   -   Total assets $ 10,530,160 $ 706,348 $ 8,208,850 $ 535,013   Interest-bearing liabilities: Deposits: NOW, checking and money market accounts $ 1,531,449 $ 51,535 3.37 % $ 1,300,150 $ 41,282 3.18 % Savings accounts 726,168 7,117 0.98 713,068 9,527 1.34 Time deposits   4,380,809   217,679 4.97     3,677,491   159,250 4.33     Total interest-bearing deposits 6,638,426 276,331 4.16 5,690,709 210,059 3.69 Securities sold under agreements to repurchase 400,614 15,308 3.82 152,059 5,313 3.49 Short-term borrowings and Federal funds purchased 324,962 16,557 5.10 224,883 10,178 4.53 Long-term borrowings 1,113,881 52,231 4.69 683,978 33,424 4.89 Subordinated debentures   312,889   23,333 7.46     152,136   12,106 7.96     Total interest-bearing liabilities 8,790,772 383,760 4.37 6,903,765 271,080 3.93 Non-interest-bearing deposits 767,641 - 544,910 - Other noninterest-bearing liabilities 86,316 - 113,089 - Stockholders’ equity   885,431   -   647,086   -   Total liabilities and stockholders’ equity $ 10,530,160 $ 383,760 $ 8,208,850 $ 271,080   Net interest-earning assets/net interest income/net interest rate spread (4) $ 1,051,208 $ 322,588 2.81 % $ 922,898 $ 263,933 2.91 %   Net interest margin (5) 3.28 % 3.37 %   Ratio of interest-earning assets to interest-bearing liabilities 1.12x 1.13x   Tax equivalent basis: Total interest-earning assets (6) $ 9,841,980 $ 714,374 7.26 % $ 7,826,663 $ 540,784 6.91 % Total interest-bearing liabilities   8,790,772   383,760 4.37     6,903,765   271,080 3.93     Net interest-earning assets/net interest income/net interest rate spread (4) $ 1,051,208 $ 330,614 2.89 % $ 922,898 $ 269,704 2.98 %   Net interest margin (5) 3.36 % 3.45 %   Average cost of deposits: Total interest-bearing deposits $ 6,638,426 $ 276,331 4.16 % $ 5,690,709 $ 210,059 3.69 % Noninterest-bearing deposits   767,641   -   544,910   -   Total deposits $ 7,406,067 $ 276,331 3.73 % $ 6,235,619 $ 210,059 3.37 % (1) Non-accrual loans are included in the table for computation purposes; however, interest for such loans is recognized on a cash basis. (2) Average loans include loans held for sale. (3) Average yield on investment securities is computed using historical cost balances; the yield information does not give effect to changes in fair value that are reflected as a component of stockholders’ equity. (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (5) Net interest margin represents net interest income divided by average interest-earning assets. (6) Interest income from nontaxable securities has been adjusted to a tax equivalent basis using a statutory Federal income tax rate of 35.0%. Interest income from nontaxable investment securities calculated on a tax equivalent basis was $22.9 million and $16.5 million for the twelve months ended December 31, 2007 and 2006, respectively. UCBH Holdings, Inc. and Subsidiaries Selected Financial Data (Dollars in Thousands, Except Per Share Amounts) (Unaudited)     December 31,   December 31, 2007 2006   Selected loan data: Loans held for sale: Commercial: Secured by real estate - nonresidential $ 175,101 $ 141,348 Commercial business   1,109     1,203     Total commercial loans   176,210     142,551     Consumer: Residential mortgage (one-to-four family)   927     310     Total loans held for sale (1) $ 177,137   $ 142,861     Loans held in portfolio: Commercial: Secured by real estate – nonresidential $ 2,317,501 $ 2,341,572 Secured by real estate – multifamily 1,186,177 1,275,594 Construction 1,666,550 1,054,302 Commercial business   2,076,597     1,461,322     Total commercial loans   7,246,825     6,132,790     Consumer: Residential mortgage (one-to-four family) 518,674 448,895 Other   66,651     53,975     Total consumer loans   585,325     502,870     Total loans held in portfolio (2) $ 7,832,150   $ 6,635,660     Nonperforming loans $ 42,746 $ 12,311 Other real estate owned (OREO) 3,844 2,887 Loan delinquency ratio 1.45 % 0.84 % Nonperforming assets to total assets 0.39 0.15 Nonperforming loans to loans held in portfolio 0.55 0.19 Allowance for loan losses to nonperforming loans 174.63 503.73 Allowance for loan losses to loans held in portfolio 0.95 0.93 Net loan to deposit ratio 101.97 93.25   Selected deposit data: NOW, checking and money market accounts $ 2,417,630 $ 2,194,176 Savings accounts 986,664 942,672 Time deposits   4,376,946     4,065,997     Total deposits $ 7,781,240   $ 7,202,845     Cost of deposits 3.40 % 3.66 %   Selected equity data: Book value per share $ 9.29 $ 7.90   United Commercial Bank and subsidiaries regulatory capital ratios: Total risk-based capital 10.66 % 10.53 % Tier 1 risk-based capital 8.50 9.67 Tier 1 leverage ratio 7.46 9.30   UCBH Holdings, Inc. and subsidiaries regulatory capital ratios: Total risk-based capital 10.62 % 10.72 % Tier 1 risk-based capital 8.46 9.86 Tier 1 leverage ratio 7.42 9.50 (1) Includes net unamortized deferred loan fees, purchase premiums and discounts of $322,000 and $213,000 at December 31, 2007 and December 31, 2006, respectively. (2) Includes net unamortized deferred loan fees purchase premiums and discounts of $17.9 million and $25.8 million at December 31, 2007, and December 31, 2006, respectively.