10-K

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TABLE OF CONTENTS
Item 9B. Other Information

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2008.
OR
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                   to

Commission File Number 000-50923

WILSHIRE BANCORP, INC.
(Exact name of registrant as specified in its charter)

California State or other jurisdiction of incorporation or organization	20-0711133 I.R.S. Employer Identification Number
3200 Wilshire Blvd. Los Angeles, California Address of principal executive offices	90010 Zip Code

(213) 387-3200
Registrant's telephone number, including area code

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

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

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

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

         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 ý    No o

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

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer ý Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

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

         The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2008 was approximately $252 million (computed based on the closing sale price of the common stock at $8.57 per share as of such date). Shares of common stock held by each officer and director and each person owning more than ten percent of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of the affiliate status is not necessarily a conclusive determination for other purposes.

         The number of shares of Common Stock of the registrant outstanding as of February 27, 2009 was 29,413,757.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the registrant's Proxy Statement relating to the registrant's 2008 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K, where indicated.

TABLE OF CONTENTS

			Page
Cautionary Statement Regarding Forward-Looking Statements and Information			3
PART I			3
	Item 1.	Business	3
	Item 1A.	Risk Factors	28
	Item 1B.	Unresolved Staff Comments	38
	Item 2.	Properties	38
	Item 3.	Legal Proceedings	40
	Item 4.	Submission of Matters to a Vote of Security Holders	40
PART II			40
	Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	40
	Item 6.	Selected Financial Data	44
	Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	87
	Item 8.	Financial Statements and Supplementary Data	89
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	90
	Item 9A.	Controls and Procedures	90
	Item 9B.	Other Information	93
PART III			93
	Item 10.	Directors and Executive Officers of the Registrant	93
	Item 11.	Executive Compensation	93
	Item 12.	Security Ownership of Certain Beneficial Owners, Management and Related Shareholder Matters	93
	Item 13.	Certain Relationships and Related Transactions	93
	Item 14.	Principal Accounting Fees and Services	93
PART IV			94
	Item 15.	Exhibits, Financial Statement Schedules	94

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CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS AND INFORMATION

        This Annual Report on Form 10-K, or the "Report," the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission ("SEC") and public announcements that we have previously made or may subsequently make include, may include, incorporate by reference or may incorporate by reference certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to enjoy the benefits of that act. The forward-looking statements included or incorporated by reference in this Form 10-K and those reports, statements, information and announcements address activities, events or developments that Wilshire Bancorp, Inc. (together with its subsidiaries hereinafter referred to as "the Company," "we," "us," "our" or "Wilshire Bancorp," unless the context requires otherwise) expects or anticipates will or may occur in the future. Any statements in this document about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "will continue," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," and similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties, which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document. All forward-looking statements concerning economic conditions, rates of growth, rates of income or values as may be included in this document are based on information available to us on the dates noted, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results may differ materially from those in such forward-looking statements due to fluctuations in interest rates, inflation, government regulations, economic conditions, customer disintermediation and competitive product and pricing pressures in the geographic and business areas in which we conduct operations, including our plans, objectives, expectations and intentions and other factors discussed elsewhere in this Report, including the discussion under the section entitled "Risk Factors."

        The risk factors referred to in this Report 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.

PART I

Item 1.    Business

General

        Wilshire Bancorp, Inc. is a bank holding company offering a broad range of financial products and services primarily through our main subsidiary, Wilshire State Bank, a California state-chartered commercial bank, or the "Bank." Our corporate headquarters and primary banking facilities are located at 3200 Wilshire Boulevard, Los Angeles, California 90010. In addition, we have 20 full-service Bank branch offices in Southern California, Texas, New Jersey, and the greater New York City metropolitan area. We also have 5 loan production offices, or LPOs, utilized primarily for the origination of loans

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under our Small Business Administration, or SBA, lending program in Colorado, Georgia, Texas, and Virginia.

        The Bank is an insured bank up to the maximum limits authorized under the Federal Deposit Insurance Act, as amended, or the "FDIA." Like most state-chartered banks of our size in California, we are not a member of the Federal Reserve System, but we are a member of Federal Home Loan Bank of San Francisco, a congressionally chartered Federal Home Loan Bank. At December 31, 2008, we had approximately $2.45 billion in assets, $2.05 billion in total loans and $1.81 billion in deposits.

        We operate a community bank focused on the general commercial banking business, with our primary market encompassing the multi-ethnic population of the Los Angeles County area. Our client base reflects the multi-ethnic composition of these communities.

        To address the needs of our multi-ethnic customers, we have many multilingual employees who are able to converse with our clientele in their native languages. We believe that the ability to speak the native language of our customers assists us in tailoring products and services for our customers' needs.

Available Information

        We maintain an Internet website at www.wilshirebank.com. We post our filings with the SEC on the Investor Relations component of our website, which are available free of charge, including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy and information statements and any amendments to those reports or statements as soon as reasonably practicable after such reports are filed or furnished under the Securities Exchange Act of 1934, as amended, or Exchange Act. In addition to our SEC filings, our Code of Professional Conduct and our Personal and Business Code of Conduct can be found on the Investor Relations page of our website. In addition, we post separately on our website all filings made by persons pursuant to Section 16 of the Exchange Act. You may also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0220. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Expansion

        As part of our efforts to achieve stable and long-term profitability and respond to a changing economic environment in Southern California, we constantly evaluate a variety of options to augment our traditional focus by broadening the services and products we provide. Possible avenues of growth include more branch locations, expanded days and hours of operation and new types of lending products. To date, we have not expanded into areas of brokerage or similar investment products and services but rather, we have concentrated primarily on the core businesses of accepting deposits, making loans and extending credit.

        We expanded into the states of New York and New Jersey (the "New York/New Jersey market") in 2006 and 2007, respectively. In 2009, we expect the New York/New Jersey market to continue to be a critical market for our expansion strategy. We believe the New York/New Jersey Korean-American niche is underserved relative to Los Angeles. According to United States ("U.S.") Census data, approximately 17% of all Korean-Americans reside in New York or New Jersey, which, respectively, have the second and third most Korean-American firms in the U.S., respectively. We believe our East Coast expansion was successful in 2008. The two New York branches both exceeded our expectations in terms of loan and deposit growth, more than doubling since their acquisition. Our Fort Lee branch in New Jersey also performed well with a current loan and deposit portfolios of $6.6 million and $33.0 million, respectively. To build on our success, we expect to open our third New York branch in Flushing during the first quarter of 2009.

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        Our expansion plans for 2009 are influenced by the changing conditions in the U.S. economy. The rapid deterioration of our economy was triggered by the slowdown of the housing market and emergence of subprime and credit crisis in mid-2007. The failures of banks, mortgage lenders, insurance companies, and a few major financial institutions in 2008 further added pressure to the economy and started a new trend of global recession. This so-called "financial crisis" primarily reflects the significant and broad-based illiquidity in the residential real estate and credit markets. The domino effect of the U.S. financial crisis has now become a global problem, as many institutions worldwide are financially interlinked. When this is considered along with the psychological contagions of investors, many analysts predict the current financial crisis will extend well into 2009.

        In 2009, we plan to closely monitor and review the loan production levels of our branches and LPOs. We will act with prudence in our lending practice and closely follow our underwriting policies and procedures in extending credit. Consistent with our focus of quality lending, we expect the level of lending activities to decrease relative to prior years, but we expect our loan portfolio quality to improve. We expect to closely evaluate the need for the continued existence of our LPOs.

Business Segments

        We operate in three primary business segments: Banking Operations, Trade Finance Services, and Small Business Administration Lending Services. We determine operating results of each segment based on an internal management system that allocates certain expenses to each segment. These segments are described in additional detail below:

•

Banking Operations:  Raises funds from deposits and borrowings for loans and investments and provides lending products including commercial, consumer and real estate loans to customers.

•

Small Business Administration Lending Services:  Provides loans through the SBA guaranteed lending program.

•

Trade Finance Services:  Assists our import/export customers with international transactions. Trade finance products include the issuance and collection of letters of credit, international collection and import/export financing.

        More detailed information about the financial performance of these business segments can be found in Note 20 of the financial statements included in this Report beginning on page F-1.

Lending Activities

General

        Our loan policies set forth the basic guidelines and procedures by which we conduct our lending operations. These policies address the types of loans available, underwriting and collateral requirements, loan terms, interest rate and yield considerations, compliance with laws and regulations and our internal lending limits. Our Bank Board of Directors reviews and approves our loan policies on an annual basis. We supplement our own supervision of the loan underwriting and approval process with periodic loan audits by experienced external loan specialists who review credit quality, loan documentation and compliance with laws and regulations. We engage in a full complement of lending activities, including:

•

commercial real estate and home mortgage lending,

•

commercial business lending and trade finance,

•

SBA lending, and

•

consumer loans, and

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•

construction lending

Loan Procedures

        Loan applications may be approved by the Director Loan Committee of our Bank Board of Directors, or by our management or lending officers to the extent of their lending authority. Our Bank Board of Directors authorizes our lending limits. The President, Chief Lending Officer and Chief Credit Officer of the Bank are responsible for evaluating the lending authority limits for individual credit officers and recommending lending limits for all other officers to the Bank Board of Directors for approval.

        We grant individual lending authority to the President, Chief Credit Officer and selected department managers of the Bank. Loans for which direct and indirect borrower liability exceeds an individual's lending authority are referred to the Senior Loan Committee of the Bank (a four-member committee comprised of the President, Chief Lending Officer, Chief Credit Officer, and Senior Loan Officer) or our Bank Director Loan Committee.

        At December 31, 2008, our authorized legal lending limits were $44.5 million for unsecured loans, plus an additional $29.6 million for specific secured loans. Legal lending limits are calculated in conformance with California law, which prohibits a bank from lending to any one individual or entity or its related interests an aggregate amount which exceeds 15% of shareholders' equity, plus the allowance for loan losses and capital notes and debentures, on an unsecured basis, plus an additional 10% on a secured basis. The Bank's shareholders' equity plus allowance for loan losses and capital notes and debentures at December 31, 2008 totaled $296.4 million.

        We seek to mitigate the risks inherent in our loan portfolio by adhering to our underwriting policies. The review of each loan application includes analysis of the applicant's prior credit history, income level, cash flow and financial condition, tax returns, cash flow projections, and the value of any collateral to secure the loan, based upon reports of independent appraisers and audits of accounts receivable or inventory pledged as security. In the case of real estate loans over a specified amount, the review of collateral value includes an appraisal report prepared by an independent Bank-approved appraiser. From time to time, we purchase participation interests in loans made by other financial institutions. These loans are generally subject to the same underwriting criteria and approval process as loans made directly by us.

Real Estate Loans and Home Mortgages

        We offer commercial real estate loans to finance the acquisition of, or to refinance the existing mortgages on commercial properties, which include retail shopping centers, office buildings, industrial buildings, warehouses, hotels, automotive industry facilities and apartment buildings. Our commercial real estate loans are typically collateralized by first or junior deeds of trust on specific commercial properties, and, when possible, subject to corporate or individual guarantees from financially capable parties. The properties collateralizing real estate loans are principally located in the markets where our retail branches are located, which include Southern California, Texas, New Jersey, and the greater New York City metropolitan area. However, we also provide commercial real estate loans through our LPOs. Real estate loans typically bear an interest rate that floats with our base rate, the prime rate or another established index. We do, however, offer fixed rate commercial mortgage loans with maturities not to exceed 5 to 7 years. At December 31, 2008, real estate loans constituted approximately 79.9% of our loan portfolio.

        Commercial real estate loans typically have 7-year maturities with up to 25-year amortization of principal and interest and loan-to-value ratios of 60-70% of the appraised value or purchase price, whichever is lower. We usually impose a prepayment penalty during the period within three to five years of the date of the loan.

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        Construction loans are provided to build new structures, or to substantially improve the existing structure of commercial, residential and income-producing properties. These loans generally have one to two year terms, with options to extend for additional periods to complete construction and to accommodate the lease-up period. We usually require 20-30% equity capital investment by the developer and loan-to-value ratios of not more than 60-70% of anticipated completion value. We also offer mini-perm loans as take-out financing with our construction loans. Mini-perm loans are generally made with an amortization schedule ranging from 15 to 25 years with a lump sum balloon payment due in one to seven years.

        Our total home mortgage loan portfolio outstanding at the end of 2008 and 2007 was $42.4 million and $38.0 million, respectively. The residential mortgage loans with unconventional terms such as interest only mortgage and option adjustable rate mortgage at December 31, 2008 were $2.1 million and $1.2 million, respectively, inclusive of loans held temporarily for sale or refinancing. These same loan categories were $2.8 million and $1.2 million, respectively, at December 31, 2007.

        We consider subprime mortgages to be loans secured by real property made to a borrower (or borrowers) with a diminished or impaired credit rating or with a limited credit history. We are focused on producing loans with only prime rated borrowers. As of result, our portfolio currently has no subprime exposure.

        Our real estate portfolio is subject to certain risks, including:

•

a continued decline in the economies of our primary markets,

•

interest rate increases,

•

continued reduction in real estate values in our primary markets,

•

increased competition in pricing and loan structure, and

•

environmental risks, including natural disasters.

        We strive to reduce the exposure to such risks by (a) reviewing each new loan request and renewal individually, (b) using a dual signature approval system for the approval of each loan request for loans over a certain dollar amount, (c) adherence to written loan policies, including, among other factors, minimum collateral requirements, maximum loan-to-value ratio requirements, cash flow requirements and personal guarantees, (d) independent appraisals, (e) external independent credit review, and (f) conducting environmental reviews, where appropriate. We review each loan request on the basis of our ability to recover both principal and interest in view of the inherent risks.

Commercial Business Lending

        We offer commercial business loans to sole proprietorships, partnerships and corporations. These loans include business lines of credit and business term loans to finance operations, to provide working capital or for specific purposes, such as to finance the purchase of assets, equipment or inventory. Since a borrower's cash flow from operations is generally the primary source of repayment, our policies provide specific guidelines regarding required debt coverage and other important financial ratios.

        Lines of credit are extended to businesses or individuals based on the financial strength and integrity of the borrower and are secured primarily by business assets such as accounts receivable and inventory, and have a maturity of one year or less. Such lines of credit bear an interest rate that floats with our base rate, the prime rate, or another established index.

        Business term loans are typically made to finance the acquisition of fixed assets, refinance short-term debts or to finance the purchase of businesses. Business term loans generally have terms from one to seven years. They may be collateralized by the assets being acquired or other available

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assets and bear interest rates, which either float with our base rate, prime rate, or another established index or is fixed for the term of the loan.

        We also provide other banking services tailored to the small business market. We have focused recently on diversifying our loan portfolio, which has led to an increase in commercial business loans to small and medium-sized businesses.

        Our portfolio of commercial loans is subject to certain risks, including:

•

continued decline in the economy in our primary markets,

•

interest rate increases, and

•

deterioration of a borrower's or guarantor's financial capabilities.

        We attempt to reduce the exposure to such risks by (a) reviewing each new loan request and renewal individually, (b) relying heavily on a committee approval system where inputs from experienced committee members with different types and level of lending experience are fully utilized, (c) strict adherence to written loan policies, and (d) external independent credit review. In addition, loans based on short-term assets such as account receivables and inventories are monitored on a monthly or at minimum quarterly basis. In general, we receive and review financial statements of borrowing customers on an ongoing basis during the term of the relationship and respond to any deterioration noted.

Small Business Administration Lending Services

        Small Business Administration, or SBA, lending is an important part of our business. Our SBA lending business places an emphasis on minority-owned businesses. Our SBA market area includes the geographic areas encompassed by our full-service banking offices in Southern California, Texas, New Jersey, and the New York City metropolitan area, as well as the multi-ethnic population areas surrounding our LPOs in other states. We are a SBA Preferred Lender nationwide, which permits us to approve SBA guaranteed loans in all our lending areas without further approval from the SBA. As an SBA Preferred Lender, we provide quicker and more efficient service to our clientele, enabling them to obtain SBA loans in order to acquire new businesses, expand existing businesses and acquire locations in which to do business, without having to go through the time-consuming SBA approval process that would be necessary if a prospective SBA borrower were to utilize a lender that is not an SBA Preferred Lender.

        We have made efforts to diversify our banking and financial services in order to reduce our substantial revenue reliance on SBA loans. Nonetheless, SBA loans continue to remain an important component of our business. The net revenue from our SBA department represented 10.9%, 25.5%, and 29.9% of our total net revenue in 2008, 2007 and 2006, respectively.

        Although our participation in the SBA program is subject to the legislative power of Congress and the continued maintenance of our approved status by the SBA, we have no reason to believe that this program (and our participation therein) will not continue, particularly in view of the historic longevity of the SBA program nationally.

Consumer Loans

        Consumer loans include personal loans, auto loans, and other loans typically made by banks to individual borrowers. The majority of consumer loans are concentrated in automobile loans, which we no longer offer to customers. Since the second half of 2008, we have not made any new auto loans. Because consumer loans present a higher risk potential compared to our other loan products, especially given current economic conditions, we have reduced our efforts in consumer lending since 2007.

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        Our consumer loan production has historically been comparatively small, always representing less than 5% of our total loan portfolio. As of December 31, 2008, our consumer loan portfolio represented 1.2% of the loan portfolio as compared to 1.9% and 3.4% as of December 31, 2007 and December 31, 2006, respectively.

        Our consumer loan portfolio is subject to certain risks, including:

•

general economic conditions of the markets we serve,

•

interest rate increases, and

•

consumer bankruptcy laws which allow consumers to discharge certain debts.

        We attempt to reduce the exposure to such risks through the direct approval of all consumer loans by reviewing each loan request and renewal individually, using a dual signature system of approval, strict adherence to written credit policies, and utilizing external independent credit review.

Trade Finance Services

        Our Trade Finance Department is an integral part of our business and assists our import/export customers with their international transactions. Trade Finance products include the issuance and negotiation of commercial and standby letters of credit, as well as handling of documentary collections. On the export side, we provide advising and negotiation of commercial letters of credit, and we transfer and issue back-to-back letters of credit.

        We also provide importers with trade finance lines of credit, which allow for issuance of commercial letters of credit and financing of documents received under such letters of credit, as well as documents received under documentary collections.

        Exporters are assisted through export lines of credit as well as through immediate financing of clean documents presented under export letters of credit. We work closely with the SBA through their Export Working Capital Program.

        Most of our revenue from the Trade Finance Department consists of fee income from providing facilities to support import/export customers and interest income from extensions of credit. Our Trade Finance Department's fee income was $1.2 million, $1.3 million and $1.6 million in 2008, 2007 and 2006, respectively, while its net revenue was $2.5 million, $1.0 million and $4.5 million in 2008, 2007, and 2006, respectively.

Deposit Activities and Other Sources of Funds

        Our primary sources of funds are deposits and loan repayments. Scheduled loan repayments are a relatively stable source of funds, whereas deposit inflows and outflows and unscheduled loan prepayments (which are influenced significantly by general interest rate levels, interest rates available on other investments, competition, economic conditions and other factors) are less stable. Customer deposits remain a primary source of funds, but these balances may be influenced by adverse market changes in the industry. Other borrowings may be used:

•

on a short-term basis to compensate for reductions in deposit inflows to less than projected levels, and

•

on a longer-term basis to support expanded lending activities and to match the maturity of repricing intervals of assets.

        We offer a variety of accounts for depositors which are designed to attract both short-term and long-term deposits. These accounts include certificates of deposit ("CDs"), regular savings accounts, money market accounts, checking and negotiable order of withdrawal ("NOW") accounts, installment

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savings accounts, and individual retirement accounts ("IRAs"). These accounts generally earn interest at rates established by management based on competitive market factors and management's desire to increase or decrease certain types or maturities of deposits. As needed, we augment these customer deposits with brokered deposits. The more significant deposit accounts offered by us and other sources of funds are described below:

Certificates of Deposit

        We offer several types of CDs with a maximum maturity of five years. The majority of our CDs have a maturity of one to 12 months and typically pay simple interest credited monthly or at maturity.

Regular Savings Account.

        We offer savings accounts that allow for unlimited deposits and withdrawals, provided that depositors maintain a $100 minimum balance. Interest is compounded daily and credited quarterly.

Money Market Accounts

        Money market accounts pay a variable interest rate that is tiered depending on the balance maintained in the account. Minimum opening balances vary. Interest is compounded daily and paid monthly.

Checking and NOW Account

        Checking and NOW accounts are generally non-interest and interest bearing accounts, respectively, and may include service fees based on activity and balances. NOW accounts pay interest, but require a higher minimum balance to avoid service charges.

Federal Home Loan Bank Borrowings

        To supplement our deposits as a source of funds for lending or investment, we borrow funds in the form of advances from the Federal Home Loan Bank. We may use Federal Home Loan Bank advances as part of our interest rate risk management, primarily to extend the duration of funding to match the longer term fixed rate loans held in the loan portfolio.

        As a member of the Federal Home Loan Bank system, we are required to invest in Federal Home Loan Bank stock based on a predetermined formula. Federal Home Loan Bank stock is a restricted investment security that can only be sold to other Federal Home Loan Bank members or redeemed by the Federal Home Loan Bank. As of December 31, 2008, we owned $17.5 million in FHLB stock.

        Advances from the Federal Home Loan Bank are secured by the Federal Home Loan Bank stock we own and a blanket lien on our loan portfolio and may be also secured by other assets, mainly consisting of securities which are obligations of or guaranteed by the U.S. government. At December 31, 2008, our borrowing limit with the Federal Home Loan Bank was approximately $560.1 million, with $260.0 million borrowing outstanding and $300.1 million capacity remaining.

Internet Banking

        We offer Internet banking, which allows our customers to access their deposit and loan accounts through the Internet. Customers are able to obtain transaction history and account information, transfer funds between accounts, make on-line bill payments, and open deposit accounts. We intend to improve and develop our Internet banking products and other delivery channels as the need arises and our resources permit.

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Other Services

        We also offer ATM machines located at selected branch offices, customer access to an ATM network and armored carrier services.

Marketing

        Our marketing efforts rely principally upon local advertising and promotional activity and upon the personal contacts of our directors, officers and shareholders to attract business and to acquaint potential customers with our personalized services. We emphasize a high degree of personalized client service in order to be able to satisfy each customer's banking needs. Our marketing approach emphasizes our strength as an independent, locally-managed and state chartered bank in meeting the particular needs of consumers, professionals and business customers in the community. Our management continually evaluates all of our banking services with regard to their profitability and makes conclusions based on these evaluations, whether to continue or modify our business plan, where appropriate.

Competition

Regional Branch Competition

        We currently operate 20 branch offices, with 16 in California, 1 in Texas, 1 in New Jersey, and 2 in the greater New York City metropolitan area. We consider our Bank to be a community bank focused on the general commercial banking business, with our primary market encompassing the multi-ethnic population of the Los Angeles County area. Our full-service branch offices are located primarily in areas where a majority of the businesses are owned by immigrants or minority groups. Our client base reflects the multi-ethnic composition of these communities. To further extend our market coverage and gain market share, we are scheduled to open our third New York branch in Flushing during the first quarter of 2009.

        Our market has become increasingly competitive in recent years with respect to virtually all products and services that we offer. Although the general banking market is dominated by a relatively small number of major banks with numerous offices covering a wide geographic area, we compete in our niche market directly with smaller community banks which focus on Korean-American and other minority consumers and businesses.

        There is a high level of competition within the ethnic banking market. In the greater Los Angeles metropolitan area, our primary competitors include thirteen locally-owned and operated Korean-American banks. These banks have branches located in many of the same neighborhoods in which we operate, provide similar types of products and services, and use the same Korean language publications and media for their marketing purposes. Unlike many other Korean-ethnic community banks, we also focus a significant portion of our marketing efforts on non-Korean customers.

        A less significant source of competition in our primary market includes branch offices of major national and international banks which maintain a limited bilingual staff for Korean-speaking or other language customers. Although such banks have not traditionally focused their marketing efforts on the minority customer base in our market, their competitive influence could increase should they choose to focus on this market in the future. Large commercial bank competitors have, among other advantages, the ability to finance wide-ranging and effective advertising campaigns and to allocate their investment resources to areas of highest yield and demand. Many of the major banks operating in our market area offer certain services that we do not offer directly (but some of which we offer through correspondent institutions). By virtue of their greater total capitalization, such banks likely also have substantially higher lending limits than we do. In order to compete effectively, we provide quality, personalized service and fast, local decision making which we feel distinguishes us from many of our major bank

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competitors. For customers whose loan demands exceed our internal lending limit, we attempt to arrange for such loans on a participation basis with our correspondent banks. Similarly, we assist customers requiring services that we do not currently offer in obtaining such services from our correspondent banks.

Regional Loan Production Office Competition

        We currently operate LPOs, in Aurora, Colorado (the Denver area); Atlanta, Georgia; Dallas, Texas; Houston, Texas; and Annandale, Virginia. In most of our LPO sites, we are competing with local lenders as well as Los Angeles-based Korean-American community lenders operating out-of-state LPOs. We anticipate more competition from Korean-American community lenders in most of our LPO sites in the future. In anticipation of a continued slowing of the U.S. economy and a further decrease in real estate market activity, we plan to maintain a balance of market coverage and operating costs. In 2009, we plan to grow our lending business cautiously with a focus on credit quality and safety.

Other Competitive Factors

        In addition to other banks, our competitors include savings institutions, credit unions and numerous non-banking institutions, such as finance companies, leasing companies, insurance companies, brokerage firms and investment banking firms. In recent years, increased competition has also developed from specialized finance and non-finance companies that offer money market and mutual funds, wholesale finance, credit card and other consumer finance services, including on-line banking services and personal finance software. Strong competition for deposit and loan products affects the rates of those products as well as the terms on which they are offered to customers.

        The more general competitive trends in the industry include increased consolidation and competition. Strong competitors, other than financial institutions, have entered banking markets with focused products targeted at highly profitable customer segments. Many of these competitors are able to compete across geographic boundaries and provide customers increasing access to meaningful alternatives to banking services in nearly all significant products areas. Mergers between financial institutions have placed additional pressure on banks within the industry to streamline their operations, reduce expenses and increase revenues to remain competitive. Competition has also intensified due to the federal and state interstate banking laws, which permit banking organizations to expand geographically. The California market has been particularly attractive to out-of-state institutions.

        Technological innovations have also resulted in increased competition in the financial services industry. Such innovations have, for example, made it possible for non-depository institutions to offer customers automated transfer payment services that were previously considered traditional banking products. In addition, many customers now expect a choice of several delivery systems and channels, including telephone, mail, home computer, ATMs, self-service branches and/or in-store branches. To some extent, such competition has had limited effect on us to date because many recent technological advancements do not yet have Korean or other language capabilities. However, as such technology becomes available, the competitive pressure to be at the forefront of such advancements will be significant.

        The market for the origination of SBA loans, one of our primary revenue sources, is highly competitive. We compete with other small, mid-size and major banks which originate these loans in the geographic areas in which our full service branches are located, as well as in the areas where we maintain SBA LPOs. In addition, because these loans are largely broker-driven, we compete to a large extent with banks that originate SBA loans outside of our immediate geographic area. Furthermore, because these loans may be made out of LPOs specifically set up to make SBA loans rather than out of full service branches, the barriers to entry in this area, after approval of a bank as an SBA lender,

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are relatively low. In order to succeed in this highly competitive market, we actively market our SBA loans to minority-owned businesses. However, there can be no assurance that the resale market for SBA loans will grow, decline or maintain its current status.

Business Concentration

        No individual or single group of related accounts is considered material in relation to our total assets or deposits, or in relation to our overall business. However, approximately 79.9% of our loan portfolio at December 31, 2008 consisted of real estate-related loans, including construction loans, mini-perm loans, residential mortgage loans and commercial loans secured by real estate. Moreover, our business activities are currently focused primarily in Southern California, with the majority of our business concentrated in Los Angeles and Orange Counties. Consequently, our results of operations and financial condition are dependent upon the general trends in the Southern California economies and, in particular, the commercial real estate markets. In addition, the concentration of our operations in Southern California exposes us to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in this region.

Employees

        We had 348 full time equivalent employees (344 full-time employees and 5 part-time employees) as of December 31, 2008. None of our employees are currently represented by a union or covered by a collective bargaining agreement. Management believes that our employee relations are satisfactory.

Regulation and Supervision

        The following is a summary description of the relevant laws, rules and regulations governing banks and bank holding companies. The descriptions of, and references to, the statutes and regulations below are brief summaries and do not purport to be complete. The descriptions are qualified in their entirety by reference to the specific statutes and regulations discussed.

General

        The supervision and regulation of bank holding companies and their subsidiaries are intended primarily for the protection of depositors, the deposit insurance funds of the FDIC and the banking system as a whole, and not for the protection of the bank holding company shareholders or creditors. The banking agencies have broad enforcement power over bank holding companies and banks, including the power to impose substantial fines and other penalties for violations of laws and regulations.

        Various legislation is from time to time introduced in Congress and California's legislature, including proposals to overhaul the bank regulatory system, expand the powers of depository institutions and limit the investments that depository institutions may make with insured funds. Such legislation may change applicable statutes and the operating environment in substantial and unpredictable ways. We cannot determine the ultimate effect that future legislation or implementing regulations would have upon the financial condition and results of operations of us or any of our subsidiaries.

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Wilshire Bancorp

        We are a bank holding company registered under the Bank Holding Company Act, and are subject to supervision, regulation and examination by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). The Bank Holding Company Act and other federal laws subject bank holding companies to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.

Regulatory Restrictions on Dividends; Source of Strength

        We are regarded as a legal entity separate and distinct from our other subsidiaries. The principal source of our revenues will be dividends received from the Bank. Various federal and state statutory provisions limit the amount of dividends the Bank can pay to us without regulatory approval. It is the policy of the Federal Reserve Board that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization's expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company's ability to serve as a source of strength to its banking subsidiaries.

        Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each of its banking subsidiaries and commit resources to their support. Such support may be required at times when, absent this Federal Reserve Board policy, a holding company may not be inclined to provide it. As discussed below, a bank holding company, in certain circumstances, could be required to guarantee the capital plan of an undercapitalized banking subsidiary.

        In the event of a bank holding company's bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, the trustee will be deemed to have assumed, and is required to cure immediately, any deficit under any commitment by the debtor holding company to any of the federal banking agencies to maintain the capital of an insured depository institution, and any claim for breach of such obligation will generally have priority over most other unsecured claims.

        Pursuant to a Letter Agreement dated December 12, 2008 and a Securities Purchase Agreement—Standard Terms attached thereto (collectively, the "TARP Agreements"), we issued to the U.S. Treasury (i) 62,158 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, having a liquidation preference of $1,000 per share (the "Series A Preferred Stock") and (ii) a warrant to purchase initially 949,460 shares of our common stock, for an aggregate purchase price of $62,158,000. This resulted from our voluntary participation in the Capital Purchase Program of the U.S. Treasury's Troubled Asset Relief Program, or "TARP." The TARP Agreements place limits on, among other things, our ability to pay dividends on our common stock during the time that shares of our Series A Preferred Stock are outstanding. For more information on restrictions related to the Series A Preferred Stock, see the section of this report entitled, "Regulation and Supervision—The TARP Capital Purchase Program."

        As a California corporation, Wilshire Bancorp is restricted under the California General Corporation Law ("CGCL") from paying dividends under certain conditions. The shareholders of Wilshire Bancorp will be entitled to receive dividends when and as declared by its board of directors, out of funds legally available for the payment of dividends, as provided in the CGCL. The CGCL provides that a corporation may make a distribution to its shareholders if retained earnings immediately prior to the dividend payout at least equal the amount of proposed distribution. In the event that sufficient retained earnings are not available for the proposed distribution, a corporation may, nevertheless, make a distribution, if it meets both the "quantitative solvency" and the "liquidity" tests. In general, the quantitative solvency test requires that the sum of the assets of the corporation

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equal at least 1¹/4 times its liabilities. The liquidity test generally requires that a corporation have current assets at least equal to current liabilities, or, if the average of the earnings of the corporation before taxes on income and before interest expenses for the two preceding fiscal years was less than the average of the interest expense of the corporation for such fiscal years, then current assets must equal to at least 1¹/4 times current liabilities. In certain circumstances, Wilshire Bancorp may be required to obtain the prior approval of the Federal Reserve Board to make capital distributions to its shareholders.

Activities "Closely Related" to Banking

        The Bank Holding Company Act prohibits a bank holding company, with certain limited exceptions, from acquiring direct or indirect ownership or control of any voting shares of any company which is not a bank or from engaging in any activities other than those of banking, managing or controlling banks and certain other subsidiaries, or furnishing services to or performing services for its subsidiaries. One principal exception to these prohibitions allows the acquisition of interests in companies whose activities are found by the Federal Reserve Board, by order or regulation, to be so closely related to banking or managing or controlling banks, as to be a proper incident thereto. Some of the activities that have been determined by regulation to be closely related to banking are making or servicing loans, performing certain data processing services, acting as an investment or financial advisor to certain investment trusts and investment companies and providing securities brokerage services. Other activities approved by the Federal Reserve Board include consumer financial counseling, tax planning and tax preparation, futures and options advisory services, check guaranty services, collection agency and credit bureau services and personal property appraisals. In approving acquisitions by bank holding companies of companies engaged in banking-related activities, the Federal Reserve Board considers a number of factors, and weighs the expected benefits to the public (such as greater convenience and increased competition or gains in efficiency) against the risks of possible adverse effects (such as undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices). The Federal Reserve Board is also empowered to differentiate between activities commenced de novo and activities commenced through acquisition of a going concern.

Gramm-Leach-Bliley Act; Financial Holding Companies

        The Gramm-Leach-Bliley Financial Modernization Act, or GLBA, signed into law on November 12, 1999, revised and expanded the provisions of the Bank Holding Company Act by including a new section that permits a bank holding company to elect to become a financial holding company to engage in a full range of activities that are "financial in nature." The qualification requirements and the process for a bank holding company that elects to be treated as a financial holding company require that all of the subsidiary banks controlled by the bank holding company at the time of election to become a financial holding company must be and remain at all times "well-capitalized" and "well managed." We have not yet made an election to become a financial holding company, but we may do so at some time in the future.

        GLBA specifically provides that the following activities have been determined to be "financial in nature":

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lending, trust and other banking activities;

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insurance activities;

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financial or economic advisory services;

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securitization of assets;

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securities underwriting and dealing;

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•

existing bank holding company domestic activities;

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existing bank holding company foreign activities; and

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merchant banking activities.

        In addition, GLBA specifically gives the Federal Reserve Board the authority, by regulation or order, to expand the list of "financial" or "incidental" activities, but requires consultation with the U.S. Treasury Department, and gives the Federal Reserve Board authority to allow a financial holding company to engage in any activity that is "complementary" to a financial activity and does not "pose a substantial risk to the safety and soundness of depository institutions or the financial system generally."

Privacy Policies

        Under GLBA, all financial institutions are required to adopt privacy policies, restrict the sharing of nonpublic customer data with nonaffiliated parties at the customer's request, and establish procedures and practices to protect customer data from unauthorized access. We have established policies and procedures to assure our compliance with all privacy provisions of GLBA.

Safe and Sound Banking Practices

        Bank holding companies are not permitted to engage in unsafe and unsound banking practices. The Federal Reserve Board's Regulation Y, for example, generally requires a holding company to give the Federal Reserve Board prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases or redemptions in the preceding year, is equal to 10% or more of the company's consolidated net worth. The Federal Reserve Board may oppose the transaction if it believes that the transaction would constitute an unsafe or unsound practice or would violate any law or regulation. Depending upon the circumstances, the Federal Reserve Board could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

        The Federal Reserve Board has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries which represent unsafe and unsound banking practices or which constitute violations of laws or regulations, and can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution. The penalties can be as high as $1 million for each day the activity continues.

Annual Reporting; Examinations

        We are required to file annual reports with the Federal Reserve Board, and such additional information as the Federal Reserve Board may require pursuant to the Bank Holding Company Act. The Federal Reserve Board may examine a bank holding company or any of its subsidiaries, and charge the company for the cost of such examination. Furthermore, the Bank is subjected to compliance examinations of the Federal Deposit Insurance Corporation, or "FDIC" and the California Department of Financial Institutions, or "DFI", and the Company is subject to U.S. Treasury's examination as part of our agreement with the U.S. Treasury for receiving the TARP investment.

Capital Adequacy Requirements

        The Federal Reserve Board has adopted a system using risk-based capital guidelines to evaluate the capital adequacy of certain large bank holding companies. Prior to March 30, 2006, these capital guidelines were applicable to all bank holding companies having $150 million or more in assets on a consolidated basis. However, effective March 30, 2006, the Federal Reserve Board amended the asset size threshold to $500 million for purposes of determining whether a bank holding company is subject

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to the capital adequacy guidelines. We currently have consolidated assets in excess of $500 million, and are therefore subject to the Federal Reserve Board's capital adequacy guidelines.

        Under the guidelines, specific categories of assets are assigned different risk weights, based generally on the perceived credit risk of the asset. These risk weights are multiplied by corresponding asset balances to determine a "risk-weighted" asset base. The guidelines require a minimum total risk-based capital ratio of 8.0% (of which at least 4.0% is required to consist of Tier 1 capital elements). Total capital is the sum of Tier 1 and Tier 2 capital. To be considered "well-capitalized," a bank holding company must maintain, on a consolidated basis, (i) a Tier 1 risk-based capital ratio of at least 6.0%, and (ii) a total risk-based capital ratio of 10.0% or greater. As of December 31, 2008, our Tier 1 risk-based capital ratio was 15.36% and our total risk-based capital ratio was 17.09%. Thus, we are considered "well-capitalized" for regulatory purposes.

        In addition to the risk-based capital guidelines, the Federal Reserve Board uses a leverage ratio as an additional tool to evaluate the capital adequacy of bank holding companies. The leverage ratio is a company's Tier 1 capital divided by its average total consolidated assets. Certain highly-rated bank holding companies may maintain a minimum leverage ratio of 3.0%, but other bank holding companies are required to maintain a leverage ratio of at least 4.0%. As of December 31, 2008, our leverage ratio was 13.25%.

        The federal banking agencies' risk-based and leverage ratios are minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria. The federal bank regulatory agencies may set capital requirements for a particular banking organization that are higher than the minimum ratios when circumstances warrant. Federal Reserve Board guidelines also provide that banking organizations experiencing internal growth or making acquisitions will be expected to maintain strong capital positions, substantially above the minimum supervisory levels, without significant reliance on intangible assets.

Imposition of Liability for Undercapitalized Subsidiaries

        Bank regulators are required to take "prompt corrective action" to resolve problems associated with insured depository institutions whose capital declines below certain levels. In the event an institution becomes "undercapitalized," it must submit a capital restoration plan. The capital restoration plan will not be accepted by the regulators unless each company having control of the undercapitalized institution guarantees the subsidiary's compliance with the capital restoration plan up to a certain specified amount. Any such guarantee from a depository institution's holding company is entitled to a priority of payment in bankruptcy.

        The aggregate liability of the holding company of an undercapitalized bank is limited to the lesser of 5% of the institution's assets at the time it became undercapitalized or the amount necessary to cause the institution to be "adequately capitalized." The bank regulators have greater power in situations where an institution becomes "significantly" or "critically" undercapitalized or fails to submit a capital restoration plan. For example, a bank holding company controlling such an institution can be required to obtain prior Federal Reserve Board approval of proposed dividends, or might be required to consent to a consolidation or to divest itself of the troubled institution or other affiliates.

Acquisitions by Bank Holding Companies

        The Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal Reserve Board before it may acquire all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank. In approving bank acquisitions by bank holding companies, the Federal Reserve Board is required to consider the financial

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and managerial resources and future prospects of the bank holding company and the banks concerned, the convenience and needs of the communities to be served, and various competitive factors.

Control Acquisitions

        The Change in Bank Control Act prohibits a person or group of persons from acquiring "control" of a bank holding company unless the Federal Reserve Board has been notified and has not objected to the transaction. Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act would, under the circumstances set forth in the presumption, constitute acquisition of control.

        In addition, any company is required to obtain the approval of the Federal Reserve Board under the Bank Holding Company Act before acquiring 25% (5% in the case of an acquirer that is a bank holding company) or more of the outstanding common stock of the company, or otherwise obtaining control or a "controlling influence" over the company.

Cross-guarantees

        Under the Federal Deposit Insurance Act, or FDIA, a depository institution (which definition includes both banks and savings associations), the deposits of which are insured by the FDIC, can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution, or (ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured depository institution "in danger of default." "Default" is defined generally as the appointment of a conservator or a receiver and "in danger of default" is defined generally as the existence of certain conditions indicating that default is likely to occur in the absence of regulatory assistance. In some circumstances (depending upon the amount of the loss or anticipated loss suffered by the FDIC), cross-guarantee liability may result in the ultimate failure or insolvency of one or more insured depository institutions in a holding company structure. Any obligation or liability owed by a subsidiary bank to its parent company is subordinated to the subsidiary bank's cross-guarantee liability with respect to commonly controlled insured depository institutions. The Bank is currently our only FDIC-insured depository institution subsidiary.

        Because we are a legal entity separate and distinct from the Bank, our right to participate in the distribution of assets of any subsidiary upon the subsidiary's liquidation or reorganization will be subject to the prior claims of the subsidiary's creditors. In the event of a liquidation or other dissolution of the Bank, the claims of depositors and other general or subordinated creditors of the Bank would be entitled to a priority of payment over the claims of holders of any obligation of the Bank to its shareholders, including any depository institution holding company (such as Wilshire Bancorp) or any shareholder or creditor of such holding company.

FIRREA

        The Financial Institutions Reform, Recovery and Enforcement Act of 1989, or FIRREA, includes various provisions that affect or may affect the Bank. Among other matters, FIRREA generally permits bank holding companies to acquire healthy thrifts as well as failed or failing thrifts. FIRREA removed certain cross-marketing prohibitions previously applicable to thrift and bank subsidiaries of a common holding company. Furthermore, a multi-bank holding company may now be required to indemnify the federal deposit insurance fund against losses it incurs with respect to such company's affiliated banks, which in effect makes a bank holding company's equity investments in healthy bank subsidiaries available to the FDIC to assist such company's failing or failed bank subsidiaries.

        FIRREA also expanded and increased civil and criminal penalties available for use by the appropriate regulatory agency against certain "institution-affiliated parties" primarily including

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(i) management, employees and agents of a financial institution, as well as (ii) independent contractors, such as attorneys and accountants and others who participate in the conduct of the financial institution's affairs and who caused or are likely to cause more than minimum financial loss to or a significant adverse affect on the institution, who knowingly or recklessly violate a law or regulation, breach a fiduciary duty or engage in unsafe or unsound practices. Such practices can include the failure of an institution to timely file required reports or the submission of inaccurate reports. Furthermore, FIRREA authorizes the appropriate banking agency to issue cease and desist orders that may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including restitution, reimbursement, indemnifications or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain assets or take other action as determined by the ordering agency to be appropriate.

USA PATRIOT Act

        On October 26, 2001, The Uniting and Strengthening America by Providing Appropriate Tools Is Required to Intercept and Obstruct Terrorism Act or USA PATRIOT Act, a comprehensive anti-terrorism legislation was enacted. Title III of the USA PATRIOT Act requires financial institutions to help prevent, detect and prosecute international money laundering and the financing of terrorism. The effectiveness of a financial institution in combating money laundering activities is a factor to be considered in any application submitted by the financial institution under the Bank Merger Act, which applies to the Bank, or the Bank Holding Company Act, which applies to Wilshire Bancorp. We, and our subsidiaries, including the Bank, have adopted systems and procedures to comply with the USA PATRIOT Act and regulations adopted thereunder by the Secretary of the Treasury.

The Sarbanes-Oxley Act of 2002

        On July 30, 2002, The Sarbanes-Oxley Act of 2002, or "Sarbanes-Oxley Act" was enacted. The Sarbanes-Oxley Act addresses accounting oversight and corporate governance matters relating to the operations of public companies. During 2003, the SEC issued a number of regulations under the directive of the Sarbanes-Oxley Act significantly increasing public company governance-related obligations and filing requirements, including:

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the establishment of an independent public oversight of public company accounting firms by a board that will set auditing, quality and ethical standards for and have investigative and disciplinary powers over such accounting firms,

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the enhanced regulation of the independence, responsibilities and conduct of accounting firms which provide auditing services to public companies,

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the increase of penalties for fraud related crimes,

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the enhanced disclosure, certification, and monitoring of financial statements, internal financial controls and the audit process, and

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the enhanced and accelerated reporting of corporate disclosures and internal governance.

        Furthermore, in November 2003, in response to the directives of the Sarbanes-Oxley Act, NASDAQ adopted substantially expanded corporate governance criteria for the issuers of securities quoted on the NASDAQ Global Select Market (the market on which our common stock is listed for trading). The new NASDAQ rules govern, among other things, the enhancement and regulation of corporate disclosure and internal governance of listed companies and of the authority, role and responsibilities of their boards of directors and, in particular, of "independent" members of such boards of directors, in the areas of nominations, corporate governance, compensation and the monitoring of the audit and internal financial control processes.

        The Sarbanes-Oxley Act, the SEC rules promulgated thereunder, and the new NASDAQ governance requirements have required us to review our current procedures and policies to determine

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whether they comply with the new legislation and its implementing regulations. As of the date of this filing, we believe that we are in compliance with the Sarbanes-Oxley Act, the related regulations and the NASDAQ governance requirements.

The TARP Capital Purchase Program

        On October 3, 2008, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (the "EESA") enacted by the U.S. Congress, which appropriated $700 billion for the purpose of restoring liquidity and stability in the U.S. financial system. On October 14, 2008, the U.S. Treasury established the TARP Capital Purchase Program under the authority granted by the EESA. Under the Troubled Asset Relief Program's ("TARP"), Capital Purchase Program, the U.S. Treasury made $250 billion of capital available to U.S. financial institutions in the form of senior preferred stock investments. In connection with its purchase of preferred stock, the U.S. Treasury will receive a warrant entitling the U.S. Treasury to buy the participating institution's common stock with a market price equal to 15% of the preferred stock.

        As a result of EESA, there have been numerous actions by the Federal Reserve Board, the U.S. Congress, the U.S. Treasury, the FDIC, the SEC and others to further the economic and banking industry stabilization efforts under the EESA. It remains unclear at this time what further legislative and regulatory measures will be implemented under the EESA that affect us.

        Pursuant to the TARP Agreements dated December 12, 2008, we issued to the U.S. Treasury (i) 62,158 shares of the Series A Preferred Stock, and (ii) a warrant to purchase initially 949,460 shares of our common stock, for an aggregate purchase price of $62,158,000. Both the Series A Preferred Stock and the Warrant will be accounted for as components of Tier 1 capital.

        On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the "ARRA") enacted by the U.S. Congress. The ARRA, among other things, imposed certain new executive compensation and corporate expenditure limits on all current and future recipients of funds under the TARP Capital Purchase Program, including Wilshire, as long as any obligation arising from the financial assistance provided to the recipient under the TARP Capital Purchase Program remains outstanding, excluding any period during which the U.S. Treasury holds only warrants to purchase common stock of a TARP participation (the "Covered Period").

        The current terms of participation in the TARP Capital Purchase Program include the following:

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we were required to file with the SEC a registration statement under the Securities Act of 1933 registering for resale the Series A Preferred Stock and the related warrant;

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as long as shares of the Series A Preferred Stock remain outstanding, unless all accrued and unpaid dividends for all past dividend periods on the Series A Preferred Stock are fully paid, we will not be permitted to declare or pay dividends on any shares of our common stock, any junior preferred shares or, generally, any preferred shares ranking pari passu with the Series A Preferred Stock (other than in the case of pari passu preferred shares, dividends on a pro rata basis with the Series A Preferred Stock), nor will we be permitted to repurchase or redeem any of our common stock or preferred stock other than the Series A Preferred Stock;

•

until the Series A Preferred Stock has been transferred or redeemed in whole, until December 12, 2011, the U.S. Treasury's approval is required for any increase in dividends on our common stock or any share repurchases other than repurchases of the Series A Preferred Stock, repurchases of junior preferred shares, or repurchases of common stock in connection with the administration of any employee benefit plan in the ordinary course of business and consistent with past practice;

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we must comply with the U. S. Treasury's standards for executive compensation and corporate governance while the U. S. Treasury holds the securities issued by us. Such standards apply to

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our Senior Executive Officers (as defined in the ARRA) as well as other employees. The current standards include the following:

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incentive compensation for Senior Executive Officers must not encourage unnecessary and excessive risks that threaten the value of the financial institution;

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any bonus or incentive compensation paid (or under a legally binding obligation to pay) to a Senior Executive Officer or any of our next 20 most highly-compensated employees based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate must be subject to recovery, or "clawback", by Wilshire;

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we are prohibited from paying or accruing any bonus, retention award or incentive compensation with respect to our five most highly-compensated employees or such higher number as the Secretary of the U.S. Treasury may determine is in the public interest, except for grants of restricted stock that do not fully vest during the Covered Period and do not have a value which exceeds one-third of an employee's total annual compensation;

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severance payments to a Senior Executive Officer and the five next most highly-compensated employees, generally referred to as "golden parachute" payments, are prohibited, except for payments for services performed or benefits accrued;

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compensation plans that encourage manipulation of reported earnings are prohibited;

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the U.S. Treasury may retroactively review bonuses, retention awards and other compensation previously paid to a Senior Executive Officer or any of our 20 next most highly-compensated employees that the U.S. Treasury finds to be inconsistent with the purposes of TARP or otherwise contrary to the public interest;

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our Board of Directors must establish a company-wide policy regarding excessive or luxury expenditures;

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proxy statements for our annual shareholder meetings must permit a nonbinding "say on pay" shareholder vote on the compensation of executives;

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executive compensation in excess of $500,000 for each Senior Executive Officer must not be deducted for federal income tax purposes; and

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we must comply with the executive compensation reporting and recordkeeping requirements established by the U.S. Treasury.

        The ARRA permits TARP recipients, subject to consultation with the appropriate federal banking agency, to repay to the U.S. Treasury any financial assistance received under the TARP Capital Purchase Program without penalty, delay or the need to raise additional replacement capital. The U.S. Treasury is to promulgate regulations to implement the procedures under which a TARP participant may repay any assistance received. As of the date of this Report, the U.S. Treasury had not yet issued such regulations.

        Detailed information regarding the Series A Preferred Stock and the related warrant can be found in Notes 11 and 12 of the Notes to the Consolidated Financial Statements.

Wilshire State Bank

        Wilshire State Bank is subject to extensive regulation and examination by the California Department of Financial Institutions, or the DFI, and the FDIC, which insures its deposits to the maximum extent permitted by law, and is subject to certain Federal Reserve Board regulations of transactions with its affiliates. The federal and state laws and regulations which are applicable to the Bank regulate, among other things, the scope of its business, its investments, its reserves against deposits, the timing of the availability of deposited funds and the nature and amount of and collateral for certain loans. In addition to the impact of such regulations, commercial banks are affected

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significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy.

Transactions with Affiliates

        There are various statutory and regulatory limitations, including those set forth in sections 23A and 23B of the Federal Reserve Act and the related Federal Reserve Regulation W, governing the extent to which the Bank will be able to purchase assets from or securities of or otherwise finance or transfer funds to us or our nonbanking affiliates. Among other restrictions, such transactions between the Bank and any one affiliate (including the Company) generally will be limited to 10% of the Bank's capital and surplus, and transactions between the Bank and all affiliates will be limited to 20% of the Bank's capital and surplus. Furthermore, loans and extensions of credit are required to be secured in specified amounts and are required to be on terms and conditions consistent with safe and sound banking practices.

        In addition, any transaction by a bank with an affiliate and any sale of assets or provision of services to an affiliate generally must be on terms that are substantially the same, or at least as favorable, to the bank as those prevailing at the time for comparable transactions with nonaffiliated companies.

Loans to Insiders

        Sections 22(g) and (h) of the Federal Reserve Act and its implementing regulation, Regulation O, place restrictions on loans by a bank to executive officers, directors, and principal shareholders. Under Section 22(h), loans to a director, an executive officer and to a greater than 10% shareholder of a bank and certain of their related interests, or insiders, and insiders of affiliates, may not exceed, together with all other outstanding loans to such person and related interests, the bank's loans-to-one-borrower limit (generally equal to 15% of the institution's unimpaired capital and surplus). Section 22(h) also requires that loans to insiders and to insiders of affiliates be made on terms substantially the same as offered in comparable transactions to other persons, unless the loans are made pursuant to a benefit or compensation program that (i) is widely available to employees of the bank, and (ii) does not give preference to insiders over other employees of the bank. Section 22(h) also requires prior Board of Directors approval for certain loans, and the aggregate amount of extensions of credit by a bank to all insiders cannot exceed the institution's unimpaired capital and surplus. Furthermore, Section 22(g) places additional restrictions on loans to executive officers.

Dividends

        The ability of the Bank to pay dividends on its common stock is restricted by the California Financial Code, the FDIA and FDIC regulations. In general terms, California law provides that the Bank may declare a cash dividend out of net profits up to the lesser of retained earnings or net income for the last three fiscal years (less any distributions made to shareholders during such period), or, with the prior written approval of the Commissioner of Department of Financial Institutions, in an amount not exceeding the greatest of:

•

retained earnings,

•

net income for the prior fiscal year, or

•

net income for the current fiscal year.

        The Bank's ability to pay any cash dividends will depend not only upon its earnings during a specified period, but also on its meeting certain capital requirements. The FDIA and FDIC regulations restrict the payment of dividends when a bank is undercapitalized, when a bank has failed to pay insurance assessments, or when there are safety and soundness concerns regarding a bank.

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        The payment of dividends by the Bank may also be affected by other regulatory requirements and policies, such as maintenance of adequate capital. If, in the opinion of the regulatory authority, a depository institution under its jurisdiction is engaged in, or is about to engage in, an unsafe or unsound practice (that, depending on the financial condition of the depository institution, could include the payment of dividends), such authority may require, after notice and hearing, that such depository institution cease and desist from such practice. The Federal Reserve Board has issued a policy statement providing that insured banks and bank holding companies should generally pay dividends only out of operating earnings for the current and preceding two years. In addition, all insured depository institutions are subject to the capital-based limitations required by the Federal Deposit Insurance Corporation Improvement Act of 1991.

Capital Requirements

        At December 31, 2008, the Company's and the Bank's capital ratios exceed the minimum percentage requirements for "well capitalized" institutions. See Note 16 and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Capital Adequacy Requirements" for further information regarding the regulatory capital guidelines as well as the Company's and the Bank's actual capitalization as of December 31, 2008.

        The federal banking agencies have adopted risk-based minimum capital guidelines for bank holding companies and banks which are intended to provide a measure of capital that reflects the degree of risk associated with a banking organization's operations for both transactions reported on the balance sheet as assets and transactions which are recorded as off-balance sheet items. The risk-based capital ratio is determined by classifying assets and certain off-balance sheet financial instruments into weighted categories, with higher levels of capital being required for those categories perceived as representing greater risk. Under the capital guidelines, a banking organization's total capital is divided into tiers. "Tier I capital" includes common equity and trust-preferred securities, subject to certain criteria and quantitative limits. "Tier II capital" includes hybrid capital instruments, other qualifying debt instruments, a limited amount of the allowance for loan and lease losses, and a limited amount of unrealized holding gains on equity securities. "Tier III capital" consists of qualifying unsecured debt. The sum of Tier II and Tier III capital may not exceed the amount of Tier I capital. The risk-based capital guidelines require a minimum ratio of qualifying total capital to risk-weighted assets of 8.00% and a minimum ratio of Tier I capital to risk-weighted assets of 4.00%.

        An institution's risk-based capital, leverage capital and tangible capital ratios together determine the institution's capital classification. An institution is treated as well capitalized if its total capital to risk-weighted assets ratio is 10.00% or more; its core capital to risk-weighted assets ratio is 6.00% or more; and its core capital to adjusted average assets ratio is 5.00% or more. In addition to the risk-based guidelines, the federal bank regulatory agencies require banking organizations to maintain a minimum amount of Tier I capital to total assets, referred to as the leverage ratio. For a banking organization rated "well-capitalized," the minimum leverage ratio of Tier I capital to total assets must be 3.00%.

        The current risk-based capital guidelines are based upon the 1988 capital accord of the International Basel Committee on Banking Supervision. A new international accord, referred to as Basel II, which emphasizes internal assessment of credit, market and operational risk; supervisory assessment and market discipline in determining minimum capital requirements, currently becomes mandatory for large international banks outside the U.S. in 2008, is optional for others, and must be complied with in a "parallel run" for two years along with the existing Basel I standards. A separate rule is expected to be released and issued in final form by the federal regulatory agencies in 2008 which will offer U.S. banks that will not adopt Basel II an alternative "standardized approach under Basel II" option and address concerns that the Basel II framework may offer significant competitive advantages for the largest U.S. and international banks. The U.S. banking agencies have indicated, however, that

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they will retain the minimum leverage requirement for all U.S. banks. Further revisions and proposals to the Basel II framework may also occur in response to recent adverse liquidity and securitization developments.

        The Federal Deposit Insurance Act (FDIA) gives the federal banking agencies the additional broad authority to take "prompt corrective action" to resolve the problems of insured depository institutions that fall within any undercapitalized category, including requiring the submission of an acceptable capital restoration plan. The federal banking agencies have also adopted non-capital safety and soundness standards to assist examiners in identifying and addressing potential safety and soundness concerns before capital becomes impaired. The guidelines set forth operational and managerial standards relating to: (i) internal controls, information systems and internal audit systems, (ii) loan documentation, (iii) credit underwriting, (iv) asset quality and growth, (v) earnings, (vi) risk management, and (vii) compensation and benefits.

The FDIC Improvement Act

        The Federal Deposit Insurance Corporation Improvement Act of 1991, or FDICIA, made a number of reforms addressing the safety and soundness of the deposit insurance system, supervision of domestic and foreign depository institutions, and improvement of accounting standards. This statute also limited deposit insurance coverage, implemented changes in consumer protection laws and provided for least-cost resolution and prompt regulatory action with regard to troubled institutions.

        FDICIA requires every bank with total assets in excess of $500 million to have an annual independent audit made of the bank's financial statements by a certified public accountant to verify that the financial statements of the bank are presented in accordance with generally accepted accounting principles and comply with such other disclosure requirements as prescribed by the FDIC.

        FDICIA also places certain restrictions on activities of banks depending on their level of capital. FDICIA divides banks into five different categories, depending on their level of capital. Under regulations adopted by the FDIC, a bank is deemed to be "well-capitalized" if it has a total Risk-Based Capital Ratio of 10.00% or more, a Tier 1 Capital Ratio of 6.00% or more and a Leverage Ratio of 5.00% or more, and the bank is not subject to an order or capital directive to meet and maintain a certain capital level. Under such regulations, a bank is deemed to be "adequately capitalized" if it has a total Risk-Based Capital Ratio of 8.00% or more, a Tier 1 Capital Ratio of 4.00% or more and a Leverage Ratio of 4.00% or more (unless it receives the highest composite rating at its most recent examination and is not experiencing or anticipating significant growth, in which instance it must maintain a Leverage Ratio of 3.00% or more). Under such regulations, a bank is deemed to be "undercapitalized" if it has a total Risk-Based Capital Ratio of less than 8.00%, a Tier 1 Capital Ratio of less than 4.00% or a Leverage Ratio of less than 4.00%. Under such regulations, a bank is deemed to be "significantly undercapitalized" if it has a Risk-Based Capital Ratio of less than 6.00%, a Tier 1 Capital Ratio of less than 3.00% and a Leverage Ratio of less than 3.00%. Under such regulations, a bank is deemed to be "critically undercapitalized" if it has a Leverage Ratio of less than or equal to 2.00%. In addition, the FDIC has the ability to downgrade a bank's classification (but not to "critically undercapitalized") based on other considerations even if the bank meets the capital guidelines. According to these guidelines the Bank was classified as "well-capitalized" as of December 31, 2008.

        In addition, if a bank is classified as undercapitalized, the bank is required to submit a capital restoration plan to the federal banking regulators. Pursuant to FDICIA, an undercapitalized bank is prohibited from increasing its assets, engaging in a new line of business, acquiring any interest in any company or insured depository institution, or opening or acquiring a new branch office, except under certain circumstances, including the acceptance by the federal banking regulators of a capital restoration plan for the bank.

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        Furthermore, if a bank is classified as undercapitalized, the federal banking regulators may take certain actions to correct the capital position of the bank; if a bank is classified as significantly undercapitalized or critically undercapitalized, the federal banking regulators would be required to take one or more prompt corrective actions. These actions would include, among other things, requiring: sales of new securities to bolster capital, improvements in management, limits on interest rates paid, prohibitions on transactions with affiliates, termination of certain risky activities and restrictions on compensation paid to executive officers. If a bank is classified as critically undercapitalized, FDICIA requires the bank to be placed into conservatorship or receivership within 90 days, unless the federal banking regulators determines that other action would better achieve the purposes of FDICIA regarding prompt corrective action with respect to undercapitalized banks.

        The capital classification of a bank affects the frequency of examinations of the bank and impacts the ability of the bank to engage in certain activities and affects the deposit insurance premiums paid by such bank. Under FDICIA, the federal banking regulators are required to conduct a full-scope, on-site examination of every bank at least once every 12 months. An exception to this rule is made, however, that provides that banks (i) with assets of less than $100 million, (ii) are categorized as "well-capitalized," (iii) were found to be well managed and its composite rating was outstanding, and (iv) have not been subject to a change in control during the last 12 months, need only be examined once every 18 months.

Brokered Deposits

        Under FDICIA, banks may be restricted in their ability to accept brokered deposits, depending on their capital classification. "Well-capitalized" banks are permitted to accept brokered deposits, but all banks that are not well-capitalized are not permitted to accept such deposits. The FDIC may, on a case-by-case basis, permit banks that are adequately capitalized to accept brokered deposits if the FDIC determines that acceptance of such deposits would not constitute an unsafe or unsound banking practice with respect to the bank. The Bank is currently well-capitalized and therefore is not subject to any limitations with respect to its brokered deposits.

Federal Limitations on Activities and Investments

        The equity investments and activities as a principal of FDIC-insured state-chartered banks, such as the Bank, are generally limited to those that are permissible for national banks. Under regulations dealing with equity investments, an insured state bank generally may not directly or indirectly acquire or retain any equity investment of a type, or in an amount, that is not permissible for a national bank.

FDIC Deposit Insurance Assessments

        Banks must pay assessments to the FDIC for federal deposit insurance protection. The FDIC has adopted a risk-based assessment system as required by FDICIA. Under this system, FDIC-insured depository institutions pay insurance premiums at rates based on their risk classification. Institutions assigned to higher risk classifications (that is, institutions that pose a higher risk of loss to their respective deposit insurance funds) pay assessments at higher rates than institutions that pose a lower risk. An institution's risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to the regulators. In addition, the FDIC can impose special assessments in certain instances. The FDIC may terminate its insurance of deposits if it finds that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC. The Bank's deposit insurance assessments may increase or decrease depending on the risk assessment classification to which it are assigned by the FDIC. Any increase in insurance assessments could have an adverse effect on the Bank's earnings.

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        In November 2008, the U.S. Treasury, in consultation with the President and upon the recommendation of the Boards of the FDIC and the Federal Reserve Board, has invoked the systemic risk exception of the FDIC Improvement Act of 1991. This action provided the FDIC with flexibility to provide a 100 percent guarantee for newly-issued senior unsecured debt and non-interest bearing transaction at FDIC insured institutions, which is generally regarded as the Temporary Liquidity Guarantee Program ("TLGP"). Under the TLGP, all newly issued senior unsecured debt issued by eligible entities on or before June 30, 2009 are 100 percent guaranteed for three years beyond that date, even if the liability has not matured. Funds in non-interest-bearing transaction deposit accounts held by FDIC-insured banks are 100 percent insured until December 31, 2009. All other FDIC-insured depository accounts are insured up to $250,000 per owner until December 31, 2009. On January 1, 2010, the standard coverage limit will return to $100,000 for all deposit categories except IRAs and Certain Retirement Accounts, which will continue to be insured up to $250,000 per owner. Fees for coverage were waived for the first 30 days. After the first 30 days, an additional coverage fee will be imposed for the added coverage under TLGP (see analysis about the FDIC premiums in "Noninterest Expenses" section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations).

Community Reinvestment Act

        Under the Community Reinvestment Act, or CRA, as implemented by the Congress in 1977, a financial institution has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low and moderate income neighborhoods. CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with CRA. CRA requires federal examiners, in connection with the examination of a financial institution, to assess the institution's record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution. CRA also requires all institutions to make public disclosure of their CRA ratings. The Bank has a Compliance Committee, which oversees the planning of products, and services offered to the community, especially those aimed to serve low and moderate income communities. The FDIC rated the Bank as "satisfactory" in meeting community credit needs under CRA at its most recent examination for CRA performance.

Consumer Laws and Regulations

        In addition to the laws and regulations discussed herein, the Bank is also subject to certain consumer laws and regulations that are designed to protect consumers in transactions with banks. While the list set forth herein is not exhaustive, these laws and regulations include the Truth in Lending Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Real Estate Settlement and Procedures Act, the Fair Credit Reporting Act and the Federal Trade Commission Act, among others. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. The Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.

Permissible Activities and subsidiaries

        California law permits state chartered commercial banks to engage in any activity permissible for national banks. Therefore, the Bank may form subsidiaries to engage in the many so-called "closely related to banking" or "non-banking" activities commonly conducted by national banks in operating subsidiaries, and further, pursuant to GLBA, the Bank may conduct certain "financial activities in a

26

subsidiary to the same extent as may a national bank, provided the Bank is and remains "well-capitalized," "well-managed" and in satisfactory compliance with CRA. Presently, the Bank does not have any financial subsidiaries.

        In September 2007, the U.S. Securities and Exchange Commission, or SEC, and the Federal Reserve Board finalized joint rules required by the Financial Services Regulatory Relief Act of 2006 to implement exceptions provided in the GLBA for securities activities that banks may conduct without registering with the SEC as a securities broker or moving such activities to a broker-dealer affiliate. The Federal Reserve Board's final Regulation R provides exceptions for networking arrangements with third party broker-dealers and authorities, including sweep accounts to money market funds, and with related trust, fiduciary, custodial and safekeeping needs. The final rules, which will not be effective until 2009, are not expected to have a material effect on the Bank as it does not have any securities activities.

Interstate Branching

        Under current law, California state banks are permitted to establish branch offices throughout California with prior regulatory approval. In addition, with prior regulatory approval, banks are permitted to acquire branches of existing banks located in California. Finally, California state banks generally may branch across state lines by merging with banks in other states if allowed by the applicable states' laws. California law, with limited exceptions, currently permits branching across state lines through interstate mergers resulting in the acquisition of a whole California bank that has been in existence for at least five years. Under the Federal Deposit Insurance Act, states may "opt-in" and allow out-of-state banks to branch into their state by establishing a new start-up branch in the state. California law currently prohibits de novo branching into the state of California. The Bank currently has branches located in the States of California, Texas, New Jersey and New York.

Federal Home Loan Bank System

        The Federal Home Loan Bank system, or the FHLB, of which the Bank is a member, consists of 12 regional FHLBs governed and regulated by the Federal Housing Finance Board, or the FHFB. The FHLBs serve as reserve or credit facilities for member institutions within their assigned regions. They are funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB system. They make loans (i.e., advances) to members in accordance with policies and procedures established by the FHLB and the boards of directors of each regional FHLB.

        As a system member, the Bank is entitled to borrow from the FHLB of San Francisco, or FHLB-SF, and is required to own capital stock in the FHLB-SF in an amount equal to the greater of 1% of the membership asset value, not exceeding $25 million, or 4.7% of outstanding FHLB-SF advance borrowings. The Bank is in compliance with the stock ownership rules described above with respect to such advances, commitments and letters of credit and home mortgage loans and similar obligations. All loans, advances and other extensions of credit made by the FHLB-SF to the Bank are secured by a portion of the Bank's mortgage loan portfolio, certain other investments and the capital stock of the FHLB-SF held by the Bank.

Mortgage Banking Operations

        The Bank is subject to the rules and regulations of FNMA with respect to originating, processing, selling and servicing mortgage loans and the issuance and sale of mortgage-backed securities. Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines which include provisions for inspections and appraisals, require credit reports on prospective borrowers and fix maximum loan amounts. Mortgage origination activities are subject to, among others, the Equal Credit Opportunity Act, Federal Truth-in-Lending Act and the Real Estate Settlement Procedures Act

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and the regulations promulgated thereunder which, among other things, prohibit discrimination and require the disclosure of certain basic information to mortgagors concerning credit terms and settlement costs. The Bank is also subject to regulation by the California Department of Financial Institutions, with respect to, among other things, the establishment of maximum origination fees on certain types of mortgage loan products.

Future Legislation and Economic Policy

        We cannot predict what other legislation or economic and monetary policies of the various regulatory authorities might be enacted or adopted or what other regulations might be adopted or the effects thereof. Future legislation and policies and the effects thereof might have a significant influence on overall growth and distribution of loans, investments and deposits and affect interest rates charged on loans or paid from time and savings deposits. Such legislation and policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue.

Item 1A.    Risk Factors

        The risks described below could materially and adversely affect our business, financial conditions and results of operations. You should carefully consider the following risk factors and all other information contained in this Report. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties are discussed elsewhere in this Report, and there may be additional risks not presently known to us or that we currently believe are immaterial to our business. In addition, the trading price of our common stock could decline due to any of the events described in these risks.

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

        As a lender, the largest risk we face is the possibility that a significant number of our client borrowers will fail to pay their loans when due. If borrower defaults cause losses in excess of our allowance for loan losses, it could have an adverse effect on our business, profitability, and financial condition. We have established an evaluation process designed to determine the adequacy of the allowance for loan losses. Although this evaluation process uses historical and other objective information, the classification of loans and the establishment of loan losses are dependent to a great extent on our experience and judgment. Although we believe that our allowance for loan losses is at a level adequate to absorb any inherent losses in our loan portfolio, we cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance.

Increases in our allowance for loan losses could materially affect our earnings adversely.

        Like all financial institutions, we maintain an allowance for loan losses to provide for loan defaults and non-performance. Our allowance for loan losses is based on prior experience, as well as an evaluation of the risks in the current portfolio. However, actual loan losses could increase significantly as the result of changes in economic, operating and other conditions, including changes in interest rates, which are generally beyond our control. Thus, such losses could exceed our current allowance estimates. Either of these occurrences could materially affect our earnings adversely.

        In addition, the FDIC and the DFI, as an integral part of their respective supervisory functions, periodically review our allowance for loan losses. Such regulatory agencies may require us to increase our provision for loan losses or to recognize further loan charge-offs, based upon judgments different from those of management. Any increase in our allowance required by the FDIC or the DFI could adversely affect us.

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Banking organizations are subject to interest rate risk and variations in interest rates may negatively affect our financial performance.

        A major portion of our net income comes from our interest rate spread, which is the difference between the interest rates paid by us on interest-bearing liabilities, such as deposits and other borrowings, and the interest rates we receive on interest-earning assets, such as loans we extend to our clients and securities held in our investment portfolio. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest earning assets and interest bearing liabilities. In addition, loan volume and yields are affected by market interest rates on loans, and rising interest rates generally are associated with a lower volume of loan originations.

        In 2008, Federal Reserve Board reduced the federal funds rate seven times. As of January 1, 2008, the federal funds rate was 4.25%. By December 11, 2008, the federal funds rate had been reduced to current rate of 0.00% to 0.25%. The series of reductions in the federal funds rate during 2008 effectively lowered our average interest rate for 2008, which resulted in lower average yield rates compared to 2007. The interest rate ranges for 2008 and 2007 were 0.00% to 4.25% and 4.25 to 5.25%, respectively.

        Because of the declining national economy and continued financial crisis, the credit markets are lacking liquidity. While the federal funds rate and other short-term market interest rates decreased substantially, the intermediate and long-term market interest rates, which are used by many banking organizations to guide loan pricing, have not decreased proportionately. This has led to a "steepening" of the market yield curve with short-term rates considerably lower than long-term notes. We cannot assure you that we will be able to minimize our interest rate risk. In addition, while a decrease in the general level of interest rates may improve the ability of certain borrowers with variable rate loans to pay the interest on and principal of their obligations, it reduces our interest income, and may lead to an increase in competition among banks for deposits. Accordingly, changes in levels of market interest rates could materially and adversely affect our net interest spread, net interest margin and our overall profitability.

Liquidity risk could impair our ability to fund operations, meet our obligations as they become due and jeopardize our financial condition.

        Liquidity is essential to our business. Liquidity risk is the potential that the Bank will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities or on terms which are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general. Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated or adverse regulatory actions against us. Market conditions or other events could also negatively affect the level or cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund asset growth and new business transactions at a reasonable cost, in a timely manner and without adverse consequences. Although management has implemented strategies to maintain sufficient and diverse sources of funding to accommodate planned as well as unanticipated changes in assets and liabilities under both normal and adverse conditions, any substantial, unexpected and/or prolonged change in the level or cost of liquidity could have a material adverse effect on our financial condition and results of operations.

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The profitability of Wilshire Bancorp is dependent on the profitability of the Bank.

        Because Wilshire Bancorp's principal activity is to act as the holding company of the Bank, the profitability of Wilshire Bancorp is dependent on the profitability of the Bank. The Bank operates in an extremely competitive banking environment, competing with a number of banks and other financial institutions which possess greater financial resources than those available to the Bank, in addition to other independent banks. In addition, the banking business is affected by general economic and political conditions, both domestic and international, and by government monetary and fiscal policies. Conditions such as inflation, recession, unemployment, high interest rates, short money supply, scarce natural resources, international terrorism and other disorders as well as other factors beyond the control of the Bank may adversely affect its profitability. Banks are also subject to extensive governmental supervision, regulation and control, and future legislation and government policy could adversely affect the banking industry and the operations of the Bank.

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

        The Bank is the only source of significant income for Wilshire Bancorp. Accordingly, the ability of Wilshire Bancorp to meet its debt service requirements and to pay dividends depends on the ability of the Bank to pay dividends to it. However, the Bank is subject to regulations limiting the amount of dividends that it may pay to Wilshire Bancorp. For example, any payment of dividends by the Bank is subject to the FDIC's capital adequacy guidelines. All banks and bank holding companies are required to maintain a minimum ratio of qualifying total capital to total risk-weighted assets of 8.00%, at least one-half of which must be in the form of Tier 1 capital, and a ratio of Tier 1 capital to average adjusted assets of 4.00%. If (i) the FDIC increases any of these required ratios; (ii) the total of risk-weighted assets of the Bank increases significantly; and/or (iii) the Bank's income decreases significantly, the Bank's Board of Directors may decide or be required to retain a greater portion of the Bank's earnings to achieve and maintain the required capital or asset ratios. This will reduce the amount of funds available for the payment of dividends by the Bank to Wilshire Bancorp. Further, in some cases, the FDIC could take the position that it has the power to prohibit the Bank from paying dividends if, in its view, such payments would constitute unsafe or unsound banking practices. In addition, whether dividends are paid and their frequency and amount will depend on the financial condition and performance, and the discretion of the Board of Directors of the Bank. The foregoing restrictions on dividends paid by the Bank may limit Wilshire Bancorp's ability to obtain funds from such dividends for its cash needs, including funds for payment of its debt service requirements and operating expenses and for payment of cash dividends to Wilshire Bancorp's shareholders. The amount of dividends the Bank could pay to Wilshire Bancorp as of December 31, 2008 without prior regulatory approval, which is limited by statute to the sum of undivided profits for the current year plus net profits for the preceding two years (less any distributions made to shareholders during such periods), was $69.5 million.

The holders of recently issued debentures and Series A Preferred Stock have rights that are senior to those of our common shareholders.

        In December 2002, the Bank issued an aggregate of $10 million of Junior Subordinated Debentures, sometimes referred to in this Report as the 2002 Junior Subordinated Debentures or the 2002 debentures. In addition, in the past three years, Wilshire Bancorp, as a wholly-owned subsidiary of the Bank in 2003 and as a parent company of the Bank in 2005 and 2007, issued an aggregate of $77,321,000 of Junior Subordinated Debentures as part of the issuance of $75,000,000 in trust preferred securities by statutory trusts wholly-owned by Wilshire Bancorp. The purpose of these transactions was to raise additional capital. These Junior Subordinated Debentures are senior in liquidation rights to our outstanding shares of common stock and our Series A Preferred Stock. The terms of these Junior Subordinated Debentures also restrict our ability to pay dividends on our common stock at any time we

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are in default under, or with respect to the Junior Subordinated Debentures issued in 2003, 2005 or 2007, have exercised our right to defer interest payments under the indentures governing these Junior Subordinated Debentures. As a result, in the event of our bankruptcy, dissolution or liquidation, the holder of these Junior Subordinated Debentures must be paid in full before any liquidating distributions may be made to the holders of our common and preferred stock. If we default under the terms of these Junior Subordinated Debentures or utilize our right to defer interest payments on the Junior Subordinated Debentures issued in 2003, 2005 or 2007, no dividends may be paid to holders of our common and preferred stock for so long as we remain in default or have deferred amounts remaining unpaid.

        On December 12, 2008, the Company issued $62,158,000 in Series A Preferred Stock and a warrant to the U.S. Treasury as part of the U.S. Treasury's CPP. This $62.2 million investment from the U.S. Treasury, which is commonly referred to as Troubled Assets Relief Program ("TARP") investment, was part of the government strategy to counter the ongoing financial crisis and the possible prolonged economic downturn. The TARP investment was made to us in exchange for our 62,156 shares of our Series A Preferred Stock and a warrant to purchase initially 949,460 shares of our common stock. The preferred stockholder, the U.S. Treasury, has preference with respect to dividends and liquidation over our common shareholders. Similar to the Junior Subordinated Debentures, if we default the payment of dividends on our Series A Preferred Stock, no dividends may be paid to holders of our common stock for so long as we remain in default or have deferred amounts remaining unpaid.

        Because we are substantially dependent on dividends from the Bank in order to make the periodic payments due under the terms of the Junior Subordinated Debentures issued in 2003, 2005 and 2007, and the terms of the Series A Preferred Stock issued in 2008, in the event that the Bank is unable to pay dividends to Wilshire Bancorp for any significant period of time, then we may be unable to pay the amounts due to the holders of these Junior Subordinated Debentures and the U.S. Treasury.

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

        If economic conditions worsen in the domestic or global economy, especially in California, our business, growth and profitability are likely to be materially adversely affected. A substantial number of our clients are geographically concentrated in California, and adverse economic conditions in California, particularly in the Los Angeles area, could harm the businesses of a disproportionate number of our clients. To the extent that our clients' underlying businesses are harmed, they are more likely to default on their loans. We can provide no assurance that conditions in the California economy and in the economies of other areas where we operate will not deteriorate further in the future and that such deterioration will not adversely affect us.

Recently negative development in the financial industry and U.S. and global credit markets may affect our operations and results.

        Negative developments in the latter half of 2008 in the U.S. financial market, its real estate section, and the securitization markets for the mortgage loans have resulted in uncertainty in the overall economy both domestically and globally. The market is generally expected to undergo a continual economic downtown in 2009. Commercial as well as consumer loan portfolio performances have deteriorated at many institutions and the competition for deposits and quality loans has increased significantly. In addition, the values of real estate collateral supporting many commercial loans and home mortgages have substantially declined and may continue to further decline. Bank and bank holding company stock prices have been negatively affected as has the ability of banks and bank holding companies to raise capital or borrow in the debt markets compared to recent years. As a result, there is a potential for new federal or state laws and regulations regarding lending and funding practices and liquidity standards, and bank regulatory agencies are expected to be very aggressive in

31

responding to concerns and trends identified in examinations, including the expected issuance of many formal enforcement orders. Negative developments in the financial industry and the impact of new legislation in response to those developments could negatively affect our operations by restricting our business operations, including our ability to originate or sell loans, and adversely affect our financial performance.

Governmental responses to recent market disruptions may be inadequate and may have unintended consequences.

        In response to recent market disruptions, legislators and financial regulators have taken a number of steps to stabilize the financial markets. These steps include the enactment and partial implementation of the Emergency Economic Stabilization Act of 2008, the provision of other direct and indirect assistance to distressed financial institutions, assistance by the banking authorities in arranging acquisitions of weakened banks and broker-dealers, implementation of programs by the Federal Reserve to provide liquidity to the commercial paper markets and expansion of deposit insurance coverage. The new administration and Congress have pursued additional initiatives in an effort to stimulate the economy and stabilize the financial markets, including the recent enactment of the American Recovery and Reinvestment Act of 2009, and have altered the terms of some previously announced policies. The overall effects of these and other legislative and regulatory efforts on the financial markets are uncertain. Should these or other legislative or regulatory initiatives fail to stabilize the financial markets, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Our operations may require us to raise additional capital in the future, but that capital may not be available or may not be on terms acceptable to us when it is needed.

        We are required by federal regulatory authorities to maintain adequate levels of capital to support our operations. We believe that our existing capital resources will satisfy our capital requirements for the foreseeable future and will be sufficient to offset any problem assets. However, should our asset quality erode and require significant additional provision, resulting in consistent net operating losses at the Bank, our capital levels will decline and we will need to raise capital. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, we cannot be certain of our ability to raise additional capital if needed or on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired.

The short-term and long-term impact of the new Basel II capital standards and the forthcoming new capital rules to be proposed for non-Basel II U.S. banks is uncertain.

        As a result of the recent deterioration in the global credit markets and the potential impact of increased liquidity risk and interest rate risk, it is unclear what the short-term impact of the implementation Basel II may be or what impact a pending alternative standardized approach to Basel II option for non-Basel II U.S. banks may have on the cost and availability of different types of credit and the potential compliance costs of implementing the new capital standards.

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

        Our success depends, in part, upon our ability to adapt our products and services to evolving industry standards and consumer demand. There is increasing pressure on financial services companies to provide products and services at lower prices. In addition, the widespread adoption of new technologies, including Internet-based services, could require us to make substantial expenditures to

32

modify or adapt our existing products or services. A failure to achieve market acceptance of any new products we introduce, or a failure to introduce products that the market may demand, could have an adverse effect on our business, profitability, or growth prospects.

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.

        At December 31, 2008, approximately 79.9% of our loans were secured by real estate, a substantial portion of which consist of loans secured by real estate in California. Conditions in the California real estate market historically have influenced the level of our non-performing assets. A real estate recession in Southern California could adversely affect our results of operations. In addition, California has experienced, on occasion, significant natural disasters, including earthquakes, brush fires and, during early 1998 and late 2007, flooding attributed to the weather phenomenon known as "El Nino." In addition to these catastrophes, California has experienced a moderate decline in housing prices beginning in late 2006. The decline in housing prices subsequently developed into the current financial crisis, characterized by the further decline in the real estate market in many parts of the country, including California, starting in the second half of 2007, and the failures of many financial institutions in 2008. The availability of insurance to compensate for losses resulting from such crises is limited. The occurrence of one or more of such crises could impair the value of the collateral for our real estate secured loans and adversely affect us.

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

        Our future success depends in large part upon the continuing contributions of our key management personnel. If we lose the services of one or more key employees within a short period of time, we could be adversely affected. Our future success is also dependent upon our continuing ability to attract and retain highly qualified personnel. Competition for such employees among financial institutions in California is intense. Our inability to attract and retain additional key personnel could adversely affect us. In November 2007, our former Executive Vice President and Chief Financial Officer, resigned. Following his resignation, we engaged his replacement in April 2008. In addition, our Senior Vice President and Controller, was promoted to Senior Vice President and Deputy Chief Financial Officer in conjunction with the appointment of our new Chief Financial Officer. Furthermore, effective January 1, 2008, our former President and Chief Executive Officer retired. However, in connection with his retirement, we have entered into a consulting agreement providing for his continued service as an advisor for the Bank until May 2009. Following the retirement of our former Chief Exectuive Officer, we promoted our previous Executive Vice President and Chief Lending Officer to the position of President and Chief Executive Officer; and our prior Executive Vice President and SBA Manager, was promoted to Chief Lending Officer.

        For as long as we have shares of Series A Preferred Stock outstanding in connection with the U.S. Treasury's voluntary TARP Capital Purchase Program, we will be subject to the limitations on compensation included in EESA and ARRA. These restrictions may make it more difficult for us to retain certain of our key officers and employees because competitors who are not subject to the same restrictions may be able to offer more competitive salaries and/or benefits to these individuals. More information about the compensation limitations of EESA and AARA can be found in the section entitled "Regulation and Supervision—TARP Capital Purchase Program" in Item 1 of this Report.

We may be unable to manage future growth.

        We may encounter problems in managing our future growth. Our total assets at December 31, 2008, 2007, and 2006 were $2.45 billion, $2.20 billion, and $2.01 billion, respectively, representing an increase of $253.3 million, or 11.53% in 2008 and $188.2 million, or 9.4% in 2007. We currently intend to consider additional "de novo" branches and LPOs and to investigate opportunities to acquire or

33

combine with other financial institutions that would complement our existing business, as such opportunities may arise and consistent with our deliberate expansion strategy. No assurance can be provided, however, that we will be able to identify a suitable acquisition target or consummate any such acquisition. Further, our ability to manage growth will depend primarily on our ability to attract and retain qualified personnel, monitor operations, maintain earnings and control costs. Any failure by us to accomplish these goals could result in interruptions in our business plans and could also adversely affect current operations.

Our expenses will increase as a result of increases in FDIC insurance premiums.

        The FDIC imposes an assessment against institutions for deposit insurance. This assessment is based on the risk category of the institution. Federal law requires that the designated reserve ratio for the deposit insurance fund be established by the FDIC at a 1.15% of estimated insured deposits. If this reserve ratio drops below 1.15%, the FDIC must, within 90 days, establish and implement a plan to restore the designated reserve ratio to 1.15% of estimated insured deposits within five years (absent extraordinary circumstances). Recent bank failures coupled with deteriorating economic conditions have significantly reduced the deposit insurance fund's reserve ratio. As a result of this reduced reserve ratio, on October 7, 2008, the FDIC adopted a restoration plan that would restore the reserve ratios to its required level of 1.15% over a seven-year period. There have also been increases in FDIC assessments resulting from its recently announced Temporary Liquidity Guaranty Program. Should the economy continue to decline, the FDIC premiums could continue to increase. Continued increases in FDIC insurance premiums could have an adverse effect on our earnings.

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

        We offer various Internet-based services to our clients, including online banking services. The secure transmission of confidential information over the Internet is essential to maintain our clients' confidence in our online services. Advances in computer capabilities, new discoveries or other developments could result in a compromise or breach of the technology we use to protect client transaction data. Although we have developed systems and processes that are designed to prevent security breaches and periodically test our security, failure to mitigate breaches of security could adversely affect our ability to offer and grow our online services and could harm our business.

        People generally are concerned with security and privacy on the Internet and any publicized security problems could inhibit the growth of the Internet as a means of conducting commercial transactions. Our ability to provide financial services over the Internet would be severely impeded if clients became unwilling to transmit confidential information online. As a result, our operations and financial condition could be adversely affected.

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

        As of February 27, 2009, our directors and executive officers, together with their respective affiliates, beneficially owned approximately 35% of our outstanding voting common stock (not including vested option shares). As a result, such shareholders may have the ability to significantly influence the outcome of corporate actions requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, such as a merger or sale of all or substantially all of our assets. We can provide no assurance that the investment objectives of such shareholders will be the same as our other shareholders.

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

        The market price of our common stock may be subject to significant fluctuation in response to numerous factors, including variations in our annual or quarterly financial results or those of our competitors, changes by financial research analysts in their evaluation of our financial results or those of our competitors, or our failure or that of our competitors to meet such estimates, conditions in the economy in general or the banking industry in particular, or unfavorable publicity affecting us or the banking industry. In addition, the equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies' securities and have been unrelated to the operating performance of those companies. In addition, the sale by any of our large shareholders of a significant portion of that shareholder's holdings could have a material adverse effect on the market price of our common stock. Further, the registration of any significant amount of additional shares of our common stock will have the immediate effect of increasing the public float of our common stock and any such increase may cause the market price of our common stock to decline or fluctuate significantly. Any such fluctuations may adversely affect the prevailing market price of the common stock.

We may experience goodwill impairment.

        In light of the overall instability of the economy, the continued volatility in the financial markets, the downward pressure on bank stock prices, and expectations of financial performance for the banking industry, including the Company, our estimates of goodwill fair value may be subject to change or adjustment and we may determine that impairment charges are necessary. Estimates of fair value are determined based on a complex model using cash flows and company comparisons. If management's estimates of future cash flows are inaccurate, the fair value determined could be inaccurate and impairment may not be recognized in a timely manner. Subsequent to December 31, 2008, the Company's market capitalization continued to decrease. If the Company's market capitalization continues to remain below book value, we will update our valuation analysis to determine whether goodwill is impaired. No assurance can be given that goodwill will not be written down in future periods.

We face substantial competition in our primary market area.

        We conduct our banking operations primarily in Southern California. Increased competition in our market may result in reduced loans and deposits. Ultimately, we may not be able to compete successfully against current and future competitors. Many competitors offer the same banking services that we offer in our service area. These competitors include national banks, regional banks and other community banks. We also face competition from many other types of financial institutions, including without limitation, savings and loan institutions, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. In particular, our competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits, and range and quality of products and services provided, including new technology-driven products and services. Technological innovation continues to contribute to greater competition in domestic and international financial services markets as technological advances enable more companies to provide financial services. We also face competition from out-of-state financial intermediaries that have opened low-end production offices or that solicit deposits in our market areas. If we are unable to attract and retain banking customers, we

35

may be unable to continue our loan growth and level of deposits and our results of operations and financial condition may otherwise be adversely affected.

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

        Certain provisions in our Articles of Incorporation and Bylaws could discourage unsolicited takeover proposals not approved by the Board of Directors in which shareholders could receive a premium for their shares, thereby potentially limiting the opportunity for our shareholders to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal or may have the effect of permitting our current management, including the current Board of Directors, to retain its position, and place it in a better position to resist changes that shareholders may wish to make if they are dissatisfied with the conduct of our business. The anti-takeover measures included in our Articles of Incorporation and Bylaws, include, without limitation, the following:

•

the elimination of cumulative voting,

•

the adoption of a classified board of directors,

•

super-majority shareholder voting requirements to modify certain provisions of the Articles of Incorporation and Bylaws, and

•

restrictions on certain "business combinations" with third parties who may acquire our securities outside of an action taken by us.

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

        We are subject to extensive state and federal regulation, supervision and legislation, all of which is subject to material change from time to time. These laws and regulations increase the cost of doing business and have an adverse impact on our ability to compete efficiently with other financial service providers that are not similarly regulated. Changes in regulatory policies or procedures could result in management's determining that a higher provision for loan losses would be necessary and could cause higher loan charge-offs, thus adversely affecting our net earnings. There can be no assurance that future regulation or legislation will not impose additional requirements and restrictions on us in a manner that could adversely affect our results of operations, cash flows, financial condition and prospects.

        As a participant in the TARP Capital Purchase Program, we have agreed to various requirements and restrictions imposed by the U.S. Treasury on all participants, which included a provision that the U. S. Treasury could change the terms of participation at any time. Further information regarding the current requirements and restrictions imposed on TARP participants can be found under the caption "Regulation and Supervision—The TARP Capital Purchase Program" in Item 1 of this Report.

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

        Many of our customers are locally based Korean-Americans who also conduct business in South Korea. Although we conduct most of our business with locally-based customers and rely on domestically located assets to collateralize our loans and credit arrangements, we have historically had some exposure to the economy of South Korea in connection with certain of our loans and credit transactions with Korean banks. Such exposure has consisted of:

•

discounts of acceptances created by banks in South Korea,

36

•

advances made against clean documents presented under sight letters of credit issued by banks in South Korea,

•

advances made against clean documents held for later presentation under letters of credit issued by banks in South Korea, and

•

extensions of credit to borrowers in the U.S. secured by letters of credit issued by banks in South Korea.

        We generally enter into any such loan or credit arrangements, in excess of $200,000 and of longer than 120 days, only with the largest of the Korean banks and spread other lesser or shorter term loan or credit arrangements among a variety of medium-sized Korean banks.

        As a result of the economic crisis in South Korea in the mid-1990's, management has continued to closely monitor our exposure to the Korean economy and the activities of Korean banks with which we conduct business. To date, we have not experienced any significant losses attributable to our exposure to South Korea. Nevertheless, there can be no assurance that our efforts to minimize exposure to downturns in the Korean economy will be successful in the future, and another significant downturn in the Korean economy could result in significant credit losses for us.

        In addition, because our customer base is largely Korean-American, our deposit base could significantly decrease as a result of a deterioration of the Korean economy. For example, some of our customers' businesses may rely on funds from South Korea. Further, our customers may temporarily withdraw deposits in order to transfer funds and benefit from gains on foreign exchange and interest rates, and/or to help their relatives in South Korea during downturns in the Korean economy. A significant decrease in our deposits could also have a material adverse effect on our financial condition and results of operations.

Additional shares of our common stock issued in the future could have a dilutive effect.

        Shares of our common stock eligible for future issuance and sale could have a dilutive effect on the market for our stock. Our Articles of Incorporation authorize the issuance of 80,000,000 shares of common stock. As of February 27, 2009, there were approximately 29,413,757 shares of our common stock issued and outstanding, 1,955,800 shares of our authorized but unissued shares of common stock are reserved for issuance under the Wilshire Bancorp, Inc. 2008 Stock Option Plan, or the "2008 Stock Option Plan," 949,460 shares of our authorized but unissued shares of common stock are reserved for issuance upon exercise of the warrant that we issued to the U.S. Treasury in connection with our participation in the TARP Capital Purchase Program, plus an additional 277,030 shares of our common stock are reserved for issuance to the holders of stock options previously granted and still outstanding under the Wilshire State Bank 1997 Stock Option Plan, or the "1997 Stock Option Plan." Thus, approximately 49,204,788 shares of our common stock remain authorized (not reserved for stock options and are available for future issuance and sale) at the discretion of our Board of Directors.

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

        On December 12, 2008, we received $62,158,000 from the U.S. Treasury as part of the federal government's Capital Purchase Program. In exchange for the federal funding, we issued 62,158 shares of Series A Preferred Stock, each with a stated liquidation amount of $1,000 per share, to the U.S. Treasury. As of February 27, 2009, there was a total of 62,158 shares of our Series A Preferred Stock that were issued and outstanding.

        Shares of our preferred stock eligible for future issuance and sale also could have a dilutive effect on the market for the shares of our common stock, especially because of the fact that the preferred shares would have seniority with respect to our common stock. In addition to 80,000,000 shares of

37

common stock, our Articles of Incorporation authorize the issuance of 5,000,000 shares of preferred stock. As of December 31, 2008, the total number of shares of authorized but unissued preferred stock was 4,937,842. Although our Board of Directors has no present intent to authorize the issuance of shares of preferred stock, such shares could be authorized in the future. If such shares of preferred stock are made convertible into shares of common stock, there could be a dilutive effect on the shares of common stock then outstanding. In addition, shares of preferred stock may be provided a preference over holders of common stock upon our liquidation or with respect to the payment of dividends, in respect of voting rights or in the redemption of our capital stock. The rights, preferences, privileges and restrictions applicable to any series of preferred stock may be determined by resolution of our Board of Directors without the need for shareholder approval.

Item 1B.    Unresolved Staff Comments

        None.

Item 2.    Properties

        Our primary banking facilities (corporate headquarters and various lending offices) are located at 3200 Wilshire Boulevard, Los Angeles, California and consist of approximately 42,255 square feet at the primary banking facilities as of the date of this Report. Our lease at the primary banking facilities runs through March 31, 2015, with our option to extend for two consecutive five-year periods. The combined monthly rents are currently $47,579.

        We have 20 full-service branch banking offices in Southern California, Texas, New Jersey and New York. We also lease 5 separate LPOs in Aurora, Colorado (the Denver area); Atlanta, Georgia; Dallas, Texas; Houston, Texas; and Annandale, Virginia. Information about the properties associated with each of our banking facilities is set forth in the table below:

Property	Ownership Status	Square Feet		Purchase Price		Monthly Rent		Use	Lease Expiration
Wilshire Office 3200 Wilshire Blvd. Suite 103 Los Angeles, California	leased		7,426		n/a	$	10,322	Branch office	March 2015 [w/right to extend for two consecutive 5-year periods]
Rowland Heights Office 19765 E. Colima Road Rowland Heights, California	leased		2,860		n/a	$	8,729	Branch office	May 2011 [w/right to extend for two consecutive 5-year periods]
Western Office 841 South Western Avenue Los Angeles, California	leased		4,950		n/a	$	23,539	Branch office	June 2010 [w/right to extend for one 5-year period]
Valley Office 8401 Reseda Boulevard Northridge, California	leased		7,350		n/a	$	11,760	Branch office	October 2017 [w/right to extend for two consecutive 5-year periods]
Downtown Office 1122 South Maple Avenue Suites 203, 204, 205 and 206 Los Angeles, California	leased		3,800		n/a	$	10,853	Branch office	April 2010 [w/right to extend for one 5-year period]
Cerritos Office 17500 Carmenita Road Cerritos, California	leased		4,774		n/a	$	4,895	Branch office	January 2010 [w/right to extend for one 5-year period]
Gardena Office 15435 South Western Ave. Suite 100 Gardena, California	leased		4,150		n/a	$	11,509	Branch office	November 2010 [w/right to extend for two consecutive 5-year periods]
Rancho Cucamonga Office 8045 Archibald Avenue Rancho Cucamonga, California	leased		3,000		n/a	$	6,407	Branch office	November 2010 [w/right to extend for two consecutive 5-year periods]

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Property	Ownership Status	Square Feet		Purchase Price		Monthly Rent		Use	Lease Expiration
City Center Office 3500 West 6th Street #201 Los Angeles, CA 90020	leased		3,538		n/a	$	14,152	Branch office	February 2012 [w/right to extend for three consecutive 5-year periods]
Irvine Office 14451 Red Hill Avenue Tustin, California	leased		1,960		n/a	$	10,450	Branch office	June 2013 [w/right to extend for one 5-year period]
Mid-Wilshire Office 3832 Wilshire Boulevard Los Angeles, California	leased		3,382		n/a	$	11,136	Branch office	December 2012
Fashion Town Office 1300 S. San Pedro Street Los Angeles, California	leased		3,208		n/a	$	7,413	Branch office	December 2009 [w/right to extend for two consecutive 5-year periods]
Fullerton Office 5254 Beach Blvd. Buena Park, California	leased		1,440		n/a	$	4,274	Branch office	July 2009 [w/right to extend for two consecutive 5-year periods]
Huntington Park Office 6350 Pacific Boulevard Huntington Park, California	purchased in 2000		4,350	$	710,000		n/a	Branch office	n/a
Torrance Office 2390 Crenshaw Blvd. #D Torrance, California	leased		1,550		n/a	$	5,226	Branch office	January 2010 [w/right to extend for two consecutive 5-year periods]
Garden Grove Office 9672 Garden Grove Blvd. Garden Grove, California	purchased in 2005		2,549	$	1,535,500		n/a	Branch office	n/a
Manhattan Office 11 West 32nd St. New York, NY	leased		10,400		n/a	$	32,280	Branch office	October 2009
Bayside Office 210-16 Northern Blvd. Bayside, NY	leased		2,445		n/a	$	13,520	Branch office	April 2012 [w/right to extend for three consecutive 5-year periods]
Fort Lee Office 215 Main Street Fort Lee, NJ	leased		2,264		n/a	$	10,174	Branch office	May 2017 [w/right to extend for one 5-year period]
Dallas Office 2237 Royal Lane Dallas, Texas	purchased in 2003		7,000	$	1,325,000		n/a	Branch Office & LPO office	n/a
Denver Office 2821 S. Parker Road #415 Aurora, CO	leased		1,135		n/a	$	1,466	LPO office	September 2011
Atlanta Office 3510 Shallowford Road Atlanta, GA	leased		900		n/a	$	1,764	LPO office	Month to Month
Houston Office 9801 Westheimer #801 Houston, TX	leased		1,096		n/a	$	2,101	LPO office	March 2011
Annandale Office 7535 Little River Turnpike #310A Annandale, VA	leased		1,150		n/a	$	1,947	LPO office	May 2010

        Management has determined that all of our premises are adequate for our present and anticipated level of business.

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Item 3.    Legal Proceedings

        From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is estimatable and the loss is probable.

        We believe that there are no material litigation matters at the current time. Although the results of such litigation matters and claims cannot be predicted with certainty, we believe that the final outcome of such claims and proceedings will not have a material adverse impact on our financial position, liquidity, or results of operations.

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

        No matters were submitted to our shareholders, through the solicitation of proxies or otherwise, during the fourth quarter of the year ended December 31, 2008.

PART II

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

Trading History

        Wilshire Bancorp's common stock is listed for trading on the NASDAQ Global Select Market under the symbol "WIBC."

        The information in the following table sets forth, for the quarters indicated, the high and low closing sale price for the common stock as reported on the NASDAQ Global Select Market:

		Closing Sale Price
		High		Low
Year Ended December 31, 2008
	First Quarter	$	8.37	$	6.63
	Second Quarter	$	9.94	$	6.18
	Third Quarter	$	14.99	$	7.96
	Fourth Quarter	$	13.98	$	5.95
Year Ended December 31, 2007
	First Quarter	$	19.34	$	16.00
	Second Quarter	$	16.75	$	11.50
	Third Quarter	$	12.36	$	9.85
	Fourth Quarter	$	11.54	$	7.65

        On February 27, 2009, the closing sales price for the common stock was $4.76, as reported on the NASDAQ Global Select Market.

Holders

        As of February 27, 2009, there were 148 shareholders of record of our common stock (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms).

Dividends

        As a California corporation, we are restricted under the California General Corporation Law, or CGCL, from paying dividends under certain conditions. Our shareholders are entitled to receive

40

dividends when and as declared by our board of directors, out of funds legally available for the payment of dividends, as provided in the CGCL. The CGCL provides that a corporation may make a distribution to its shareholders if retained earnings immediately prior to the dividend payout at least equal the amount of proposed distribution. In the event that sufficient retained earnings are not available for the proposed distribution, a corporation may, nevertheless, make a distribution, if it meets both the "quantitative solvency" and the "liquidity" tests. In general, the quantitative solvency test requires that the sum of the assets of the corporation equal at least 1¹/4 times its liabilities. The liquidity test generally requires that a corporation have current assets at least equal to current liabilities, or, if the average of the earnings of the corporation before taxes on income and before interest expenses for the two preceding fiscal years was less than the average of the interest expense of the corporation for such fiscal years, then current assets must be equal to at least 1¹/4 times current liabilities. In certain circumstances, we may be required to obtain the prior approval of the Federal Reserve Board to make capital distributions to our shareholders.

        It has been our general practice to retain earnings for the purpose of increasing capital to support growth, and no cash dividends were paid to shareholders prior to 2005. However, we began paying a cash dividend to our common shareholders beginning with the first quarter of 2005. While we currently pay cash dividends on our common stock, as well as to the holders of our Series A Preferred Stock pursuant to our agreements under the TARP Capital Purchase Program. Dividends are subject to the discretion of our Board of Directors and will depend on a number of factors, including future earnings, financial condition, cash needs and general business conditions. Any dividend to our common shareholders must also comply with the restrictions in our outstanding Junior Subordinated Debentures and our Series A Preferred Stock described earlier in this Report, as well as applicable bank regulations.

        The following table shows cash dividends to our common shareholders declared by Wilshire Bancorp the two years ended December 31, 2008:

Declaration Date	Payable Date	Record Date	Type
March 1, 2007	April 16, 2007	March 30, 2007	$0.05 per share
May 31, 2007	July 16, 2007	June 29, 2007	$0.05 per share
August 30, 2007	October 15, 2007	September 28, 2007	$0.05 per share
November 29, 2007	January 15, 2008	December 31, 2007	$0.05 per share
February 28, 2008	April 15, 2008	March 31, 2008	$0.05 per share
May 29, 2008	July 15, 2008	June 30, 2008	$0.05 per share
September 2, 2008	October 15, 2008	September 30, 2008	$0.05 per share
December 2, 2008	January 15, 2009	December 31, 2008	$0.05 per share

        As of December 31, 2008, we had not paid any dividends on our Series A Preferred Stock.

        Our ability to pay cash dividends in the future will depend in large part on the ability of the Bank to pay dividends on its capital stock to us. The ability of the Bank to pay dividends on its common stock is restricted by the California Financial Code, the FDIA and FDIC regulations. In general terms, California law provides that the Bank may declare a cash dividend out of net profits up to the lesser of retained earnings or net income for the last three fiscal years (less any distributions made to shareholders during such period), or, with the prior written approval of the Commissioner of Department of Financial Institutions, in an amount not exceeding the greatest of:

•

retained earnings,

•

net income for the prior fiscal year, or

•

net income for the current fiscal year.

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        The Bank's ability to pay any cash dividends will depend not only upon our earnings during a specified period, but also on our meeting certain capital requirements. The FDIA and FDIC regulations restrict the payment of dividends when a bank is undercapitalized, when a bank has failed to pay insurance assessments, or when there are safety and soundness concerns regarding a bank. The payment of dividends by the Bank may also be affected by other regulatory requirements and policies, such as maintenance of adequate capital. If, in the opinion of the regulatory authority, a depository institution under its jurisdiction is engaged in, or is about to engage in, an unsafe or unsound practice (which, depending on the financial condition of the depository institution, could include the payment of dividends), such authority may require, after notice and hearing, that such depository institution cease and desist from such practice.

Securities Authorized for Issuance under Equity Compensation Plans

        In June 2008, we established the 2008 Stock Option Plan that provides for the issuance of restricted stock and options to purchase up to 2,933,200 shares of our authorized but unissued common stock to employees, directors, and consultants. Exercise prices for options may not be less than the fair market value at the date of grant. Compensation expense for awards is recorded over the vesting period. Under the 2008 Stock Option Plan, there were options outstanding to purchase 984,000 shares of our common stock as of December 31, 2008.

        During 1997, the Bank established the 1997 Stock Option Plan, which provided for the issuance of up to 6,499,800 shares of the Company's authorized but unissued common stock to managerial employees and directors. Due to the expiration of the plan in February 2007, no additional options may be granted under the 1997 Stock Option Plan. Accordingly, no shares of our common stock remain available for future issuance under the 1997 Stock Option Plan. Nonetheless, there are 278,630 shares of our common stock reserved for issuance to the holders of stock options previously granted and still outstanding under the 1997 Stock Option Plan. The following table summarizes information as of December 31, 2008 relating to the number of securities to be issued upon the exercise of the outstanding options under the 1997 Plan and the 2009 Plan and their weighted-average exercise price.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity Compensation Plans Approved by Security Holders		2,212,090	$	10.27		—
Equity Compensation Plans Not Approved by Security Holders		—		—		—
Total Equity Compensation Plans		2,212,090	$	10.27		—

        Future grants of stock options under the 2008 plan may be subject to the limitations of EESA for as long as shares of our Series A Preferred Stock is outstanding. EESA prohibits us from accruing any bonus, retention award, or incentive compensation to at least the five most highly compensated employees of the Company (or such higher number of employees as the U.S. Treasury may determine). Although the interpretation of what specifically constitutes "incentive compensation" is not clear, it is likely that we will not be able to grant additional stock options to at least our five most highly compensated employees during the time that we have shares of Series A Preferred Stock outstanding.

42

Performance Graph

        The following graph compares the yearly percentage change in cumulative total shareholders' return on our common stock with the cumulative total return of (i) of the NASDAQ market index; (ii) all banks and bank holding companies listed on NASDAQ; and (iii) the SNL Western Bank Index, comprised of banks and bank holding companies located in California, Oregon, Washington, Montana, Hawaii, Nevada and Alaska. Both the $1 Billion - $5 Billion Asset-Size Bank Index and the SNL Western Bank Index were compiled by SNL Securities LP of Charlottesville, Virginia. The graph assumes an initial investment of $100 and reinvestment of dividends. The graph is not necessarily indicative of future price performance.

	12/31/03		12/31/04		12/31/05		12/31/06		12/31/07		12/31/08
Wilshrie Bancorp Inc	$	100.00	$	170.35	$	178.98	$	199.63	$	84.11	$	99.40
NASDAQ Composite		100.00		108.59		110.08		120.56		132.39		78.72
SNL $1B - $5B Bank Index		100.00		123.42		121.31		140.38		102.26		84.81
SNL Western Bank Index		100.00		113.64		118.32		133.50		111.51		108.57

Source: SNL Financial LC, Charlottesville, VA

Issuer Purchase of Equity Securities

        In July 2007, our board of directors authorized a stock repurchase program, under which up to $10 million outstanding common shares in the open market can be repurchased by Wilshire Bancorp for a period of twelve months ending on July 31, 2008. Since its inception, we repurchased a total of 127,425 shares at an average price of $9.91. All of these shares were repurchased during 2007. During 2008, there were no repurchases under the program. This program completed its term and expired as of July 31, 2008.

43

Item 6.    Selected Financial Data

        The following table presents selected historical financial information as of and for each of the years in the five years ended December 31, 2008. The selected historical financial information is derived from our audited consolidated financial statements and should be read in conjunction with our financial statements and the notes thereto which appear elsewhere in this Annual Report and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Item 7 below:

			As of and For the Years Ended December 31,
			2008		2007		2006		2005		2004
			(Dollars in Thousands)
Summary Statement of Operations Data:
	Interest income		$	148,633	$	157,636	$	141,400	$	97,289	$	59,798
	Interest expense			66,014		76,286		64,823		34,341		17,463
	Net interest income before provision for loan losses			82,619		81,350		76,577		62,948		42,335
	Provision for losses on loans and loan commitments			12,110		14,980		6,000		3,350		3,567
	Noninterest income			20,646		22,584		26,400		20,478		20,997
	Noninterest expenses			48,400		44,839		41,232		33,563		27,283
	Income before income taxes			42,755		44,115		55,745		46,513		32,482
	Income tax provision			16,282		17,309		21,803		18,753		13,024
	Preferred stock dividend			155		—		—		—		—
	Net income available for common shareholders			26,318		26,806		33,942		27,760		19,458
Per Common Share Data:(1)
	Net income available for common shareholders:
		Basic	$	0.90	$	0.91	$	1.17	$	0.97	$	0.70
		Diluted	$	0.90	$	0.91	$	1.16	$	0.96	$	0.68
	Book value per common share		$	6.65	$	5.87	$	5.12	$	3.95	$	3.14
	Weighted average common shares outstanding:
		Basic		29,368,762		29,339,454		28,986,217		28,544,474		27,623,766
		Diluted		29,407,388		29,449,211		29,330,732		28,913,542		28,515,881
	Year end shares outstanding			29,413,757		29,253,311		29,197,420		28,630,600		28,142,470

⁽¹⁾

As adjusted to reflect a two-for-one stock split effected in the form of a 100% stock dividend, issued in December 2004.

44

		As of and For the Years Ended December 31,
		2008			2007			2006			2005			2004
		(Dollars in Thousands)
Summary Statement of Financial Condition Data (Year End):
	Total loans, net of unearned income(1)	$	2,051,528		$	1,809,050		$	1,560,539		$	1,262,560		$	1,020,723
	Allowance for loan losses		29,437			21,579			18,654			13,999			11,111
	Other real estate owned		2,663			133			138			294			—
	Total assets		2,450,011			2,196,705			2,008,484			1,666,273			1,265,641
	Total deposits		1,812,601			1,763,071			1,751,973			1,409,465			1,098,705
	Federal Home Loan Bank advances		260,000			150,000			20,000			61,000			41,000
	Junior subordinated debentures		87,321			87,321			61,547			61,547			25,464
	Total shareholders' equity		255,060			171,786			149,635			113,104			88,307
Performance ratios:
	Return on average total equity(2)		14.14	%		16.33	%		25.51	%		27.21	%		25.42	%
	Return on average common equity(3)		14.30	%		16.33	%		25.51	%		27.21	%		25.42	%
	Return on average assets(4)		1.14	%		1.31	%		1.85	%		1.92	%		1.70	%
	Net interest margin(5)		3.80	%		4.28	%		4.51	%		4.71	%		4.05	%
	Efficiency ratio(6)		46.87	%		43.14	%		40.04	%		40.23	%		43.08	%
	Net loans to total deposits at year end		111.56	%		101.38	%		88.01	%		88.58	%		92.90	%
	Common dividend payout ratio		22.34	%		21.98	%		17.09	%		16.48	%		—
Capital ratios:
	Average common shareholders' equity to average total assets		7.89	%		8.01	%		7.26	%		7.05	%		6.71	%
	Tier 1 capital to average total assets		13.25	%		10.36	%		9.79	%		9.39	%		8.35	%
	Tier 1 capital to total risk-weighted assets		15.36	%		11.83	%		11.81	%		11.60	%		9.87	%
	Total capital to total risk-weighted assets		17.09	%		14.58	%		13.63	%		14.41	%		11.95	%
Asset quality ratios:
	Nonperforming loans to total loans(7)		0.76	%		0.59	%		0.44	%		0.20	%		0.26	%
	Nonperforming assets(8) to total loans and other real estate owned		0.89	%		0.60	%		0.45	%		0.22	%		0.26	%
	Net charge-offs (recoveries) to average total loans		0.26	%		0.66	%		0.06	%		0.03	%		0.10	%
	Allowance for loan losses to total loans at year end		1.43	%		1.19	%		1.20	%		1.11	%		1.09	%
	Allowance for loan losses to nonperforming loans		189.27	%		203.55	%		272.38	%		567.15	%		411.63	%

⁽¹⁾

Total loans are the sum of loans receivable and loans held for sale and reported at their outstanding principal balances net of any unearned income which is unamortized deferred fees and costs and premiums and discounts.

⁽²⁾

Net income divided by average total shareholders' equity.

⁽³⁾

Net income available to common shareholders divided by common shareholders' equity.

⁽⁴⁾

Net income divided by average total assets.

⁽⁵⁾

Represents net interest income as a percentage of average interest-earning assets.

⁽⁶⁾

Represents the ratio of noninterest expense to the sum of net interest income before provision for loan losses and total noninterest income.

⁽⁷⁾

Nonperforming loans consist of nonaccrual loans, loans past due 90 days or more and restructured loans.

⁽⁸⁾

Nonperforming assets consist of nonperforming loans (see footnote no. 1 above), other real estate owned and repossessed vehicles.

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        This discussion presents management's analysis of our results of operations and financial condition as of and for each of the years in the three-year period ended December 31, 2008. The discussion should be read in conjunction with our financial statements and the notes related thereto which appear elsewhere in this Report.

Executive Overview

Introduction

        Wilshire Bancorp, Inc. 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-K, 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 26, 2004, except where otherwise indicated, are to the Bank.

        We operate a community bank 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 December 31, 2008, we had approximately $2.45 billion in assets, $2.05 billion in total loans and $1.81 billion in deposits. We also have expanded and diversified our business geographically by focusing on the continued development of the east coast market.

        In May 2006, we completed the acquisition of Liberty Bank of New York ("Liberty") and its merger into the Bank. With this acquisition, we added $66 million in total assets and two branches in New York City. We paid $14.5 million for this transaction, which consisted of $8.6 million in cash and $5.9 million in our common stock (328,110 shares). We also incurred merger-related costs of $625,000 which we recognized as additional consideration in connection with this business combination.

        In July 2007, we acquired a branch of Royal Bank America ("RBA") in Fort Lee, New Jersey in exchange for our branch at Flushing, New York. In this branch exchange transaction, we purchased selected fixed assets and assumed selected liabilities, including a portion of RBA's time deposits. As consideration, we transferred to RBA selected intangible and fixed assets, and selected liabilities, including a portion of time deposits, intangible liabilities, and lease obligations. The amounts involved in this transaction were insignificant except for the time deposits exchanged. In the branch exchange transaction, both parties transferred deposit liabilities in the amount of approximately $6 million. The branch exchange transaction was accounted for as an exchange of assets and liabilities. The Fort Lee, New Jersey loan portfolio has grown 713.5% to $6.5 million as of December 31, 2008, as compared with the prior year end. Deposit growth at the Fort Lee branch has also exceeded our expectation, it has increased 10.0% to $34.8 million as of December 31, 2008, as compared with the prior year end.

        Subsequent to the branch exchange in July 2007, we opened a new Bayside branch in New York to compensate for the loss of our Flushing branch. The above-described transactions resulted in an expansion of our banking service and market coverage to the State of New Jersey and the greater New York City metropolitan area. Similar to the New Jersey branch, the loan portfolio of our two New York

46

branches has grown 365.0% since the acquisition, from $25.7 million to $119.5 million at the end of 2008. Our deposit portfolio in the New York branches has also experienced significant growth, up 103.4% from $50.5 million at the time of the acquisition to $102.7 million at the end of 2008. Because we recognize the business opportunities in Flushing and in an attempt to further expand our market coverage in the New York/New Jersey area, we plan to open our own Flushing branch in the first quarter of 2009. This will be our third branch in the greater New York City metropolitan area.

        In addition to our expansion into the New York/New Jersey area, we further expanded our banking network within the state of California. In August 2008, we opened our new City Center branch office in Los Angeles, California. To improve operating efficiency, we also merged a market branch in Rancho Cucamonga, California, into a neighboring branch in the same city during December 2008.

        Over the past several years, our network of branches and LPOs has expanded geographically. We currently maintain twenty branch offices and five LPOs. We believe that our market coverage complements our multi-ethnic small business focus. We intend to be cautious about our growth strategy in future years regarding opening of additional branches and LPOs. We expect to continue implementing our growth strategy using planning and market analysis, and as our needs and resources permit.

        In December 2002, the Bank issued $10 million of the 2002 Junior Subordinated Debentures. Subsequently, the Company, as a wholly-owned subsidiary in 2003 and as a parent company of the Bank in 2005 and 2007, issued a total of $77,321,000 of Junior Subordinated Debentures in connection with a $75,000,000 trust preferred securities issuance by statutory trusts wholly-owned by the Company. We believe that the supplemental capital raised in connection with the issuance of these debentures allowed us to achieve and maintain status as a well-capitalized institution and sustained our continued loan growth.

        In December 2008, we issued 62,158 shares of newly designated Series A Preferred Stock, each with a stated liquidation amount of $1,000 per share, and an attached warrant exercisable initially for 949,460 shares of our common stock, with an exercise price of $9.82 per share, to the U.S. Treasury in exchange for the U.S. Treasury's $62.2 million investment in the TARP Capital Purchase Program. This additional capital infusion from the United States government further strengthened our capital status, which will allow us to assist financial market with much needed liquidity via careful lending to qualified borrowers.

        As evidenced by our past several years of operations, we have experienced significant balance sheet growth. We have implemented a strategy of building our core banking foundation by focusing on commercial loans and business transaction accounts. Our management believes that this strategy has created recurring revenue streams, diversified our product portfolio and enhanced shareholder value.

2008 Key Performance Indicators

        We believe the following were key indicators of our performance for operations during 2008:

•

our total assets grew to $2.45 billion at the end of 2008, or an increase of 11.53% from $2.20 billion at the end of 2007.

•

our total deposits grew to $1.81 billion at the end of 2008, or an increase of 2.81% from $1.76 billion at the end of 2007.

•

our total loans grew to $2.05 billion at the end of 2008, or an increase of 13.40% from $1.81 billion at the end of 2007.

•

total net interest income slightly increased to $82.6 million in 2008, or an increase of 1.56% from $81.4 million in 2007. The smaller increase in net interest relative to the growth in our

47

loan portfolio was primarily due to numerous federal funds rate reductions in 2008, which lowered our net interest margin.

•

total noninterest income decreased to $20.6 million in 2008, or a decrease of 8.58% from $22.6 million in 2007. This decrease was primarily due to a reduction in the volume and premium rate on SBA loan sales under the weakened national economy, which is attributable primarily to the ongoing financial crisis.

•

total noninterest expense increased to $48.4 million in 2008, or 7.94% from $44.8 million in 2007. The increase is mainly due to an increase in our FDIC deposit insurance premium, stock compensation expenses attributable to the 2008 Stock Option Plan, and personnel and premises expenses associated with our business growth. Nonetheless, due to our continuous effort in minimizing operating expenses, noninterest expenses as a percentage of average assets were lowered to 2.1% in 2008 from 2.2% in 2007.

•

our efficiency ratio (the ratio of noninterest expense to the sum of net interest income before provision for loan losses and total noninterest income) remained at a relatively low level (below 50%), at 46.9% and 43.1% in 2008 and 2007, respectively.

        Net income available for common shareholders for 2008 decreased to $26.3 million, or $0.90 per diluted common share, as compared with $26.8 million, or $0.91 per diluted common share in 2007. The decrease in net income is primarily attributable to a change of management strategy to shift our efforts and focus of from promoting profit growth to improving loan portfolio quality. These changes are discussed in more detail in the section of this Report entitled, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

2009 Outlook

        As we look ahead to 2009, we expect that the declining economy and real estate markets in our primary market areas will continue to be significant determinants to the quality of our assets in future periods, and thus, to our results of operations, liquidity and financial condition. Due to the gradual decrease in housing prices since late 2006, and the emergence of the financial crisis during the second half of 2008, the real estate market and our overall economy are generally declining. The national economy has reached its lowest point since 2000, and we anticipate a further decline in 2009. In an attempt to stimulate the economy, the Federal Reserve Board has aggressively cut the federal funds rate by 100 to 75 basis points to the unprecedentedly low level of 0.00% to 0.25% as of December 16, 2008. Prior to that, the rates had already been reduced six times, including 50 basis points reductions on October 8, 2008 and October 29, 2008. In addition to federal funds rate cuts, the Federal Reserve Board has been aggressively selling treasury instruments to pump money and liquidity into the banking system and the credit market in an attempt boost spending, ease lending and the shorting pressure of the market. We expect that the deterioration of our economy will negatively affect our asset quality. Responding proactively to this anticipated business environment, we shifted our focus from growth to improvement of our asset quality. Since 2007, we have strengthened loan underwriting standards and have been carefully scrutinizing any exceptions to our loan policy. We anticipate these changes will result in loan growth that is slower than our historic levels, but we also anticipate a corresponding improvement in the quality of our loan portfolio.

        We expect that the financial crisis will continue and will have widespread effects across different industries and countries. We therefore expect the general economy to continue to slow in 2009. Nonetheless, the U.S. government is implementing several initiatives in an attempt to stimulate the national economy. On October 3, 2008, EESA was enacted by the U.S. Congress, which appropriated $700 billion for the purpose of restoring liquidity and stability in the U.S. financial system. On October 14, 2008, the U.S. Treasury established the TARP Capital Purchase Program under the authority granted by the EESA. Under the TARP Capital Purchase Program, the U.S. Treasury made

48

$250 billion of capital available to U.S. financial institutions in the form of senior preferred stock investments. Like many other sound financial institutions, we voluntarily participated in the Capital Purchase Program and received $62.2 million in additional funding that has further strengthened our capital position.

        In addition, the Federal Reserve Board has aggressively purchased treasury securities and reduced the federal funds rates as means to improve market liquidity and encourage banks to make credit available to qualified borrowers. On February 17, 2009, ARRA was enacted by the U.S. Congress, providing an additional approximately $787 billion to stimulate the national economy. We are optimistic that these government initiatives will result in some economic recovery during the latter half of 2009 and 2010.

        In contrast, in response to the current weak economic conditions, the FDIC issued a letter indicating that it intends to charge a special assessment in 2009 and that assessment may be as much as 20 basis points based on our deposits or assessment base as of June 30, 2009, but the actual amount has not been determined by the FDIC. We expect to accrue and record this one-time expense when FDIC finalizes the assessment in the second quarter of 2009, and to incur the actual payment in the third quarter of 2009.

        On a micro economic level within our own business, we plan to continue to focus on management of our net interest margin through 2009 and beyond. We are liability sensitive for the first year time frame, meaning that more interest bearing liabilities will reprice than interest earning assets in 2009. However, we should begin to see opposite movement by the first quarter of 2010 because we are more asset sensitive in the long term as interest earning assets will re-price more quickly than interest bearing liabilities. In general, based upon our current mix of deposits, loans and investments, a decrease in interest rates would result the increase of net interest margin and NPV. Increases in interest rates would be expected to have opposite effect. However, given in the current low interest rate environment, further decreases in interest rate will result in net interest margin as shown in our simulation results below.

        It is our expectation that the strategic change toward more moderate and quality loan growth will reduce the volume of our higher yielding, higher risk loans. Although we did not have any subprime borrowers in our current loan portfolio, it is our belief that a more stringent lending strategy is to our benefit in managing loan losses in the current economic environment. As a result, our net interest margin should experience only moderate growth. To complement these strategic changes, explore new business opportunities and reduce costs, we plan to extend our market coverage into the East Coast of the U.S. We also plan to continue our core deposit campaign that links monetary awards to core deposit growth. We expect that these measures will benefit our net interest margin going forward.

        Notwithstanding the overall slower national economy, we believe that there will be slower but continual economic growth in our niche market areas, which includes the Korean-American business sectors located in Southern California, Texas, New Jersey, and the greater New York City metropolitan area. We expect that this growth will be mainly attributable to an anticipated capital influx from the Republic of Korea because of the successful passage of the Republic of Korea—United States Free Trade Agreement in October 2008, and admission of Korea into the United States' Visa Waiver Program in November 2008. Accordingly, we therefore believe that we will continue to grow, provided that such growth will be at a more controlled pace than we have experienced in the past few years. The reduction in our growth rate is expected to result in a healthier balance sheet, as we expect to see fewer non-performing loans. Hence, our asset base is expected to be of better quality with more core-deposits.

        We will continue to consider opportunities for growth in our existing markets, as well as opportunities to expand into new markets through de novo branching and regional LPOs. We are currently in the planning process of opening our third New York branch in Flushing during the first

49

quarter of 2009. We believe the third New York branch, together with the existing Fort Lee, New Jersey branch and the two existing New York branches, will be a critical part of our planned expansion strategy, especially in the East Coast market of the U.S. because of its high level of small business activity and diverse population.

        In addition, we will continue to focus on streamlining our operations so that our expenses do not outpace the overall growth of our business.

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 several 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 SBA loans, and the treatment and valuation of stock-based compensation and business combination. In each area, we have identified the variables most important in the estimation process. We have used the best information available to make the estimates 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.

Investment Securities

        Our investment policy seeks to provide and maintain liquidity, and to produce favorable returns on investments without incurring unnecessary interest rate or credit risk, while complementing our lending activities. Our investment securities portfolio is subject to interest rate risk. Fluctuations in interest rates may cause actual prepayments to vary from the estimated prepayments over the life of a security. This may result in adjustments to the amortization of premiums or accretion of discounts related to these instruments, consequently changing the net yield on such securities. Reinvestment risk is also associated with the cash flows from such securities. The unrealized gain/loss on such securities may also be adversely impacted by changes in interest rates.

        Under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, investment securities that management has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and recorded at amortized cost. Securities not classified as held-to-maturity or trading, with readily determinable fair values, are classified as "available-for-sale" and recorded at fair value. Purchase premiums and discounts are recognized in interest income using the interest method over the estimated lives of the securities.

        The classification and accounting for investment securities are discussed in detail in Notes 1 and 2 of the consolidated financial states presented elsewhere in this report Under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, investment securities generally must be classified as held-to-maturity, available-for-sale, or trading. The appropriate classification is based partially on our ability to hold the securities to maturity and largely on management's intentions with respect to either

50

holding or selling the securities. The classification of investment securities is significant since it directly impacts the accounting for unrealized gains and losses on securities. Unrealized gains and losses on trading securities flow directly through earnings during the periods in which they arise. Investment securities that are classified as held-to-maturity are recorded at amortized cost. Unrealized gains and losses on available-for-sale securities are recorded as a separate component of stockholders' equity (accumulated other comprehensive income or loss) and do not affect earnings until realized or are deemed to be other-than-temporarily impaired. The fair values of investment securities are generally determined by reference to the average of at least two quoted market prices obtained from independent external brokers or independent external pricing service providers who have experience in valuing these securities. In obtaining such valuation information from third parties, we have evaluated the methodologies used to develop the resulting fair values. We perform a monthly analysis on the broker quotes received from third parties to ensure that the prices represent a reasonable estimate of the fair value. The procedures include, but are not limited to, initial and on-going review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. We ensure whether prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed based on spreads, and when available, market indices. As a result of this analysis, if we determine there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding.

        We are obligated to assess, at each reporting date, whether there is an other-than-temporary impairment to our investment securities. Such impairment must be recognized in current earnings rather than in other comprehensive income. The determination of other-than-temporary impairment is a subjective process, requiring the use of judgment and assumptions. We examine all individual securities that are in an unrealized loss position at each reporting date for other-than-temporary impairment. Specific investment-related factors we examine to assess impairment include the nature of the investment, severity and duration of the loss, the probability that we will be unable to collect all amounts due, and analysis of the issuers of the securities and whether there has been any cause for default on the securities and any change in the rating of the securities by the various rating agencies. Additionally, we evaluate whether the creditworthiness of the issuer calls the realization of contractual cash flows into question. We reexamine the financial resources, intent and the overall ability of the Company to hold the securities until their fair values recover. Management does not believe that there are any investment securities, other than those identified in the current and previous periods, which are deemed to be other-than-temporarily impaired as of December 31, 2008. Investment securities are discussed in more detail in Note 2 of our consolidated financial statements presented later in this report.

        As required under Financial Accounting Standards Board ("FASB") Emerging Issues Task Force ("EITF") 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interest in Securitized Financial Assets, and EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20, we consider all available information relevant to the collectability of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of future cash flows and making its other-than-temporary impairment assessment for our portfolio of residual securities and pooled trust preferred securities. We consider factors such as remaining payment terms of the security, prepayment speeds, the financial condition of the issuer(s), expected defaults, and the value of any underlying collateral.

        As of December 31, 2008 and December 31, 2007, no investment securities were determined to have any other-than-temporary impairment. The unrealized losses on our government sponsored

51

enterprises ("GSE") bonds, collateralized mortgage obligations ("CMOs"), and mortgage-backed securities ("MBS") are attributable to both changes in interest rates and a repricing risk in the market. All GSE bonds, GSE CMO, and GSE MBS securities are backed by U.S. Government Sponsored and Federal Agencies and therefore rated "AAA." We have no exposure to the "Subprime Market" in the form of Asset Backed Securities ("ABS") and Collateralized Debt Obligations ("CDOs") that had previously been rated "AAA" but have since been downgraded to below investment grade. We have the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 and 2007 until the market value recovers or the securities mature.

        Municipal bonds and corporate bonds are evaluated by reviewing the creditworthiness of the issuer and general market conditions. The unrealized losses on our investment in municipal and corporate securities were primarily attributable to both changes in interest rates and a repricing risk in the market. We have the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 and 2007 until the market value recovers or the securities mature.

Small Business Administration Loans

        Certain SBA loans that may be sold prior to maturity have been designated as held for sale at origination and are recorded at the lower of cost or market value, determined on an aggregate basis. A valuation allowance is established if the market value of such loans is lower than their cost, and operations are charged or credited for valuation adjustments. When we sell a loan, we usually sell the guaranteed portion of the loan and retain the non-guaranteed portion. We receive sales proceeds from: (i) the guaranteed principal of the loan, (ii) the deferred premium for the difference between the book value of the retained portion and the fair value allocated to the retained portion, and (iii) the loan excess servicing fee ("ESF"). At the time of sale, the deferred premium, which is amortized over the remaining life of the loan as an adjustment to yield, is recorded for the difference between the book value and the fair value allocated to the retained portion. The sales gain is recognized from the difference between the proceeds and the book value allocated to the sold portion.

        We allocate the book value of the related loan among three portions on the basis of their relative fair value: (i) the sold portion, (ii) the retained portion, and (iii) the ESF. We estimate the fair value of each portion based on the following. The amount received for the sale represents the fair value of the sold portion. The fair value of the retained portion is computed by discounting its future cash flows over the estimated life of the loan. We calculate the fair value of the ESF for the loan from the cash in-flow of the net servicing fee over the estimated life of the loan, discounted at an above average discount rate and a range of constant prepayment rates of the related loans.

        We capitalize the fair value allocated to ESF in two categories: (i) intangible servicing assets (the contracted servicing fee less normal servicing costs), and (ii) interest-only strip, or "I/O strip," receivables (excess of ESF over the contracted servicing fee). The servicing asset is recorded based on the present value of the contractually specified servicing fee, net of servicing cost, over the estimated life of the loan, with an average discount rate and a range of constant prepayment rates of the related loans. Prior to December 31, 2006, the servicing asset is amortized in proportion to and over the period of estimated servicing income. For purposes of measuring impairment, the servicing assets are stratified by collateral types. Management periodically evaluates the fair value of servicing assets for impairment. A valuation allowance is recorded when the fair value is below the carrying amount and a recovery of the valuation allowance is recorded when its fair value exceeds the carrying amount. However, a reversal may not exceed the original valuation allowance recorded. On January 1, 2007, we adopted SFAS No. 156, Accounting for Servicing of Financial Assets, and selected a fair value measurement method to measure our servicing assets and liabilities and recognized a one time increase in their fair value of $80,000, net of tax effects. Any subsequent increase or decrease in fair value of servicing assets and liabilities is to be included in our current earnings in the statement of operations. An interest-only strip is recorded based on the present value of the excess of future interest income, over the

52

contractually specified servicing fee, calculated using the same assumptions as noted above. Interest-only strips are accounted for at their estimated fair value, with unrealized gains recorded as an adjustment in accumulated other comprehensive income in shareholders' equity. If the estimated fair value is less than its carrying value, the loss is considered as other-than-temporary impairment and it is charged to the current earnings. I/O strips are amortized over the remaining life of the loan as an adjustment to yield and monitored for impairment.

Allowance for Loan Losses

        Accounting for the allowance for loan losses involves significant judgment and assumptions by management and is based on historical data and management's view of the current economic environment. At least on a quarterly basis, our management reviews the methodology and adequacy of the allowance for loan losses and reports its assessment to the Board of Directors for its review and approval.

        We base our allowance for loan losses on an estimate of probable losses inherent in our loan portfolio. Our methodology for assessing loan loss allowances is intended to reduce the differences between estimated and actual losses and involves a detailed analysis of our loan portfolio in three phases:

•

the specific review of individual loans in accordance with Statement of Financial Accounting Standards (SFAS) No.114, Accounting by Creditors for Impairment of a Loan,

•

the segmenting and reviewing of loan pools with similar characteristics in accordance with SFAS No. 5, Accounting for Contingencies, and

•

our judgmental estimate based on various qualitative factors.

        The first phase of our allowance analysis involves the specific review of individual loans to identify and measure impairment. At this phase, we evaluate each loan except for homogeneous loans, such as automobile loans and home mortgages. Specific risk-rated loans are deemed impaired with respect to all amounts, including principal and interest, which will likely not be collected in accordance with the contractual terms of the related loan agreement. Impairment for commercial and real estate loans is measured either based on the present value of the loan's expected future cash flows or, if collection on the loan is collateral dependent, the estimated fair value of the collateral, less selling and holding costs.

        The second phase involves segmenting the remainder of the risk-rated loan portfolio into groups or pools of loans, together with loans with similar characteristics for evaluation in accordance with SFAS No. 5. We perform loss migration analysis and calculate the loss migration ratio for each loan pool based on its historical net losses and benchmark it against the levels of other peer banks.

        In the third phase, we consider relevant internal and external factors that may affect the collectability of a loan portfolio and each group of loan pools. As a general rule, the factors listed below will be considered to have no impact to our loss migration analysis. However, if there exists information to warrant adjustment to the loss migration ratios, the changes will be made in accordance with the established parameters and supported by narrative and/or statistical analysis. We use a credit risk matrix to determine the impact to the loss migration analysis. This matrix enables management to adjust the general allocation based on the loss migration ratio. The factors currently considered are, but are not limited to: concentration of credit, delinquency trend, nature and volume of loan trend, non-accrual and problem loan trends, loss and recovery trend, quality loan review, lending and management staff, lending policies and procedures, and external factors such as changes in legal and regulatory requirements, on the level of estimated credit losses in the current portfolio. For all factors, the extent of the adjustment will be commensurate with the severity of the conditions that concern each factor.

53

        The evaluation of the inherent loss with respect to these factors is subject to a higher degree of uncertainty because they are not identified with specific problem credits or portfolio components.

        Central to our credit risk management and our assessment of appropriate loss allowance is our loan risk rating system. Under this system, the originating credit officer assigns borrowers an initial risk rating based on a thorough analysis of each borrower's financial capacity in conjunction with industry and economic trends. Approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and credit administration personnel. Credits are monitored by line and credit administration personnel for deterioration in a borrower's financial condition which may impact the ability of the borrower to perform under the contract. Although management has allocated a portion of the allowance to specific loans, specific loan pools, including off-balance sheet credit exposures which are reported separately as part of other liabilities, the adequacy of the allowance is considered in its entirety.

Non-Accrual Loan Policy

        Interest on loans is credited to income as earned and is accrued only if deemed collectible. Accrual of interest is discontinued when a loan is over 90 days delinquent unless management believes the loan is adequately collateralized and in the process of collection. Generally, payments received on nonaccrual loans are recorded as principal reductions. Interest income is recognized after all principal has been repaid or an improvement in the condition of the loan has occurred that would warrant resumption of interest accruals.

Other Real Estate Owned

        Other real estate owned ("OREO"), which represents real estate acquired through foreclosure, or deed in lieu of foreclosure in satisfaction of commercial and real estate loans, is carried at the lower of cost or estimated fair value less the estimated selling costs of the real estate. The fair value of the property is based upon a current appraisal. The difference between the fair value of the real estate collateral and the loan balance at the time of transfer is recorded as a loan charge-off if fair value is lower than the loan balance. Subsequent to foreclosure, management periodically performs valuations and the OREO property is carried at the lower of carrying value or fair value, less cost to sell. The determination of a property's estimated fair value incorporates (i) revenues projected to be realized from disposal of the property, (ii) construction and renovation costs, (iii) marketing and transaction costs, and (iv) holding costs (e.g., property taxes, insurance and homeowners' association dues). Any subsequent declines in the fair value of the OREO property after the date of transfer are recorded through a write-down of the asset. Any subsequent operating expenses or income, reduction in estimated fair values, and gains or losses on disposition of such properties are charged or credited to current operations.

Bank Owned Life Insurance ("BOLI") Obligation

        Under EITF 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Slit-Dollar Life Insurance Arrangements, an employer is required to recognize obligations associated with endorsement split-dollar life insurance arrangements that extend into the participant's post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. EITF 06-4 is effective as of the beginning of the entity's first fiscal year after December 15, 2007. We adopted EITF 06-4 on January 1, 2008 using the later option based on the future death benefit. Upon this adoption, we recognized increases in the liability for unrecognized post-retirement obligations of $806,000 and $1,070,000 for directors and officers, respectively, as a cumulative adjustment to our current year's beginning equity. During the year of 2008, the increases in BOLI expense and liability related to the adoption of

54

EITF 06-4 was $144,000, which was included as part of the other expenses and other liabilities balances in the consolidated financial statements.

Goodwill

        We recognized goodwill and intangible assets in connection with the acquisition of Liberty Bank of New York. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill will no longer be amortized, but rather be subject to impairment testing at least annually. We tested goodwill for impairment as of December 31, 2008.

Income Taxes

        We accounted for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enacted date.

        We record net tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event we determine that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to reduce the current period provision for income taxes.

        Our effective tax rates were often lower than the statutory rates. This was mainly due to state tax benefits derived from doing business in an enterprise zone and tax preferential treatment for our ownership of BOLI and low income housing tax credit funds.

        In 2007, we adopted the provision of FASB Financial Interpretation No. ("FIN") 48, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. As a result of the implementation of the Interpretation, the Company recognized an increase in the liability for unrecognized tax benefit of $153,000 and related interest of $9,000. As of December 31, 2008, the total unrecognized tax benefit that would affect the effective rate if recognized was $333,000, and related interest was $36,000 (see Note 13).

Stock-Based Compensation

        We issued stock-based compensation to certain employees, officers, and directors. On January 1, 2006, we adopted SFAS 123R, Share-Based Payment, for stock based compensation. SFAS No. 123R allows for two alternative transition methods. We follow the modified prospective method, which requires application of the new Statement to new awards and to awards modified, repurchased or cancelled after the required effective date. Accordingly, prior period amounts have not been restated. Additionally, compensation cost for the portion of awards for which the requisite service has not been

55

rendered that are outstanding as of January 1, 2006 are recognized as the requisite services are rendered on or after January 1, 2006. The compensation cost of that portion of awards is based on the grant-date fair value of those awards.

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, the governmental budgetary matters, and the actions of the Federal Reserve Board.

        Our average net loans were $1.93 billion in 2008, as compared with $1.65 billion in 2007 and $1.41 billion in 2006, representing similar increases of 17.2% in both 2008 and 2007, respectively, from each of the prior annual periods and average interest-earning assets were $2.17 billion in 2008, as compared with $1.90 billion in 2007 and $1.70 billion in 2006, representing increases of 14.3% and 11.9% in 2008 and 2007, respectively, from each of the prior annual periods. Our average interest-bearing deposits also increased by 1.8% to $1.45 billion in 2008, as compared with $1.42 billion in 2007, after increasing 12.3% in 2007 from $1.27 billion in 2006. Together with other borrowings (see "Financial Condition—Deposits and Other Sources of Funds" below), average interest-bearing liabilities increased by 17.9% to $1.82 billion in 2008, as compared with $1.54 billion in 2007, after increasing by 13.0% in 2007 from $1.37 billion in 2006.

        The Federal Reserve Board's rate decreases since September 2007 resulted in a slight decrease in our average yield on interest-earning assets to 8.29% in 2007 from 8.32% in 2006. In response to the declining national economy, the Federal Reserve Board further reduced the federal funds rate seven times in 2008. Since the last rate reduction on December 16, 2008, the current federal funds rate has been 0.00% to 0.25%, an unprecedentedly low level. Accordingly, the average yield on interest-earning assets sharply decreased to 6.84% in 2008. During the same time periods, the rates for deposits in our local markets remained competitive, which required us to closely monitor our cost of funds so that it would be in line with our yield on assets. Our average yield on interest earning assets decreased 145 basis points to 6.84% in 2008 from 8.29% in 2007 and 8.32% in 2006. As a result, interest income decreased 5.7% to $148.6 million in 2008, as compared to $157.6 million in 2007. Consistent to the drop in interest income, interest expense decreased 13.5% to $66.0 million in 2008, as compared with $76.3 million in 2007. In 2007, interest income grew 11.5% to $157.6, as compared with $141.4 million in 2006. The growth in interest income, however, was outpaced by a 17.7% increase in interest expense to $76.3 million in 2007 from $64.8 million in 2006.

        The combined result of our growth and careful monitoring efforts with respect to cost of funds resulted in an increase in our net interest income. Net interest income increased 1.6%, or $1.3 million, to $82.6 million in 2008, following an increase of 6.2%, or $4.8 million in 2007 to $81.4 million from $76.6 million in 2006. Impacted by the Federal Reserve Board's rate cuts and the stiff deposit competition among financial institutions, our net interest spread and net interest margin deteriorated in 2008 to 3.21% and 3.80%, respectively, lowered from 3.35% and 4.28% in 2007, and 3.58% and 4.51% in 2006.

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        The following table sets forth, for the periods indicated, our average balances of assets, liabilities and shareholders' equity, in addition to the major components of net interest income and net interest margin:

Distribution, Yield and Rate Analysis of Net Income

(Dollars in Thousands)

			For the Years Ended December 31,
			2008							2007							2006
			Average Balance		Interest Income/ Expense		Average Rate/ Yield			Average Balance		Interest Income/ Expense		Average Rate/ Yield			Average Balance		Interest Income/ Expense		Average Rate/ Yield
Assets:
Earning assets:
	Net loans(1)		$	1,933,048	$	137,630		7.12	%	$	1,649,130	$	144,740		8.78	%	$	1,407,250	$	127,840		9.08	%
	Securities of government sponsored enterprises			212,126		10,035		4.73	%		173,581		8,765		5.05	%		173,985		7,687		4.42	%
	Other investment securities			15,355		714		4.65	%		25,392		1,210		4.77	%		20,588		969		4.71	%
	Federal funds sold			13,262		254		1.91	%		54,026		2,921		5.41	%		97,198		4,886		5.03	%
	Interest-earning deposits			—		—		—			—		—		—			427		18		4.26	%
Total interest-earning assets				2,173,791		148,633		6.84	%		1,902,129		157,636		8.29	%		1,699,448		141,400		8.32	%
Total noninterest-earning assets				157,238							147,205							133,920
		Total assets	$	2,331,029						$	2,049,334						$	1,833,368
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Money market deposits			402,323		13,147		3.27	%		445,130		20,090		4.51	%		356,602		15,151		4.25	%
	Super NOW deposits			21,290		286		1.34	%		22,511		297		1.32	%		20,853		245		1.18	%
	Savings deposits			38,250		1,297		3.39	%		29,816		710		2.38	%		25,093		332		1.32	%
	Time certificates of deposit in denominations of $100,000 or more			797,404		29,840		3.74	%		776,697		40,516		5.22	%		706,729		36,082		5.11	%
	Other time deposits			186,639		7,342		3.93	%		146,837		7,153		4.87	%		155,741		7,133		4.58	%
	FHLB advances and other borrowings			287,566		9,287		3.23	%		49,407		2,067		4.18	%		39,755		1,543		3.88	%
	Junior subordinated debenture			87,321		4,815		5,51	%		73,904		5,453		7.38	%		61,547		4,337		7.05	%
Total interest-bearing liabilities				1,820,793		66,014		3.63	%		1,544,302		76,286		4.94	%		1,366,320		64,823		4.74	%
Noninterest-bearing liabilities:
	Noninterest-bearing deposits			298,163							315,177							310,031
	Other liabilities			24,833							25,718							23,974
Total noninterest-bearing liabilities				322,996							340,895							334,005
Shareholders' equity				187,240							164,137							133,043
		Total liabilities and shareholders' equity	$	2,331,029						$	2,049,334						$	1,833,368
Net interest income					$	82,619						$	81,350						$	76,577
Net interest spread(2)								3.21	%						3.35	%						3.58	%
Net interest margin(3)								3.80	%						4.28	%						4.51	%

⁽¹⁾

Net loan fees have been included in the calculation of interest income. Net loan fees were approximately $4,155,000, $6,692,000, and $5,914,000 for the years ended December 31, 2008, 2007, and 2006, respectively. Loans are net of the allowance for loan losses, deferred fees, unearned income, and related direct costs, but include those placed on non-accrual status.

⁽²⁾

Represents the average rate earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

⁽³⁾

Represents net interest income as a percentage of average interest-earning assets.

        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

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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)

		For the Year Ended December 31, 2008 vs. 2007 Increases (Decreases) Due to Change In									For the Year Ended December 31, 2007 vs. 2006 Increases (Decreases) Due to Change In
		Volume			Rate			Total			Volume			Rate			Total
Interest income:
Net loans(1)		$	22,675		$	(29,785	)	$	(7,110	)	$	21,352		$	(4,452	)	$	16,900
Securities of government sponsored enterprises			1,851			(581	)		1,270			(18	)		1,096			1,078
Other Investment securities			(467	)		(29	)		(496	)		229			12			241
Federal funds sold			(1,437	)		(1,230	)		(2,667	)		(2,310	)		345			(1,965	)
Interest-earning deposits			—			—			—			(18	)		—			(18	)
	Total interest income		22,622			(31,625	)		(9,003	)		19,235			(2,999	)		16,236
Interest expense:
Money market deposits			(1,794	)		(5,149	)		(6,943	)		3,949			990			4,939
Super NOW deposits			(16	)		5			(11	)		21			31			52
Savings deposits			235			352			587			72			306			378
Time certificates of deposit in denominations of $100,000 or more			1,054			(11,730	)		(10,676	)		3,636			798			4,434
Other time deposits			1,721			(1,532	)		189			(420	)		440			20
FHLB advances and other borrowings			7,793			(573	)		7,220			397			127			524
Junior subordinated debenture			886			(1,524	)		(638	)		904			212			1,116
	Total interest expense		9,879			(20,151	)		(10,272	)		8,559			2,904			11,463
Change in net interest income		$	12,743		$	(11,474	)	$	1,269		$	10,676		$	(5,903	)	$	4,773

⁽¹⁾

Net loan fees have been included in the calculation of interest income. Net loan fees were approximately $4,155,000, $6,692,000, and $5,914,000 for the years ended December 31, 2008, 2007, and 2006, respectively. Loans are net of the allowance for loan losses, deferred fees, unearned income, and related direct costs, but include those placed on non-accrual status.

Provision for Loan Losses and Provision for Loan Commitments

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

        Although we have enhanced our stringent loan underwriting standards and proactive credit follow-up procedures, we experienced a substantial increase of the provision for loan losses because of the weak economy, the decline in the real estate market, and the unprecedented nationwide increase in loan defaults and foreclosures. With our enhanced credit underwriting procedures and a tightening of

58

our loan growth, our provision for loan losses decreased to $12.1 million in 2008 from $15.0 million in 2007. However, the loan loss provisions for the recent two years have substantially increased, as compared with $6.0 million in 2006. The increases in our provisions were primarily to keep pace with the continued growth of our loan portfolio and an increase of non-performing loans (see "Nonperforming Assets" below for further discussion). The $12.1 million provision in 2008 was net of a recovery of $755,000 to the reserve for loan commitments, while the $15.0 million and $6.0 million provisions in 2007 and 2006 included $1,107,000 and $104,000 provisions to the reserve for loan commitments, respectively. The procedures for monitoring the adequacy of the allowance for loan losses, as well as detailed information concerning the allowance itself, are described in the section entitled "Allowance for Loan Losses and Loan Commitments" below.

Noninterest Income

        Total noninterest income decreased to $20.6 million in 2008, as compared with $22.6 million and $26.4 million in 2007 and 2006, respectively. Noninterest income was 0.9% of average assets in 2008, lowered from 1.1% and 1.4% in 2007 and 2006, respectively. We currently earn non-interest income from various sources, including an income stream provided by bank owned life insurance, or 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)

		2008					2007					2006
For the Years Ended December 31,		(Amount)		(%)			(Amount)		(%)			(Amount)		(%)
Service charges on deposit accounts		$	11,964		58.0	%	$	9,781		43.3	%	$	9,554		36.2	%
Loan-related servicing fees			3,174		15.4	%		2,133		9.4	%		2,099		8.0	%
Gain on sale of loans			2,186		10.6	%		7,502		33.2	%		11,642		44.1	%
Income from other earning assets			1,248		6.0	%		1,148		5.1	%		1,045		3.9	%
Other income			2,074		10.0	%		2,020		9.0	%		2,060		7.8	%
	Total	$	20,646		100.0	%	$	22,584		100.0	%	$	26,400		100.0	%
Average assets		$	2,331,029				$	2,049,334				$	1,833,368
Noninterest income as a % of average assets					0.9	%				1.1	%				1.4	%

        Our largest source of noninterest income in 2008 was service charge income on deposit accounts, which represented over 58% of total noninterest income. Service charges increased to $12.0 million in 2008, as compared with $9.8 million and $9.6 million in 2007 and 2006, respectively. The increase in services charge income was primarily due to our increase of over 20% during February 2008 in the services charges we apply to our customers' deposit accounts. We constantly review service charge rates to maximize service charge income while maintaining a competitive position.

        Our second largest source of non-interest income was loan-related servicing fees, which represented approximately 15% of our total non-interest 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 has generally increased. In 2008, it increased to $3.2 million, as compared with $2.1 million in both 2007 and 2006. The 2008 increase of $1.0 million increase was primarily attributable to $0.7 million more in income related to a smaller

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disposal of servicing assets and I/O strips of $1.1 million, such contra income were $1.8 million and $1.4 million in 2007 and 2006, respectively. The servicing fee income on sold loans is credited when we collect the monthly payments on the sold loans we are servicing and charged by the monthly amortization of servicing rights and I/O strips that we originally capitalized upon sale of the related loans. Such servicing rights and I/O strips are also charged against the loan service fee income account when the sold loans are paid off.

        Our third largest source of noninterest income was the gain on sale of loans, representing approximately 11% of our total noninterest income in 2008. This category of income has substantially decreased to $2.2 million in 2008 from $7.5 million and $11.6 million in 2007 and 2006, respectively. This noninterest income is derived primarily from the sale of the guaranteed portion of SBA loans. We sell the guaranteed portion of SBA loans in government securities secondary markets and retain servicing rights. Due to the weakened economy and ongoing financial crisis, our SBA loan production levels decreased to $63.3 million in 2008 as compared with $139.5 million and $151.1 million in 2007 and 2006, respectively, and accordingly the gain on sale of the guaranteed portions of SBA loans decreased to $2.2 million in 2008, as compared with $5.9 million in 2007 and $8.4 million in 2006. The $3.7 million decrease in gain of guaranteed portion of SBA loan sales in 2008 was primarily attributed to the lowered sales volume and decrease in sales premium rates from 6.7% in 2007 to 5.3% in 2008. There was no sale of the unguaranteed portion of SBA loans in 2008, which resulted in no gain on sale for the year, as compared with $1.5 million, and $3.1 million in 2007, and 2006, respectively. This source of noninterest income also includes sales gains on residential mortgage loans. However, due to the decline of the residential mortgage market, sale transactions of residential mortgage loans were low, so the gain on such sales decreased to $19,000 in 2008, as compared with $121,000 and $225,000, in 2007 and 2006.

        Income on other earning assets represents income from earning assets other than interest-earning assets, such as dividend income from FHLB stock ownership and the increase in cash surrender value of BOLI. Such income was $1.2 million, $1.1 million and $1.0 million in 2008, 2007 and 2006, respectively. The $100,000 change in 2008 was primarily due to $43,000 increase in BOLI interest income, and $58,000 increase in FHLB dividend income. Similarly in 2007, the $103,000 increase in income was also primarily attributable to an additional BOLI interest and FHLB stock dividends.

        Other income represented income from miscellaneous sources, such as loan referral fees, SBA loan packaging fees, gain on sale of investment securities and excess of insurance proceeds over carrying value of an insured loss that generally increases as our business grows. Other income increased to $2.1 million in 2008, as compared with $2.0 million in 2007 and $2.1 million in 2006.

Noninterest Expense

        Total noninterest expense increased to $48.4 million in 2008 from $44.8 million in 2007 which previously increased from $41.2 million in 2006. These increases were primarily attributable to the increase in stock compensation expenses for new stock options granted in June 2008 and various expenses associated with the integration of our new Los Angeles office opened in August 2008. However, due to continuing efforts to minimize operating expenses during our expansion, we were able to maintain noninterest expenses as a percentage of average assets at a low level of 2.1% in 2008, as compared with 2.2% in both 2007 and 2006. Management believes that its efforts in cost-cutting and revenue diversification have effectively maintained our operational efficiency at comparatively low levels in 2008. Despite the weak economic conditions, our efficiency ratio has only slightly increased to 46.9% in 2008, from 43.1% in 2007 and $40.0% in 2006.

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

Noninterest Expense

(Dollars in Thousands)

		2008					2007					2006
For the Years Ended December 31,		(Amount)		(%)			(Amount)		(%)			(Amount)		(%)
Salaries and employee benefits		$	26,517		54.8	%	$	24,437		54.5	%	$	23,823		57.8	%
Occupancy and equipment			6,128		12.7	%		5,302		11.8	%		4,554		11.0	%
Data processing			3,111		6.4	%		3,089		6.9	%		2,450		5.9	%
Professional fees			1,840		3.8	%		1,392		3.1	%		1,143		2.8	%
Outsourced service for customers			1,556		3.2	%		1,783		4.0	%		1,349		3.3	%
Deposit insurance premium			1,285		2.7	%		923		2.1	%		187		0.5	%
Advertising and promotional			1,016		2.1	%		1,230		2.7	%		1,256		3.0	%
Office supplies			729		1.5	%		702		1.6	%		709		1.7	%
Communications			437		0.9	%		483		1.1	%		462		1.1	%
Directors' fees			431		0.9	%		554		1.2	%		535		1.3	%
Investor relation expenses			307		0.6	%		294		0.7	%		262		0.6	%
Amortization of investments in affordable housing partnerships			809		1.7	%		532		1.2	%		329		0.8	%
Amortization of other intangibles assets			298		0.6	%		298		0.7	%		185		0.4	%
Other			3,936		8.1	%		3,820		8.4	%		3,988		9.8	%
	Total	$	48,400		100.0	%	$	44,839		100.0	%	$	41,232		100.0	%
Average assets		$	2,331,029				$	2,049,334				$	1,833,368
Noninterest expense as a % of average assets					2.1	%				2.2	%				2.2	%

        Salaries and employee benefits historically represent more than half of our total noninterest expense and generally increase as our branch network and business volume expand. These expenses increased to $26.5 million in 2008, as compared with $24.4 million in 2007 and $23.8 million in 2006, representing increases of 8.5% and 2.6% in 2008 and 2007, respectively, over each of the prior year periods. The $2.1 million increase in 2008 over 2007 was the result of overall compensation increases, coupled with $0.8 million increase in stock compensation attributable to the new options granted in June 2008 under the 2008 Stock Option Plan. Although additional staffing was necessitated by our new office openings and business growth in the past 12 months, we have successfully controlled and maintained our total number of employees through effective allocation of our human resources. The number of full-time equivalent employees decreased to 348 in December 2008, as compared with 368 and 330 in 2007 and 2006, respectively. Nonetheless, our steady asset growth helped us increased assets per employee to $7.0 million, as compared with $6.0 million and $6.1 million at the end of 2008, 2007 and 2006, respectively.

        Occupancy and equipment expenses represent approximately 10% to 13% of total noninterest expenses and totaled $6.1 million in 2008, compared to $5.3 million in 2007 and $4.6 million in 2006, representing increases of 15.6% and 16.4% in 2008 and 2007, respectively, over each of the prior year periods. These increases were attributable primarily to the expansion of our office network and the additional office space and lease expenses for our new California branch office opened in August 2008. Similarly, the 2007 increases were primarily attributed to the addition of our Bayside branch, while the increases in 2006 were primarily attributed to our first two branches in the New York-New Jersey area.

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        Data processing expenses remained constant at $3.1 million in 2008 and 2007, which previously increased 26.1% from $2.5 million in 2006. The increase in data processing in 2007 corresponded to the growth of our business. Since we exercised extra caution in limiting expenses in 2008, we were successful in keeping this overhead cost down in the current year.

        Professional fees generally increase as we grow and we expect these expenditures continue to be significant, as we address the enhanced SEC and NASDAQ corporate governance requirements and the local regulation of the states into which we expand our business operations. Professional fees were $1.8 million, $1.4 million, and $1.1 million, or 3.8%, 3.1%, and 2.8% of total noninterest expense, in 2008, 2007 and 2006, respectively. The $448,000 increase in 2008 was mainly attributable to the $215,000 increase in legal fees related to loan collection, property foreclosure and repossession, and various other legal consultations, and the $234,000 increase in fees related to consulting, system test, and various accounting and auditing services. Similarly in 2007, the $249,000 increase was mainly attributable to the legal and accounting fees incurred for various legal consultations and to comply with the enhanced financial reporting requirements of the Sarbanes-Oxley Act, or SOX.

        Outsourced service costs for customers are payments made to third parties who provide services that were traditionally provided by banks to their customers, such as armored car services or bookkeeping services, 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 activities and the increase in depositors demanding such services, our outsourced service costs generally rise in proportion with our business growth. Nonetheless, with our successful cost control measures, these expenses decreased to $1.6 million in 2008, as compared with $1.8 million in 2007 and $1.3 million in 2006.

        Deposit insurance premium expenses represent The Financing Corporation (FICO) and FDIC insurance premium assessments. In 2008, these expenses increased to $1,285,000 from $923,000 in 2007, which was primarily attributable to the new $251,000 FDIC risk insurance premium assessment beginning in the second quarter of 2007. Prior to the second quarter of 2007, only FICO premium of $50,000 was assessed. In addition to the regular $251,000 FDIC risk insurance premium assessment, there was another additional $90,000 increase in the FDIC risk insurance premium assessment attributable to a temporary increase in deposit insurance coverage in the fourth quarter of 2008 as part of the FDIC's Temporary Liquidity Guarantee Program. (see related discussion in Item 1, Business). Because there was no FIDC deposit insurance assessment and only an approximate $50,000 FICO premium was assessed prior to 2007, the expenses in this category were only $187,000 in 2006.

        Advertising and promotional expenses decreased to $1.0 million in 2008 from $1.2 million in 2007, which previously decreased from $1.3 million in 2006, representing 2.1%, 2.7%, and 3.0% of total noninterest expenses in 2008, 2007 and 2006, respectively. These expenses represent marketing activities, such as media advertisements and promotional gifts for customers of newly opened offices, especially in the new areas such as the east coast market in New York and New Jersey. The expenses have been decreasing in the past two years, which was primarily attributable to our cost management efforts and the stabilization of our east coast expansion.

        Noninterest expense, other than the categories specifically addressed above, increased by $264,000, or 4.0%, to $6.9 million in 2008 from $6.7 million in 2007. The increase represents a normal growth in association with the growth of our business activities and was in line with our expectation. In 2007, noninterest expenses remained roughly the same, as compared with 2006, which has a balance of $6.5 million.

        As a result of our cost control effort, noninterest expense increased less rapidly at 7.9% in 2008 and 8.7% in 2007, as compared with 20.5% in 2006. Our successful expansion into the New York/New Jersey market in the previous years has paved the groundwork for our further expansion into the east coast in 2008 and beyond. Accordingly, we did not see the same level of increases in expenses in 2008 and 2007, as compared with 2006. Although management anticipates that noninterest expense will

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continue to increase as we continue to grow, we remain committed to cost-control and operational efficiency, and we expect to keep these increases to a minimum relative to our rate of growth.

Provision for Income Taxes

        For the year ended December 31, 2008, we made a provision for income taxes of $16.3 million on pretax net income of $42.8 million, representing an effective tax rate of 38.1%, as compared with a provision for income taxes of $17.3 million on pretax net income of $44.1 million, representing an effective tax rate of 39.2% for 2007, and a provision of $21.8 million on pretax net income of $55.7 million, representing an effective tax rate of 39.1% for 2006.

        The effective tax rate in 2008 was slightly lower than those in prior years due primarily to an increase in low income housing tax credit funds and the effect of a change in our 2007 estimated tax provision. Our lower effective tax rates compared to statutory rates were mainly due to state tax benefits derived from doing business in an enterprise zone and tax preferential treatment for our ownership of BOLI and low income housing tax credit funds (see "Other Earning Assets" for further discussion). Generally, income tax expense is the sum of two components: current tax expense and deferred tax expense (benefit). Current tax expense is calculated by applying the current tax rate to taxable income. Deferred tax expense accounts for the change in deferred tax assets (liabilities) from year to year. Deferred income tax assets and liabilities represent the tax effects, based on current tax law, of future deductible or taxable amounts attributable to events that have been recognized in our 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 December 31, 2008, 2007 and 2006, we had net deferred tax assets of $12.1 million, $9.2 million and $9.7 million, respectively.

        On January 1, 2007, we adopted the provisions of FIN 48, Accounting for Uncertainty in Income Taxes. As a result of applying the provisions of FIN 48, we recognized an increase in the liability for unrecognized tax benefit of $153,000 and related interest of $9,000. As of December 31, 2008, the total unrecognized tax benefit that would affect the effective rate if recognized was $333,000. The adjustment was solely related to the state exposure from California Enterprise Zone net interest deductions. We do not expect the unrecognized tax benefits to change significantly over the next 12 months.

        As of the December 31, 2008, the total accrued interest related to uncertain tax positions was $36,000. We accounted for interest related to uncertain tax positions as part of our provision for federal and state income taxes. Accrued interest was included as part of our net deferred tax asset in the consolidated financial statements.

        We file United States federal and state income tax returns in jurisdictions with varying statue of limitations. The 2005 through 2008 tax years generally remain subject to examination by federal and most state tax authorities. We are currently under examinations for the 2005 and 2006 tax years under the California Franchise Tax Board and the New York State Department of Taxation and Finance. We believe that we have adequately provided or paid for income tax issues not yet resolved with federal, state and foreign tax authorities. Based upon consideration of all relevant facts and circumstances, we do not expect the examination results will have a material impact on our consolidated financial statement as of December 31, 2008 (see Note 13).

Financial Condition

Investment Portfolio

        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.

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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 December 31, 2008, 2007, and 2006, we had $30.0 million, $10.0 million and $130.0 million, respectively, in overnight federal funds sold and repurchase agreements. We did not have any interest bearing deposits in other financial institutions as of December 31, 2008, 2007, and 2006.

Investment Securities

        Management of our investment securities portfolio focuses on providing an adequate level of liquidity and establishing a balanced interest rate-sensitive position, while earning an adequate level of investment income without taking undue risk. As of December 31, 2008, our investment portfolio is primarily comprised of United States government agency securities, accounting for 94% of the entire investment portfolio. Our U.S. government agency securities holdings are all "prime/conforming" mortgage backed securities, or MBS, and collateralized mortgage obligations, or CMOs, guaranteed by FNMA, FHLMC, or GNMA. GNMAs are considered equivalent to U.S. Treasury securities, as they are backed by the full faith and credit of the U.S. government. Currently, there are no subprime mortgages in our investment portfolio. Besides the U.S. government agency securities, we also have a 3% investment in corporate debt and 3% in municipal debt securities. Among all of our corporate and municipal debt securities, 95% carry the top rating of "Aaa/AAA", while the remaining 5%, or $5.5 million, carry an intermediate "Investment Grade" rating of at least "Baa1/BBB+" or above. Our investment portfolio does not contain any government sponsored enterprises, or GSE, preferred securities or any distressed corporate securities that had required other-than-temporary-impairment charges as of December 31, 2008. We classified our investment securities as "held-to-maturity" or "available-for-sale" Pursuant to SFAS No. 115. We adopted SFAS No. 157 and SFAS No. 159 effective January 1, 2008, and we adopted FASB Staff Position ("FSP") SFAS No. 157-3 effective October 10, 2008. Pursuant to the fair value election option of SFAS No. 159, we have chosen to continue classifying our existing instruments of investment securities as "held-to-maturity" or "available-for-sale" under SFAS No. 115. Investment securities that we intend to hold until maturity are classified as held to maturity securities, and all other investment securities are classified as available-for-sale. The carrying values of available-for-sale investment securities are adjusted for unrealized gains and losses as a valuation allowance and any gain or loss is reported on an after-tax basis as a component of other comprehensive income. 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, and there were no such other-than-temporary-impairment in 2008. The fair market values of our held-to-maturity and available-for-sale securities were respectively $0.1 million and $229.1 million as of December 31, 2008.

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        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 December 31, 2008				As of December 31, 2007				As of December 31, 2006
		Amortized Cost		Market Value		Amortized Cost		Market Value		Amortized Cost		Market Value
Held to Maturity:
Securities of government sponsored enterprises		$	—	$	—	$	7,000	$	7,001	$	14,000	$	13,845
Collateralized mortgage obligations			139		135		164		151		196		181
Municipal securities			—		—		220		220		425		419
	Total held-to-maturity securities	$	139	$	135	$	7,384	$	7,372	$	14,621	$	14,446
Available for Sale:
Securities of government sponsored enterprises		$	25,952	$	26,187	$	64,932	$	65,175	$	87,809	$	87,511
Mortgage backed securities			124,549		125,513		60,470		60,557		21,033		20,917
Collateralized mortgage obligations			62,557		63,303		73,416		73,286		38,650		38,260
Corporate securities			7,048		6,953		17,390		17,484		13,445		13,387
Municipal securities			7,323		7,180		7,725		7,754		7,725		7,763
	Total available-for-sale securities	$	227,429	$	229,136	$	223,933	$	224,256	$	168,662	$	167,838

        The following table summarizes the maturity and repricing schedule of our investment securities at their carrying values and their weighted average yields at December 31, 2008:

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:
Collateralized mortgage obligations		$	—		—		$	139		3.95	%	$	—		—		$	—		—		$	139		3.95	%
Available-for-sale:
Securities of government sponsored enterprises			2,066		5.25	%		15,075		3.78	%		9,046		3.71	%		—		—			26,187		3.87	%
Mortgage backed securities			8,927		4.14	%		904		5.62	%		526		5.39	%		115,156		5. 06	%		125,513		5.00	%
Collateralized mortgage obligations			52,703		4.73	%		10,600		5.77	%		—		—			—		—			63,303		4.91	%
Corporate securities			—		—			6,953		5.41	%		—		—			—		—			6,953		5.41	%
Municipal securities			—		—			—		—			4,519		3.75	%		2,661		4.31	%		7,180		3.96	%
	Total investment securities	$	63,696		4.67	%	$	33,671		4.79	%	$	14,091		3.79	%	$	117,817		5.04	%	$	229,275		4.83	%

        Our investment securities holdings decreased by $2.4 million, or 1.0%, to $229.3 million at December 31, 2008, compared to holdings of $231.6 million at December 31, 2007. Holdings at December 31, 2006 were $182.5 million. Total investment securities as a percentage of total assets were 9.4% and 10.5% at December 31, 2008 and 2007, respectively, compared to 9.1% at December 31, 2006. As of December 31, 2008, investment securities having a carrying value of $221.8 million were pledged to secure certain deposits.

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        As of December 31, 2008, held-to-maturity securities, which are carried at their amortized costs, decreased to $0.1 million from $7.4 million and $14.6 million at December 31, 2007 and 2006, respectively. The $7.3 million reduction in 2008 was due to $7.0 million investments being called and the remainder $0.3 million matured, while the entire $7.2 million reduction in 2007 was due to investments being called. Available-for-sale securities, which are stated at their fair market values, increased to $229.1 million at December 31, 2008 from $224.3 million and $167.8 million at December 31, 2007 and 2006, respectively. The $4.8 million increase in 2008 represented $3.4 million net purchases and $1.4 million unrealized gain, while the $56.5 million increase in 2007 represented $55.4 million net purchases and $1.1 million unrealized gain. These increases reflect a strategy of improving our levels of liquidity using available-for-sale securities, in addition to immediately available funds which are maintained mainly in the form of overnight investments.

        The following tables show 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 December 31, 2008 and 2007, respectively (dollars in thousands):

As of December 31, 2008

	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
Collateralized mortgage obligations	$	2,642	$	(65	)	$	1,591	$	(17	)	$	4,233	$	(82	)
Mortgage-backed securities		12,287		(300	)		536		(3	)		12,823		(303	)
Corporate securities		5,000		(49	)		1953		(47	)		6,953		(96	)
Municipal securities		5,712		(157	)		—		—			5,712		(157	)
	$	25,641	$	(571	)	$	4,080	$	(67	)	$	29,721	$	(638	)

As of December 31, 2007

	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	$	—	$	—		$	4,993	$	(7	)	$	4,993	$	(7	)
Collateralized mortgage obligations		1,749		(11	)		9,266		(436	)		11,015		(447	)
Mortgage backed securities		37,967		(36	)		2,545		(27	)		40,512		(63	)
Corporate securities		4,972		(1	)		1,983		(16	)		6,955		(17	)
Municipal securities		1,392		(13	)		2,347		(2	)		3,739		(15	)
	$	46,080	$	(61	)	$	21,134	$	(488	)	$	67,214	$	(549	)

        As of December 31, 2008, the total unrealized losses less than 12 months old were $571,000, and total unrealized losses more than 12 months old were $67,000. The aggregate related fair value of investments with unrealized losses less than 12 months old was $25.6 million at December 31, 2008, and those with unrealized losses more than 12 months old were $4.1 million. As of December 31, 2007, the total unrealized losses less than 12 months old were $61,000 and total unrealized losses more than 12 months old were $488,000. The aggregate related fair value of investments with unrealized losses less than 12 months old was $46.1 million at December 31, 2007, and those with unrealized losses more than 12 months old were $21.1 million.

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

        We performed detailed evaluation of the investment portfolio in assessing individual positions that have market values that have declined below cost. In assessing whether there was other-than-temporary impairment, we considered in a disciplined manner:

•

Whether or not all contractual cash flows due on a security will be collected; and

•

Our positive intent and ability to hold the debt security until recovery in fair value or maturity

        A number of factors are considered in the analysis, including but not limited to:

•

Issuer's credit rating;

•

Likelihood of the issuer's default or bankruptcy;

•

Collateral underlying the security;

•

Industry in which the issuer operates;

•

Nature of the investment;

•

Severity and duration of the decline in fair value; and

•

Analysis of the average life and effective maturity of the security.

        We do not believe that any individual unrealized loss as of December 31, 2008 represented an other-than-temporary impairment. The unrealized losses on our GSE bonds, GSE CMOs, and GSE MBS were attributable to both changes in interest rate (U.S. Treasury curve) and a repricing of risk (spreads widening against risk-fee rate) in the market. We do not own any non-agency MBS or CMO. All GSE bonds, GSE CMO, and GSE MBS securities are backed by U.S. Government Sponsored and Federal Agencies and therefore rated "Aaa/AAA." We have no exposure to the "Subprime Market" in the form of Asset Backed Securities, or ABS, and Collateralized Debt Obligations, or CDOs, that had previously been rated "Aaa/AAA" but have since been downgraded to below investment grade. We have the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 until the market value recovers or the securities mature.

        Municipal bonds and corporate bonds are evaluated by reviewing the credit-worthiness of the issuer and general market conditions. The unrealized losses on our investment in municipal and corporate securities were primarily attributable to both changes in interest rates and a repricing of risk in the market. We have the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 until the market value recovers or the securities mature.

Loan Portfolio

        Total loans are the sum of loans receivable and loans held for sale and reported at their outstanding principal balances net of any unearned income which is unamortized deferred fees and costs and premiums and discounts. Total loans net of unearned income increased by $242.5 million, or 13.40%, to $2.05 billion at December 31, 2008 from $1.81 billion at December 31, 2007. Total loans net of unearned income were $1.56 billion, $1.26 billion and $1.02 billion at December 31, 2006, 2005 and 2004, respectively. Total loans net of unearned income as a percentage of total assets were 83.7%, 82.4%, 77.7%, 75.8%, and 80.6% for 2008, 2007, 2006, 2005 and 2004, respectively.

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        In the ordinary course of our business, we originate and service our own loans. For salable loans that we choose to sell in the secondary market, we sell them with representations and warranties generally consistent with industry practices, but without recourse. The exception is SBA loans, and it is our practice to resell these loans in the secondary market for the guaranteed portion with 90-day recourse. Accordingly, we do not retain a significant amount of the credit risk exposure on the loans sold. And, for all loans we originate and carry, we have not had any subprime loans.

        Real estate secured loans consist primarily of commercial real estate loans and are extended to finance the purchase and/or improvement of commercial real estate and/or businesses thereon. The properties may be either user owned or for investment purposes. Our loan policy adheres to the real estate loan guidelines set forth by the FDIC. The policy provides guidelines including, among other things, fair review of appraisal value, limitation on loan-to-value ratio, and minimum cash flow requirements to service debt. Loans secured by real estate equaled $1.60 billion, $1.39 billion, $1.18 billion, $1.01 billion, and $0.86 billion, as of December 31, 2008, 2007, 2006, 2005 and 2004, respectively. Real estate secured loans as a percentage of total loans were 77.8%, 76.6%, 75.8%, 80.1%, and 84.2% at December 31, 2008, 2007, 2006, 2005 and 2004, respectively. Because of the decline of the national real estate market and as a result of our target marketing efforts for unsecured business and commercial loans, the volume of our real estate secured loans as a percentage of our total loan portfolio has decreased in the 2008, 2007 and 2006, compared to the prior years, and we believe there will be further decreases going forward. We offer a wide selection of residential mortgage programs, including non-traditional mortgages such as interest only and payment option adjustable rate mortgages. However, we are extremely cautious at offering such unconventional loans to our customers, and currently we carried no subprime loans in our portfolio. Most of our salable loans are transferred to the secondary market, but we retain a portion on our books as portfolio loans. This secondary market has become less active compared to the prior years as a result of the general decline in the real estate market and the fact that a few key purchasers in the market have experienced financial difficulties due to the ongoing credit crisis. Our total home mortgage loan portfolio outstanding at the end of 2008 and 2007 were $42.4 million and $38.0 million, respectively, and they represented only a small fraction of our total loan portfolio at 2.4% in 2008 and 2.1% in 2007. We have deemed the effect of this segment of our portfolio on our credit risk profile to be immaterial. The residential mortgage loans with unconventional terms such as interest only mortgage and option adjustable rate mortgage at December 31, 2008 were $2.1 million and $1.2 million, respectively, inclusive of loans held temporarily for sale or refinancing. They were $2.8 million and $1.2 million, respectively, at December 31, 2006.

        Commercial and industrial loans include revolving lines of credit, as well as term business loans. Commercial and industrial loans were $389.2 million, $330.1 million, $278.2 million, $190.8 million, and $136.0 million at the end of 2008, 2007, 2006, 2005 and 2004, respectively. Commercial and industrial loans were 18.9%, 18.2%, 17.8%, 15.1%, and 13.3% as a percentage of total loans at the end of 2008, 2007, 2006, 2005 and 2004, respectively. Such increases in recent years were mainly caused by our marketing strategy, which targets the relationship-based accounts, such as unsecured business and commercial loans. In the current economic environment, we exercise more due diligence in acquiring new loans. Consequently, we expect that our loan portfolio will continue to grow, but at a more controlled pace.

        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 provide as a service only to existing customers. As consumer loans present a higher risk potential compared to our other loan products, especially given current economic conditions, we have reduced our effort in consumer lending since 2007. Accordingly, as of December 31, 2008, the balance of consumer loans was down by $9.9 million to $23.7 million, as compared with $33.6 million, $53.1 million, $42.9 million and $18.8 million at the end of 2007, 2006, 2005 and 2004, respectively. Consumer loans as a percentage of total loans have historically been minimal.

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        Construction loans are generally extended as a temporary financing vehicle only, which also represented less than 5% of our total loan portfolio. In response to the current real estate market, we have applied stricter loan underwriting policy when making loans in this category. As a result, construction loans decreased to $43.2 million as of December 31, 2008, as compared with $59.4 million, $46.3 million and $17.4 million and $7.0 million at the end of 2007, 2006, 2005 and 2004, respectively.

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

        The following table sets forth the amount of total loans net of 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 as of December 31,
		2008			2007			2006			2005			2004
		(Dollars in Thousands)
Construction		$	43,180		$	59,443		$	46,285		$	17,366		$	6,972
Real estate secured			1,599,627			1,385,986			1,183,030			1,011,513			858,998
Commercial and industrial			389,217			330,052			278,165			190,796			135,943
Consumer			23,669			33,569			53,059			42,885			18,810
	Total loans net of unearned income	$	2,055,693		$	1,809,050		$	1,560,539		$	1,262,560		$	1,020,723
Participation loans sold and serviced by the Company		$	314,988		$	338,166		$	336,652		$	273,876		$	235,534
Construction			2.1	%		3.3	%		3.0	%		1.4	%		0.7	%
Real estate secured			77.8	%		76.6	%		75.8	%		80.1	%		84.2	%
Commercial and industrial			18.9	%		18.2	%		17.8	%		15.1	%		13.3	%
Consumer			1.2	%		1.9	%		3.4	%		3.4	%		1.8	%
	Total loans net of unearned income		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

        The following table shows the contractual maturity distribution and repricing intervals of the outstanding loans in our portfolio as of December 31, 2008. 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 amounts on the table below are the gross loan balances at

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December 31, 2008 before netting unearned income totaling $4.2 million and the gross amount of non accrual loans of $22.5 million is not included:

Loan Maturities and Repricing Schedule

		At December 31, 2008,
		Within One Year		After One But Within Five Years		After Five Years		Total
		(Dollars in Thousands)
Construction		$	43,180	$	—	$	—	$	43,180
Real estate secured			681,173		811,212		92,696		1,585,081
Commercial and industrial			362,097		16,470		2,543		381,110
Consumer			18,347		5,476		—		23,823
	Total loans	$	1,104,797	$	833,158	$	95,239	$	2,033,194
Loans with variable (floating) interest rates		$	938,053	$	22,790	$	—	$	960,843
Loans with predetermined (fixed) interest rates		$	166,744	$	810,368	$	95,239	$	1,072351

        The majority of the properties that we take 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 and around the country have generally increased in the last 10-year span from 1996 to 2006. Since late 2006, we have started to see below-trend growth in GDP and a gradual decline of the real estate market in Southern California and many other areas in the country. The financial crisis worsened during the later half of 2008, and we observed further decline in the real estate market across the nation. Nonetheless, as of year end 2008, 78.2% of our loans are secured by first mortgages on various types of real estate. We expect to see the decline in real estate values to continue into 2009, so with the current economic conditions, no assurance can be given that property values will not decline further in 2009.

Nonperforming Assets

        Nonperforming assets, or NPAs, consist of nonperforming loans, or NPLs, restructured loans, and other NPAs. NPLs are reported at their outstanding balances, net of any portion guaranteed by SBA, and consist of loans on non-accrual status and loans 90 days or more past due and still accruing interest. Restructured loans are loans of which the terms of repayment have been renegotiated, resulting in a reduction or deferral of interest or principal. Other NPAs consist of properties, mainly other real estates owned, or OREO, and repossessed vehicles, acquired by foreclosure or similar means that 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 relatively low level of NPLs prior to 2007. However, the general economic condition of the U.S. as well as the local economies in which we do business have shown a gradual decline as the housing sector and GDP growth continued to show weakness in 2008 and the GDP has started to show negative movement. This unfavorable macro economy environment affected the strength of our borrowers' strength, and our NPLs, net of SBA guaranteed portion, increased to $15.6 million at the end of 2008, as compared with $10.6 million, $6.8 million, $2.5 million, and $2.7 million at the end of 2007, 2006, 2005, and 2004, respectively. At December 31, 2008, the NPLs as a percentage of total loans was 0.76%, increased from 0.59%, 0.44%, 0.20% and 0.26% in 2007, 2006, 2005 and 2004, respectively.

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        At December 31, 2008, we had $2.7 million as other NPAs, which was comprised of eight OREOs, with seven of those foreclosed in 2008. We have listed the properties for sale as of December 31, 2008. Among those eight OREOs, we have recorded $123,000 provision for one of them, with a total value of $446,000. The OREO was subsequently sold in February 2009 for a small gain of $7,000. At the end of 2007, the majority of our OREO was attributable to a single OREO valued at $133,000, which was foreclosed in the fourth quarter of 2007. At the end of 2006, we had a different OREO, which was subsequently sold in January 2007 at a small loss. At the end of 2005, we had three OREOs as other nonperforming assets with an aggregate value of $294,000, which were subsequently sold without significant losses. Together with OREO and repossessed vehicles, we managed the ratio of NPAs as a percentage of total loans and other nonperforming assets at a relatively low level for the past five years, equaling 0.74%, 0.60%, 0.45%, 0.22% and 0.26% as of December 31, 2008, 2007, 2006, 2005 and 2004, respectively.

        Management believes that the reserve provided for NPAs, together with the tangible collateral, were adequate as of December 31, 2008. See "Allowance for Loan Losses and Loan Commitments" below for further discussion. Except for the $18.2 million disclosed in the table above, as of December 31, 2008, management was not aware of any material credit problems of borrowers that would cause it to have serious doubts about the ability of a borrower to comply with the present loan payment terms. However, no assurance can be given that credit problems do not exist that may not have been brought to the attention of management.

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        The following tables provide information with respect to the components of our NPAs as of the dates indicated (the figures in the table are net of the portion guaranteed by SBA, with the total amounts adjusted and reconciled for the SBA guaranteed portion for the gross NPAs):

Non-performing Assets

(Dollars in Thousands)

				At December 31,
				2008			2007			2006			2005			2004
Nonaccrual loans:(1)
Real estate secured				$	9,334		$	8,154		$	2,530		$	1,171		$	2,242
Commercial and industrial					5,874			1,986			2,342			341			401
Consumer					131			154			930			292			0
		Total			15,339			10,294			5,802			1,804			2,643
Loans 90 days or more past due and still accruing:
Real estate secured					—			117			208			553			—
Commercial and industrial					213			4			839			111			—
Consumer					—			187			—			—			42
	Total				213			308			1,047			664			42
			Total nonperforming loans(2)		15,552			10,602			6,849			2,468			2,685
Repossessed vehicles					0			50			95			—			—
Other real estate owned					2,663			133			138			295			—
			Total nonperforming assets, net of SBA guarantee		18,215			10,785			7,082			2,763			2,685
Guaranteed portion of nonperforming SBA loans					7,158			4,424			4,266			3,517			3,907
			Total gross nonperforming assets		25,373			15,209			11,348			6,280			6,592
Restructured loans					2,161			—			—			—			14
			Total gross nonperforming assets and restructured loans	$	27,534		$	15,209		$	11,348		$	6,280		$	6,606
Nonperforming loans as a percentage of total loans					0.76	%		0.59	%		0.44	%		0.20	%		0.26	%
Nonperforming assets, net of SBA guarantee, as a Percentage of total loans and other nonperforming assets					0.89	%		0.60	%		0.45	%		0.22	%		0.26	%
Allowance for loan losses as a percentage of nonperforming loans					189.27	%		203.55	%		272.38	%		567.15	%		411.63	%

⁽¹⁾

During the fiscal year ended December 31, 2008, no interest income related to these loans was included in net income. Additional interest income of approximately $2.13 million would have been recorded during the year ended December 31, 2008, if these loans had been paid in accordance with their original terms and had been outstanding throughout the fiscal year ended December 31, 2008 or, if not outstanding throughout the fiscal year ended December 31, 2008, since origination.

⁽²⁾

During the fiscal year ended December 31, 2008, no interest income related to this loan was included in net income. Additional interest income would be negligible during the year ended December 31, 2008, if this loan had been paid in accordance with its original term and had been outstanding throughout the fiscal year ended December 31, 2008.

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Allowance for Loan Losses and Loan Commitments

        Based on the 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 loan commitments, such as commitments to extend credit or letters of credit. Charges made for the outstanding loan portfolio were credited to the allowance for loan losses, whereas charges related to loan commitments were credited to the reserve for loan commitments, which is presented as a component of other liabilities. The provision for loan losses and loan commitments is discussed in the section entitled "Provision for Loan Losses and Provision for Loan Commitments" above.

        As a result of our stricter underwriting policies, and the improved due diligence in our loan review process, the net charge-offs in 2008 decreased to $5.0 million, as compared to $11.0 million in 2007. Nonetheless, the net charge-offs in the recent two years were much higher compared to the previous years because the weak business climate adversely impacted the financial condition of a number of our clients. Our net charge-offs were $1.8 million, $0.3 million, and $0.9 million, respectively in 2006, 2005, and 2004. The net charge-offs in 2008 were mainly comprised of $5.2 million of commercial and industrial loan charge-offs, $1.1 million of commercial real estate loan charge-offs, and $0.9 million of consumer loan charge-offs. The $5.0 million net charge-offs represents 0.26% of average total loans in 2008, as compared with 0.66%, 0.13%, 0.03%, and 0.10%, in 2007, 2006, 2005, and 2004, respectively.

        In order to keep pace with the increase of NPLs and the size of our loan portfolio, we increased our allowance for loan losses by 36.4%, or $7.9 million, to $29.4 million at December 31, 2008, as compared with $21.6 million at December 31, 2007. Such allowances were $18.7 million, $14.0 million, and $11.1 million at December 31, 2006, 2005, and 2004, respectively. With the continued increase of the allowance for loan losses and loan commitments in recent years, we were able to maintain the adequate ratio of allowance for loan losses to total loans at 1.48%, 1.19%, 1.20%, 1.11%, and 1.09% at the end of 2008, 2007, 2006, 2005, and 2004, respectively. Management believes that the current ratio of 1.48% is adequate for our loan portfolio because the level of total NPLs as of December 31, 2008 was relatively low at 0.76% of total loans.

        Although management believes our allowance at December 31, 2008 was adequate to absorb losses from any known and inherent risks in the portfolio, no assurance can be given that economic conditions which adversely affect our service areas or other variables will not result in increased losses in the loan portfolio in the future.

        The table below summarizes, for the years indicated, loan balances at the end of each period, the daily averages during the period, changes in the allowance for loan losses and loan commitments

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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 and loan commitments:

Allowance for Loan Losses and Loan Commitments

		2008			2007			2006			2005			2004
		(Dollars in Thousands)
Balances:
Allowance for loan losses:
Balances at beginning of year		$	21,579		$	18,654		$	13,999		$	11,111		$	9,011
Actual charge-offs:
Real estate secured			1,070			785			138			127			—
Commercial and industrial			5,174			8,752			883			866			1,230
Consumer			903			1,734			1,141			107			139
	Total charge-offs		7,147			11,271			2,162			1,100			1,369
Recoveries on loans previously charged off
Real estate secured			—			—			146			30			—
Commercial and industrial			1,927			119			148			708			419
Consumer			213			204			26			37			42
	Total recoveries		2,140			323			320			775			461
Net loan charge-offs			5,007			10,948			1,842			324			908
Allowance for loan losses acquired in LBNY acquisition			—			—			601			—			—
Provision for loan losses			12,110			14,980			6,000			3,350			3,567
Less: provision(credit) for losses on off balance sheet item			(755	)		1,107			104			137			559
Balances at end of year		$	29,437		$	21,579		$	18,654		$	13,999		$	11,111
Allowance for loan commitments:
Balances at beginning of year		$	1,998		$	891		$	779		$	642		$	83
Provision (credit) for losses on loan commitments			(755	)		1,107			112			137			559
Balance at end of year		$	1,243		$	1,998		$	891		$	779		$	642
Ratios:
Net loan charge-offs to average total loans			0.26	%		0.66	%		0.13	%		0.03	%		0.10	%
Allowance for loan losses to total loans at end of year			1.43	%		1.19	%		1.20	%		1.11	%		1.09	%
Net loan charge-offs to allowance for loan losses at end of year			17.01	%		50.73	%		9.88	%		2.32	%		8.17	%
Net loan charge-offs to provision for loan losses and loan commitments			41.35	%		73.08	%		30.70	%		9.68	%		25.46	%

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

Distribution and Percentage Composition of Allowance for Loan Losses

		Amount Outstanding as of December 31,
		2008			2007			2006			2005			2004
		(Dollars in Thousands)
Applicable to:
Construction		$	190		$	557		$	352		$	152		$	66
Real estate secured			11,628			13,445			9,933			9,751			8,081
Commercial and industrial			17,209			7,023			7,164			3,742			2,796
Consumer			410			554			1,205			354			168
	Total Allowance	$	29,437		$	21,579		$	18,654		$	13,999		$	11,111
Construction			0.65	%		2.58	%		1.89	%		1.09	%		0.59	%
Real estate secured			39.50	%		62.30	%		53.24	%		69.65	%		72.73	%
Commercial and industrial			58.46	%		32.55	%		38.41	%		26.73	%		25.17	%
Consumer			1.39	%		2.57	%		6.46	%		2.53	%		1.51	%
	Total Allowance		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Contractual Obligations

        The following table represents our aggregate contractual obligations (principal and interest) to make future payments as of December 31, 2008:

(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	$	116,097	$	154,661	$	—	$	—	$	270,758
Junior subordinated debentures(1)		2,766		3,791		11,252		77,321		95,130
Operating leases		3,057		3,971		2,637		2,170		11,835
Unrecognized tax Benefits & related interest		55		567		—		—		622
Time deposits		1,117,461		9,627		—		—		1,127,088
Total	$	1,239,436	$	172,617	$	13,889	$	79,491	$	1,505,433

⁽¹⁾

See detailed disclosure of junior subordinated debentures, including interest rates, in the following subsection "Junior Subordinated Debenture; Trust Preferred Securities."

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 December 31, 2008, 2007 and 2006, we had commitments to extend credit of $153.4 million, $284.9 million, and $141.2 million, respectively. Obligations under standby letters of credit were $12.7 million, $10.0 million, and $9.5 million, for 2008, 2007 and 2006, respectively, and the obligations under commercial letters of credit were $15.1 million, $10.8 million, and $14.8 million for the same periods.

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        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.

Other Earning Assets

        For various business purposes, we make investments in earning assets other than the interest-earning assets 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 of the BOLI.

        In an effort to provide additional benefits aimed at retaining key employees, while generating a tax-exempt noninterest income stream, we purchased $10.5 million and $3.0 million in BOLI during 2003 and 2005, respectively, from insurance carriers rated AA or above. In 2008, we purchased $532,000 more in BOLI from the same insurance carriers. We are the owner and the primary beneficiary of the life insurance policies and recognize the increase of the cash surrender value of the policies as tax-exempt other income.

        In 2003, we also invested in several low-income housing tax credit funds ("LIHTCF") to promote our participation in CRA activities. We committed to invest, over two to three years, a total of $3 million to two different LIHTCF—$1 million in Apollo California Tax Credit Fund XXII, LP, and $2 million in Hudson Housing Los Angeles Revitalization Fund, LP. In 2006, in order to promote our CRA activities in each of the assessment areas in Dallas, New York, and Los Angeles, we also committed to invest additional $1 million, $2 million, and $3 million in WNC Institutional Tax Credit Fund XXI, WNC Institutional Tax Credit Fund X New York Series 7, and WNC Institutional Tax Credit Fund X California Series 6, respectively. In 2007, we made $4 million additional commitment to invest in Hudson Housing Los Angeles Revitalization Fund IV LP. We receive the returns on these investments, over the fifteen years following the said two to three-year investment periods in the form of tax credits and tax deductions. Recently in 2008, we committed to invest $3 million in WNC Institutional Tax Credit Fund X New York Series 9 in order to promote our CRA activities in the assessment area in New York and $3 million in WNC Institutional Tax Credit Fund 26 in order to promote our CRA activities in the assessment area in Dallas.

        As a collateral for our FHLB borrowings, we are required by FHLB to invest in FHLB stock. In 2008, our total additional investment in FHLB stock was $8.2 million, and our total dividends received from our FHLB stock holdings were $0.6 million. Therefore, the total asset value of the FHLB stock increased $8.8 million to $17.5 million as of year end 2008 from $8.7 million in the prior year.

        The balances of other earning assets as of December 31, 2008 and December 31, 2007 were as follows:

(Dollars in Thousands)	Balance as of December 31, 2008		Balance as of December 31, 2007
Type
BOLI	$	17,395	$	16,228
LIHTCF		9,019		6,222
Federal Home Loan Bank Stock		17,537		8,695

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Deposits and Other Sources of Funds

Deposits

        Deposits are our primary source of funds. Total deposits at December 31, 2008, 2007 and 2006 were $1.81 billion, $1.76 billion and $1.75 billion, respectively, representing an increase of $49.5 million, or 2.8%, in 2008 and $11.1 million, or 0.6%, in 2007. The average deposits for the years ended December 31, 2008, 2007 and 2006 were $1.74 billion, $1.74 billion, and $1.58 billion, respectively. The average deposit balances remained about the same between year ends of 2008 and 2007. In 2007, the average deposit balances increased $161.1 million, or 10.2%, from the prior year end. The slow down in deposit growth was primarily due to the stiff competition among other banks in the community. We expect our expansion into the New York/New Jersey area and more branch coverage within our primary market of Southern California to outpace the existing deposit competition. In 2009, we expect to see a moderate but higher deposit growth rate than in 2008.

        After 2004, our niche market depositor's preference in time deposits bearing relatively high interest rates decreased the level of deposits in transactional accounts and we increased our reliance on time deposits to fund our loan growth. Despite our efforts in controlling the growth of expensive time deposits, the percentage of the average time deposits over the average total deposits slightly increased to 56.4% in 2008, from 53.2% in 2007 and 54.8% in 2006, because of the stiff competition for deposits in the markets where we do business. We will continue to promote our core-deposit campaign in order to achieve the assigned core deposit goals and to reduce our level of time deposit reliance going forward.

        The average rate paid on time deposits in denominations of $100,000 or more decreased to 3.74% in 2008 as compared with 5.22% in 2007, which previously increased from 5.11% in 2006. See "Net Interest Income and Net Interest Margin" for further discussion.

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

Average Deposits

	For the Years Ended December 31,
	2008					2007					2006
	Average Balance		Average Rate			Average Balance		Average Rate			Average Balance		Average Rate
	(Dollars in Thousands)
Demand, noninterest-bearing	$	298,163				$	315,176				$	310,031
Money market		402,323		3.27	%		445,130		4.51	%		356,602		4.25	%
Super NOW		21,290		1.34	%		22,511		1.32	%		20,853		1.18	%
Savings		38,250		3.39	%		29,816		2.38	%		25,093		1.32	%
Time certificates of deposit in denominations of $100,000 or more		797,404		3.74	%		776,697		5.22	%		706,729		5.11	%
Other time deposits		186,639		3.93	%		146,837		4.87	%		155,741		4.58	%
Total deposits	$	1,744,069		2.98	%	$	1,736,167		3.96	%	$	1,575,049		3.74	%

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        The scheduled maturities of our time deposits in denominations of $100,000 or greater at December 31, 2007 are, as follows:

Maturities of Time Deposits of $100,000 or More, at December 31, 2008

(Dollars in Thousands)

Three months or less		$	448,214
Over three months through six months			270,037
Over six months through twelve months			179,788
Over twelve months			4,765
	Total	$	902,804

        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 that were more than 1% of our total deposits, but at both December 31, 2008, 2007 and 2006, the California State Treasury was the only depositor whose deposit balance was more than 3% of our total deposits.

        In addition to our regular customer base, we also accept brokered deposits on a selective basis at reasonable interest rates to augment deposit growth. During 2008, the ongoing financial crisis and stiff competition for customer deposits among banks within the markets where we do business has driven up interest rates on various deposit products. As a result, broker deposits have been lower in cost, as compared with other time deposits. Accordingly, we have increased these deposits to $147.9 million at December 31, 2008 from $62.6 million and $5.2 million, at December 31, 2007 and 2006, respectively, in order to improve our net interest margin and to limit our reliance on high interest rate time deposits. Most of the brokered deposits will mature within one year.

FHLB Borrowings

        Although deposits are the primary source of funds for our lending and investment activities and for general business purposes, we may obtain advances from the FHLB as an alternative to retail deposit funds. We have historically utilized borrowings from FHLB in order to take advantage of the flexibility and comparatively low cost. Due to the ongoing financial crisis and stiff competition for customer deposits among banks in our market, we have occasionally used FHLB borrowings as an alternative to fund our growing loan portfolio. See "Liquidity Management" below for the details on the FHLB borrowings program.

        The following table is a summary of FHLB borrowings for fiscal years 2008 and 2007:

(Dollars in thousands)	2008			2007
Balance at year-end	$	260,000		$	150,000
Average balance during the year	$	286,213		$	46,890
Maximum amount outstanding at any month-end	$	370,000		$	155,000
Average interest rate during the year		3.23	%		4.24	%
Average interest rate at year-end		3.16	%		4.22	%

TARP Preferred Stock

        On December 12, 2008, we issued we issued to the U.S. Treasury 62,158 shares of Series A Preferred Stock and a warrant to purchase initially 949,460 shares of our common stock, for an aggregate purchase price of $62,158,000. The warrant has an exercise price of $9.82 per share. The $62.2 million of Series A Preferred Stock qualifies as Tier 1 capital and carries an initial 5% coupon

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for the first 5 years, which will adjust to 9% thereafter. Dividends are cumulative, computed on the basis of a 360-day year or 30-day months, and payable quarterly in arrears on the 15th day of February, May, August and November of each year. We are permitted, subject to consultation with the appropriate federal banking agency, to repay to the U.S. Treasury any financial assistance received under the TARP Capital Purchase Program without penalty, delay or the need to raise additional replacement capital. The U.S. Treasury is to promulgate regulations to implement the procedures under which a TARP participant may repay any assistance received. As of the date of this Report, the U.S. Treasury had not yet issued such regulations.

        Detailed information regarding the Series A Preferred Stock and the related warrant can be found in Notes 11 and 12 of the Notes to the Consolidated Financial Statements.

Junior Subordinated Debentures; Trust Preferred Securities

        In December 2002, the Bank issued $10 million of the 2002 Junior Subordinated Debentures. Subsequently, the Company, as a wholly-owned subsidiary in 2003 and as a parent company of the Bank in 2005 and 2007, issued a total of $77,321,000 of Junior Subordinated Debentures in connection with a $75,000,000 trust preferred securities issuance by statutory trusts wholly-owned by the Company.

        2002 Bank Level Junior Subordinated Debenture.    In December 2002, the Bank issued a $10 million Junior Subordinated Debenture (the "2002 debenture"). The interest rate payable on the 2002 debenture was 4.57% at December 31, 2008, 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 entire $10 million debenture, in whole or in part, was callable upon the Bank's option on any March 26, June 26, September 26 or December 26 on or after December 26, 2007 (the "Redemption Date") pursuant to Section 10.1 of the Debenture agreement. Depending on the level of interest rate difference and our level of fund sources, we may decide to exercise and call the debenture in 2009.

        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 holding company level capital purposes under current Federal Reserve Board capital guidelines.

        2003 Junior Subordinated Debenture; Trust Preferred Securities Issuance.    In December 2003, Wilshire Bancorp was formed as a wholly-owned subsidiary of the Bank, in order to raise additional capital funds through the issuance of trust preferred securities. Prior to the completion of the August 2004 bank holding company reorganization, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire Statutory Trust I, which issued $15 million in trust preferred securities. Wilshire Bancorp then purchased all of the common interest in the Wilshire Statutory Trust I ($464,000) and issued the 2003 Junior Subordinated Debenture (the "2003 debenture") in the amount of approximately $15.5 million to the Wilshire Statutory Trust I with terms substantially similar to the 2003 trust preferred securities in exchange for the proceeds from the issuance of the Wilshire Statutory Trust I's 2003 trust preferred securities and common securities. Wilshire Bancorp subsequently deposited the proceeds from the 2003 debenture in a depository account at the Bank and infused $14.5 million as additional equity capital to the Bank immediately following the holding company reorganization. The rate of interest on the 2003 debenture and related trust preferred securities was 4.72% at December 31, 2008, 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 entire $15 million trust preferred securities, in whole or in part, was callable upon the Company's option on any March 17, June 17, September 17 or December 17 on or after December 17, 2008 (the "Redemption Date") pursuant to Section 10.1 of the

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trust preferred securities agreement. Depending on the level of discount rate difference and our level of fund sources, we may decide to exercise and call the trust preferred securities in 2009.

        March 2005 Junior Subordinated Debenture; Trust Preferred Securities Issuance.    In March 2005, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire Statutory Trust II, which issued $20 million in trust preferred securities. Wilshire Bancorp then purchased all of the common interest in the Wilshire Statutory Trust II ($619,000) and issued the 2005 Junior Subordinated Debenture (the "March 2005 debenture") in the amount of $20.6 million to the Wilshire Statutory Trust II with terms substantially similar to the March 2005 trust preferred securities in exchange for the proceeds from the issuance of the Wilshire Statutory Trust II's March 2005 trust preferred securities and common securities. Wilshire Bancorp subsequently deposited the proceeds from the March 2005 debenture in a depository account at the Bank and infused $14 million as additional equity capital to the Bank. The rate of interest on the March 2005 debenture and related trust preferred securities was 3.66% at December 31, 2008, which adjusts quarterly to the three-month LIBOR plus 1.79%. The March 2005 debenture and related trust preferred securities will mature on March 17, 2035. The interest on both the March 2005 debenture and related trust preferred securities are payable quarterly and no scheduled payments of principal are due prior to maturity. Wilshire Bancorp may redeem the March 2005 debenture (and in turn the trust preferred securities) in whole or in part at par prior to maturity on or after March 17, 2010.

        September 2005 Junior Subordinated Debenture; Trust Preferred Securities Issuance.    In September 2005, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire Statutory Trust III, which issued $15 million in trust preferred securities. Wilshire Bancorp then purchased all of the common interest in the Wilshire Statutory Trust III and issued its Junior Subordinated Debt Securities (the "September 2005 debenture") in the amount of $15.5 million to the Wilshire Statutory Trust III with terms substantially similar to the September 2005 trust preferred securities and common securities. Wilshire Bancorp subsequently deposited the proceeds from the September 2005 debenture in a depository account at the Bank. Until September 15, 2010, the securities will be fixed at a 6.07% annual interest rate, thereafter converting to a floating rate of three-month LIBOR plus 1.40%, resetting quarterly. The September 2005 debenture and related trust preferred securities will mature on September 15, 2035. The interest on both the September 2005 debenture and related trust preferred securities are payable quarterly and no scheduled payments of principal are due prior to maturity. Wilshire Bancorp may redeem the September 2005 debenture (and in turn the trust preferred securities) in whole or in part at par prior to maturity on or after September 15, 2010.

        July 2007 Junior Subordinated Debenture; Trust Preferred Securities Issuance.    In July 2007, Wilshire Bancorp organized its wholly owned subsidiary, Wilshire Statutory Trust IV, which issued $25 million in trust preferred securities. Wilshire Bancorp then purchased all of the common interest in the Wilshire Statutory Trust IV ($774,000) and issued the 2007 Junior Subordinated Debenture (the "July 2007 debenture") in the amount of $25.8 million to the Wilshire Statutory Trust IV with terms substantially similar to the July 2007 trust preferred securities in exchange for the proceeds from the issuance of the Wilshire Statutory Trust IV's July 2007 trust preferred securities and common securities. Wilshire Bancorp subsequently deposited the proceeds from the July 2007 debenture in a depository account at the Bank. The rate of interest on the July 2007 debenture and related trust preferred securities was 3.38% at December 31, 2008, which adjusts quarterly to the three-month LIBOR plus 1.38%. The July 2007 debenture and related trust preferred securities will mature on September 15, 2037. The interest on both the July 2007 debenture and related trust preferred securities are payable quarterly and no scheduled payments of principal are due prior to maturity. Wilshire Bancorp may redeem the July 2007 debenture (and in turn the trust preferred securities) in whole or in part at par prior to maturity on or after September 15, 2012.

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        Payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities are guaranteed by Wilshire Bancorp. The junior subordinated debentures are senior to our shares of common stock and Series A Preferred Stock. As a result, 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 or Series A Preferred Stock. We have the right to defer distributions on the junior subordinated debentures and related trust preferred securities for up to five years, during which time no dividends may be paid to holders of our common stock.

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

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

        Under the final rule, as of December 31, 2008, Wilshire Bancorp categorized all $75.0 million trust preferred securities as Tier 1 capital.

Asset/Liability Management

        Management seeks to ascertain optimum and stable utilization of available assets and liabilities as a vehicle to attain our overall business plans and objectives. In this regard, management focuses on measurement and control of liquidity risk, interest rate risk and market risk, capital adequacy, operation risk and credit risk. See "Risk Factors" for further discussion on these risks. Information concerning interest rate risk management is set forth under "Item 7A—Quantitative and Qualitative Disclosures about Market Risk."

Liquidity Management

        Liquidity management involves our ability to meet cash flow requirements arising from fluctuations in deposit levels and demands of daily operations, which include funding of securities purchases, providing for customers' credit needs and ongoing repayment of borrowings. Maintenance of adequate liquidity requires that sufficient resources be available at all time to meet our cash flow requirements. Liquidity in a banking institution is required primarily to provide for deposit withdrawals and the credit needs of its customers and to take advantage of investment opportunities as they arise. Liquidity management involves our ability to convert assets into cash or cash equivalents without incurring significant loss, and to raise cash or maintain funds without incurring excessive additional cost. Our

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liquidity is actively managed on a daily basis and reviewed periodically by the Asset/Liability Committee and the Board of Directors. This process is intended to ensure the maintenance of sufficient funds to meet the needs of the Company, including adequate cash flow for off-balance sheet instruments.

        Our primary sources of liquidity are derived from financing activities which include the acceptance of customer and brokered deposits, federal funds facilities, repurchase agreement facilities, advances from the FHLB of San Francisco, and issuance of long-term debt. These funding sources are augmented by payments of principal and interest on loans, the routine liquidation of securities from the available-for-sale portfolio and securitizations of loans. In addition, government programs, such as FDIC's TLGP, may influence deposit behavior. Primary use of funds include withdrawal of and interest payments on deposits, originations and purchases of loans, purchases of investment securities, and payment of operating expenses.

        During the years ended December 31, 2008, 2007, and 2006, we experienced net cash inflows from operating activities of $25.9 million, $32.0 million, and $51.8 million, respectively. In 2008, net cash provided by operating activities was primarily attributable to the $26.5 million net income adjusted for various non-cash flow adjustments, including the subtraction of $60.0 million "origination of loan held for sale," and additions of $51.7 million "proceeds from sale of loans held for sale" and $12.1 million "provision for losses on loans and loan commitments." Similarly in 2007 and 2006, the net cash provided by operating activities were primarily attributable to the net income earned during the immediately preceding years.

        Net cash outflows from investing activities totaled $251.1 million, $305.9 million, and $287.7 million during 2008, 2007 and 2006, respectively, and were primarily related to the net increases in loans receivable for those three years. As our loan portfolio continued to grow, "net increase in loan receivable" were $240.5 million, $271.2 million, and $308.0 million for 2008, 2007 and 2006, respectively.

        Net cash inflows from financing activities were $230.3 million, $161.2 million, and $246.9 million for 2008, 2007, and 2006, respectively. The net cash provided by financing activities in 2008 was primarily due to the proceeds from FHLB borrowings and other borrowings of $124.0 million, and issuance of Series A Preferred Stock to the U.S. Treasury in an amount equal to $62.2 million. In addition to the debt and equity financing, there was a $49.5 million net increase in deposits. In 2007, net cash provided by financing activities were primarily related to $130.0 million FHLB borrowings and other borrowings, and $25.8 million proceed from issuance of trust preferred securities. In 2006, the net cash provided by financing activities were the net difference of $292.0 million net increase in deposits, and $41.0 million redemption of FHLB borrowings and other borrowings.

        For purpose of having liquid cash available for emergencies, 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 December 31, 2008, 2007 and 2006 totaled approximately $345.1 million, $324.7 million and 378.6 million, respectively. Our liquidity level measured as the percentage of liquid assets to total assets was 14.1%, 14.8% and 18.8% at December 31, 2008, 2007 and 2006, respectively.

        As a secondary source of liquidity, we have available a combination of borrowing sources comprised of the Federal Reserve Bank's discount window, FHLB advances, federal funds lines with various corresponding banks, and several master repurchase agreements with major brokerage companies. Among all these sources, we prefer 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 reasonable cost, we limit our use to 50% of our borrowing capacity, as

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such borrowing does not qualify as core funds. As of December 31, 2008, our borrowing capacity from the FHLB was about $560.1 million and the outstanding balance was $260.0 million, or approximately 46.4% of our borrowing capacity. As of December 31, 2008, we also maintained a guideline to purchase up to a combined $35.0 million in federal funds lines with two correspondent banks.

Capital Resources and Capital Adequacy Requirements

        Historically, our primary source of capital has been internally generated operating income through retained earnings. In order to ensure adequate levels of capital, we conduct ongoing assessments of projected sources and uses of capital in conjunction with projected increases in assets and level of risks. We have considered, and we will continue to consider, additional sources of capital as the need arises, whether through the issuance of additional equity, debt or hybrid securities. When the U.S. Treasury made TARP funds available to financial institutions in October 2008, our Board of Directors decided to take advantage of this opportunity and increased our capital by participating in the program. In December 2008, we received a TARP investment from the U.S. Treasury in the amount of $62.2 million (see Notes 11 and 12).

        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 this Annual Report on Form 10-K for additional information regarding regulatory capital requirements.

        As of December 31, 2008, we were qualified as a "well capitalized institution" under the regulatory framework for prompt corrective action. The following table presents the regulatory standards for well-capitalized institutions, compared to our capital ratios as of the dates specified for Wilshire Bancorp, Inc and Wilshire State Bank:

							Actual ratios for the Company as of:
	Regulatory Adequately- Capitalized Standards			Regulatory Well- Capitalized Standards
Wilshire Bancorp, Inc.							December 31, 2008			December 31, 2007			December 31, 2006
Total capital to risk-weighted assets		8	%		10	%		17.09	%		14.58	%		13.63	%
Tier I capital to risk-weighted assets		4	%		6	%		15.36	%		11.83	%		11.81	%
Tier I capital to average assets		4	%		5	%		13.25	%		10.36	%		9.79	%

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							Actual ratios for the Bank as of:
	Regulatory Adequately- Capitalized Standards			Regulatory Well- Capitalized Standards
Wilshire State Bank							December 31, 2008			December 31, 2007			December 31, 2006
Total capital to risk-weighted assets		8	%		10	%		13.59	%		13.59	%		13.51	%
Tier I capital to risk-weighted assets		4	%		6	%		11.86	%		11.80	%		11.68	%
Tier I capital to average assets		4	%		5	%		10.24	%		10.33	%		9.69	%

        At December 31, 2008, total shareholders' equity increased by $83.3 million, after declaring cash dividends of $5.9 million, to $255.1 million from $171.8 million at December 31, 2008. Such additional capital was primarily derived from our issuance of $62.2 million in Series A Preferred Stock to the U.S. Treasury. In 2007, total shareholders' equity also grew by $22.2 million from $149.6 million at December 31, 2006, after declaring cash dividends of $5.9 million, primarily from internally generated operating income of $26.8 million. Our equity also increased by the share-based compensation and other comprehensive income.

        As of December 31, 2008, for the regulatory capital ratio computation purposes, we considered the Junior Subordinated Debentures of $87.3 million, which consists of $10.0 million issued by the Bank and $77.3 million issued by the Company in connection with the issuance of $75.0 million trust preferred securities. At December 31, 2007, Wilshire Bancorp accounted for $57.1 million of such securities as Tier 1 capital and $27.9 million as Tier 2 capital. As of December 31, 2008, as the result of issuance of the Series A Preferred Stock in December 2008, the portion qualified for Tier 1 capital increased to $134.4 million ($59.4 million TARP preferred stock and $75.0 million trust preferred securities), decreasing the portion for Tier 2 capital to $10.0 million. For the Bank level, only the $10.0 million debenture issued by the Bank in 2002 is treated as Tier 2 capital. See "Deposits and Other Sources of Funds" for further discussion regarding the capital treatment of subordinated debentures and the trust preferred securities.

Recent Accounting Pronouncements

        In December 2007, the FASB issued SFAS No. 141R, Business Combinations. This new statement revises SFAS No. 141, which was issued June 2001. SFAS No. 141R changes multiple aspects of the accounting for business combinations. Under the guidance in SFAS No. 141R, the acquisition method must be used, which requires the acquirer to recognize most identifiable assets acquired, liabilities assumed and non-controlling interests in the acquiree at their full fair value on the acquisition date. Goodwill is to be recognized as the excess of the consideration transferred plus the fair value of the non-controlling interest over the fair values of the identifiable net assets acquired. Subsequent changes in the fair value of contingent consideration classified as a liability are to be recognized in earnings, while contingent consideration classified as equity is not to be remeasured. Costs such as transaction costs are to be excluded from acquisition accounting, generally leading to recognizing expense and additionally, restructuring costs that do not meet certain criteria at the acquisition date are to be subsequently recognized as post-acquisition costs. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We do not expect the adoption of SFAS No. 141R to have a material impact on our consolidated financial statements

        In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, which amends Accounting Research Bulletin ("ARB") No. 51, Consolidated Financial Statements. SFAS No. 160 requires a non-controlling interest or minority interest to be reported by all entities in the same way, which is as equity in the consolidated financial statements. It also requires income attributable to the non-controlling interest to be disclosed on the face of the consolidated statement of income. Furthermore, SFAS No. 160 eliminates the diversity that currently

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exists in accounting for transactions between an entity and non-controlling interests by requiring they be treated as equity transactions. Pursuant to SFAS No. 160, our equity method investments will be reported as part of our equity. SFAS No. 160 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008, and interim periods within those years. Early adoption is prohibited. The provisions of SFAS No. 160 should be applied prospectively, except for presentation and disclosure requirements. The presentation and disclosure requirements should be applied retrospectively for all periods presented. We are in the process of evaluating the impact that the adoption of SFAS No. 160 will have on our consolidated financial statements.

        In February 2008, the FASB issued FSP SFAS No.157-2, which delays the effective date of SFAS No. 157, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The delay is intended to allow the FASB and constituents additional time to consider the effect of various implementation issues that have arise, or that may arise, from the application of SFAS No. 157. This FSP applies to various nonfinancial assets and liabilities, including goodwill and nonfinancial long-lived assets, and it defers the effective date of SFAS No. 157 to such nonfinancial assets and liabilities to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. We do not expect the adoption of FSP SFAS No. 157-2 to have a material impact on our consolidated financial statements.

        In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This new statement has the same scope as SFAS No. 133. Accordingly, it applies to all entities. SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors a better and clearer understanding of the derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. The statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. We are in the process of evaluating the impact that the adoption of SFAS No. 161 will have on our consolidated financial statements (In September 2008, FASB issued FSP SFAS No.133-1 and FIN 45-4 to clarify the effective date of SFAS No. 161, see detail for FSP SFAS No.133-1 and FIN 45-4 below).

        In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("GAAP"). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board ("PCAOB") amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles", which is currently under SEC review. We do not expect the adoption of SFAS No. 162 to have a material impact on our consolidated financial statements

        In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Shared-Based Payment Transactions Are Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of SFAS No. 128, Earnings per Share. FSP No. EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period EPS data presented are to be adjusted

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retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of this FSP. Early adoption is not permitted. We are in the process of evaluating the impact that the adoption of FSP No. EITF 03-6-1 will have on our consolidated financial statements.

        In September 2008, the FASB issued FSP SFAS No.133-1 and FIN 45-4, Disclosure about Credit Derivatives and Certain Guarantees: An Amendment of SFAS No. 133 and FIN 45; and Clarification of the Effective Date of SFAS No. 161. This FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance and cash flows of the sellers of credit derivatives. It amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FIN 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others—an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. The provisions of the FSP that amend SFAS No. 133 and FIN 45 are effective for reporting periods (annual or interim) ending after November 15, 2008. Because the FSP amends only the disclosure requirements for credit derivatives and certain guarantees, the adoption of FSP SFAS No. 133-1 and FIN 45-4 did not have a material impact on our consolidated financial statements.

        In October 2008, the FASB issued FSP SFAS No.157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of SFAS No. 157, Fair Value Measurements, in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for the financial asset is not active. This FSP is effective upon issuance, including prior periods for which financial statements have not been issued. Revisions resulting for as a change in the valuation technique or its application shall be accounted for as a change in accounting estimate under SFAS No. 154, Accounting Changes and Error Corrections. However, such revisions shall be exempt from SFAS No. 154 disclosure requirement. We utilized and followed this FSP in our fair valuation procedures pursuant SFAS No. 157 (see Note 3).

        In December 2008, the FASB issued FSP SFAS No.140-4 and FIN 46R-8, Disclosure by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities. This FSP amends SFAS No. 140, Accounting for Transfer and Servicing of Financial Assets and Extinguishments of Liabilities, to require public entities to provide additional disclosures about transfers of financial assets. It also amends FIN 46R, Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. Additionally, this FSP requires certain disclosures to be provided by a public enterprise that is a sponsor of a qualifying special purpose entity, or SPE, that holds a variable interest in the qualifying SPE but was not the transferor (nontransferor) of financial assets to the qualifying SPE, and a servicer of a qualifying SPE that holds a significant variable interest in the qualifying SPE but was not the transferor (nontransferor) of financial assets to the qualifying SPE. FSP SFAS No. 140-4 and FIN 46R-8 is effective for the first reporting period, interim or annual, ending after December 15, 2008, with earlier adoption encouraged. An entity (enterprise) is encouraged, but not required, to disclose comparative information in periods earlier than the effective date for disclosures that were not previously required for public entities (enterprises) by SFAS No. 140 and FIN 46R. However, once this FSP is adopted, comparative disclosures are required for periods subsequent to the effective date. The adoption of FSP SFAS No. 140-4 and FIN 46R-8 did not have a material impact on our consolidated financial statements.

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        In December 2008, the FASB issued FSP SFAS No.132R-1, Employer's Disclosures about Postretirement Benefit Plan Asset, which amends SFAS No. 132R, Employer's Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on employers' disclosures about plan assets of a defined benefit pension or other postretirement plan. The objectives of the disclosures are to provide users of financial statements with an understanding of the plan investment policies and strategies regarding investment allocation, major categories of plan assets, use of fair valuation inputs and techniques, effect of fair value measurements using significant unobservable inputs (i.e., level 3 inputs), and significant concentrations of risk within plan assets. FSP SFAS No. 132R-1 is effective for financial statements issued for fiscal years beginning after December 15, 2009, with early adoption permitted. This FSP does not require comparative disclosures for earlier periods. We are in the process of evaluating the impact that the adoption of FSP SFAS No. 132R-1 will have on our consolidated financial statements.

        In January 2009, the FASB issued FSP No. EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. As explicitly spelled out in the title of this FSP, it amends the impairment guidance in EITF 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Asset, to achieve more consistent determination of whether an other-than-temporary impairment has occurred. This FSP also retains and emphasizes the objective of an other-than-temporary impairment assessment and the related disclosure requirements in SFAS No. 115 and other related guidance. FSP No. EITF 99-20-1 is effective for interim and annual financial statements with reporting periods ending after December 15, 2008, and is to be applied prospectively. Retrospective application to a prior interim or annual period is not permitted. The adoption of FSP No. EITF 99-20-1 did not have a material impact on our consolidated financial statements.

Impact of Inflation; Seasonality

        Inflation primarily impacts us through its effect on interest rates. Our primary source of income is net interest income, which is affected by changes in interest rates. We attempt to limit the impact of inflation on our net interest margin through management of rate-sensitive assets and liabilities and the analysis of interest rate sensitivity. The effect of inflation on premises and equipment as well as noninterest expenses has not been significant for the periods covered in this report. Our business is generally not seasonal.

Item 7A.    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 ("ALM") Committee, which reports monthly to the Board on activities related to market risk management. As part of the management of our market risk, our ALM committee 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 of equity. 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

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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, we would be deemed to be "liability-sensitive" for that period.

        We usually 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 interest-earning assets and interest-paying liabilities available to be repriced within one year.

        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 changing by differing increments and at different time intervals for each type of interest-sensitive asset and liability. The interest rate sensitivity gaps reported in the tables arise when assets are funded with liabilities having different repricing intervals. Because 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 ALM committee 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 and accounts 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.

        Although the simulation measures the volatility of net interest income and net portfolio value under immediate increase or decrease of market interest rate scenarios in 100 basis point increments, our main concern is the negative effect of a reasonably-possible worst scenario. The ALM policy prescribes that for the worst possible rate decreasing 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, respectively.

        In general, based upon our current mix of deposits, loans and investments, decrease in interest rates would result the increase of net interest margin and NPV. Increase in interest rates would be expected to have opposite effect. However, given in the record low interest rate environment, further decrease in interest rate will result in net interest margin as shown in our simulation measures below.

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

        The following table sets forth the interest rate sensitivity of our interest-earning assets and interest-bearing liabilities as of December 31, 2008 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.

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Interest Rate Sensitivity Analysis

			At December 31, 2008 Amounts Subject to Repricing Within
			0-3 months			3-12 months			1-5 years			After 5 years			Total
			(Dollars in Thousands)
Interest-earning assets:
	Gross loans(1)		$	985,883		$	118,914		$	833,158		$	95,239		$	2,033,194
	Investment securities			8,035			55,661			33,671			131,908			229,275
	Federal funds sold and cash equivalents			30,001			—			—			—			30,001
	Interest-earning deposits			—			—			—			—			—
		Total	$	1,023,919		$	174,575		$	866,829		$	227,147		$	2,292,470
Interest-bearing liabilities:
	Savings deposits		$	44,452		$	—		$	—		$	—		$	44,452
	Time deposits of $100,000 or more			448,214			449,825			4,765			—			902,804
	Other time deposits			72,527			126,566			4,520			—			203,613
	Other interest-bearing deposits			384,190			—			—			—			384,190
	Other borrowings			145,857			50,000			165,464			—			361,321
		Total	$	1,095,240		$	626,391		$	174,749		$	—		$	1,896,380
Interest rate sensitivity gap			$	(71,321	)	$	(451,816	)	$	692,080		$	227,147		$	396,090
	Cumulative interest rate sensitivity gap		$	(71,321	)	$	(523,137	)	$	168,943		$	396,090
Cumulative interest rate sensitivity gap ratio (based on total assets)				-3.10	%		-22.75	%		7.35	%		17.23	%

(1)

Excludes the gross amount of non-accrual loans of approximately $22.5 million at December 31, 2008.

        The following table sets forth our estimated net interest income over a twelve months period and NPV based on the indicated changes in market interest rates as of December 31, 2008.

(Dollars in Thousands)

Change (in Basis Points)		Net Interest Income (Next Twelve Months)		% Change			NPV		% Change
	+200	$	85,394		2.08	%	$	298,617		-1.59	%
	+100		84,751		1.31	%		303,421		0.00	%
	0		83,656		—			303,434		—
	-100		84,239		0.70	%		290,295		-4.33	%
	-200		83,689		0.04	%		275,653		-9.16	%

        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. Although our policy also permits us to purchase rate caps and floors and interest rate swaps, we are not currently engaged in any of those types of transactions.

Item 8.    Financial Statements and Supplementary Data

        The information required by this item is included in Part IV, Item 15(a)(1) and are presented beginning on Page F-1.

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

        Not applicable.

Item 9A.    Controls and Procedures

Controls and Procedures

        As of December 31, 2008, 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 interim chief executive officer and interim chief financial officer concluded that, as of December 31, 2008, 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 SEC, 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.

Management's Annual Report on Internal Control over Financial Reporting

        Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

        Our internal control over financial reporting includes those policies and procedures that:

•

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

•

provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and

•

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

        Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time. Our system contains self monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.

        Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by

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the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our system of internal control over financial reporting was effective as of December 31, 2008. The Company's internal control over financial reporting has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control over Financial Reporting

        There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2008 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Wilshire Bancorp, Inc.
Los Angeles, California

        We have audited the internal control over financial reporting of Wilshire Bancorp, Inc. and subsidiaries (the "Company") as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2008 of the Company and our report dated March 12, 2009 expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California
March 12, 2009

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Item 9B.    Other Information

        Not applicable.

PART III

Item 10.    Directors and Executive Officers of the Registrant

        Information required by this item is incorporated herein by reference to the Company's proxy statement (schedule 14A) for its 2009 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after December 31, 2008.

Item 11.    Executive Compensation

        Information required by this item is incorporated herein by reference to the Company's proxy statement (schedule 14A) for its 2009 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after December 31, 2008.

Item 12.    Security Ownership of Certain Beneficial Owners, Management and Related Shareholder Matters

        Information required by this item is incorporated herein by reference to the Company's proxy statement (schedule 14A) for its 2009 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after December 31, 2008.

Item 13.    Certain Relationships and Related Transactions

        Information required by this item is incorporated herein by reference to the Company's proxy statement (schedule 14A) for its 2009 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after December 31, 2008.

Item 14.    Principal Accounting Fees and Services

        Information required by this item is incorporated herein by reference to the Company's proxy statement (schedule 14A) for its 2009 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after December 31, 2008.

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PART IV

Item 15.    Exhibits, Financial Statement Schedules

(a)

List of documents filed as part of this report

(1)

Financial Statements

        The following financial statements of Wilshire Bancorp, Inc. are filed as a part of this Form 10-K on the pages indicated:

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Financial Statements:
Consolidated Statements of Financial Condition	F-2
Consolidated Statement of Operations	F-3
Consolidated Statements of Changes in Shareholders' Equity	F-4
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-8

(2)

Financial Statement Schedules

        Schedules to the financial statements are omitted because the required information is not applicable or the information is presented in the Company's financial statements or related notes.

(3)

Exhibits

Exhibit Table

Reference Number		Item
	3.1	Articles of Incorporation, as amended and restated(1)
	3.2	Second Amended and Restated Bylaws of Wilshire Bancorp, Inc. effective December 12, 2008(2)
	3.3	Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock, Series A(2)
	4.1	Specimen of Common Stock Certificate(3)
	4.2	Indenture of Subordinated Debentures dated as of September 19, 2002
	4.3	Indenture by and between Wilshire Bancorp, Inc. and U.S. Bank National Association dated as of December 17, 2003(3)
	4.4	Amended and Restated Declaration of Trust by and among Wilshire Bancorp, Inc., U.S. Bank National Association, Soo Bong Min and Brian E. Cho dated as of December 17, 2003(4)
	4.5	Guaranty Agreement by and between Wilshire Bancorp, Inc. and U.S. Bank National Association dated as of December 17, 2003(4)
	4.6	Indenture by and between Wilshire Bancorp, Inc. and Wilmington Trust Company dated as of March 17, 2005(4)
	4.7	Amended and Restated Declaration of Trust by and among Wilshire Bancorp, Inc., Wilmington Trust Company, Soo Bong Min, Brian E. Cho and Elaine Jeon dated as of March 17, 2005(4)
	4.8	Guaranty Agreement by and between Wilshire Bancorp, Inc. and Wilmington Trust Company dated as of March 17, 2005(4)
	4.9	Indenture by and between Wilshire Bancorp, Inc. and Wilmington Trust Company dated as of September 15, 2005(4)

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Reference Number		Item
	4.10	Amended and Restated Declaration of Trust by and among Wilshire Bancorp, Inc., Wilmington Trust Company, Brian E. Cho and Elaine Jeon dated as of September 15, 2005(4)
	4.11	Guaranty Agreement by and between Wilshire Bancorp, Inc. and Wilmington Trust Company dated as of September 15, 2005(4)
	4.12	Indenture by and between Wilshire Bancorp, Inc. and LaSalle Bank National Association dated as of July 10, 2007.(5)
	4.13	Amended and Restated Declaration of Trust by and among LaSalle National Trust Delaware, LaSalle Bank National Association, Wilshire Bancorp, Inc., Soo Bong Min and Brian E. Cho dated as of July 10, 2007.(5)
	4.14	Guarantee Agreement by and between Wilshire Bancorp, Inc. and LaSalle Bank National Association dated as of July 10, 2007.(5)
	4.15	Form of Certificate for the Series A Preferred Stock(2)
	4.16	Warrant to Purchase Common Stock(2)
	10.1	Lease dated September 1, 1996 between the Company and Wilmont, Inc. (Main Office—1st floor)(6)
	10.2	Lease dated May 1, 1990 between the Company and Western Properties Co., Ltd. (Western Branch)(6)
	10.3	Lease dated February 3, 1997 between the Company and Benlin Properties (Downtown Branch)(6)
	10.4	Sublease dated June 20, 1997 between the Company and Property Development Assoc. (Cerritos Branch)(6)
	10.5	1997 Stock Option Plan of Wilshire Bancorp, Inc.(6),(12)
	10.6	Addendum to Downtown Branch Lease, dated February 3, 1997 between the Company and Benlin Properties (Downtown Branch)(7)
	10.7	Lease dated October 26, 1998 between the Company and Union Square Limited Partnership. (Seattle Business Lending Office)(7)
	10.8	Lease dated March 18, 1999 between the Company and BGK Texas Property Management, Inc. (Dallas Business Lending Office)(8)
	10.9	Lease dated February 4, 2000 between the Company and Wilmont, Inc. (Commercial Loan Center and Corporate headquarter—14th floor)(9)
	10.10	Lease dated September 1, 2000 between the Company and Joseph Hanasab (Gardena Office)(10)
	10.11	Lease dated January 8, 2001 between the Company and UNT Atia Co. II, a California general partnership (Rowland Heights Office)(9)
	10.12	Sublease dated March 13, 2002 between the Company and Assi Food International, Inc (Garden Grove Office)(11)
	10.13	Lease dated October 3, 2002 between the Company and Terok Management, Inc. (Mid-Wilshire Office)(10)
	10.14	Survivor income plan and exhibit thereto (Split dollar agreement)(10),(12)
	10.15	Stock Purchase Agreement by and between Wilshire Bancorp, Inc. and Texas Bank dated January 29, 2004
	10.16	Consulting Agreement with Soo Bong Min dated December 19, 2007(12),(13)
	10.17	Letter Agreement, dated as of December 12, 2008, including the Securities Purchase Agreement—Standard Terms incorporated by reference therein, between the Company and the United States Department of the Treasury(2)
	10.18	Additional Letter Agreement, dated as of December 12, 2008, between the Company and the United States Department of the Treasury(2)

95

Reference Number		Item
	10.19	Form of Letter Agreement, executed by each of Joanne Kim, Alex Ko, Sung Soo Han, Seung Hoon Kang, and David Kim(2)
	10.20	Form of Waiver, executed by each of Joanne Kim, Alex Ko, Sung Soon Han, Seung Hoon Kang, and David Kim(2)
	10.21	2008 Stock Option Plan of Wilshire Bancorp, Inc.(12),(14)
	11	Statement Regarding Computation of Net Earnings per Share(15)
	12.1	Statement regarding computation of ratios of earnings to fixed charges
	21	Subsidiaries of the Registrant
	23.1	Consent of Independent Registered Public Accounting Firm
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	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 by reference to the Exhibits in the Registration Statement on Form S-4, as filed with the SEC on June 15, 2004.

⁽²⁾

Incorporated by reference to the Exhibits in the Company's Form 8-K, as filed with the SEC on December 17, 2008..

⁽³⁾

Incorporated by reference to the Exhibits in the Registration Statement on Form S-4, as filed with the SEC on April 1, 2004.

⁽⁴⁾

Incorporated by reference to the Exhibits to the Company's Form 10-K, as filed with the SEC on March 16, 2007.

⁽⁵⁾

Incorporated by reference to the Exhibits to the Company's Form 10-Q, as filed with the SEC on November 9, 2007.

⁽⁶⁾

Incorporated by reference to the Exhibits to the Company's Form 10-SB Registration Statement, as filed with the FDIC on August 7, 1998.

⁽⁷⁾

Incorporated by reference to the Exhibits to the Company's Form 10-KSB, as filed with the FDIC on March 30, 1999.

⁽⁸⁾

Incorporated by reference to the Exhibits to the Company's Form 10-KSB, as filed with the FDIC on April 5, 2000.

⁽⁹⁾

Incorporated by reference to the Exhibits to the Company's Form 10-KSB, as filed with the FDIC on March 29, 2001.

⁽¹⁰⁾

Incorporated by reference to the Exhibits to the Company's Form 10-Q, as filed with the FDIC on August 20, 2003.

⁽¹¹⁾

Incorporated by reference to the Exhibits to the Company's Form 10-K, as filed with the FDIC on March 31, 2004.

⁽¹²⁾

Indicates compensation or compensatory plan, contract or arrangement.

⁽¹³⁾

Incorporated by reference to the Exhibits to the Company's Form 8-K, as filed with the SEC on December 20, 2007.

⁽¹⁴⁾

Incorporated by reference to the Exhibits to the Company's Form S-8, as filed with the SEC on July 18, 2008.

⁽¹⁵⁾

The information required by this Exhibit is incorporated by reference from Note [18] of the Company's Financial Statements included herein.

96

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 12, 2009	WILSHIRE BANCORP, INC. a California corporation
	By:	/s/ ALEX KO Alex Ko Chief Financial Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ STEVEN KOH Steven Koh	Chairman and Director	March 12, 2009
/s/ JOANNE KIM Joanne Kim	President and Chief Executive Officer (Principal Executive Officer)	March 12, 2009
/s/ LAWRENCE JEON Lawrence Jeon	Director	March 12, 2009
/s/ KYU-HYUN KIM Kyu-Hyun Kim	Director	March 12, 2009
/s/ MEL ELLIOT Mel Elliot	Director	March 12, 2009
/s/ RICHARD Y. LIM Richard Y. Lim	Director	March 12, 2009
/s/ FRED F. MAUTNER Fred F. Mautner	Director	March 12, 2009

97

Signature	Title	Date
/s/ YOUNG H. PAK Young H. Pak	Director	March 12, 2009
/s/ HARRY SIAFARIS Harry Siafaris	Director	March 12, 2009
/s/ GAPSU KIM Gapsu Kim	Director	March 12, 2009
/s/ ALEX KO Alex Ko	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 12, 2009

98

Wilshire Bancorp, Inc.

Financial Statements as of December 31, 2008
and 2007 and for Each of the Three Years in the
Period Ended December 31, 2008 and
Report of Independent Registered Public
Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Wilshire Bancorp, Inc.
Los Angeles, California

        We have audited the accompanying consolidated statements of financial condition of Wilshire Bancorp, Inc. and subsidiaries (the "Company") as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Wilshire Bancorp, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2009 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche LLP

Los Angeles, California
March 12, 2009

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (DOLLARS IN THOUSANDS)

					December 31, 2008		December 31, 2007
ASSETS
	Cash and due from banks				$	67,540	$	82,506
	Federal funds sold and other cash equivalents					30,001		10,003
		Cash and cash equivalents				97,541		92,509
	Securities available for sale, at fair value (amortized cost of $227,429 and $223,933 at December 31, 2008 and December 31, 2007, respectively)					229,136		224,256
	Securities held to maturity, at amortized cost (fair value of $135 and $7,372 at December 31, 2008 and December 31, 2007, respectively)					139		7,384
	Loans receivable, net of allowance for loan losses of $29,437 and $21,579 at December 31, 2008 and December 31, 2007, respectively					2,003,665		1,779,558
	Loans held for sale—at the lower of cost or market					18,427		7,912
	Federal Home Loan Bank stock, at cost					17,537		8,695
	Other real estate owned					2,663		133
	Due from customers on acceptances					2,213		3,377
	Cash surrender value of bank owned life insurance					17,395		16,228
	Investment in affordable housing partnerships					9,019		6,222
	Bank premises and equipment					11,265		10,960
	Accrued interest receivable					9,975		10,062
	Deferred income taxes					12,051		9,151
	Servicing assets					4,838		4,949
	Goodwill					6,675		6,675
	Other assets					7,472		8,634
TOTAL					$	2,450,011	$	2,196,705
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
	Deposits:
		Noninterest bearing			$	277,542	$	314,114
		Interest bearing:
			Savings			44,452		31,812
			Money market and NOW accounts			384,190		485,547
			Time deposits of $100,000 or more			902,804		788,883
			Other time deposits			203,613		142,715
				Total deposits		1,812,601		1,763,071
	Federal Home Loan Bank borrowings and other borrowings					274,000		150,000
	Junior subordinated debentures					87,321		87,321
	Accrued interest payable					6,957		10,440
	Acceptances outstanding					2,213		3,377
	Other liabilities					11,859		10,710
				Total liabilities		2,194,951		2,024,919
COMMITMENTS AND CONTINGENCIES (Note 9)
SHAREHOLDERS' EQUITY:
	Preferred stock, $1,000 par value—authorized, 5,000,000 shares; issued and outstanding, 62,158 shares and no shares at December 31, 2008 and December 31, 2007, respectively					59,443		—
	Common stock, no par value—authorized, 80,000,000 shares; issued and outstanding, 29,413,757 shares and 29,253,311 shares at December 31, 2008 and December 31, 2007, respectively					54,038		49,633
	Accumulated other comprehensive income, net of tax					1,239		375
	Retained earnings					140,340		121,778
				Total shareholders' equity		255,060		171,786
TOTAL					$	2,450,011	$	2,196,705

See accompanying notes to consolidated financial statements.

F-2

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

			For Each of the Three Years in the Period Ended December 31, 2008
			2008		2007		2006
INTEREST INCOME:
	Interest and fees on loans		$	137,630	$	144,740	$	127,841
	Interest on investment securities			10,749		9,975		8,673
	Interest on federal funds sold			254		2,921		4,885
		Total interest income		148,633		157,636		141,399
INTEREST EXPENSE:
	Interest on deposits			51,912		68,766		58,944
	Interest on FHLB advances and other borrowings			9,287		2,067		1,542
	Interest on junior subordinated debentures			4,815		5,453		4,337
		Total interest expense		66,014		76,286		64,823
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES AND LOAN COMMITMENTS				82,619		81,350		76,576
PROVISION FOR LOAN LOSSES AND LOAN COMMITMENTS				12,110		14,980		6,000
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES AND LOAN COMMITMENTS				70,509		66,370		70,576
NON-INTEREST INCOME:
	Service charges on deposit accounts			11,964		9,781		9,554
	Gain on sale of loans			2,186		7,502		11,642
	Loan-related servicing fees			3,174		2,133		2,099
	Other income			3,322		3,168		3,105
		Total noninterest income		20,646		22,584		26,400
NON-INTEREST EXPENSES:
	Salaries and employee benefits			26,517		24,437		23,823
	Occupancy and equipment			6,128		5,302		4,554
	Data processing			3,111		3,089		2,450
	Professional fees			1,840		1,392		1,143
	Other operating			10,804		10,619		9,262
		Total noninterest expenses		48,400		44,839		41,232
INCOME BEFORE INCOME TAXES				42,755		44,115		55,744
INCOME TAXES				16,282		17,309		21,802
NET INCOME			$	26,473	$	26,806	$	33,942
Preferred stock cash dividend accrued				155		—		—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS			$	26,318	$	26,806	$	33,942
PER COMMON SHARE INFORMATION
	Basic		$	0.90	$	0.91	$	1.17
	Diluted		$	0.90	$	0.91	$	1.16
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
	Basic			29,368,762		29,339,454		28,986,217
	Diluted			29,407,388		29,449,211		29,330,732

See accompanying notes to consolidated financial statements.

F-3

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(DOLLARS IN THOUSANDS)

							Common Stock
													Accumulated Other Comprehensive Income (Loss)
					Preferred Stock		Numbers of Shares			Amount						Retained Earnings			Total Shareholders' Equity
BALANCE—January 1, 2006					$	—		28,630,600		$	41,341		$	(1,026	)	$	72,789		$	113,104
	Stock options exercised							238,710			474									474
	Cash dividend declared																(5,811	)		(5,811	)
	Share-based compensation expense										472									472
	Tax benefit from stock options exercised										899									899
	Shares issued for acquisition of Liberty Bank of New York							328,110			5,937									5,937
	Comprehensive income:
		Net income															33,942			33,942
		Other comprehensive income:
			Change in unrealized gain on interest-only strips (net of tax)											65						65
			Change in unrealized gain on securities available for sale (net of tax)											553						553
				Comprehensive income																34,560
BALANCE—December 31, 2006						—		29,197,420			49,123			(408	)		100,920			149,635
	Stock options exercised							183,316			138									138
	Cash dividend declared																(5,866	)		(5,866	)
	Share-based compensation expense										348									348
	Tax benefit from stock options exercised										1,286									1,286
	Stock repurchase							(127,425	)		(1,262	)								(1,262	)
	Cumulative impact of change in accounting for uncertainties in income taxes (net of tax)																(162	)		(162	)
	Cumulative impact of change in accounting for fair valuation method adoption (net of tax)																80			80
	Comprehensive income:
		Net income															26,806			26,806
		Other comprehensive income:
			Change in unrealized gain on interest-only strips (net of tax)											117						117
			Change in unrealized gain on securities available for sale (net of tax)											666						666
				Comprehensive income																27,589
BALANCE—December 31, 2007						—		29,253,311			49,633			375			121,778			171,786
	Stock options exercised							160,446			470									470
	Cash dividend declared or accrued
		Common stock															(5,880	)		(5,880	)
		Preferred stock															(155	)		(155	)
	Share-based compensation expense										1,139									1,139
	Tax benefit from stock options exercised										57									57
	Issuance of preferred stock—62,158 shares					59,419														59,419
	Accretion of discount on preferred stock					24														24
	Issuance of stock warrants—949,460 shares										2,739									2,739
	Cumulative impact of change in accounting for bank owned life insurance																(1,876	)		(1,876	)
	Comprehensive income:																			—
		Net income															26,473			26,473
		Other comprehensive income:
			Change in unrealized gain on interest-only strips (net of tax)											61						61
			Change in unrealized gain on securities available for sale (net of tax)											803						803
				Comprehensive income																27,337
BALANCE—December 31, 2008					$	59,443		29,413,757		$	54,038		$	1,239		$	140,340		$	255,060

(Continued)

See accompanying notes to consolidated financial statements.

F-4

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

		For Each of the Three Years in the Period Ended December 31, 2008
		2008		2007		2006
DISCLOSURE OF RECLASSIFICATION AMOUNTS WITHIN ACCUMULATED OTHER COMPREHENSIVE INCOME:
	Unrealized gains on securities available for sale arising during period	$	1,384	$	1,147	$	953
	Less income tax expense		581		481		400
	Net unrealized gains on securities available for sale	$	803	$	666	$	553
	Net unrealized gains on interest-only strips arising during period	$	105	$	202	$	25
	Less reclassification adjustment for impairment		—		—		(88	)
	Less income tax expense		44		85		48
	Net unrealized gains on interest-only strips	$	61	$	117	$	65

See accompanying notes to consolidated financial statements.

F-5

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

				For each of the Three Years in the Period Ended December 31, 2008
				2008			2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	26,473		$	26,806		$	33,942
	Adjustments to reconcile net income to net cash
		provided by operating activities:
		Amortization (accretion) of investment securities			1,088			(126	)		(87	)
		Depreciation of Bank premises and equipment			1,809			1,628			1,351
		Amortization of investments in affordable housing partnerships			809			—			—
		Provision for losses on loans and loan commitments			12,110			14,980			6,000
		Provision for other real estate owned losses			123			—			—
		Deferred tax benefit			(3,525	)		(54	)		(1,516	)
		Loss on disposition of bank premises and equipment			158			12			163
		Net gain on sale of loans held for sale			(2,186	)		(7,502	)		(11,642	)
		Proceeds from sale of loans held for sale			51,681			134,818			195,319
		Origination of loans held for sale			(60,009	)		(131,245	)		(170,441	)
		(Gain) or loss on sale or call of available for sale securities			(3	)		(42	)		2
		Decrease in fair value of serving assets			877			1,906			—
		Recovery of valuation allowance of servicing assets			—			—			(172	)
		Servicing assets amortization			—			—			1,867
		(Gain) or loss on sale of other real estate owned			(17	)		(138	)		1
		Share-based compensation expense			1,139			348			472
		Change in cash surrender value of life insurance			(634	)		(593	)		(537	)
		Servicing assets capitalized			(766	)		(1,637	)		(2,092	)
		Tax benefit from exercise of stock options			(57	)		(1,286	)		(899	)
		Decrease (Increase) in accrued interest receivable			87			(13	)		(2,876	)
		Decrease (Increase) in other assets			948			(3,706	)		(1,478	)
		Dividends of Federal Home Loan Bank stock			(616	)		(421	)		(345	)
		(Decrease) Increase in accrued interest payable			(3,484	)		(1,566	)		5,052
		Increase (Decrease) in other liabilities			(77	)		(186	)		(272	)
			Net cash provided by operating activities		25,928			31,983			51,812
CASH FLOWS FROM INVESTING ACTIVITIES:
	Net decrease in interest-bearing deposits in other financial institutions				—			—			500
	Proceeds from principal repayment, matured or called securities held to maturity				7,245			7,237			8,247
	Purchase of securities available for sale				(117,851	)		(188,388	)		(72,200	)
	Proceeds from principal repayments, matured, called, or sold securities available for sale				113,270			133,285			59,153
	Net increase in loans receivable				(240,482	)		(271,246	)		(308,031	)
	Proceeds from sale of other loans				—			14,325			21,231
	Proceeds from sale of other real estate owned				875			1,530			186
	Proceeds from sale of repossessed vehicles				28			112			—
	Purchases of investments in affodable housing partnerships				(3,606	)		—			—
	Purchases of Bank premises and equipment				(1,964	)		(2,181	)		(1,641	)
	Purchases of Federal Home Loan Bank stock				(8,225	)		(732	)		(1,015	)
	Purchases of bank owned life insurance				(532	)		—			—
	Proceeds from disposition of Bank equipment				3			166			4
	Acquisition of Liberty Bank, net of cash and cash equivalents acquired				—			—			5,906
			Net cash used in investing activities		(251,239	)		(305,892	)		(287,660	)

(Continued)

See accompanying notes to consolidated financial statements.

F-6

WILSHIRE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

			For each of the Three Years in the Period Ended December 31, 2008
			2008			2007			2006
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from exercise of stock options		$	470		$	138		$	474
	Payment of cash dividend on common stock			(5,872	)		(5,864	)		(5,497	)
	Increase (decrease) in Federal Home Loan Bank borrowings and other borrowings			124,000			130,000			(41,000	)
	Tax benefit from exercise of stock options			57			1,286			899
	Net increase in deposits			49,530			11,099			292,011
	Increase in junior subordinated debentures			—			25,774			—
	Cash proceed from issuance of preferred stock			62,158			—			—
	Purchases of common stock			—			(1,262	)		—
		Net cash provided by financing activities		230,343			161,171			246,887
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				5,032			(112,738	)		11,039
CASH AND CASH EQUIVALENTS—Beginning of year				92,509			205,247			194,208
CASH AND CASH EQUIVALENTS—End of year			$	97,541		$	92,509		$	205,247
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
	Interest paid		$	69,498		$	77,851		$	59,715
	Income taxes paid		$	19,429		$	16,795		$	23,387
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
	Transfer of loans to other real estate owned		$	3,510		$	1,391		$	—
	Other assets transferred to Bank premises and equipment		$	312		$	120		$	755
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
	Common stockcash dividend declared, but not paid		$	1,471		$	1,463		$	1,460
	Preferred stock cash dividend declared, but not paid		$	155		$	—		$	—

See accompanying notes to consolidated financial statements.

F-7

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Wilshire Bancorp, Inc. (the "Company" or "We") 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 reorganization into a holding company structure at a meeting held on August 25, 2004. As a result of the reorganization, shareholders of the Bank are now shareholders of the Company and the Bank is a direct subsidiary of the Company. The Bank's primary source of revenue is from providing financing for business working capital, commercial real estate, and trade activities, and its investment portfolio. The accounting and reporting policies of the Bank are in accordance with accounting principles generally accepted in the United States of America and conform to general practices in the banking industry.

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and its subsidiary, Wilshire State Bank. Inter-company transactions and accounts have been eliminated in consolidation.

Cash and Cash Equivalents—Cash and cash equivalents include cash and due from banks, term and overnight federal funds sold and securities purchased under agreements to resell, all of which have original maturities of less than 90 days. As of December 31, 2008, a majority of the cash and cash equivalent, or $30.0 million, were federal funds sold.

Restriction on Cash—Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements.

Investment Securities—Investments are classified into three categories and accounted for as follows:

(i)

Securities that the Company has the positive intent and ability to hold to maturity are classified as "held to maturity" and reported at amortized cost;



(ii)

Securities that are bought and held principally for the purpose of selling them in the near future are classified as "trading securities" and reported at fair value. Unrealized gains and losses are recognized in earnings; and



(iii)

Securities not classified as held to maturity or trading securities are classified as "available for sale" and reported at fair value. Unrealized gains and losses are reported, net of taxes, as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

        Accreted discounts and amortized premiums on investment securities are included in interest income by the interest method, and unrealized and realized gains or losses related to holding or selling securities are calculated using the specific-identification method. 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 the consolidated statements of operations. The Company did not record any other-than-temporary impairment on investment securities in 2008, 2007 and 2006. However, in 2008, 2007 and 2006, the Company recognized other-than-temporary charges of

F-8

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

$0, $0 and $88,020, respectively on its interest-only ("I/O") strip related to Small Business Administration ("SBA") loans sold, which were included as a component of non-interest expense. The I/O strips are accounted for like available-for-sale securities; impairment charges reduce the cost basis of the I/O strips and reduce earnings.

Loans—Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses and any deferred fees or costs on originated loans.

        Interest on loans is credited to income as earned and is accrued only if deemed collectible. Accrual of interest is generally discontinued when a loan is over 90 days delinquent unless management believes the loan is adequately collateralized and in the process of collection. Generally, payments received on nonaccrual loans are recorded as principal reductions. Interest income is recognized after all principal has been repaid or an improvement in the condition of the loan has occurred that would warrant resumption of interest accruals.

        Nonrefundable fees, net of incremental costs, associated with the origination or acquisition of loans are deferred and recognized as an adjustment of the loan yield over the lives of the loans using the interest method. Other loan fees and charges, representing service costs for the prepayment of loans, for delinquent payments, or for miscellaneous loan services, are recorded as income when collected.

        Certain loans that may be sold prior to maturity have been designated as held for sale at origination and are recorded at the lower of cost or market value, determined on an aggregate basis. A valuation allowance is established if the market value of such loans is lower than their cost, and operations are charged or credited for valuation adjustments. The premium on the pro-rata principal of SBA loans sold is recognized as gain on sale of loan at the time of the sale. The remaining portion of the premium related to the unsold principal of the SBA loans, is presented as unearned income in Note 3, is deferred and amortized over the remaining life of the loan as an adjustment to yield. Upon sales of such loans, the Company receives a fee for servicing the loans. A servicing asset is recorded based on the present value of the contractually specified servicing fee, net of servicing cost, over the estimated life of the loan, with an average discount rate and a range of constant prepayment rates of the related loans. The servicing asset is amortized in proportion to and over the period of estimated servicing income. For purposes of measuring impairment, the servicing assets are stratified by collateral types. Prior to December 31, 2006, the Company periodically evaluates the fair value of servicing assets for impairment. A valuation allowance was recorded when the fair value was below the carrying amount and a recovery of the valuation allowance was recorded when its fair value exceeded the carrying amount. However, a reversal could not exceed the original valuation allowance recorded. On January 1, 2007, we adopted Statement of Financial Accounting Standards ("SFAS") No. 156, Accounting for Servicing of Financial Assets, and selected a fair value measurement method to measure our servicing assets and liabilities and recognized the net increase in their fair value of $80,000, net of tax effects as a credit to retained earnings. Any subsequent increase or decrease in fair value of servicing assets and liabilities is to be included with loan related servicing income on our current earnings in the statement of operations (see Note 5).

F-9

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        An interest-only strip or I/O strip is recorded based on the present value of the excess of future interest income, generally amounts in excess of 1.00%, over the contractually specified servicing fee, calculated using the same assumptions as noted above. I/O strips are accounted for at their estimated fair value, with unrealized gains recorded as an adjustment in accumulated other comprehensive income in shareholders' equity. If the estimated fair value is less than its carrying value, the loss is considered as other-than-temporary impairment and it is charged to the current earnings. I/O strips are amortized over the remaining life of the loan as an adjustment to yield and monitored for impairment.

Allowance for Loan Losses—Accounting for the allowance for loan losses involves significant judgment and assumptions by management and is based on historical data and management's view of the current economic environment. At least on a quarterly basis, management reviews the methodology and adequacy of the allowance for loan losses and reports its assessment to the Board of Directors for its review and approval.

        We base our allowance for loan losses on an estimation of probable losses inherent in our loan portfolio. Our methodology for assessing loan loss allowances is intended to reduce the differences between estimated and actual losses and involves a detailed analysis of our loan portfolio in three phases:

•

the specific review of individual loans in accordance with SFAS No. 114, Accounting by Creditors for Impairment of a Loan,

•

the segmenting and reviewing of loan pools with similar characteristics in accordance with SFAS No. 5, Accounting for Contingencies, and

•

a judgmental estimate based on various qualitative factors.

        The first phase of our allowance analysis involves the specific review of individual loans to identify and measure impairment. At this phase, we evaluate each loan except for homogeneous loans, such as automobile loans and home mortgages. Specific risk-rated loans are deemed impaired with respect to all amounts, including principal and interest, which will likely not be collected in accordance with the contractual terms of the related loan agreement. Impairment for commercial and real estate loans is measured either based on the present value of the loan's expected future cash flows or, if collection on the loan is collateral dependent, the estimated fair value of the collateral, less selling and holding costs.

        The second phase involves segmenting the remainder of the risk-rated loan portfolio into groups or pools of loans, together with loans with similar characteristics for evaluation in accordance with SFAS No. 5. We perform loss migration analysis and calculate the loss migration ratio for each loan pool based on its historical net losses and benchmark it against the levels of other peer banks.

        In the third phase, we consider relevant internal and external factors that may affect the collectability of a loan portfolio and each group of loan pools. As a general rule, the factors listed below will be considered to have no impact to our loss migration analysis. However, if there exists information to warrant adjustment to the loss migration ratios, the changes will be made in accordance with the established parameters and supported by narrative and/or statistical analysis. We use a credit risk matrix to determine the impact to the loss migration analysis. This matrix enables management to adjust the general allocation based on the loss migration ratio. The factors currently considered are, but are not limited to: concentration of credit, delinquency trend, nature and volume of loan trend,

F-10

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

non-accrual and problem loan trends, loss and recovery trend, quality loan review, lending and management staff, lending policies and procedures, and external factors such as changes in legal and regulatory requirements, on the level of estimated credit losses in the current portfolio. For all factors, the extent of the adjustment will be commensurate with the severity of the conditions that concern each factor.

Bank Premises and Equipment—Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation on building, furniture, fixtures and equipment is computed on the straight-line method over the estimated useful lives of the related assets, which range from 3 to 30 years. Leasehold improvements are capitalized and amortized on the straight-line method over the term of the lease or the estimated useful lives of the improvements, whichever is shorter.

Other Real Estate Owned—Other real estate owned, which represents real estate acquired through foreclosure in satisfaction of commercial and real estate loans, is stated at fair value less estimated selling costs of the real estate. Loan balances in excess of the fair value of the real estate acquired at the date of acquisition are charged to the allowance for loan losses.

        Any subsequent operating expenses or income, reduction in estimated fair values, and gains or losses on disposition of such properties are charged or credited to current operations.

Impairment of Long-Lived Assets—The Company reviews its long-lived assets for impairment annually or when events or circumstances indicate that the carrying amount of these assets may not be recoverable. An asset is considered impaired when the expected undiscounted cash flows over the remaining useful life are less than the net book value. When impairment is indicated for an asset, the amount of impairment loss is the excess of the net book value over its fair value.

Federal Home Loan Bank ("FHLB") Stock—The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and both cash and stock dividends are reported as income (see Note 10).

Bank Owned Life Insurance ("BOLI") Obligation—FASB Emerging Issue Task Force ("EITF") 06-4 requires an employer to recognize obligations associated with endorsement split-dollar life insurance arrangements that extend into the participant's post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. EITF 06-4 is effective as of the beginning of the entity's first fiscal year after December 15, 2007. The Company adopted EITF 06-4 on January 1, 2008 using the later option, i.e., based on the future death benefit. Upon this adoption, the Company recognized increases in the liability for unrecognized post-retirement obligations of $806,000 and $1,070,000 for directors and officers, respectively, as a cumulative adjustment to the current year's beginning equity. During the year of 2008, the increase in BOLI expense and liability related to the adoption of EITF 06-4 was $144,000, which was included as part of the other expenses and other liabilities balances in the consolidated financial statements.

Affordable Housing Investment Partnerships—The Company has invested in limited partnerships formed to develop and operate affordable housing units for lower income tenants throughout the states of California, Texas, and New York. The investments are accounted for using the cost method of

F-11

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

accounting. The costs of the investments are being amortized on a straight line method over the life of related tax credits. If the partnerships cease to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken is subject to recapture with interest. Such investments are recorded in other assets in the accompanying consolidated statements of financial condition.

Goodwill—The Company recognized goodwill in connection with the acquisition of Liberty Bank of New York. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill is no longer amortized, but rather subject to impairment testing at least annually. The Company tested goodwill for impairment as of December 31, 2008. There was no impairment in recorded goodwill as of December 31, 2008 (see Note 14).

Income Taxes—The Company accounted for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enacted date.

        The Company records net tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to reduce the current period provision for income taxes.

        In 2007, the Company adopted the provision of FASB Financial Interpretation No. ("FIN") 48, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. As a result of the implementation of the Interpretation, the Company recognized an increase in the liability for unrecognized tax benefit of $153,000 and related interest of $9,000. As of December 31, 2008, the total unrecognized tax benefit was $333,000, and related interest was $36,000 (see Note 13).

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 that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the earnings of the Company.

F-12

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income—Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on I/O strips and securities available for sale. The accumulated change in other comprehensive income, net of tax, was recognized as a separate component of equity.

Dividend Restrictions—Banking regulations require maintaining certain capital levels and may limit the dividends paid by the bank to the Company or by the Company to shareholders. In addition, as part of the TARP agreement, the Company is limited to declare or pay or set apart for dividend payments on any common shares or shares of any other series of preferred stock rankings prior to fully fulfill the dividend payment requirement of the TARP.

Repurchase of Common Stock—In July 2007, the Company's board of directors authorized a stock repurchase program, under which up to $10 million outstanding common shares in the open market can be repurchased for a period of twelve months ending on July 31, 2008. Since its inception, the Company has repurchased a total of 127,425 shares at an average price of $9.91 through this program in 2007. During 2008, there were no such repurchases. This program completed its term and expired as of July 31, 2008.

Stock-Based Compensation—The Company issued stock-based compensation to certain employees, officers, and directors. In 2006, the Company adopted SFAS 123R, Share-Based Payment, for stock based compensation. SFAS No. 123R allows for two alternative transition methods. The Company follows the modified prospective method, which requires application of the new Statement to new awards and to awards modified, repurchased or cancelled after the required effective date. Accordingly, prior period amounts have not been restated. Additionally, compensation cost for the portion of awards for which the requisite service has not been rendered that are outstanding as of January 1, 2006 are recognized as the requisite services are rendered on or after January 1, 2006. The compensation cost of that portion of awards is based on the grant-date fair value of those awards (see Note 12).

Use of Estimates in the Preparation of Financial Statements—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification—To conform to the consolidated financial statements of the prior period to the current period's presentation, the Company has reclassified (i) change in the fair valuation of servicing assets and liabilities of $521,000 and $84,000 from other income to loan-related servicing income for years 2007 and 2006, respectively, within the Consolidated Statement of Operations; and (ii) $2,474,000 from servicing assets amortization to decrease in fair value of servicing assets for year 2007 within the operating activities section of the Consolidated Statements of Cash Flows.

Recent Accounting Pronouncements—In December 2007, the FASB issued SFAS No. 141R, Business Combinations. This new statement revises SFAS No. 141, which was issued June 2001. SFAS No. 141R changes multiple aspects of the accounting for business combinations. Under the guidance in SFAS No. 141R, the acquisition method must be used, which requires the acquirer to recognize most identifiable assets acquired, liabilities assumed and non-controlling interests in the acquiree at their full

F-13

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

fair value on the acquisition date. Goodwill is to be recognized as the excess of the consideration transferred plus the fair value of the non-controlling interest over the fair values of the identifiable net assets acquired. Subsequent changes in the fair value of contingent consideration classified as a liability are to be recognized in earnings, while contingent consideration classified as equity is not to be remeasured. Costs such as transaction costs are to be excluded from acquisition accounting, generally leading to recognizing expense and additionally, restructuring costs that do not meet certain criteria at the acquisition date are to be subsequently recognized as post-acquisition costs. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No.141R to have a material impact on its consolidated financial statements.

        In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, which amends Accounting Research Bulletin ("ARB") No. 51, Consolidated Financial Statements. SFAS No. 160 requires a non-controlling interest or minority interest to be reported by all entities in the same way, which is as equity in the consolidated financial statements. It also requires income attributable to the non-controlling interest to be disclosed on the face of the consolidated statement of income. Furthermore, SFAS No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and non-controlling interests by requiring they be treated as equity transactions. Pursuant to SFAS No. 160, the Company's equity method investments will be reported as part of its equity. SFAS No. 160 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008, and interim periods within those years. Early adoption is prohibited. The provisions of SFAS No. 160 should be applied prospectively, except for presentation and disclosure requirements. The presentation and disclosure requirements should be applied retrospectively for all periods presented. The Company is in the process of evaluating the impact that the adoption of SFAS No. 160 will have on its consolidated financial statements.

        In February 2008, the FASB issued FSP SFAS No.157-2, which delays the effective date of SFAS No. 157, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The delay is intended to allow the FASB and constituents additional time to consider the effect of various implementation issues that have arise, or that may arise, from the application of SFAS No. 157. This FSP applies to various nonfinancial assets and liabilities, including goodwill and nonfinancial long-lived assets, and it defers the effective date of SFAS No. 157 to such nonfinancial assets and liabilities to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. The Company does not expect the adoption of FSP SFAS No.157-2 to have a material impact on its consolidated financial statements.

        In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This new statement has the same scope as SFAS No. 133. Accordingly, it applies to all entities. SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors a better and clearer understanding of the derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related

F-14

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

interpretations, and how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. The statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company is in the process of evaluating the impact that the adoption of SFAS No. 161 will have on its consolidated financial statements (In September 2008, FASB issued FSP SFAS No.133-1 and FIN 45-4 to clarify the effective date of SFAS No. 161, see detail for FSP SFAS No.133-1 and FIN 45-4 below).

        In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("GAAP"). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board ("PCAOB") amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles", which is currently under SEC review. The Company does not expect the adoption of SFAS No.162 to have a material impact on its consolidated financial statements.

        In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Shared-Based Payment Transactions Are Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of SFAS No. 128, Earnings per Share. FSP No. EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period EPS data presented are to be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of this FSP. Early adoption is not permitted. The Company is in the process of evaluating the impact that the adoption of FSP No. EITF 03-6-1 will have on its consolidated financial statements.

        In September 2008, the FASB issued FSP SFAS No.133-1 and FIN 45-4, Disclosure about Credit Derivatives and Certain Guarantees: An Amendment of SFAS No. 133 and FIN 45; and Clarification of the Effective Date of SFAS No. 161. This FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance and cash flows of the sellers of credit derivatives. It amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FIN 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others—an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. The provisions of the FSP that amend SFAS No. 133 and FIN 45 are effective for reporting periods (annual or interim) ending after November 15, 2008. Because the FSP amends only the disclosure requirements for credit derivatives and certain guarantees, the adoption of FSP SFAS No. 133-1 and FIN 45-4 did not have a material impact on the Company's consolidated financial statements.

F-15

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        In October 2008, the FASB issued FSP SFAS No.157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of SFAS No. 157, Fair Value Measurements, in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for the financial asset is not active. This FSP is effective upon issuance, including prior periods for which financial statements have not been issued. Revisions resulting for as a change in the valuation technique or its application shall be accounted for as a change in accounting estimate under SFAS No. 154, Accounting Changes and Error Corrections. However, such revisions shall be exempt from SFAS No. 154 disclosure requirement. The Company utilized and followed this FSP in our fair valuation procedures pursuant SFAS No. 157 (see Note 3).

        In December 2008, the FASB issued FSP SFAS No.140-4 and FIN 46R-8, Disclosure by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities. This FSP amends SFAS No. 140, Accounting for Transfer and Servicing of Financial Assets and Extinguishments of Liabilities, to require public entities to provide additional disclosures about transfers of financial assets. It also amends FIN 46R, Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. Additionally, this FSP requires certain disclosures to be provided by a public enterprise that is a sponsor of a qualifying special purpose entity, or SPE, that holds a variable interest in the qualifying SPE but was not the transferor (nontransferor) of financial assets to the qualifying SPE, and a servicer of a qualifying SPE that holds a significant variable interest in the qualifying SPE but was not the transferor (nontransferor) of financial assets to the qualifying SPE. FSP SFAS No. 140-4 and FIN 46R-8 is effective for the first reporting period, interim or annual, ending after December 31, 2008, with earlier adoption encouraged. An entity (enterprise) is encouraged, but not required, to disclose comparative information in periods earlier than the effective date for disclosures that were not previously required for public entities (enterprises) by SFAS No. 140 and FIN 46R. However, once this FSP is adopted, comparative disclosures are required for periods subsequent to the effective date. The Company does not expect the adoption of FSP SFAS No. 140-4 and FIN 46R-8 to have a material impact on its consolidated financial statements.

        In December 2008, the FASB issued FSP SFAS No.132R-1, Employer's Disclosures about Postretirement Benefit Plan Asset, which amends SFAS No. 132R, Employer's Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on employers' disclosures about plan assets of a defined benefit pension or other postretirement plan. The objectives of the disclosures are to provide users of financial statements with an understanding of the plan investment policies and strategies regarding investment allocation, major categories of plan assets, use of fair valuation inputs and techniques, effect of fair value measurements using significant unobservable inputs (i.e., level 3 inputs), and significant concentrations of risk within plan assets. FSP SFAS No. 132R-1 is effective for financial statements issued for fiscal years beginning after December 15, 2009, with early adoption permitted. This FSP does not require comparative disclosures for earlier periods. The Company is in the process of evaluating the impact that the adoption of FSP SFAS No. 132R-1 will have on its consolidated financial statements.

F-16

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        In January 2009, the FASB issued FSP No. EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. As explicitly spelled out in the title of this FSP, it amends the impairment guidance in EITF 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Asset, to achieve more consistent determination of whether an other-than-temporary impairment has occurred. This FSP also retains and emphasizes the objective of an other-than-temporary impairment assessment and the related disclosure requirements in SFAS No. 115 and other related guidance. FSP No. EITF 99-20-1 is effective for interim and annual financial statements with reporting periods ending after December 15, 2008, and is to be applied prospectively. Retrospective application to a prior interim or annual period is not permitted. The Company does not expect the adoption of FSP No. EITF 99-20-1 to have a material impact on its consolidated financial statements.

2. INVESTMENT SECURITIES

        The following is a summary of the investment securities at December 31:

2008 (Dollars in Thousands)		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
Available for sale:
	Securities of government sponsored enterprises	$	25,952	$	235	$	—	$	26,187
	Corporate securities		7,048		—		95		6,953
	Collateralized mortgage obligations		62,557		824		78		63,303
	Mortgage-backed securities		124,549		1,267		303		125,513
	Municipal bonds		7,323		14		157		7,180
Total		$	227,429	$	2,340	$	633	$	229,136
Held to maturity:
	Collateralized mortgage obligations	$	139	$	—	$	4	$	135
Total		$	139	$	—	$	4	$	135

F-17

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

2. INVESTMENT SECURITIES (Continued)

2007 (Dollars in Thousands)		Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Available for sale:
	Securities of government sponsored enterprises	$	64,932	$	250	$	7	$	65,175
	Corporate securities		17,390		111		17		17,484
	Collateralized mortgage obligations		73,416		305		435		73,286
	Mortgage-backed securities		60,470		149		62		60,557
	Municipal bonds		7,725		43		14		7,754
Total		$	223,933	$	858	$	535	$	224,256
Held to maturity:
	Securities of government sponsored enterprises	$	7,000	$	1	$	—	$	7,001
	Collateralized mortgage obligations		164		—		13		151
	Municipal bonds		220		—				220
Total		$	7,384	$	1	$	13	$	7,372

        As of December 31, 2008, held-to-maturity securities, which are carried at their amortized costs, decreased to $0.1 million from $7.4 million and $14.6 million at December 31, 2007 and 2006, respectively. The $7.3 million reduction in 2008 was due to $7.0 million investments being called and the remainder $0.3 million matured, while the entire $7.2 million reduction in 2007 was due to investments being called. Available-for-sale securities, which are stated at their fair market values, increased to $229.1 million at December 31, 2008 from $224.3 million and $167.8 million at December 31, 2007 and 2006, respectively. The $4.8 million increase in 2008 represented $3.4 million net purchases and $1.4 million unrealized gain, while the $56.5 million increase in 2007 represented $55.4 million net purchases and $1.1 million unrealized gain. These increases reflect a strategy of improving our levels of liquidity using available-for-sale securities, in addition to immediately available funds which are maintained mainly in the form of overnight investments.

        Accrued interest and dividends receivable on investment securities totaled $1,331,000 and $1,492,000 at December 31, 2008 and 2007, respectively.

        The following tables show 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 December 31:

	Less than 12 months					12 months or longer					Total
2008 (Dollars in Thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Collateralized mortgage obligations	$	2,642	$	(65	)	$	1,591	$	(17	)	$	4,233	$	(82	)
Mortgage-backed securities		12,287		(300	)		536		(3	)		12,823		(303	)
Municipal securities		5,712		(157	)		—		—			5,712		(157	)
Corporate securities		5,000		(49	)		1,953		(47	)		6,953		(96	)
	$	25,641	$	(571	)	$	4,080	$	(67	)	$	29,721	$	(638	)

F-18

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

2. INVESTMENT SECURITIES (Continued)

	Less than 12 months					12 months or longer					Total
(Dollars in Thousands) 2007	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Securities of government sponsored enterprises	$	—	$	—		$	4,993	$	(7	)	$	4,993	$	(7	)
Collateralized mortgage obligations		1,749		(11	)		9,266		(436	)		11,015		(447	)
Mortgage-backed securities		37,967		(36	)		2,545		(27	)		40,512		(63	)
Municipal securities		1,392		(13	)		2,347		(2	)		3,739		(15	)
Corporate securities		4,972		(1	)		1,983		(16	)		6,955		(17	)
	$	46,080	$	(61	)	$	21,134	$	(488	)	$	67,214	$	(549	)

        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, the Company considers, 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.

        The Company performs an evaluation of the investment portfolio in assessing individual positions that have market values that have declined below cost. In assessing whether there is other-than-temporary impairment, the Company considers in a disciplined manner:

•

Whether or not all contractual cash flows due on a security will be collected

•

The Company's positive intent and ability to hold the debt security until recovery in fair value or maturity

        A number of factors are considered in the analysis, including but not limited to:

•

Issuer's credit rating

•

Likelihood of the issuer's default or bankruptcy

•

Collateral underlying the security

•

Industry in which the issuer operates

•

Nature of the investment

•

Severity and duration of the decline in fair value

•

Analysis of the average life and effective maturity of the security

        The Company does not believe that any individual unrealized loss as of December 31, 2008 represents an other-than-temporary impairment. The unrealized losses on our government sponsored enterprises ("GSE") bonds, collateralized mortgage obligations ("CMOs"), and mortgage-backed securities ("MBS") are attributable to both changes in interest rate (U.S. Treasury curve) and a repricing of risk (spreads widening against risk-fee rate) in the market. All GSE bonds, GSE CMO, and GSE MBS securities are backed by U.S. Government Sponsored and Federal Agencies and

F-19

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

2. INVESTMENT SECURITIES (Continued)

therefore rated "AAA." The Company has no exposure to the "Subprime Market" in the form of Asset Backed Securities ("ABS") and Collateralized Debt Obligations ("CDOs") that had previously been rated "AAA" but has since been downgraded to below investment grade. The Company has the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 and 2007 until the market value recovers or the securities mature.

        Municipal bonds and corporate bonds are evaluated by reviewing the credit-worthiness of the issuer and general market conditions. The unrealized losses on our investment in municipal and corporate securities were primarily attributable to both changes in interest rates and a repricing risk in the market. The Company has the intent and ability to hold the securities in an unrealized loss position at December 31, 2008 and 2007 until the market value recovers or the securities mature.

        The amortized cost and estimated fair value of investment securities at December 31, 2008, by contractual maturity, are shown below:

(Dollars in Thousands)		Amortized Cost		Estimated Fair Value
Available for sale:
	Due in one year or less	$	2,218	$	2,304
	Due after one year through five years		22,906		22,932
	Due after five years through ten years		22,841		22,900
	Due after ten years		179,464		181,000
Total		$	227,429	$	229,136
Held to maturity:
	Due in one year or less	$	—	$	—
	Due after one year through five years		—		—
	Due after five years through ten years		—		—
	Due after ten years		139		135
Total		$	139	$	135

        Securities with amortized cost of approximately $219,972,000 and $208,534,000 were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2008 and 2007, respectively.

3. FAIR VALUE OPTION AND MEASUREMENT FOR FINANCIAL ASSETS AND LIABILITIES

        In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Under the statement, the fair value option may be applied instrument by instrument, with only a few exceptions, but may only apply to entire instruments and not to portions of instruments. The fair value option is a one-time election for existing instruments and is irrevocable. The Company adopted SFAS No. 159 as of January 1, 2008. All assets and liabilities are evaluated for eligibility of the fair value option under

F-20

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

3. FAIR VALUE OPTION AND MEASUREMENT FOR FINANCIAL ASSETS AND LIABILITIES (Continued)

the statement. Based on the analysis performed, the Company concluded that the fair value option provided by this statement is not elected for any of the existing instruments under its current asset and liability balances. The Company will constantly review the new asset and liability additions on an ongoing basis, and will elect fair value option pursuant to SFAS No. 159 for any new instruments that fall in line with the fair value accounting and reporting.

        In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which provides a definition of fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value, and therefore, does not expand the use of fair value in any new circumstance. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an arm's length transaction between market participants in the markets where we conduct business. SFAS No. 157 clarifies that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to data lacking transparency.

        In October 2008, the FASB issued FASB Staff Position ("FSP") SFAS No.157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of SFAS No. 157, Fair Value Measurements, in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for the financial asset is not active. This FSP is effective upon issuance, including prior periods for which financial statements have not been issued. Revisions resulting for as a change in the valuation technique or its application shall be accounted for as a change in accounting estimate under SFAS No. 154, Accounting Changes and Error Corrections. However, such revisions shall be exempt from SFAS No. 154 disclosure requirement. The Company adopted FSP SFAS No. 157-3 on its issuance date, October 10, 2008. The adoption of this FSP did not have a material impact on the Company's fair value determination and its consolidated financial statements.

        The fair value inputs of the instruments are classified and disclosed in one of the following categories pursuant to SFAS No. 157:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The quoted price shall not be adjusted for the blockage factor (i.e., size of the position relative to trading volume).

Level 2—Pricing inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair value is determined through the use of models or other valuation methodologies, including the use of pricing matrices. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3—Pricing inputs are inputs unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or

F-21

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

3. FAIR VALUE OPTION AND MEASUREMENT FOR FINANCIAL ASSETS AND LIABILITIES (Continued)

liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation.

        In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

        The Company adopted SFAS No. 157 as of January 1, 2008 and FSP SFAS No.157-3 as of October 10, 2008. It used the following methods and assumptions in estimating our fair value disclosure for financial instruments. Financial assets and liabilities recorded at fair value on a recurring basis are listed as follows:

Securities available for sale—Investment in available-for-sale securities is recorded at fair value pursuant to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. Fair value measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speeds, and default rates. The securities available for sale include federal agency securities, mortgage-backed securities, collateralized mortgage obligations, municipal bonds and corporate debt securities. Our existing investment available-for-sale security holdings as of December 31, 2008 are measured using matrix pricing models in lieu of direct price quotes and recorded based on Level 2 measurement inputs.

Servicing assets and interest-only strips—Small Business Administration ("SBA") loan servicing assets and interest-only strips represent the value associated with servicing SBA loans sold. The value is determined through a discounted cash flow analysis which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. Adjustments are only made when the discounted cash flows are less than the carrying value. The Company classifies SBA loan servicing assets and interest-only strips as recurring with Level 3 measurement inputs.

Impaired loans—A loan is considered to be impaired when it is probable that all of the principal and interest due under the original underwriting terms of the loan may not be collected. Impairment is measured based on the fair value of the underlying collateral. The fair value is determined through appraisals and other matrix pricing models, which required a significant degree of management judgment. The Company measures impairment on all nonaccrual loans and trouble debt restructured loans, except automobile loans, for which it has established specific reserves as part of the specific allocated allowance component of the allowance for loan losses. The Company records impaired loans as recurring with Level 3 measurement inputs.

Servicing liabilities—SBA loan servicing liabilities represent the value associated with servicing SBA loans sold. The value is determined through a discounted cash flow analysis which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. Adjustments are only made when the

F-22

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

3. FAIR VALUE OPTION AND MEASUREMENT FOR FINANCIAL ASSETS AND LIABILITIES (Continued)

discounted cash flows are less than the carrying value. The Company classifies SBA loan servicing liabilities as recurring with Level 3 measurement inputs.

        The table below summarizes the valuation of our investments by the above SFAS No. 157 fair value hierarchy levels as of December 31, 2008:

Assets Measured at Fair Value
(Dollars in Thousands)

	As of December 31, 2008
				Fair Value Measurements Using:
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale	$	229,136		$	—	$	229,136	$	—
Servicing assets		4,838			—		—		4,838
Interest-only strips		632			—		—		632
Impaired loans		27,955			—		—		27,955
Servicing liabilities		(328	)		—		—		(328	)

        Financial instruments measured at fair value on a recurring basis, which were part of the asset balances that were deemed to have Level 3 fair value inputs when determining valuation, are identified in the table below by asset category with a summary of changes in fair value for the quarter ended December 31, 2008:

(Dollars in Thousands)	At January 1, 2008			Realized Losses in Net Income			Unrealized Gains in Other Comprehensive Income		Net Purchases, Sales and Settlements		Transfers In/out of Level 3		At December 31, 2008			Net Cumulative Unrealized Gains
Servicing assets	$	4,949		$	(877	)	$	—	$	766	$	—	$	4,838		$	—
Interest-only strips		753			(226	)		105		—		—		632			249
Impaired loans		15,545			(1,599	)		—		14,009		—		27,955			—
Servicing liabilities		(379	)		51			—		—		—		(328	)		—

F-23

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

4. LOANS RECEIVABLE, LOANS HELD FOR SALE, AND ALLOWANCE FOR LOAN LOSSES

        The following is a summary of loans as of December 31:

	2008					2007
(Dollars in Thousands)	Loans Held for Sale		Loans Receivable			Loans Held for Sale		Loans Receivable
Commercial loans	$	5,235	$	383,982		$	2,997	$	332,336
Real estate loans		13,192		1,629,615			4,915		1,441,149
Installment loans		—		23,669			—		33,569
		18,427		2,037,266			7,912		1,807,054
Allowance for loan losses		—		(29,437	)		—		(21,579	)
Deferred loan fees		—		(178	)		—		(788	)
Unearned income		—		(3,986	)		—		(5,129	)
Net loans	$	18,427	$	2,003,665		$	7,912	$	1,779,558

        At December 31, 2008, 2007 and 2006, the Company serviced loans sold to unaffiliated parties in the amounts of $314,988,000, $338,166,000, and $340,573,000, respectively.

        The maturity or repricing distribution of the loan portfolio as of December 31, 2008 is as follows:

(Dollars in Thousands)	Loans Held for Sale		Loans Receivable		Total Loans
Less than one year	$	18,034	$	1,086,763	$	1,104,797
One to five years		—		833,158		833,158
After five years		393		94,846		95,239
Total gross loans	$	18,427	$	2,014,767	$	2,033,194

        The rate composition of the loan portfolio as of December 31, 2008 is as follows:

(Dollars in Thousands)	Loans Held for Sale		Loans Receivable		Total Loans
Fixed rate loans	$	18,034	$	1,054,317	$	1,072,351
Variable rate loans		393		960,450		960,843
Total gross loans	$	18,427	$	2,014,767	$	2,033,194

        The amounts on the tables above are the gross loan balance at December 31, 2008 before netting deferred loan fees and unearned income totaling $4.2 million, and the gross amount of non-accrual loans approximately of $22.5 million is not included.

        As of December 31, 2008 and 2007, the government guaranteed portion of total gross loans was $36.6 million and $33.1 million, respectively.

        Management believes that as of December 31, 2008 and 2007, the allowance for loan losses is adequate to provide for losses in the loan portfolio; however, the allowance is an estimate that is inherently uncertain and depends on the outcome of future events. Management's estimates are based

F-24

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

4. LOANS RECEIVABLE, LOANS HELD FOR SALE, AND ALLOWANCE FOR LOAN LOSSES (Continued)

on previous loan loss experience; volume, growth and composition of the loan portfolio; the value of collateral; and current economic conditions.

        The Company evaluates credit risks associated with the commitments to extend credit and letters of credit at the same time it evaluates credit risk associated with the loan portfolio. However, the allowances necessary for the commitments are reported separately in other liabilities in the accompanying statements of financial condition and are not part of the allowance for loan losses as presented above.

        The activity in the allowance for loan losses was as follows for the years ended December 31:

(Dollars in Thousands)	2008			2007			2006
Balance—beginning of year	$	21,579		$	18,654		$	13,999
Provision for loan losses		12,865			13,873			5,896
Loans charged off		(7,147	)		(11,271	)		(2,162	)
Recoveries of charge-offs		2,140			323			320
Allowance for loan losses acquired from Liberty Bank of New York acquisition		—			—			601
Balance—end of year	$	29,437		$	21,579		$	18,654

        The activity in the liability for losses on loan commitments was as follows for the years ended December 31:

(Dollars in Thousands)	2008			2007		2006
Balance—beginning of year	$	1,998		$	891	$	779
Provision (Credit) for losses on loan commitments		(755	)		1,107		104
Allowance for loan commitment acquired from Liberty Bank of New York acquisition		—			—		8
Balance—end of year	$	1,243		$	1,998	$	891

        The following is a summary of impaired loans with and without specific reserve as of December 31, 2008 and 2007:

	2008				2007
(Dollars in Thousands)	Loan Amount		Specific Reserve		Loan Amount		Specific Reserve
Impaired loans without specific reserve	$	11,881	$	—	$	10,243	$	—
Impaired loans with specific reserve		16,074		6,215		5,302		1,910
Total impaired loans	$	27,955	$	6,215	$	15,545	$	1,910

        The average recorded investment in impaired loans during the years ended December 31, 2008 and 2007 was $29.4 million and $19.4 million, respectively. There was no interest income recognized from the impaired loans in 2008 and 2007.

F-25

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

4. LOANS RECEIVABLE, LOANS HELD FOR SALE, AND ALLOWANCE FOR LOAN LOSSES (Continued)

        At December 31, 2008, the Company had loans on non-accrual status of $15.3 million, net of SBA guaranteed, as compared with $10.3 million at December 31, 2007.

        The Company provides residential mortgage lending and it offers a wide selection of residential mortgage programs, including non-traditional mortgages such as interest only and payment option adjustable rate mortgages. Most of the salable loans are transferred to the secondary market while certain portion was retained on our books as portfolio loans. The total home mortgage loan portfolio outstanding at the end of 2008 and 2007 was $42.4 million and $38.0 million, respectively and the effect on the Company's credit risk profile was immaterial. The residential mortgage loans with unconventional terms such as interest only mortgage and option adjustable rate mortgage at December 31, 2008 were $2.1 million and $1.2 million, respectively, inclusive of loans held temporarily for sale or refinancing. They were $2.8 million and $1.2 million, respectively, at December 31, 2007.

        The following is an analysis of all loans to officers and directors of the Company and its affiliates as of December 31. All such loans were made under terms that are consistent with the Company's normal lending policies:

(Dollars in Thousands)	2008			2007
Outstanding balance—beginning of year	$	11,779		$	35,557
Credit granted, including renewals		1,642			804
Repayments		(2,862	)		(24,582	)
Outstanding balance—end of year	$	10,559		$	11,779

        Income from these loans totaled approximately $564,000, $1,780,000 and $2,944,000 for the years ended December 31, 2008, 2007 and 2006, respectively, and is reflected in the accompanying consolidated statements of operations.

5. LOAN SERVICING ASSETS

        The principal balance of SBA loans serviced for others at 2008 year end was $307.2 million.

F-26

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

5. LOAN SERVICING ASSETS (Continued)

        The following is a summary of activity for servicing assets and the related valuation allowance in the consolidated statements of financial condition at December 31, 2008 and 2007, respectively:

(Dollars in Thousands)	2008			2007
Beginning of year	$	4,949		$	5,081
Additions		766			1,637
Disposals		(608	)		(1,390	)
Changes in fair value		(269	)		(516	)
Cumulative effect due to adoption of FAS 156(1) (Note 1)		—			137
End of year	$	4,838		$	4,949

⁽¹⁾

Upon adoption of SFAS No. 156 effective January 1, 2007, the $137,000 adjustment represented the total of $80,000 fair value adjustment, net of tax, to the beginning equity, and $43,000 and $15,000 federal and state deferred liabilities (see Note 1).

        The fair valuation of servicing assets in accordance with the adoption of SFAS No. 156 was determined based on the present value of the contractually specified servicing fee, net of servicing cost, over the estimated life of the loan, with an average discount rate and a range of constant prepayment rates.

        The following table is a summary of average discount rates and constant prepayment rates of our servicing loan portfolio as of December 31, 2008 and 2007, respectively:

	2008			2007
Avg. Discount Rate		7.00	%		9.79	%
Constant Prepayment Rate		18.20	%		18.40	%

6. BANK PREMISES AND EQUIPMENT

        The following is a summary of the major components of Bank premises and equipment as of December 31:

(Dollars in Thousands)	2008			2007
Land	$	2,068		$	2,068
Building		2,508			2,508
Furniture and equipment		6,566			5,634
Leasehold improvements		9,137			8,115
		20,279			18,325
Accumulated depreciation and amortization		(9,014	)		(7,365	)
	$	11,265		$	10,960

F-27

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

7. INVESTMENTS IN AFFORDABLE HOUSING PARTNERSHIPS

        The Company has invested in certain limited partnerships that were formed to develop and operate apartment complexes designed as high-quality affordable housing for lower income tenants throughout the United States. The Company's ownership in each limited partnership varies from 1.20% to 26.66%. As of December 31, 2008, we have eight such investments, with a net carrying value of $9.0 million at December 31, 2008. Each of the partnerships must meet the regulatory requirements for affordable housing for a minimum 15-year compliance period to fully utilize the tax credits. If the partnerships ceased to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken may be subject to recapture with interest.

        The remaining federal tax credits to be utilized over a maximum of 15 years are $15.0 million as of December 31, 2008. The Company's usage of federal tax credits approximated $942,000, $542,000 and $391,000 during 2008, 2007, and 2006, respectively. Investment amortization amounted to $809,000, $532,000 and $329,000 for the years ended December 31, 2008, 2007, and 2006, respectively.

8. DEPOSITS

        Time deposits by maturity dates are as follows at December 31:

(Dollars in Thousands)	2008		2007
Less than three months	$	520,740	$	460,254
After three to six months		340,244		225,304
After six months to twelve months		236,148		233,621
After twelve months		9,285		12,419
Total	$	1,106,417	$	931,598

        The scheduled maturities of time deposits as of December 31, 2008 are as follows:

(Dollars in Thousands)
2009	$	1,097,132
2010		8,789
2011		496
2012		—
2013 and thereafter		—
Total	$	1,106,417

F-28

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

9. COMMITMENTS AND CONTINGENCIES

        The Company leases premises and equipment under non cancelable operating leases. Future minimum rental commitments under these leases are as follows at December 31, 2008:

(Dollars in Thousands) Year	Amount
2009	$	3,057
2010		2,212
2011		1,759
2012		1,461
2013		1,176
Thereafter		2,170
	$	11,835

        Rental expense recorded under such leases amounted to approximately $3,009,000, $2,646,000, and $2,271,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

        In the normal course of business, the Company is involved in various legal claims. Management has reviewed all legal claims against the Company with outside legal counsel and has taken into consideration the views of such counsel as to the outcome of the claims. In management's opinion, the final disposition of all such claims will not have a material adverse effect on the financial position and results of operations of the Company.

        The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The Company's exposure to credit loss in the event of nonperformance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counterparty.

        Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing properties. The Company had commitments to extend credit of approximately $153,441,000 and $284,896,000 and obligations under standby letters of credit and commercial letters of credit of approximately $27,833,000 and $20,762,000 at December 31, 2008 and 2007, respectively.

10. FHLB BORROWINGS AND JUNIOR SUBORDINATED DEBENTURES

        At December 31, 2008, the Company had approved financing with the Federal Home Loan Bank ("FHLB") for a maximum advance of up to 30% of total assets based on qualifying collateral. The Company's actual borrowing capacity under the FHLB standard credit program per our pledged

F-29

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

10. FHLB BORROWINGS AND JUNIOR SUBORDINATED DEBENTURES (Continued)

collateral was approximately $560.1 million, with $260.0 million borrowing outstanding and $300.1 million capacity remaining as of December 31, 2008.

        The following table indicates our outstanding advances from FHLB at December 31, 2008.

Amount (Dollars in Thousands)		Issue Date		Maturity Date		Rate
$	40,000		01/08/2008		01/08/2009		3.64	%
	20,000		01/14/2008		01/14/2009		3.23	%
	50,000		12/17/2007		12/17/2009		4.07	%
	40,000		01/08/2008		01/08/2010		3.44	%
	40,000		03/31/2008		03/31/2011		2.12	%
	25,000		12/01/2008		12/01/2011		2.73	%
	25,000		12/02/2008		12/02/2011		2.62	%
	20,000		12/13/2008		12/05/2011		2.61	%
$	260,000						3.16	%

        The following table summarizes information relating to the Company's FHLB advances for the periods or dates indicated:

	Year Ended December 31,
	2008			2007			2006
	(Dollars in Thousands)
Average balance during the year	$	286,213		$	46,890		$	39,108
Average interest rate during the year		3.23	%		4.24	%		3.83	%
Maximum month-end balance during the year	$	370,000		$	155,000		$	20,000
Loan collateralizing the agreements at year-end	$	1,113,734		$	946,764		$	832,255

        The Company had five issuances of junior subordinated debentures, $10,000,000, $15,464,000, $20,619,000, $15,464,000, and $25,774,000, respectively, at December 31, 2008. The first one was issued by the Bank and the others were issued by the Company to trusts in which the Company is the sole stockholder in connection with the issuance of trust preferred securities.

F-30

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

10. FHLB BORROWINGS AND JUNIOR SUBORDINATED DEBENTURES (Continued)

        The following table summarizes our outstanding Subordinated Debentures at December 31, 2008:

Name	Issued Date		Amount of Debenture Issued (Dollars in Thousands)		Common Securities (Dollars in Thousands)		Interest Rate	Current Rate			Callable Date			Maturity Date
Wilshire State Bank Junior Subordinated Debentures		12/19/2002	$	10,000		N/A	3-Month LIBOR + 3.10%		4.57	%		03/26/2009	(1)		12/26/2012
Wilshire Statutory Trust I		12/17/2003		15,464		464	3-Month LIBOR + 2.85%		4.72	%		03/17/2009	(2)		12/17/2033
Wilshire Statutory Trust II		03/17/2005		20,619		619	3 Month LIBOR + 1.79%		3.66	%		03/17/2010			03/17/2035
Wilshire Statutory Trust III		09/15/2005		15,464		464	6.07% Fixed until 09-15-2010 thereafter 3-Month LIBOR + 1.40%		6.07	%		09/15/2010			09/15/2035
Wilshire Statutory Trust IV		07/10/2007		25,774		774	3 Month LIBOR + 1.38%		3.38	%		09/15/2012			09/15/2037
			$	87,321	$	2,321

⁽¹⁾

The Bank has the right to redeem the $10 million debentures, in whole or in part, on any March 26, June 26, September 26 or December 26 on or after December 26, 2007. The next callable date as of this report is March 26, 2009.

⁽²⁾

The Company has the right to redeem the $15 million debentures, in whole or in part, on any March 17, June 17, September 17 or December 17 on or after December 17, 2008. The next callable date as of this report is March 17, 2009.

11. TROUBLED ASSETS RELIEF PROGRAM ("TARP") SERIES A PREFERRED STOCKS AND WARRANTS

        On December 12, 2008, the Company issued $62,158,000 in preferred stocks and warrants to the United States Department of the Treasury ("U.S. Treasury") as part of the U.S. Treasury's Capital Purchase Program ("CPP"). The funding of this $62.2 million of preferred stock investment from the U.S. Treasury, which is commonly referred to as TARP investment, marks the completion of the sale to the U.S. Treasury of 62,158 shares of newly designated Fixed Rate Cumulative Perpetual Preferred Stock, Series A (each with a stated liquidation amount of $1,000 per share) and a warrant (100% vesting at grant, with 10-year term) exercisable initially for 949,460 shares of the Company's common stock, with an exercise price of $9.82 per share (see Note 12). The preferred stock will pay cumulative dividends at a rate of 5% per year for the first 5 years, and 9% thereafter. The Company is restricted for a period of three years from the closing date, in the buyback of company stock and in increasing the quarterly dividend in excess of the current level. As of December 31, 2008, the amount of TARP

F-31

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

11. TROUBLED ASSETS RELIEF PROGRAM ("TARP") SERIES A PREFERRED STOCKS AND WARRANTS (Continued)

preferred stock was $59.4 million and TARP warrant was $2.7 million, of which, 100% were qualified for Tier 1 capital.

12. TARP STOCK WARRANT AND STOCK OPTION PLAN

TARP Stock Warrant

        On December 12, 2008, as an attached term to the TARP agreement, the Company granted to the U.S. Treasury 949,460 warrants to purchase shares of the Company's common stock at an exercise price determined at $9.82. The warrant carries a 10-year term and was 100% vested at grant. Based on the present value of future cash flows of the TARP preferred stock investment, the Company determined the market value of the TARP preferred shares (i.e., TARP preferred shares without attached warrants) at its receipt date. In addition, the Company utilized the Black-Scholes model to obtain the fair value of the TARP warrants. The allocated warrant value was calculated based on the proportional fair value of the warrant in comparison with the total fair values of the TARP preferred stock and TARP warrant. The value allocated to TARP warrant was recorded as a discount to the TARP preferred stock, which was determined to be amortized using effective yield method. As of December 31, 2008, the unamortized TARP preferred discount was $2,715,000. To determine the warrant allocation ratio in accordance to APB Opinion No. 14, we use the fair value of the warrant divided by the sum of the fair value of warrants plus the fair value of the straight preferred stock. This ratio is then multiplied by the total amount of TARP capital issued to arrive at the value to be allocated to the warrant.

Stock Option Plan

        The Company has issued stock options to employees under share-based compensation plans. Stock options are issued at the current market price on the date of grant. The vesting period and contractual term are determined at the time of grant, but the contractual term may not exceed 10 years from the date of grant. The grant date fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The expected life (estimated period of time outstanding) of options was estimated using the simplified method. The expected volatility was based on historical volatility for a period equal to the stock option's expected life. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

        During 1997, the Bank established the 1997 stock option plan ("1997 Plan") that provided for the issuance of options to purchase up to 6,499,800 shares of its authorized but unissued common stock to managerial employees and directors. The options granted under the 1997 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. This 1997 Plan completed its ten-year term and expired in May 2007. In accordance with the terms of the 1997 Plan, options granted under the 1997 Plan will remain outstanding according to their respective terms, despite expiration of the 1997 Plan. Options granted through 2005 under this stock option plan expire not more than 10 years after the date of grant, but options granted after 2005 expire not more than 5 years after the date of grant. As of December 31, 2008, 278,630 shares were previously granted and outstanding under this option plan. Options granted under the stock option plan expire not more than 10 years after the date of grant.

F-32

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

12. TARP STOCK WARRANT AND STOCK OPTION PLAN (Continued)

        In 2006, the Company adopted SFAS 123R, Share-Based Payment, using the modified prospective method. Accordingly, prior-period amounts have not been restated.

        In June 2008, the Company has established the 2008 stock option plan ("2008 Plan") that provides for the issuance of restricted stock and options to purchase up to 2,933,200 shares of its authorized but unissued common shares to employees, directors, and consultants. Exercise prices for options may not be less than the fair market value at the date of grant. Compensation expense for awards is recorded over the vesting period. Under the 2008 Plan, there were options outstanding to purchase 984,000 shares of our common stock as of December 31, 2008.

        Pursuant to the adoption of SFAS No. 123R, our stock-based compensation expense was $1,139,000 and $348,000 for 2008 and 2007, respectively. Cash provided by operating activities decreased by $57,000 and $1,286,000 for 2008 and 2007, respectively. Cash provided by financing activities increased by identical amounts for both 2008 and 2007, related to excess tax benefits from stock-based payment arrangements.

        For 2008, 2007, and 2006, 1,001,000, 0, and 187,000 shares were granted, respectively. The weighted average fair value of options granted during 2008 and 2006 was $2.46 and $5.26 per share, respectively. They were estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions indicated below:

	2008			2007		2006
Expected life		3 - 6.8 years			—		3.4 - 3.8 years
Expected volatility		30.80	%		—		32.89	%
Expected dividend yield		2.19	%		—		1.06	%
Risk-free interest rate		3.53	%		—		4.70	%

        The expected life of stock options granted was estimated using the historical exercise behavior of employees. The expected volatility was based on historical volatility for a period equal to the stock option's expected life. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

        Activity in the stock option plan, which has been retroactively adjusted for all stock splits, is as follows for the years ended December 31:

2008	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (Dollars in Thousands)
Outstanding at January 1, 2008		522,476		$	12.16
Granted		1,001,000			9.14
Excercised		(160,446	)		2.93
Forfeited		(100,400	)		16.30
Outstanding at December 31, 2008		1,262,630		$	10.61	6.51 years	$	141
Option exercisable at December 31, 2008		406,970		$	12.20	5.92 years	$	106

F-33

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

12. TARP STOCK WARRANT AND STOCK OPTION PLAN (Continued)

        The following table summarizes information about stock options outstanding as of December 31, 2008:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Number Exercisable		Weighted- Average Exercise Price
$2.00 - $2.99		14,880	$	2.57		3.39		14,880	$	2.57
$9.00 - $10.99		984,000		9.14		7.07		203,400		9.14
$13.00 - $14.99		47,000		13.74		6.28		37,200		13.74
$15.00 - $16.99		100,050		15.21		6.23		80,990		15.22
$17.00 - $19.99		116,700		18.79		2.58		70,500		18.79
Outstanding at end of year		1,262,630		10.61		6.51		406,970		12.20

        Activities related to stock options are presented as follows:

(Dollars in Thousands, Except per Share Data)	2008		2007		2006
Total intrinsic value of options exercised	$	792	$	3,161	$	3,768
Total fair value of options vested	$	702	$	320	$	300
Weighted average fair value of options granted during the year	$	2.46	$	—	$	5.26

        As of December 31, 2008, total unrecognized compensation cost related to stock options that have been granted prior to the end of 2008 amounted to $1,242,000. This cost is expected to be recognized over a weighted average period of 1.75 years.

        A summary of the status and changes of the Company's non-vested shares related to the Company's stock plans as of and during 2008 is presented below:

	Shares			Weighted Average Grant date Fair value
Non vested at January 1, 2008		164,540		$	4.15
Granted		1,001,000			2.46
Vested		(259,020	)		2.71
Forfeited on unvested shares		(50,860	)		5.69
Non vested at December, 2008		855,660		$	2.63

F-34

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

13. INCOME TAXES

        A summary of income tax expense (benefit) for 2008, 2007 and 2006 follows:

(Dollars in Thousands)		Current		Deferred			Total
2008:
	Federal	$	15,426	$	(2,660	)	$	12,766
	State		4,381		(865	)		3,516
		$	19,807	$	(3,525	)	$	16,282
2007:
	Federal	$	13,469	$	63		$	13,532
	State		3,893		(116	)		3,777
		$	17,362	$	(53	)	$	17,309
2006:
	Federal	$	18,390	$	(1,208	)	$	17,182
	State		4,928		(308	)		4,620
		$	23,318	$	(1,516	)	$	21,802

        The following is a summary of the income taxes receivable. The $763,000 and $597,000 federal income taxes receivables are included in other assets as of December 31, 2008 and December 31, 2007, respectively. The $221,000 state taxes payable was included in other liabilities as of December 31, 2008, and the $267,000 state taxes receivable was included in other assets as of December 31, 2007:

(Dollars in Thousands)		2008			2007
Current income taxes:
	Federal	$	(763	)	$	(597	)
	State		221			(267	)
Total income taxes receivable		$	(542	)	$	(864	)

F-35

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

13. INCOME TAXES (Continued)

        The cumulative temporary differences, as tax effected, are as follows as of December 31, 2008 and 2007:

2008 (Dollars in Thousands)		Federal		State		Total
Deferred tax assets:
	Statutory bad debt deduction less than financial statement provision	$	10,766	$	3,335	$	14,101
	Tax depreciation less than financial statement depreciation		902		361		1,263
	Amortization of start-up cost		7		2		9
	Deferred rent		46		14		60
	OREO reserve		43		13		56
	SFAS 123R non-qualified stock options		264		82		346
	Unrealized loss on loans held-for-sale		306		95		401
	Accrued professional fees		30		9		39
Total deferred tax assets			12,364		3,911		16,275
Deferred tax liabilities:
	Prepaid expenses		190		59		249
	Deferred loan origination costs		1,575		488		2,063
	Unrealized gain on securities available-for-sale		541		100		641
	Intangible related to business combination		318		98		416
	FASB 156 adjustment		459		142		601
	State tax deferred and other		76		178		254
Total deferred tax liabilities			3,159		1,065		4,224
Net deferred tax assets		$	9,205	$	2,846	$	12,051

F-36

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

13. INCOME TAXES (Continued)

2007 (Dollars in Thousands)		Federal		State		Total
Deferred tax assets:
	Statutory bad debt deduction less than financial statement provision	$	8,227	$	2,549	$	10,776
	Tax depreciation less than financial statement depreciation		631		282		913
	Amortization of start-up cost		21		6		27
	Deferred rent		68		21		89
	Net operating loss		112		—		112
	SFAS 123R non-qualified stock options		54		17		71
	Unrealized gain on securities available-for-sale		164		51		215
	State tax deferred and other		—		9		9
	Unrealized loss on loans held-for-sale		190		—		190
Total deferred tax assets			9,467		2,935		12,402
Deferred tax liabilities:
	Prepaid expenses		333		103		436
	Deferred loan origination costs		1,395		432		1,827
	Unrealized gain on securities available-for-sale		24		—		24
	Intangible related to business combination		422		131		553
	FASB 156 adjustment		231		71		302
	State tax deferred and other		—		109		109
Total deferred tax liabilities			2,405		846		3,251
Net deferred tax assets		$	7,062	$	2,089	$	9,151

        In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income, and tax-planning strategies in making this assessment. A valuation allowance against deferred tax assets at the balance-sheet date is not considered necessary, because it is more likely than not the deferred tax asset will be fully realized.

        A reconciliation of the difference between the federal statutory income tax rate and the effective tax rate is shown in the following table for the three years ended December 31:

	2008			2007			2006
Statutory tax rate		35	%		35	%		35	%
State taxes—net of California Enterprise Zone tax credit		5			5			5
Tax credits and other items		(2	)		(1	)		(1	)
Total		38	%		39	%		39	%

F-37

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

13. INCOME TAXES (Continued)

        On January 1, 2007, the Company adopted the provisions of FIN 48. As a result of applying the provisions of FIN 48, it recognized an increase in the liability for unrecognized tax benefit of $235,000 and related interest of $14,000, gross of U.S. federal tax benefit, which was accounted for as a decrease to the beginning balance of retained earnings. The following table summarizes the activity related to the changes of unrecognized tax benefit in 2008 and 2007:

(Dollars in Thousands)	2008			2007
Unrecognized tax benefit:
Balance, beginning of the year	$	319		$	235
Increases related to current year tax positions		231			84
Expiration of the statue of limitations for assessment of taxes		(38	)		—
Balance, end of the year	$	512		$	319

        As of December 31, 2008, the total unrecognized tax benefit that would affect the effective rate if recognized was $333,000, which was solely related to the state exposure from California Enterprise Zone net interest deductions. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.

        As of the December 31, 2008, the total accrued interest related to uncertain tax positions was $36,000. The Company accounted for interest related to uncertain tax positions as part of our provision for federal and state income taxes. Accrued interest was included as part of our net deferred tax asset in the consolidated financial statements.

        The Company files U.S. federal and state income tax returns in jurisdictions with varying statue of limitations. The 2005 through 2008 tax years generally remain subject to examination by federal and most state tax authorities. The Company is currently under examinations for the 2005 and 2006 tax years under the California Franchise Tax Board and the New York State Department of Taxation and Finance. The Company do not expect the examination results will have a material impact to its consolidated financial statement as of December 31, 2008.

14. GOODWILL

        The Company recorded goodwill of $6.7 million from the acquisition of Liberty Bank of New York in May 2006. The carrying amount of goodwill amounted to $6.7 million at both December 31, 2008 and 2007 since no impairment losses were recoded during those years.

15. RETIREMENT PLAN

        In 1996, the Company established a 401(k) savings plan, which is open to all eligible employees who are 21 years old or over and have completed six months of service. The plan provides for the Company's matching contribution up to 6% of participants' compensation during the plan year. Vesting in employer contributions is 25% after two years of service and 25% per year thereafter. Total employer contributions to the plan amounted to approximately $613,000, $545,000, and $413,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

F-38

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

16. REGULATORY MATTERS

        The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

        Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum ratios (set forth in the table below) of total and Tier I capital to risk-weighted assets (as defined) and Tier I capital (as defined) to average assets. Management believes that, as of December 31, 2008 and 2007, the Company meets all capital adequacy requirements to which it is subject.

        Federal Reserve Board rules provide that a bank holding company may count proceeds from a trust preferred securities issuance as Tier 1 capital in an amount up to 25% of its total Tier 1 capital. Under the current Federal Reserve Board capital guidelines, as of December 31, 2008, the Company is able to include all of the TARP preferred investment from the U.S. Treasury as Tier 1 capital. In addition, part of the proceeds from the previously issued trust preferred securities was also classified as Tier 1 capital. As a result, the Company's total risk-weighted capital ratio improved 251 basis points to 17.09% at December 31, 2008, as compared with 14.58% at December 31, 2007. As of December 31, 2008, the Company's Tier 1 risk-weighted capital ratio and Tier 1 capital ratio were 15.36% and 13.25%, respectively, as compared with 11.83% and 10.36% as of December 31, 2007.

        The Company is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table.

F-39

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

16. REGULATORY MATTERS (Continued)

        The Company's and Bank's actual capital amounts and ratios are presented in the table:

				Actual					For Capital Adequacy Purposes						To Be Categorized As Well Capitalized under Prompt Corrective Action Provisions
				Amount (in Thousands)		Ratio			Amount (in Thousands)			Ratio			Amount (in Thousands)			Ratio
As of December 31, 2008:
	Total Capital (to risk-weighted assets):
		Wilshire Bancorp, Inc.		$	356,509		17.09	%	$	166,899	³		8.00	%	$	208,624	³		10.00	%
			Wilshire State Bank	$	283,421		13.59	%	$	166,811	³		8.00	%	$	208,514	³		10.00	%
	Tier 1 Capital (to risk-weighted assets):
		Wilshire Bancorp, Inc.		$	320,374		15.36	%	$	83,449	³		4.00	%	$	125,174	³		6.00	%
			Wilshire State Bank	$	247,300		11.86	%	$	83,406	³		4.00	%	$	125,108	³		6.00	%
	Tier 1 Capital (to average assets):
		Wilshire Bancorp, Inc.		$	320,374		13.25	%	$	96,703	³		4.00	%	$	120,879	³		5.00	%
			Wilshire State Bank	$	247,300		10.24	%	$	96,575	³		4.00	%	$	120,718	³		5.00	%
As of December 31, 2007:
	Total Capital (to risk-weighted assets):
		Wilshire Bancorp, Inc.		$	270,877		14.58	%	$	148,592	³		8.00	%	$	185,740	³		10.00	%
			Wilshire State Bank	$	252,231		13.59	%	$	148,516	³		8.00	%	$	185,646	³		10.00	%
	Tier 1 Capital (to risk-weighted assets):
		Wilshire Bancorp, Inc.		$	219,792		11.83	%	$	74,296	³		4.00	%	$	111,444	³		6.00	%
			Wilshire State Bank	$	219,021		11.80	%	$	74,258	³		4.00	%	$	111,387	³		6.00	%
	Tier 1 Capital (to average assets):
		Wilshire Bancorp, Inc.		$	219,792		10.36	%	$	84,870	³		4.00	%	$	106,087	³		5.00	%
			Wilshire State Bank	$	219,021		10.33	%	$	84,776	³		4.00	%	$	105,970	³		5.00	%

        As a holding company whose only significant asset is the common stock of the Bank, the Company's ability to pay dividends on its common stock and to conduct business activities directly or in non-banking subsidiaries depends significantly on the receipt of dividends or other distributions from the Bank. The Bank's ability to pay any cash dividends will depend not only upon its earnings during a specified period, but also on its meeting certain capital requirements. The Federal Deposit Insurance Act and FDIC regulations restrict the payment of dividends when a bank is undercapitalized, when a bank has failed to pay insurance assessments, or when there are safety and soundness concerns regarding a bank.

F-40

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

16. REGULATORY MATTERS (Continued)

        The payment of dividends by the Bank may also be affected by other regulatory requirements and policies, such as maintenance of adequate capital. If, in the opinion of the regulatory authority, a depository institution under its jurisdiction is engaged in, or is about to engage in, an unsafe or unsound practice (that, depending on the financial condition of the depository institution, could include the payment of dividends), such authority may require, after notice and hearing, that such depository institution cease and desist from such practice. The Federal Reserve Board has issued a policy statement that provides that insured banks and bank holding companies should generally pay dividends only out of operating earnings for the current and preceding two years. In addition, all insured depository institutions are subject to the capital-based limitations required by the Federal Deposit Insurance Corporation Improvement Act of 1991. In addition to the regulation of dividends and other capital distributions, there are various statutory and regulatory limitations on the extent to which the Bank can finance or otherwise transfer funds to the Company or any of its non-banking subsidiaries, whether in the form of loans, extensions of credit, investments or asset purchases. The Federal Reserve Act and Regulation may further restrict these transactions in the interest of safety and soundness. The foregoing restrictions on dividends paid by the Bank may limit Wilshire Bancorp's ability to obtain funds from such dividends for its cash needs, including funds for payment of its debt service requirements and operating expenses and for payment of cash dividends to Wilshire Bancorp's shareholders. Furthermore, as part of the TARP agreement, the Company is limited to declare or pay or set apart for dividend payments on any common shares or shares of any other series of preferred stock rankings prior to fully fulfill the dividend payment requirement of the TARP. The amount of dividends the Bank could pay to Wilshire Bancorp as of December 31, 2008 without prior regulatory approval, which is limited by statute to the sum of undivided profits for the current year plus net profits for the preceding two years (less any distributions made to shareholders during such periods), was $69.5 million.

F-41

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

        The table below is a summary of fair value estimates as of December 31, 2008 and 2007, for financial instruments, as defined by SFAS No. 107, Disclosures about Fair Value of Financial Instruments, including those financial instruments for which the Company did not elect fair value option pursuant to SFAS No. 159. In addition, the provisions of SFAS No. 107 do not require the disclosure of the fair value of lease financing instruments and nonfinancial instruments, including goodwill and intangible assets. The estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data in order to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts at December 31:

		2008				2007
(Dollars in Thousands)		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
	Cash and cash equivalents	$	97,541	$	97,541	$	92,509	$	92,509
	Investment securities held to maturity		139		135		7,384		7,372
	Loans receivable—net		2,003,665		2,008,949		1,779,558		1,781,090
	Loans held for sale		18,427		19,396		7,912		8,382
	Cash surrender value of life insurance		17,395		17,395		16,228		16,228
	Federal Home Loan Bank stock		17,537		17,537		8,695		8,695
	Accrued interest receivable		9,975		9,975		10,062		10,062
	Due from customer on acceptances		2,213		2,213		3,377		3,377
Liabilities:
	Noninterest-bearing deposits	$	277,542	$	277,542	$	314,114	$	314,114
	Interest-bearing deposits		1,535,059		1,536,325		1,448,957		1,453,371
	Junior subordinated Debentures		87,321		87,321		87,321		87,321
	Short-Term Federal Fund Purchased		14,000		14,000		—		—
	Federal Home Loan Bank borrowings		260,000		262,202		150,000		150,105
	Accrued interest payable		6,957		6,957		10,440		10,440
	Acceptances outstanding		2,213		2,213		3,377		3,377

        The methods and assumptions used to estimate the fair value of each class of financial statements for which it is practicable to estimate that value are explained below:

Cash and Cash Equivalents—The carrying amounts approximate fair value due to the short-term nature of these investments.

Investment Securities Held to Maturity—The fair value of investment securities Held to Maturity is generally obtained from market bids from similar or identical securities, or obtained from independent securities brokers or dealers.

Loans Receivable-Net—Fair values are estimated for portfolios of loans with similar financial characteristics, primarily fixed and adjustable rate interest terms. The fair values of fixed rate

F-42

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

17. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

mortgage loans are based on discounted cash flows utilizing applicable risk-adjusted spreads relative to the market pricing of similar fixed rate loans, as well as anticipated repayment schedules as of December 31, 2008 and 2007 respectively. The fair values of adjustable rate commercial loans are based on the estimated discounted cash flows as of the year ends of 2008 and 2007 utilizing the discount rates that approximate the pricing of loans collateralized by similar commercial properties. The estimated fair values are net of allowance for loan losses.

Loans Held for Sale—Similar fair valuation as to Loans Receivable-Net. Fair values are estimated for portfolios of loans with similar financial characteristics, primarily fixed and adjustable rate interest terms. The fair values of fixed rate mortgage loans are based on discounted cash flows utilizing applicable risk-adjusted spreads relative to the current pricing of similar fixed rate loans, as well as anticipated repayment schedules. The fair value of adjustable rate commercial loans is based on the estimated discounted cash flows utilizing the discount rates that approximate the pricing of loans collateralized by similar commercial properties.

Cash Surrender Value of Life Insurance—The carrying amounts approximate fair value since the carrying amount represents the cash surrender value.

Federal Home Loan Bank Stock—The carrying amounts approximate fair value, as the stock may be sold back to the FHLB at the carrying value.

Accrued Interest Receivable—The carrying amount of accrued interest receivable approximates its fair value due to the short-term nature of this asset.

Deposits—The fair values of nonmaturity deposits are equal to the carrying values of such deposits. Nonmaturity deposits include noninterest-bearing demand deposits, savings accounts, super NOW accounts, and money market demand accounts. Discounted cash flows have been used to value term deposits, such as CDs. The discount rate used is based on interest rates currently being offered by the Company on comparable deposits as to amount and term. The carrying amount of accrued interest payable approximates its fair value.

Junior Subordinated Debentures and Federal Home Loan Bank Borrowings—The fair value of debt is based on discounted cash flows. The discount rate used is based on the current market rate.

Accrued Interest Payable—The carrying amount of accrued interest payable approximates its fair value due the short-term nature of this liability.

Due from Customer on Acceptances and Acceptances Outstanding—The carrying amount approximates fair value due to the short-term maturities of these instruments.

Loan Commitments and Standby Letters of Credit—The fair value of loan commitments and standby letters of credit is based upon the difference between the current value of similar loans and the price at which the Company has committed to make the loans. The fair value of loan commitments and standby letters of credit is not material at December 31, 2008 and 2007.

        The fair value estimates presented herein are based on pertinent information available to management at December 31, 2008 and 2007. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been

F-43

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

17. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

comprehensively revalued for purposes of these financial statements since that date, and therefore, current estimates of fair value may differ significantly from the amounts presented herein.

18. EARNINGS PER SHARE

        The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations at December 31, 2008, 2007 and 2006:

(Dollars in Thousands, Except per Share Data)			2008		2007		2006
Numerator:
	Net income available to common shareholders		$	26,318	$	26,806	$	33,942
Denominator:
	Denominator for basic earnings per share:
		Weighted-average shares		29,368,762		29,339,454		28,986,217
	Effect of dilutive securities:
		Stock option dilution(1)		38,626		109,757		344,515
		Stock warrant dilution(2)		—		n/a		n/a
	Denominator for diluted earnings per share:
		Adjusted weighted-average shares and assumed conversions		29,407,388		29,449,211		29,330,732
Basic earnings per share			$	0.90	$	0.91	$	1.17
Diluted earnings per share			$	0.90	$	0.91	$	1.16

(1)

Excludes 1,248,000 , 348,000 and 162,000 options outstanding at December 31, 2008, 2007 and 2006, respectively, for which the exercise price exceeded the average market price of the Company's common stock. Therefore, these stock options were deemed anti-dilutive, and were excluded from the diluted earnings per share calculation.



(2)

There were 949,460, 0, and 0 warrants outstanding at December 31, 2008, 2007, and 2006, respectively. The warrants' exercise price exceeded the average market price of the Company's common stock as of December 31, 2008. Therefore, the stock warrants were deemed anti-dilutive, and were excluded from the diluted earnings per share calculation.

F-44

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

19. QUARTERLY FINANCIAL DATA (UNAUDITED)

        Summarized quarterly financial data follows:

	Three Months Ended
2008	Mar 31		Jun 30		Sep 30		Dec 31		Total
	(Dollars in Thousands, Except per Share Data)
Net interest income	$	19,744	$	20,333	$	21,414	$	21,128	$	82,619
Provision for loan losses		1,400		1,400		3,400		5,910		12,110
Net income available to common shareholders		7,050		7,429		6,868		4,971		26,318
Basic earnings per common share		0.24		0.25		0.23		0.17		0.90
Diluted earnings per common share		0.24		0.25		0.23		0.17		0.90

2007
Net interest income	$	18,973	$	20,916	$	20,938	$	20,523	$	81,350
Provision for loan losses		1,630		4,500		4,100		4,750		14,980
Net income		7,317		7,346		6,644		5,499		26,806
Basic earnings per common share		0.25		0.25		0.23		0.18		0.91
Diluted earnings per common share		0.25		0.25		0.23		0.18		0.91

20. 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, installment and real estate loans, to its customers.

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

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

F-45

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

20. BUSINESS SEGMENT INFORMATION (Continued)

        The following are the results of operations of the Company's segments for the year-ended December 31:

	Business Segment
2008 (Dollars in Thousands)	Banking Operations		TFS		SBA		Company
Net interest income	$	68,526	$	2,218	$	11,875	$	82,619
Less provision for loan losses		5,091		830		6,189		12,110
Other operating income		15,239		1,119		4,288		20,646
Net revenue		78,674		2,507		9,974		91,155
Other operating expenses		43,665		1,092		3,643		48,400
Income before taxes	$	35,009	$	1,415	$	6,331	$	42,755
Total assets	$	2,244,645	$	47,850	$	157,516	$	2,450,011

	Business Segment
2007 (Dollars in Thousands)	Banking Operations		TFS			SBA		Company
Net interest income	$	61,285	$	3,212		$	16,853	$	81,350
Less provision for loan losses		9,133		3,440			2,407		14,980
Other operating income		13,122		1,268			8,194		22,584
Net revenue		65,274		1,040			22,640		88,954
Other operating expenses		39,009		1,055			4,775		44,839
Income before taxes	$	26,265	$	(15	)	$	17,865	$	44,115
Total assets	$	1,994,323	$	48,727		$	153,655	$	2,196,705

	Business Segment
2006 (Dollars in Thousands)	Banking Operations		TFS		SBA		Company
Net interest income	$	55,769	$	4,176	$	16,632	$	76,577
Less provision for loan losses		4,404		1,254		342		6,000
Other operating income		12,064		1,618		12,718		26,400
Net revenue		63,429		4,540		29,008		96,977
Other operating expenses		35,045		1,016		5,171		41,232
Income before taxes	$	28,384	$	3,524	$	23,837	$	55,745
Total assets	$	1,818,580	$	56,117	$	133,787	$	2,008,484

21. RELATED PARTIES TRANSACTION

        The Company, in the normal course of business has paid, and to the extent permitted by applicable regulations and other regulatory restrictions and expects to continue to pay the loan referral

F-46

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

21. RELATED PARTIES TRANSACTION (Continued)

fees to affiliates of one of the Company's officers. Such fees were approximately $104,000 and $657,000 for the fiscal years 2008 and 2007, respectively, and have been paid from loan fees collected from the borrowers. All such transactions are and will continue to be on terms no less favorable to the Company than those which could be obtained with non-affiliated parties. Management believes that such loans were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other parties and do not involve more than the normal risk of collectibility or present other unfavorable features.

22. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY

        The following presents the unconsolidated financial statements of only the parent company, Wilshire Bancorp, Inc., as of December 31:

			2008		2007
			(Dollars in Thousands)
STATEMENTS OF FINANCIAL CONDITION
Assets:
	Cash and cash equivalents		$	72,288	$	18,013
	Investment in subsidiary			259,306		230,473
	Prepaid income taxes			2,234		2,224
	Other assets			321		71
		Total assets	$	334,149	$	250,781
Liabilities:
	Other borrowings		$	77,321	$	77,321
	Accounts payable and other liabilities			142		212
	Cash dividend payable			1,626		1,462
		Total liabilities		79,089		78,995
Shareholders' Equity				255,060		171,786
Total			$	334,149	$	250,781

F-47

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

22. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (Continued)

		2008		2007		2006
		(Dollars in Thousands)
STATEMENTS OF OPERATIONS
Interest expense		$	4,154	$	4,603	$	3,506
Other operating expense			1,772		883		885
	Total expense		5,926		5,486		4,391
Other income			124		138		—
Undistributed earnings of subsidiary			29,846		29,905		36,487
Earnings before income tax provision			24,044		24,557		32,096
Income tax benefit			2,429		2,249		1,846
Net Income		$	26,473	$	26,806	$	33,942

F-48

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

22. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (Continued)

				2008			2007			2006
				(Dollars in Thousands)
STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Net income				$	26,473		$	26,806		$	33,942
	Adjustments to reconcile net earnings to net cash used in operating activities:
		Increase (decrease) in accounts payable and other liabilities			(70	)		70			14
		Stock compensation expense			1,140			348			472
		Decrease (increase) in prepaid income taxes			(10	)		(623	)		1,309
		Tax benefit from exercise of stock options			(57	)		(1,286	)		(899	)
		Increase in other assets			(225	)		(31	)		(40	)
		Undistributed earnings of subsidiary			(29,789	)		(28,619	)		(35,588	)
			Net cash used in operating activities		(2,538	)		(3,335	)		(790	)
Cash flows from investing activities:
	Payments for investments in and advances to subsidiary				—			(774	)		—
	Cash payment for acquisition of Liberty Bank of New York				—			—			(9,217	)
		Net cash used in investing activities			—			(774	)		(9,217	)
Cash flows from financing activities:
	Proceeds from the issuance of preferred stock				62,158			—			—
	Proceeds from the issuance of trust preferred securities				—			25,774			—
	Proceeds from exercise of stock options				470			138			474
	Tax benefit from exercise of stock options				57			1,286			899
	Cash paid to acquire treasury stock				—			(1,262	)		—
	Payments of cash dividend				(5,872	)		(5,863	)		(5,497	)
		Net cash provided by (used in) financing activities			56,813			20,073			(4,124	)
	Net (decrease) increase in cash and cash equivalents				54,275			2,049			(14,131	)
	Cash and cash equivalents, beginning of year				18,013			15,964			16,180
	Cash and cash equivalents, end of year			$	72,288		$	18,013		$	2,049

23. SUBSEQUENT EVENTS

        In light of the overall instability of the economy, the continued volatility in the financial markets, the downward pressure on bank stock prices, and expectations of financial performance for the banking industry, including Wilshire Bancorp Inc., the Company estimates of goodwill fair value may be subject to change or adjustment and it may determine that impairment charges are necessary. Estimates of fair value are determined based on a complex model using cash flows and company comparisons. If management's estimates of future cash flows are inaccurate, the fair value determined could be inaccurate and impairment may not be recognized in a timely manner. Subsequent to December 31, 2008, the Company's market capitalization continued to decrease. If the Company's market capitalization continues to remain below book value, the Company will update its valuation analysis to

F-49

WILSHIRE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2008

23. SUBSEQUENT EVENTS (Continued)

determine whether goodwill is impaired. No assurance can be given that goodwill will not be written down in future periods.

        The FDIC issued a letter indicating that it intends to charge a special assessment in 2009 and that assessment may be as much as 20 basis points based on our deposits or assessment base as of June 30, 2009, but the actual amount has not been determined by the FDIC. We expect to accrue and record this one-time expense when FDIC finalizes the assessment in the second quarter of 2009, and incur the actual payment in the third quarter of 2009.

F-50

EX-4.2

Exhibit 4.2

WILSHIRE STATE BANK,
as Issuer

INDENTURE

Dated as of December 19, 2002

STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,
as Trustee

FLOATING RATE JUNIOR SUBORDINATED DEBENTURES

DUE 2012

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS		1
Section 1.1.	Definitions	1
ARTICLE II. DEBENTURES		5
Section 2.1.	Authentication and Dating	5
Section 2.2.	Form of Trustee’s Certificate of Authentication	5
Section 2.3.	Form and Denomination of Debentures	6
Section 2.4.	Execution of Debentures	6
Section 2.5.	Exchange and Registration of Transfer of Debentures	6
Section 2.6.	Mutilated, Destroyed, Lost or Stolen Debentures	8
Section 2.7.	Temporary Debentures	9
Section 2.8.	Payment of Interest and Additional Interest	9
Section 2.9.	Cancellation of Debentures Paid, etc.	11
Section 2.10.	Computation of Interest Rate	11
Section 2.11.	CUSIP Numbers	12
Section 2.12.	Regulation S Compliance	12
ARTICLE III. PARTICULAR COVENANTS OF THE BANK		14
Section 3.1.	Payment of Principal, Premium and Interest; Agreed Treatment of the Debentures	14
Section 3.2.	Offices for Notices and Payments, etc.	14
Section 3.3.	Appointments to Fill Vacancies in Trustee’s Office	14
Section 3.4.	Provision as to Paying Agent	14
Section 3.5.	Certificate to Trustee	15
Section 3.6.	Compliance with Consolidation Provisions	15
Section 3.7.	Limitation on Dividends	15
Section 3.8.	Federal Regulatory Approval Required	16
ARTICLE IV. SECURITYHOLDERS’ LISTS AND REPORTS BY THE BANK AND THE TRUSTEE		16
Section 4.1.	Securityholders’ Lists	16
Section 4.2.	Preservation and Disclosure of Lists	17
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT		18
Section 5.1.	Events of Default	18
Section 5.2.	Payment of Debentures on Default; Suit Therefor	19
Section 5.3.	Application of Moneys Collected by Trustee	20
Section 5.4.	Proceedings by Securityholders	21
Section 5.5.	Proceedings by Trustee	21
Section 5.6.	Remedies Cumulative and Continuing; Delay or Omission Not a Waiver	21
Section 5.7.	Direction of Proceedings and Waiver of Defaults by Majority of Securityholders	22
Section 5.8.	Notice of Defaults	22

i

Section 5.9.	Undertaking to Pay Costs	22
ARTICLE VI. CONCERNING THE TRUSTEE		23
Section 6.1.	Duties and Responsibilities of Trustee	23
Section 6.2.	Reliance on Documents, Opinions, etc.	23
Section 6.3.	No Responsibility for Recitals, etc.	24
Section 6.4.	Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debentures	25
Section 6.5.	Moneys to be Held in Trust	25
Section 6.6.	Compensation and Expenses of Trustee	25
Section 6.7.	Officers’ Certificate as Evidence	26
Section 6.8.	Eligibility of Trustee	26
Section 6.9.	Resignation or Removal of Trustee	26
Section 6.10.	Acceptance by Successor Trustee	27
Section 6.11.	Succession by Merger, etc.	28
Section 6.12.	Authenticating Agents	28
ARTICLE VII. CONCERNING THE SECURITYHOLDERS		29
Section 7.1.	Action by Securityholders	29
Section 7.2.	Proof of Execution by Securityholders	30
Section 7.3.	Who Are Deemed Absolute Owners	30
Section 7.4.	Debentures Owned by Bank Deemed Not Outstanding	30
Section 7.5.	Revocation of Consents; Future Holders Bound	30
ARTICLE VIII. SECURITYHOLDERS’ MEETINGS		31
Section 8.1.	Purposes of Meetings	31
Section 8.2.	Call of Meetings by Trustee	31
Section 8.3.	Call of Meetings by Bank or Securityholders	31
Section 8.4.	Qualifications for Voting	31
Section 8.5.	Regulations	31
Section 8.6.	Voting	32
Section 8.7.	Quorum; Actions	32
ARTICLE IX. SUPPLEMENTAL INDENTURES		33
Section 9.1.	Supplemental Indentures without Consent of Securityholders	33
Section 9.2.	Supplemental Indentures with Consent of Securityholders	34
Section 9.3.	Effect of Supplemental Indentures	35
Section 9.4.	Notation on Debentures	35
Section 9.5.	Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee	35
ARTICLE X. REDEMPTION OF SECURITIES		35
Section 10.1.	Optional Redemption	35
Section 10.2.	Notice of Redemption; Selection of Debentures	35
Section 10.3.	Payment of Debentures Called for Redemption	36
ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE		36
Section 11.1.	Bank May Consolidate, etc., on Certain Terms	36

ii

Section 11.2.		Successor Entity to be Substituted	37
Section 11.3.		Opinion of Counsel to be Given to Trustee	37
ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE			37
Section 12.1.		Discharge of Indenture	37
Section 12.2.		Deposited Moneys to be Held in Trust by Trustee	38
Section 12.3.		Paying Agent to Repay Moneys Held	38
Section 12.4.		Return of Unclaimed Moneys	38
ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS			38
Section 13.1.		Indenture and Debentures Solely Corporate Obligations	38
ARTICLE XIV. MISCELLANEOUS PROVISIONS			39
Section 14.1.		Successors	39
Section 14.2.		Official Acts by Successor Entity	39
Section 14.3.		Surrender of Bank Powers	39
Section 14.4.		Addresses for Notices, etc.	39
Section 14.5.		Governing Law	39
Section 14.6.		Evidence of Compliance with Conditions Precedent	39
Section 14.7.		Non-Business Days	40
Section 14.8.		Table of Contents, Headings, etc.	40
Section 14.9.		Execution in Counterparts	40
Section 14.10.		Separability	40
Section 14.11.		Assignment	40
ARTICLE XV. SUBORDINATION OF DEBENTURES			40
Section 15.1.		Agreement to Subordinate	40
Section 15.2.		Default on Senior Indebtedness	40
Section 15.3.		Liquidation, Dissolution, Bankruptcy	41
Section 15.4.		Subrogation	42
Section 15.5.		Trustee to Effectuate Subordination	42
Section 15.6.		Notice by the Bank	43
Section 15.7.		Rights of the Trustee; Holders of Senior Indebtedness	43
Section 15.8.		Subordination May Not Be Impaired	43
Exhibit A	Form of Junior Subordinated Debenture
Exhibit B	Form of Regulation S Certificate

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THIS INDENTURE, dated as of December 19, 2002, between Wilshire State Bank, a state nonmember bank organized under the laws of California (the “Bank”), and State Street Bank and Trust Company of Connecticut, National Association, a national banking association organized under the laws of the United States of America, as debenture trustee (the “Trustee”).

WITNESSETH:

WHEREAS, for its lawful corporate purposes, the Bank has duly authorized the issuance of its Floating Rate Junior Subordinated Debentures due 2012 (the “Debentures”) under this Indenture to provide, among other things, for the execution and authentication, delivery and administration thereof, and the Bank has duly authorized the execution of this Indenture; and

WHEREAS, all acts and things necessary to make this Indenture a valid agreement according to its terms, have been done and performed;

NOW, THEREFORE, This Indenture Witnesseth:

In consideration of the premises, and the purchase of the Debentures by the holders thereof, the Bank covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debentures as follows:

ARTICLE I.
DEFINITIONS

Section 1.1.Definitions. The terms defined in this Section 1.1 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.1. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles and the term “generally accepted accounting principles” means such accounting principles as are generally accepted in the United States at the time of any computation. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“Additional Interest” means interest, if any, that shall accrue on any interest on the Debentures the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the Interest Rate, compounded quarterly (to the extent permitted by law).

“Affiliate” has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder.

“Authenticating Agent” means any agent or agents of the Trustee which at the time shall be appointed and acting pursuant to Section 6.12.

“Bank” means Wilshire State Bank, a state nonmember bank organized under the laws of California and, subject to the provisions of Article XI, shall include its successors and assigns.

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

“Board of Directors” means the board of directors or the executive committee or any other duly authorized designated officers of the Bank.

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“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Bank to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee.

“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in New York City or Hartford, Connecticut are permitted or required by any applicable law to close.

“Certificate” means a certificate signed by any one of the principal executive officer, the principal financial officer or the principal accounting officer of the Bank.

“Coupon Rate” has the meaning set forth in Section 2.8.

“Debenture” or “Debentures” means a Temporary Debenture or a Permanent Debenture, as applicable.

“Debenture Register” has the meaning specified in Section 2.5.

“Default” means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default

“Defaulted Interest” has the meaning set forth in Section 2.8.

“Distribution Compliance Period” has the meaning set forth in Rule 902 of Regulation S.

“Distribution Period” has the meaning set forth in Section 2.8.

“Determination Date” has the meaning set forth in Section 2.10.

“Event of Default” means any event specified in Section 5.1, continued for the period of time, if any, and after the giving of the notice, if any, therein designated.

“FDIC” means the Federal Deposit Insurance Corporation and any successor federal agency that is primarily responsible for insuring the deposit accounts of banks or supervising state banks that are not members of the Federal Reserve.

“Federal Reserve” means the Board of Governors of the Federal Reserve System and any successor federal agency that is primarily responsible for regulating the activities of bank holding companies and state member banks.

“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented, or both.

“Interest Payment Date,” means each March 26, June 26, September 26 and December 26 during the term of this Indenture.

“Interest Rate” means for the period beginning on (and including) the date of original issuance and ending on (but excluding) March 26, 2003 the rate per annum of 4.51% and for each Distribution Period thereafter, the Coupon Rate.

“Maturity Date” means December 26, 2012.

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“State Nonmember Bank Securities Laws” means the federal laws applicable to state nonmember banks (12 U.S.C. 1811 et seq.), as amended from time to time or any successor legislation, and the regulations promulgated thereunder, including 12 C.F.R. Part 335.

“Officers’ Certificate” means a certificate signed by the Chairman of the Board, the Chief Executive Officer, the Vice Chairman, the President, any Managing Director or any Vice President, and by the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary of the Bank, and delivered to the Trustee. Each such certificate shall include the statements provided for in Section 14.6 if and to the extent required by the provisions of such Section.

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Bank, or may be other counsel reasonably satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 14.6 if and to the extent required by the provisions of such Section.

The term “outstanding,” when used with reference to Debentures, means, subject to the provisions of Section 7.4, as of any particular time, all Debentures authenticated and delivered by the Trustee or the Authenticating Agent under this Indenture, except:

(a)Debentures theretofore canceled by the Trustee or the Authenticating Agent or delivered to the Trustee for cancellation;

(b)Debentures, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Bank) or shall have been set aside and segregated in trust by the Bank (if the Bank shall act as its own paying agent); provided, however, that, if such Debentures, or portions thereof, are to be redeemed prior to maturity thereof, notice of such redemption shall have been given as provided in Section 10.3 or provision satisfactory to the Trustee shall have been made for giving such notice; and

(c)Debentures paid pursuant to Section 2.6 or in lieu of or in substitution for which other Debentures shall have been authenticated and delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the Bank and the Trustee is presented that any such Debentures are held by bona fide holders in due course.

“Permanent Debenture” has the meaning set forth in Section 2.12.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Predecessor Security” of any particular Debenture means every previous Debenture evidencing all or a portion of the same debt as that evidenced by such particular Debenture; and, for purposes of this definition, any Debenture authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the same debt as the lost, destroyed or stolen Debenture.

“Principal Office of the Trustee,” or other similar term, means the office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which at the time of the execution of this Indenture shall be 225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103.

“Redemption Date” has the meaning set forth in. Section 10.1.

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“Redemption Price” means 100% of the principal amount of the Debentures being redeemed, plus accrued and unpaid interest on such Debentures to the Redemption Date.

“Regulation S” means Regulation S under the Securities Act.

“Regulation S Certificate” has the meaning set forth in Section 2.12.

“Release Date” has the meaning set forth in Section 2.12.

“Responsible Officer” means, with respect to the Trustee, any officer within the Principal Office of the Trustee, including any vice-president, any assistant vice-president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Principal Trust Office of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

“Securities Act” means the Securities Act of 1933, as amended from time to time or any successor legislation.

“Securityholder,” “holder of Debentures,” or other similar terms, means any Person in whose name at the time a particular Debenture is registered on the register kept by the Bank or the Trustee for that purpose in accordance with the terms hereof.

“Senior Indebtedness” means, with respect to the Bank, all claims (including post default interest in the case of liquidation of the Bank) against the Bank, incurred, assumed or guaranteed by the Bank, having the same priority as the Bank’s obligations to its depositors, its obligations under bankers’ acceptances and letters of credit, and its obligations to any other creditors (including its obligations to the Federal Reserve, FDIC, and any rights acquired by the FDIC as a result of loans made by the FDIC to the Bank or the purchase or guarantee of any of its assets by the FDIC pursuant to the provisions of 12 USC §1823(c), (d) or (e)), whether now outstanding or hereafter incurred, or any higher priority, and the principal, premium, if any, and interest in respect thereof, whether incurred on or prior to the date of this Indenture or thereafter incurred. Notwithstanding the foregoing, “Senior Indebtedness” shall not include Debentures issued pursuant to this Indenture or obligations with respect to which in the instrument creating or evidencing the same, or pursuant to which the same is outstanding, it is provided that such obligations are pari passu, junior or otherwise not superior in right of payment to the Debentures. Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness.

“Subsidiary” means with respect to any Person, (i) any corporation at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by such Person or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of the outstanding partnership or similar interests of which shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner. For the purposes of this definition, “voting stock” means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

“3-Month LIBOR” has the meaning set forth in Section 2.10.

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“Telerate Page 3750” has the meaning set forth in Section 2.10.

“Temporary Debenture” has the meaning set forth in Section 2.12.

“Trustee” means State Street Bank and Trust Company of Connecticut, National Association, and, subject to the provisions of Article VI hereof; shall also include its successors and assigns as Trustee hereunder.

ARTICLE II.
DEBENTURES

Section 2.1.Authentication and Dating. Upon the execution and delivery of this Indenture, or from time to time thereafter, Debentures in an aggregate principal amount not in excess of $10,000,000.00 may be executed and delivered by the Bank to the Trustee for authentication, and the Trustee shall thereupon authenticate and make available for delivery said Debentures to or upon the written order of the Bank, signed by its Chairman of the Board of Directors, Chief Executive Officer, Vice Chairman, President, one of its Managing Directors or one of its Vice Presidents without any further action by the Bank hereunder. In authenticating such Debentures, and accepting the additional responsibilities under this Indenture in relation to such Debentures, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon:

(a)a copy of any Board Resolution or Board Resolutions relating thereto and, if applicable, an appropriate record of any action taken pursuant to such resolution, in each case certified by the Secretary or an Assistant Secretary of the Bank, as the case may be; and

(b)an Opinion of Counsel prepared in accordance with Section 14.6 which shall also state:

(1)that such Debentures, when authenticated and delivered by the Trustee and issued by the Bank in each case in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Bank, subject to or limited by applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, moratorium and other statutory or decisional laws relating to or affecting creditors’ rights or the reorganization of financial institutions (including, without limitation, preference and fraudulent conveyance or transfer laws), heretofore or hereafter enacted or in effect, affecting the rights of creditors generally; and

(2)that all laws and requirements in respect of the execution and delivery by the Bank of the Debentures have been complied with and that authentication and delivery of the Debentures by the Trustee will not violate the terms of this Indenture.

The Trustee shall have the right to decline to authenticate and deliver any Debentures under this Section if the Trustee, being advised in writing by counsel, determines that such action may not lawfully be taken or if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing holders.

The definitive Debentures shall be typed, printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Debentures, as evidenced by their execution of such Debentures.

Section 2.2.Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication on all Debentures shall be in substantially the following form:

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This is one of the Debentures referred to in the within-mentioned Indenture.

State Street Bank and Trust Company of Connecticut, National Association, as Trustee

By

Authorized Signer

Section 2.3.Form and Denomination of Debentures. The Debentures shall be substantially in the form of Exhibit A attached hereto. The Debentures shall be in registered, certificated form without coupons and in minimum denominations of $100,000.00 and any multiple of $1,000.00 in excess thereof. Any attempted transfer of the Debentures in a block having an aggregate principal amount of less than $100,000.00 shall be deemed to be voided and of no legal effect whatsoever. Any such purported transferee shall be deemed not to be a holder of such Debentures for any purpose, including, but not limited to the receipt of payments on such Debentures, and such purported transferee shall be deemed to have no interest whatsoever in such Debentures. The Debentures shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the officers executing the same may determine with the approval of the Trustee as evidenced by the execution and authentication thereof

Section 2.4.Execution of Debentures. The Debentures shall be signed in the name and on behalf of the Bank by the manual or facsimile signature of its Chairman of the Board of Directors, Chief Executive Officer, Vice Chairman, President, one of its Managing Directors or one of its Vice Presidents. Only such Debentures as shall bear thereon a certificate of authentication substantially in the form herein before recited, executed by the Trustee or the Authenticating Agent by the manual signature of an authorized signer, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee or the Authenticating Agent upon any Debenture executed by the Bank shall be conclusive evidence that the Debenture so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.

In case any officer of the Bank who shall have signed any of the Debentures shall cease to be such officer before the Debentures so signed shall have been authenticated and delivered by the Trustee or the Authenticating Agent, or disposed of by the Bank, such Debentures nevertheless may be authenticated and delivered or disposed of as though the Person who signed such Debentures had not ceased to be such officer of the Bank; and any Debenture may be signed on behalf of the Bank by such Persons as, at the actual date of the execution of such Debenture, shall be the proper officers of the Bank, although at the date of the execution of this Indenture any such person was not such an officer.

Every Debenture shall be dated the date of its authentication.

Section 2.5.Exchange and Registration of Transfer of Debentures. The Bank shall cause to be kept, at the office or agency maintained for the purpose of registration of transfer and for exchange as provided in Section 3.2, a register (the “Debenture Register”) for the Debentures issued hereunder in which, subject to such reasonable regulations as it may prescribe, the Bank shall provide for the registration and transfer of all Debentures as in this Article II provided. The Debenture Register shall be in written form or in any other form capable of being converted into written form within a reasonable time.

Debentures to be exchanged may be surrendered at the Principal Office of the Trustee or at any office or agency to be maintained by the Bank for such purpose as provided in Section 3.2, and the Bank shall execute, the Bank or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange therefor the Debenture or Debentures which the Securityholder making the exchange shall be entitled to receive. Upon due presentment for registration of

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transfer of any Debenture at the Principal Office of the Trustee or at any office or agency of the Bank maintained for such purpose as provided in Section 3.2, the Bank shall execute, the Bank or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in the name of the transferee or transferees a new Debenture for a like aggregate principal amount. Registration or registration of transfer of any Debenture by the Trustee or by any agent of the Bank appointed pursuant to Section 3.2, and delivery of such Debenture, shall be deemed to complete the registration or registration of transfer of such Debenture.

All Debentures presented for registration of transfer or for exchange or payment shall (if so required by the Bank or the Trustee or the Authenticating Agent) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Bank and the Trustee or the Authenticating Agent duly executed by the holder or his attorney duly authorized in writing.

No service charge shall be made for any exchange or registration of transfer of Debentures, but the Bank or the Trustee may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection therewith.

The Bank or the Trustee shall not be required to exchange or register a transfer of any Debenture for a period of 15 days next preceding the date of selection of Debentures for redemption.

Notwithstanding anything herein to the contrary, Debentures may not be transferred except in compliance with the restricted securities legend set forth below, unless otherwise determined by the Bank, upon the advice of counsel expert in securities law, in accordance with applicable law:

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION.

THIS OBLIGATION IS SUBORDINATED TO CLAIMS OF DEPOSITORS, IS UNSECURED, AND IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW (INCLUDING 12 U.S.C. 1811 ET SEQ. AND 12 C.F.R. PART 335 PROMULGATED THEREUNDER (THE “STATE NONMEMBER BANK SECURITIES LAWS”)) AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW, INCLUDING THE STATE NONMEMBER BANK SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE BANK, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER, AS APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS

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SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AS APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, SUBJECT TO THE BANK’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE BANK.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

Section 2.6.Mutilated, Destroyed, Lost or Stolen Debentures. In case any Debenture shall become mutilated or be destroyed, lost or stolen, the Bank shall execute, and upon its written request the Trustee shall authenticate and deliver, a new Debenture bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debenture, or in lieu of and in substitution for the Debenture so destroyed, lost or stolen. In every case the applicant for a substituted Debenture shall furnish to the Bank and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Bank

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and the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.

The Trustee may authenticate any such substituted Debenture and deliver the same upon the written request or authorization of any officer of the Bank. Upon the issuance of any substituted Debenture, the Bank may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debenture which has matured or is about to mature or has been called for redemption in full shall become mutilated or be destroyed, lost or stolen, the Bank may, instead of issuing a substitute Debenture, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debenture) if the applicant for such payment shall furnish to the Bank and the Trustee such security or indemnity as may be required by them to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Bank and to the Trustee of the destruction, loss or theft of such Debenture and of the ownership thereof.

Every substituted Debenture issued pursuant to the provisions of this Section 2.6 by virtue of the fact that any such Debenture is destroyed, lost or stolen shall constitute an additional contractual obligation of the Bank, whether or not the destroyed, lost or stolen Debenture shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debentures duly issued hereunder. All Debentures shall be held and owned upon the express condition that, to the extent permitted by applicable law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debentures and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

Section 2.7.Temporary Debentures. Pending the preparation of definitive Debentures, the Bank may execute and the Trustee shall authenticate and make available for delivery temporary Debentures that are typed, printed or lithographed. Temporary Debentures shall be issuable in any authorized denomination, and substantially in the form of the definitive Debentures in lieu of which they are issued but with such omissions, insertions and variations as may be appropriate for temporary Debentures, all as may be determined by the Bank. Every such temporary Debenture shall be executed by the Bank and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Debentures. Without unreasonable delay the Bank will execute and deliver to the Trustee or the Authenticating Agent definitive Debentures and thereupon any or all temporary Debentures may be surrendered in exchange therefor, at the principal corporate trust office of the Trustee or at any office or agency maintained by the Bank for such purpose as provided in Section 3.2, and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange for such temporary Debentures a like aggregate principal amount of such definitive Debentures. Such exchange shall be made by the Bank at its own expense and without any charge therefor except that in case of any such exchange involving a registration of transfer the Bank may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Debentures shall in all respects be entitled to the same benefits under this Indenture as definitive Debentures authenticated and delivered hereunder.

Section 2.8.Payment of Interest and Additional Interest. Interest at the Interest Rate and any Additional Interest on any Debenture that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Debentures shall be paid to the Person in whose name said Debenture (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment except that interest and any Additional Interest payable on the Maturity Date shall be paid to the Person to whom principal is paid. In the event that any Debenture or portion thereof is

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called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Debenture will be paid upon presentation and surrender of such Debenture.

Each Debenture shall bear interest for the period beginning on (and including) the date of original issuance and ending on (but excluding) March 26, 2003 at a rate per annum of 4.51%, and shall bear interest for each successive period beginning on (and including) March 26, 2003, and each succeeding Interest Payment Date, and ending on (but excluding) the next succeeding Interest Payment Date (each, a “Distribution Period”) at a rate per annum equal to the 3-Month LIBOR, determined as described in Section 2.10, plus 3.10% (the “Coupon Rate”); provided, however, that prior to December 26, 2007, the Coupon Rate shall not exceed 11.75%, applied to the principal amount thereof, until the principal thereof becomes due and payable, and on any overdue principal and to the extent that payment of such interest is enforceable under applicable law (without duplication) on any overdue installment of interest at the Interest Rate compounded quarterly. Interest shall be payable quarterly in arrears on each Interest Payment Date with the first installment of interest to be paid on March 26, 2003.

Any interest on any Debenture, including Additional Interest, that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Bank to the Persons in whose names such Debentures (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Bank shall notify the Trustee in writing at least 25 days prior to the date of the proposed payment of the amount of Defaulted Interest proposed to be paid on each such Debenture and the date of the proposed payment, and at the same time the Bank shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Bank of such special record date and, in the name and at the expense of the Bank, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at its address as it appears in the Debenture Register, not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Debentures (or their respective Predecessor Securities) are registered on such special record date and shall be no longer payable.

The Bank may make payment of any Defaulted Interest on any Debentures in any other lawful manner after notice given by the Bank to the Trustee of the proposed payment method; provided, however, the Trustee in its sole discretion deems such payment method to be practical.

The Bank shall not pay any interest on the Debentures while it remains in default in the payment of any assessment due to the FDIC; provided, that, if such default is due to a dispute between the Bank and the FDIC over the amount of such assessment, this limitation shall not apply, if the Bank deposits security satisfactory to the FDIC for payment upon final determination of the issue.

The term “regular record date” as used in this Section shall mean the close of business on the 15th day next preceding the applicable Interest Payment Date.

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Subject to the foregoing provisions of this Section, each Debenture delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Debenture shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Debenture.

Section 2.9.           Cancellation of Debentures Paid, etc. All Debentures surrendered for the purpose of payment, redemption, exchange or registration of transfer, shall, if surrendered to the Bank or any paying agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be promptly canceled by it, and no Debentures shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. All Debentures canceled by any Authenticating Agent shall be delivered to the Trustee. The Trustee shall destroy all canceled Debentures unless the Bank otherwise directs the Trustee in writing. If the Bank shall acquire any of the Debentures, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Debentures unless and until the same are surrendered to the Trustee for cancellation.

Section 2.10.        Computation of Interest Rate. The amount of interest payable for the Distribution Period commencing on March 26, 2003 and each succeeding Distribution Period will be calculated by applying the Interest Rate to the principal amount outstanding at the commencement of the Distribution Period and multiplying each such amount by the actual number of days in the Distribution Period concerned divided by 360. In the event that any date on which interest is payable on the Debentures is not a Business Day, then payment of interest payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. All percentages resulting from any calculations on the Debentures will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward)).

(a)“3-Month LIBOR” means the London interbank offered interest rate for three-month, U.S. dollar deposits determined by the Trustee in the following order of priority:

(1)the rate (expressed as a percentage per annum) for U.S. dollar deposits having a three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination Date (as defined below). “Telerate Page 3750” means the display designated as “Page 3750” on the Dow Jones Telerate Service or such other page as may replace Page 3750 on that service or such other service or services as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits;

(2)if such rate cannot be identified on the related Determination Date, the Trustee will request the principal London offices of four leading banks in the London interbank market to provide such banks’ offered quotations (expressed as percentages per annum) to prime banks in the London interbank market for U.S. dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on such Determination Date. If at least two quotations are provided, 3-Month LIBOR will be the arithmetic mean of such quotations;

(3)if fewer than two such quotations are provided as requested in clause (2) above, the Trustee will request four major New York City banks to provide such banks’ offered quotations (expressed as percentages per annum) to leading European banks for loans in U.S.

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dollars as of 11:00 a.m. (London time) on such Determination Date. If at least two such quotations are provided, 3-Month LIBOR will be the arithmetic mean of such quotations; and

(4)if fewer than two such quotations are provided as requested in clause (3) above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the Distribution Period immediately preceding such current Distribution Period.

If the rate for U.S. dollar deposits having a three-month maturity that initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination Date is superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such Determination Date, then the corrected rate as so substituted on the applicable page will be the applicable 3-Month LIBOR for such Determination Date.

(b)The Coupon Rate for any Distribution Period will at no time be higher than the maximum rate then permitted by New York law as the same may be modified by United States law.

(c)“Determination Date” means the date that is two London Banking Days (i.e., a business day in which dealings in deposits in U.S. dollars are transacted in the London interbank market) preceding the particular Distribution Period for which a Coupon Rate is being determined.

(d)The Trustee shall notify the Bank and any securities exchange or interdealer quotation system on which the Debentures are listed, of the Coupon Rate and the Determination Date for each Distribution Period, in each case as soon as practicable after the determination thereof but in no event later than the thirtieth (30th) day of the relevant Distribution Period. Failure to notify the Bank or any securities exchange or interdealer quotation system, or any defect in said notice, shall not affect the obligation of the Bank to make payment on the Debentures at the applicable Coupon Rate. Any error in the calculation of the Coupon Rate by the Trustee may be corrected at any time by notice delivered as above provided. Upon the request of a holder of a Debenture, the Trustee shall provide the Coupon Rate then in effect and, if determined, the Coupon Rate for the next Distribution Period.

(e)Subject to the corrective rights set forth above, all certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions relating to the payment and calculation of interest on the Debentures by the Trustee will (in the absence of willful default, bad faith and manifest error) be final, conclusive and binding on the Bank and all of the holders of the Debentures, and no liability shall (in the absence of willful default, bad faith or manifest error) attach to the Trustee in connection with the exercise or non-exercise by either of them or their respective powers, duties and discretion.

Section 2.11.CUSIP Numbers. The Bank in issuing the Debentures may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Securityholders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Debentures or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Debentures, and any such redemption shall not be affected by any defect in or omission of such numbers. The Bank will promptly notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.12.Regulation S Compliance.

(a)Notwithstanding anything in this Article II to the contrary all Debentures issued on or before the expiration of the Distribution Compliance Period will be in the form of a temporary Debenture (“Temporary Debentures”) and will contain the following additional legend:

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THIS DEBENTURE IS A TEMPORARY DEBENTURE FOR PURPOSES OF REGULATION S UNDER THE SECURITIES ACT (AS DEFINED BELOW). NEITHER THIS TEMPORARY DEBENTURE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW. NO BENEFICIAL OWNERS OF THIS TEMPORARY DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.

Holders of a beneficial interest in Debentures sold in reliance on Regulation S are prohibited from receiving distributions or from exchanging beneficial interests in Temporary Debentures for a beneficial interest in a Permanent Debenture until the later of (i) the expiration of the Distribution Compliance Period (the “Release Date”) and (ii) the furnishing of a certificate, substantially in the form of Exhibit B attached hereto, certifying that the beneficial owner of the Temporary Debenture is not a “U.S. Person” as defined in Section 902 of Regulation S (a “Regulation S Certificate”).

(b)Any interest in a Debenture evidenced by a Temporary Debenture is exchangeable for an interest in a Debenture, authenticated and delivered in substantially the form attached as Exhibit A hereto, without the legend referenced in Section 2.12(a) (the “Permanent Debenture”) upon the later of (i) the Release Date and (ii) the furnishing of a Regulation S Certificate.

(c)On or prior to the Release Date, each holder of a Temporary Debenture shall deliver to the Trustee a Regulation S Certificate; provided, however, that any holder of a Temporary Debenture on the Release Date that has previously delivered a Regulation S Certificate hereunder shall not be required to deliver any subsequent Regulation S Certificate (unless the certificate previously delivered is no longer true as of such subsequent date, in which case such holder shall promptly notify the Trustee thereof and shall deliver an updated Regulation S Certificate). No Securityholder shall be entitled to receive an interest in a Permanent Debenture or any payment of principal of or interest on or any other payment with respect to its beneficial interest in a Temporary Debenture prior to the Trustee receiving such Regulation S Certificate.

(d)Any payments of principal of, interest on or any other payment on a Temporary Debenture received by the Trustee with respect to any Debenture owned by a Securityholder that has not delivered the Regulation S Certificate required by this Section 2.12 shall be held by the Trustee. The Trustee shall remit such payments to the applicable Securityholder only after the Trustee has received the requisite Regulation S Certificate, at which time the Trustee shall forward such payments to the Securityholder that is entitled thereto on its records.

(e)Each Securityholder shall exchange its interest in a Temporary Debenture for an interest in a Permanent Debenture on or after the Release Date upon furnishing to the Trustee the Regulation S Certificate pursuant to the terms of this Section 2.12. On and after the Release Date, upon receipt by the Trustee of any Regulation S Certificate described in the immediately preceding sentence, the Bank shall execute and, upon receipt of an order to authenticate, the Authentication Agent shall authenticate and deliver the Permanent Debenture; provided, however, that a Permanent Debenture may have been previously executed by the Bank and an order to authenticate specifying the date on which authentication is to take place may have been delivered by the Bank to the Trustee prior to the Release Date.

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ARTICLE III.
PARTICULAR COVENANTS OF THE BANK

Section 3.1.Payment of Principal, Premium and Interest; Agreed Treatment of the Debentures.

(a)The Bank covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and premium, if any, and interest and any Additional Interest on the Debentures at the place, at the respective times and in the manner provided in this Indenture and the Debentures. Each installment of interest on the Debentures may be paid (i) by mailing checks for such interest payable to the order of the holder of Debentures entitled thereto as they appear on the registry books of the Bank if a request for a wire transfer has not been received by the Bank or (ii) by wire transfer to any account with a banking institution located in the United States designated in writing by such Person to the paying agent no later than the related record date.

(b)The Bank will treat the Debentures as indebtedness, and the amounts payable in respect of the principal amount of such Debentures as interest, for all United States federal income tax purposes. All payments in respect of such Debentures will be made free and clear of United States withholding tax to any beneficial owner thereof that has provided an Internal Revenue Service Form W8 BEN (or any substitute or successor form) establishing its non-United States status for United States federal income tax purposes.

Section 3.2.Offices for Notices and Payments, etc. So long as any of the Debentures remain outstanding, the Bank will maintain in Hartford, Connecticut, an office or agency where the Debentures may be presented for payment, an office or agency where the Debentures may be presented for registration of transfer and for exchange as in this Indenture provided and an office or agency where notices and demands to or upon the Bank in respect of the Debentures or of this Indenture may be served. The Bank will give to the Trustee written notice of the location of any such office or agency and of any change of location thereof. Until otherwise designated from time to time by the Bank in a notice to the Trustee, or specified as contemplated by Section 2.5, such office or agency for all of the above purposes shall be the office or agency of the Trustee. In case the Bank shall fail to maintain any such office or agency in Hartford, Connecticut, or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Principal Office of the Trustee.

In addition to any such office or agency, the Bank may from time to time designate one or more offices or agencies outside Hartford, Connecticut, where the Debentures may be presented for registration of transfer and for exchange in the manner provided in this Indenture, and the Bank may from time to time rescind such designation, as the Bank may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Bank of its obligation to maintain any such office or agency in Hartford, Connecticut, for the purposes above mentioned. The Bank will give to the Trustee prompt written notice of any such designation or rescission thereof.

Section 3.3.Appointments to Fill Vacancies in Trustee’s Office. The Bank, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.9, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 3.4.Provision as to Paying Agent.

(a)If the Bank shall appoint a paying agent other than the Trustee, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provision of this Section 3.4,

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(1)that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, or interest, if any, on the Debentures (whether such sums have been paid to it by the Bank or by any other obligor on the Debentures) in trust for the benefit of the holders of the Debentures;

(2)that it will give the Trustee prompt written notice of any failure by the Bank (or by any other obligor on the Debentures) to make any payment of the principal of and premium, if any, or interest, if any, on the Debentures when the same shall be due and payable; and

(3)that it will, at any time during the continuance of any Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent.

(b)If the Bank shall act as its own paying agent, it will, on or before each due date of the principal of and premium, if any, or interest, if any, on the Debentures, set aside, segregate and hold in trust for the benefit of the holders of the Debentures a sum sufficient to pay such principal, premium or interest so becoming due and will notify the Trustee in writing of any failure to take such action and of any failure by the Bank (or by any other obligor under the Debentures) to make any payment of the principal of and premium, if any, or interest, if any, on the Debentures when the same shall become due and payable.

Whenever the Bank shall have one or more paying agents for the Debentures, it will, on or prior to each due date of the principal of and premium, if any, or interest, if any, on the Debentures, deposit with a paying agent a sum sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such paying agent is the Trustee) the Bank shall promptly notify the Trustee in writing of its action or failure to act.

(c)Anything in this Section 3.4 to the contrary notwithstanding, the Bank may, at any time, for the purpose of obtaining a satisfaction and discharge with respect to the Debentures, or for any other reason, pay, or direct any paying agent to pay to the Trustee all sums held in trust by the Bank or any such paying agent, such sums to be held by the Trustee upon the trusts herein contained.

(d)Anything in this Section 3.4 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.4 is subject to Sections 12.3 and 12.4.

Section 3.5.Certificate to Trustee. The Bank will deliver to the Trustee on or before 120 days after the end of each fiscal year, so long as Debentures are outstanding hereunder, a Certificate stating that in the course of the performance by the signers of their duties as officers of the Bank they would normally have knowledge of any default during such fiscal year by the Bank in the performance of any covenants contained herein, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature and status thereof.

Section 3.6.Compliance with Consolidation Provisions. The Bank will not, while any of the Debentures remain outstanding, consolidate with, or merge into, or merge into itself, or sell or convey all or substantially all of its property to any other Person unless the provisions of Article XI hereof are complied with.

Section 3.7.Limitation on Dividends. If there shall have occurred and be continuing an Event of Default, then the Bank shall not, and shall not allow any Affiliate of the Bank to, (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Bank’s capital stock or its Affiliates’ capital stock (other than payments of dividends or distributions to the Bank) or make any guarantee payments with respect to the foregoing or (y) make

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any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Bank or any Affiliate that rank pari passu in all respects with or junior in interest to the Debentures (other than, with respect to clauses (x) and (y) above, (1) repurchases, redemptions or other acquisitions of shares of capital stock of the Bank in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Bank (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Event of Default, (2) as a result of any exchange or conversion of any class or series of the Bank’s capital stock (or any capital stock of a subsidiary of the Bank) for any class or series of the Bank’s capital stock or of any class or series of the Bank’s indebtedness for any class or series of the Bank’s capital stock, (3) the purchase of fractional interests in shares of the Bank’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (4) any declaration of a dividend in connection with any stockholders’ rights plan, or the issuance of rights, stock or other property under any stockholders’ rights plan, or the redemption or repurchase of rights pursuant thereto, or (5) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock and any cash payments in lieu of fractional shares issued in connection therewith).

Section 3.8.Regulatory Approval Required. The Debentures may not be repaid in the case of an acceleration due to an Event of Default or voluntarily redeemed without the prior written approval of or, if applicable, written notice to the FDIC. If such approval is necessary, within 30 days after receipt of any declaration of acceleration pursuant to Section 5.1, the Bank will apply to the FDIC for written approval of repayment prior to maturity. In the event that the Bank obtains such prior written approval, the Bank shall notify the Securityholders, and the Trustee will arrange for prompt payment on the Debentures.

No payment shall at any time be made on account of the principal of this Debenture, unless following such payment the aggregate of the Bank’s shareholders’ equity and capital notes or debentures thereafter outstanding shall be the equal of such aggregate at the date of the original issue of this Debenture, or as otherwise authorized by the California Commissioner of Financial Institutions.

ARTICLE IV.
SECURITYHOLDERS’ LISTS AND REPORTS
BY THE BANK AND THE TRUSTEE

Section 4.1.Securityholders’ Lists. The Bank covenants and agrees that it will furnish or caused to be furnished to the Trustee:

(a)on each regular record date for the Debentures, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Securityholders of the Debentures as of such record date; and

(b)at such other times as the Trustee may request in writing, within 30 days after the receipt by the Bank of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

except that no such lists need be furnished under this Section 4.1 so long as the Trustee is in possession thereof by reason of its acting as Debenture registrar.

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Section 4.2.Preservation and Disclosure of Lists.

(a)The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debentures (1) contained in the most recent list furnished to it as provided in Section 4.1 or (2) received by it in the capacity of Debentures registrar (if so acting) hereunder. The Trustee may destroy any list furnished to it as provided in Section 4.1 upon receipt of a new list so furnished.

(b)In case three or more holders of Debentures (hereinafter referred to as “applicants”) apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Debenture for a period of at least 6 months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Debentures with respect to their rights under this Indenture or under such Debentures and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall within 5 Business Days after the receipt of such application, at its election, either:

(1)afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.2, or

(2)inform such applicants as to the approximate number of holders of Debentures whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.2, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application.

If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Securityholder whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.2 a copy of the form of proxy or other communication which is specified in such request with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission or the FDIC, if permitted or required by applicable law, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of all Debentures, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission or the FDIC, as permitted or required by applicable law, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission or the FDIC shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Securityholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

(c)          Each and every holder of Debentures, by receiving and holding the same, agrees with Bank and the Trustee that neither the Bank nor the Trustee nor any paying agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Debentures in accordance with the provisions of subsection (b) of this Section 4.2, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b).

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ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT

Section 5.1.Events of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)the Bank defaults in the payment of any interest upon any Debenture when it becomes due and payable, and fails to cure such default for a period of 30 days; or

(b)the Bank defaults in the payment of all or any part of the principal of (or premium, if any, on) any Debentures as and when the same shall become due and payable either at maturity, upon redemption, by declaration of acceleration or otherwise; or

(c)the Bank defaults in the performance of, or breaches, any of its covenants or agreements in this Indenture or in the terms of the Debentures established as contemplated in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Bank by the Trustee or to the Bank and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Debentures, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(d)a court of competent jurisdiction shall enter a decree or order for relief in respect of the Bank in an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Bank or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or

(e)the Bank shall commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Bank or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due.

If an Event of Default occurs and is continuing with respect to the Debentures, then, and in each and every such case, unless the principal of the Debentures shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding hereunder, by notice in writing to the Bank (and to the Trustee if given by Securityholders), may declare the entire principal of the Debentures and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Debentures shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Bank shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Debentures and the principal of and premium, if any, on the Debentures which shall

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have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and Additional Interest) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other amounts due to the Trustee pursuant to Section 6.6, and if any and all Events of Default under this Indenture, other than the non-payment of the principal of or premium, if any, on Debentures which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein—then and in every such case the holders of a majority in aggregate principal amount of the Debentures then outstanding, by written notice to the Bank and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Bank, the Trustee and the holders of the Debentures shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Bank, the Trustee and the holders of the Debentures shall continue as though no such proceeding had been taken.

Section 5.2.Payment of Debentures on Default; Suit Therefor. The Bank covenants that upon the occurrence of an Event of Default pursuant to Section 5.1(a) or Section 5.1(b) then, upon demand of the Trustee, the Bank will pay to the Trustee, for the benefit of the holders of the Debentures the whole amount that then shall have become due and payable on all Debentures for principal and premium, if any, or interest, or both, as the case may be, with Additional Interest accrued on the Debentures (to the extent that payment of such interest is enforceable under applicable law); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorneys and counsel, and any other amounts due to the Trustee under Section 6.6. In case the Bank shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Bank or any other obligor on such Debentures and collect in the manner provided by law out of the property of the Bank or any other obligor on such Debentures wherever situated the moneys adjudged or decreed to be payable.

In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Bank or any other obligor on the Debentures under Bankruptcy Law, or in case a receiver or trustee shall have been appointed for the property of the Bank or such other obligor, or in the case of any other similar judicial proceedings relative to the Bank or other obligor upon the Debentures, or to the creditors or property of the Bank or such other obligor, the Trustee, irrespective of whether the principal of the Debentures shall then be due and payable as therein expressed or by declaration of acceleration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.2, shall be entitled and empowered, by intervention in such proceedings or otherwise,

(i)to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Debentures and, in case of any judicial proceedings,

(ii)to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all other amounts due to the Trustee under Section 6.6), and of the Securityholders allowed in such judicial proceedings relative to the Bank or any other obligor on the Debentures, or to the

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creditors or property of the Bank or such other obligor, unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Debentures in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or Person performing similar functions in comparable proceedings,

(iii)to collect and receive any moneys or other property payable or deliverable on any such claims, and

(iv)to distribute the same after the deduction of its charges and expenses.

Any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Securityholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other amounts due to the Trustee under Section 6.6.

Nothing herein contained shall be construed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Debentures or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

All rights of action and of asserting claims under this Indenture, or under any of the Debentures, may be enforced by the Trustee without the possession of any of the Debentures, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Debentures.

In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the holders of the Debentures, and it shall not be necessary to make any holders of the Debentures parties to any such proceedings.

Section 5.3.Application of Moneys Collected by Trustee. Any moneys collected by the Trustee pursuant to this Article V shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the several Debentures in respect of which moneys have been collected, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid:

First: To the payment of costs and expenses incurred by, and reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all other amounts due to the Trustee under Section 6.6;

Second: To the payment of all Senior Indebtedness of the Bank if and to the extent required by Article XV;

Third: To the payment of the amounts then due and unpaid upon Debentures for principal (and premium, if any), and interest on the Debentures, in respect of which or for the benefit of which money has been collected, ratably, without preference or priority of any kind, according to the amounts due on such Debentures for principal (and premium, if any) and interest, respectively; and

Fourth: The balance, if any, to the Bank.

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Section 5.4.Proceedings by Securityholders. No holder of any Debenture shall have any right to institute any suit, action or proceeding for any remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default with respect to the Debentures and unless the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding shall have given the Trustee a written request to institute such action, suit or proceeding and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred thereby, and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action, suit or proceeding.

Notwithstanding any other provisions in this Indenture, however, the right of any holder of any Debenture to receive payment of the principal of, premium, if any, and interest, on such Debenture when due, or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the consent of such holder and by accepting a Debenture hereunder it is expressly understood, intended and covenanted by the taker and holder of every Debenture with every other such taker and holder and the Trustee, that no one or more holders of Debentures shall have any right in any manner whatsoever by virtue or by availing itself of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other Debentures, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debentures. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 5.5.Proceedings by Trustee. In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

Section 5.6.Remedies Cumulative and Continuing; Delay or Omission Not a Waiver. Except as otherwise provided in Section 2.6, all powers and remedies given by this Article V to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Debentures, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to the Debentures, and no delay or omission of the Trustee or of any holder of any of the Debentures to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 5.4, every power and remedy given by this Article V or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

No delay or omission of the Trustee or any Securityholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to any Securityholder may be exercised from time to time, and as often as may be deemed expedient, by the Trustee (in accordance with its duties under Section 6.1 hereof) or by such holder, as the case may be.

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Section 5.7.Direction of Proceedings and Waiver of Defaults by Majority of Securityholders. The holders of a majority in aggregate principal amount of the Debentures affected (voting as one class) at the time outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such Debentures; provided, however, that (subject to the provisions of Section 6.1) the Trustee shall have the right to decline to follow any such direction if the Trustee shall determine that the action so directed would be unjustly prejudicial to the holders not taking part in such direction or if the Trustee being advised by counsel determines that the action or proceeding so directed may not lawfully be taken or if a Responsible Officer of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability.

The holders of a majority in aggregate principal amount of the Debentures at the time outstanding may on behalf of the holders of all of the Debentures waive (or modify any previously granted waiver of) any past default or Event of Default, and its consequences, except a default (a) in the payment of principal of, premium, if any, or interest on any of the Debentures or (b) in respect of covenants or provisions hereof which cannot be modified or amended without the consent of the holder of each Debenture affected. Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Bank, the Trustee and the holders of the Debentures shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section, said default or Event of Default shall for all purposes of the Debentures and this Indenture be deemed to have been cured and to be not continuing.

Section 5.8.Notice of Defaults. The Trustee shall, within 90 days after the actual knowledge by a Responsible Officer of the Trustee of the occurrence of a default with respect to the Debentures, mail to all Securityholders, as the names and addresses of such holders appear upon the Debenture Register, notice of all defaults with respect to the Debentures known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term “defaults” for the purpose of this Section 5.8 being hereby defined to be the events specified in clauses (a), (b), (c), (d) and (e) of Section 5.1, not including periods of grace, if any, provided for therein); provided, however, that, except in the case of default in the payment of the principal of, premium, if any, or interest on any of the Debentures, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders.

Section 5.9.Undertaking to Pay Costs. All parties to this Indenture agree, and each holder of any Debenture by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided,  however, that the provisions of this Section 5.9 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate more than 10% in principal amount of the Debentures outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Debenture against the Bank on or after the same shall have become due and payable.

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ARTICLE VI.
CONCERNING THE TRUSTEE

Section 6.1.Duties and Responsibilities of Trustee. With respect to the holders of Debentures issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Debentures and after the curing or waiving of all Events of Default which may have occurred, with respect to the Debentures, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Debentures has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(a)prior to the occurrence of an Event of Default with respect to Debentures and after the curing or waiving of all Events of Default which may have occurred

(1)the duties and obligations of the Trustee with respect to Debentures shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations with respect to the Debentures as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee, and

(2)in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

(b)the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and

(c)the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith, in accordance with the direction of the Securityholders pursuant to Section 5.7, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is ground for believing that the repayment of such funds or liability is not assured to it under the terms of this Indenture or indemnity satisfactory to the Trustee against such risk is not reasonably assured to it.

Section 6.2.Reliance on Documents, Opinions, etc. Except as otherwise provided in Section 6.1:

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(a)the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)any request, direction, order or demand of the Bank mentioned herein shall be sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Bank;

(c)the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(d)the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;

(e)the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to the Debentures (that has not been cured or waived) to exercise with respect to Debentures such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

(f)the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, coupon or other paper or document, unless requested in writing to do so by the holders of not less than a majority in aggregate principal amount of the outstanding Debentures affected thereby; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding;

(g)the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents (including any Authenticating Agent) or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed by it with due care; and

(h)with the exceptions of defaults under Sections 5.1(b) or 5.1(c), the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Debentures unless a written notice of such Default or Event of Default shall have been given to the Trustee by the Bank or any other obligor on the Debentures or by any holder of the Debentures.

Section 6.3.No Responsibility for Recitals etc. The recitals contained herein and in the Debentures (except in the certificate of authentication of the Trustee or the Authenticating Agent) shall be taken as the statements of the Bank, and the Trustee and the Authenticating Agent assume no responsibility for the correctness of the same. The Trustee and the Authenticating Agent make no representations as to the validity or sufficiency of this Indenture or of the Debentures. The Trustee and

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the Authenticating Agent shall not be accountable for the use or application by the Bank of any Debentures or the proceeds of any Debentures authenticated and delivered by the Trustee or the Authenticating Agent in conformity with the provisions of this Indenture.

Section 6.4.Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debentures. The Trustee or any Authenticating Agent or any paying agent or any transfer agent or any Debenture registrar, in its individual or any other capacity, may become the owner or pledgee of Debentures with the same rights it would have if it were not Trustee, Authenticating Agent, paying agent, transfer agent or Debenture registrar.

Section 6.5.Moneys to be Held in Trust. Subject to the provisions of Section 12.4, all moneys received by the Trustee or any paying agent shall, until used or applied as herein provided, be held in trust for the purpose for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee and any paying agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Bank. So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from time to time upon the written order of the Bank, signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President, a Managing Director, a Vice President, the Treasurer or an Assistant Treasurer of the Bank.

Section 6.6.Compensation and Expenses of Trustee. The Bank covenants and agrees to pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct. For purposes of clarification, this Section 6.6 does not contemplate the payment by the Bank of acceptance or annual administration fees owing to the Trustee pursuant to the services to be provided by the Trustee under this Indenture or the fees and expenses of the Trustee’s counsel in connection with the closing of the transactions contemplated by this Indenture. The Bank also covenants to indemnify each of the Trustee or any predecessor Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any and all loss, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee) incurred without negligence or willful misconduct on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability. The obligations of the Bank under this Section 6.6 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Debentures upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Debentures.

Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1(d) or Section 5.1(e), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

The provisions of this Section shall survive the resignation or removal of the Trustee and the defeasance or other termination of this Indenture.

Notwithstanding anything in this Indenture or any Debenture to the contrary, the Trustee shall have no obligation whatsoever to advance funds to pay any principal of or interest on or other amounts with respect to the Debentures or otherwise advance funds to or on behalf of the Bank.

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Section 6.7.Officers’ Certificate as Evidence. Except as otherwise provided in Sections 6.1 and 6.2, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

Section 6.8.Eligibility of Trustee. The Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia or a corporation or other Person authorized under such laws to exercise corporate trust powers, having (or whose obligations under this Indenture are guaranteed by an affiliate having) a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000.00) and subject to supervision or examination by federal, state, territorial, or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8 the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent records of condition so published.

The Bank may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Bank, serve as Trustee.

In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.8, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.9.

If the Trustee has or shall acquire any “conflicting interest” within the meaning of §310(b) of the Trust Indenture Act of 1939, the Trustee shall either eliminate such interest or resign, to the extent and in the manner described by this Indenture.

Section 6.9.Resignation or Removal of Trustee

(a)The Trustee, or any trustee or trustees hereafter appointed, may at any time resign by giving written notice of such resignation to the Bank and by mailing notice thereof, at the Bank’s expense, to the holders of the Debentures at their addresses as they shall appear on the Debenture Register. Upon receiving such notice of resignation, the Bank shall promptly appoint a successor trustee or trustees by written instrument, in duplicate, executed by order of its Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation to the affected Securityholders, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, or any Securityholder who has been a bona fide holder of a Debenture or Debentures for at least six months may, subject to the provisions of Section 5.9, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee.

(b)In case at any time any of the following shall occur —

(1)the Trustee shall fail to comply with the provisions of Section 6.8 after written request therefor by the Bank or by any Securityholder who has been a bona fide holder of a Debenture or Debentures for at least 6 months, or

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(2)the Trustee shall cease to be eligible in accordance with the provisions of Section 6.8 and shall fail to resign after written request therefor by the Bank or by any such Securityholder, or

(3)the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, the Bank may remove the Trustee and appoint a successor Trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to the provisions of Section 5.9, any Securityholder who has been a bona fide holder of a Debenture or Debentures for at least 6 months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint successor Trustee.

(c)Upon prior written notice to the Bank and the Trustee, the holders of a majority in aggregate principal amount of the Debentures at the time outstanding may at any time remove the Trustee and nominate a successor Trustee, which shall be deemed appointed as successor Trustee unless within 10 Business Days after such nomination the Bank objects thereto, in which case, or in the case of a failure by such holders to nominate a successor Trustee, the Trustee so removed or any Securityholder, upon the terms and conditions and otherwise as in subsection (a) of this Section 6.9 provided, may petition any court of competent jurisdiction for an appointment of a successor.

(d)Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor Trustee as provided in Section 6.10.

Section 6.10.Acceptance by Successor Trustee. Any successor Trustee appointed as provided in Section 6.9 shall execute, acknowledge and deliver to the Bank and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations with respect to the Debentures of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Bank or of the successor Trustee, the Trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 6.6, execute and deliver an instrument transferring to such successor Trustee all the rights and powers of the Trustee so ceasing to act and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee thereunder. Upon request of any such successor Trustee, the Bank shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such Trustee to secure any amounts then due it pursuant to the provisions of Section 6.6.

If a successor Trustee is appointed, the Bank, the retiring Trustee and the successor Trustee shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debentures as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trust hereunder by more than one

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Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee.

No successor Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Trustee shall be eligible under the provisions of Section 6.8.

In no event shall a retiring Trustee be liable for the acts or omissions of any successor Trustee hereunder.

Upon acceptance of appointment by a successor Trustee as provided in this Section 6.10, the Bank shall mail notice of the succession of such Trustee hereunder to the holders of Debentures at their addresses as they shall appear on the Debenture Register. If the Bank fails to mail such notice within 10 Business Days after the acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Bank.

Section 6.11.Succession by Merger, etc. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided such corporation shall be otherwise eligible and qualified under this Article.

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Debentures shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee, and deliver such Debentures so authenticated; and in case at that time any of the Debentures shall not have been authenticated, any successor to the Trustee may authenticate such Debentures either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Debentures or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Debentures in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

Section 6.12.Authenticating Agents. There may be one or more Authenticating Agents appointed by the Trustee upon the request of the Bank with power to act on its behalf and subject to its direction in the authentication and delivery of Debentures issued upon exchange or registration of transfer thereof as fully to all intents and purposes as though any such Authenticating Agent had been expressly authorized to authenticate and deliver Debentures; provided, however, that the Trustee shall have no liability to the Bank for any acts or omissions of the Authenticating Agent with respect to the authentication and delivery of Debentures. Any such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States or of any state or territory thereof or of the District of Columbia authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of at least $50,000,000.00 and being subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually pursuant to law or the requirements of such authority, then for the purposes of this Section 6.12 the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect herein specified in this Section.

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Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section 6.12 without the execution or filing of any paper or any further act on the part of the parties hereto or such Authenticating Agent.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Bank. The Trustee may at any time terminate the agency of any Authenticating Agent with respect to the Debentures by giving written notice of termination to such Authenticating Agent and to the Bank. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section 6.12, the Trustee may, and upon the request of the Bank shall, promptly appoint a successor Authenticating Agent eligible under this Section 6.12, shall give written notice of such appointment to the Bank and shall mail notice of such appointment to all holders of Debentures as the names and addresses of such holders appear on the Debenture Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities with respect to the Debentures of its predecessor hereunder, with like effect as if originally named as Authenticating Agent herein.

The Bank agrees to pay to any Authenticating Agent from time to time reasonable compensation for its services. Any Authenticating Agent shall have no responsibility or liability for any action taken by it as such in accordance with the directions of the Trustee.

ARTICLE VII.
CONCERNING THE SECURITYHOLDERS

Section 7.1.Action by Securityholders. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debentures may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Securityholders in person or by agent or proxy appointed in writing, or (b) by the record of such holders of Debentures voting in favor thereof at any meeting of such Securityholders duly called and held in accordance with the provisions of Article VIII, or (c) by a combination of such instrument or instruments and any such record of such a meeting of such Securityholders or (d) by any other method the Trustee deems satisfactory.

If the Bank shall solicit from the Securityholders any request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, the Bank may, at its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such Debentures for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, but the Bank shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of outstanding Debentures have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, and for that purpose the outstanding Debentures shall be computed as of the record date; provided, however, that no such authorization,

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agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than 6 months after the record date.

Section 7.2.Proof of Execution by Securityholders. Subject to the provisions of Section 6.1, 6.2 and 8.5, proof of the execution of any instrument by a Securityholder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Debentures shall be proved by the Debenture Register or by a certificate of the Debenture registrar. The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

The record of any Securityholders’ meeting shall be proved in the manner provided in Section 8.6.

Section 7.3.Who Are Deemed Absolute Owners. Prior to due presentment for registration of transfer of any Debenture, the Bank, the Trustee, any Authenticating Agent, any paying agent, any transfer agent and any Debenture registrar may deem the Person in whose name such Debenture shall be registered upon the Debenture Register to be, and may treat him as, the absolute owner of such Debenture (whether or not such Debenture shall be overdue) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Debenture and for all other purposes; and neither the Bank nor the Trustee nor any Authenticating Agent nor any paying agent nor any transfer agent nor any Debenture registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being or upon his order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Debenture.

Section 7.4.Debentures Owned by Bank Deemed Not Outstanding. In determining whether the holders of the requisite aggregate principal amount of Debentures have concurred in any direction, consent or waiver under this Indenture, Debentures which are owned by the Bank or any other obligor on the Debentures or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Bank or any other obligor on the Debentures shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided, however, that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Debentures which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Debentures so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 7.4 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Debentures and that the pledgee is not the Bank or any such other obligor or Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Bank or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

Section 7.5.Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debentures specified in this Indenture in connection with such action, any holder (in cases where no record date has been set pursuant to Section 7.1) or any holder as of an applicable record date (in cases where a record date has been set pursuant to Section 7.1) of a Debenture (or any Debenture issued in whole or in part in exchange or substitution therefor) the serial number of which is shown by the evidence to be included in the Debentures the holders of which have consented to such action may, by filing written notice with the Trustee at the Principal Office of the Trustee and upon proof of holding as provided in Section 7.2, revoke such action so far as concerns such Debenture (or so far as concerns the principal amount represented by any exchanged or substituted Debenture). Except as aforesaid any such action taken by the holder of any

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Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of such Debenture, and of any Debenture issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon such Debenture or any Debenture issued in exchange or substitution therefor.

ARTICLE VIII.
SECURITYHOLDERS’ MEETINGS

Section 8.1.Purposes of Meetings. A meeting of Securityholders may be called at any time and from time to time pursuant to the provisions of this Article VIII for any of the following purposes:

(a)to give any notice to the Bank or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Securityholders pursuant to any of the provisions of Article V;

(b)to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article VI;

(c)to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 9.2; or

(d)to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of such Debentures under any other provision of this Indenture or under applicable law.

Section 8.2.Call of Meetings by Trustee. The Trustee may at any time call a meeting of Securityholders to take any action specified in Section 8.1, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Securityholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to holders of Debentures affected at their addresses as they shall appear on the Debentures Register and, if the Bank is not a holder of Debentures, to the Bank. Such notice shall be mailed not less than 20 nor more than 180 days prior to the date fixed for the meeting.

Section 8.3.Call of Meetings by Bank or Securitvholders. In case at any time the Bank pursuant to a Board Resolution, or the holders of at least 10% in aggregate principal amount of the Debentures, as the case may be, then outstanding, shall have requested the Trustee to call a meeting of Securityholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Bank or such Securityholders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 8.1, by mailing notice thereof as provided in Section 8.2.

Section 8.4.Qualifications for Voting. To be entitled to vote at any meeting of Securityholders a Person shall (a) be a holder of one or more Debentures with respect to which the meeting is being held or (b) a Person appointed by an instrument in writing as proxy by a holder of one or more such Debentures. The only Persons who shall be entitled to be present or to speak at any meeting of Securityholders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Bank and its counsel.

Section 8.5.Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders, in regard to proof of the holding of Debentures and of the appointment of proxies, and in regard to the

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appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Bank or by Securityholders as provided in Section 8.3, in which case the Bank or the Securityholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting.

Subject to the provisions of Section 7.4, at any meeting each holder of Debentures with respect to which such meeting is being held or proxy therefor shall be entitled to one vote for each $1,000.00 principal amount of Debentures held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debenture challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debentures held by him or instruments in writing as aforesaid duly designating him as the Person to vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to the provisions of Section 8.2 or 8.3 may be adjourned from time provided, however,ty of those present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

Section 8.6.Voting. The vote upon any resolution submitted to any meeting of holders of Debentures with respect to which such meeting is being held shall be by written ballots on which shall be subscribed the signatures of such holders or of their representatives by proxy and the serial number or numbers of the Debentures held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 8.2. The record shall show the serial numbers of the Debentures voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Bank and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

Section 8.7.Quorum; Actions. The Persons entitled to vote a majority in principal amount of the Debentures then outstanding shall constitute a quorum for a meeting of Securityholders; provided, however, that if any action is to be taken at such meeting with respect to a consent, waiver, request, demand, notice, authorization, direction or other action which may be given by the holders of not less than a specified percentage in principal amount of the Debentures then outstanding, the Persons holding or representing such specified percentage in principal amount of the Debentures then outstanding will constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Securityholders, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such

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adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 8.2, except that such notice need be given only once not less than 5 days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Debentures then outstanding which shall constitute a quorum.

Except as limited by the provisos in the first paragraph of Section 9.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the affirmative vote of the holders of a majority in principal amount of the Debentures then outstanding; provided, however, that, except as limited by the provisos in the first paragraph of Section 9.2, any resolution with respect to any consent, waiver, request, demand, notice, authorization, direction or other action which this Indenture expressly provides may be given by the holders of not less than a specified percentage in principal amount of the Debentures then outstanding may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the holders of a not less than such specified percentage in principal amount of the Debentures then outstanding.

Any resolution passed or decision taken at any meeting of holders of Debentures duly held in accordance with this Section shall be binding on all the Securityholders, whether or not present or represented at the meeting.

ARTICLE IX.
SUPPLEMENTAL INDENTURES

Section 9.1.Supplemental Indentures without Consent of Securityholders. The Bank, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto, without the consent of the Securityholders, for one or more of the following purposes:

(a)to evidence the succession of another Person to the Bank, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Bank, pursuant to Article XI hereof;

(b)to add to the covenants of the Bank such further covenants, restrictions or conditions for the protection of the holders of Debentures as the Board of Directors shall consider to be for the protection of the holders of such Debentures, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default;

(c)to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture; provided that any such action shall not materially adversely affect the interests of the holders of the Debentures;

(d)to add to, delete from, or revise the terms of Debentures, including, without limitation, any terms relating to the issuance, exchange, registration or transfer of Debentures (for purposes of

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assuring that no registration of Debentures is required under the Securities Act or the State Nonmember Bank Securities Laws); provided, however, that any such action shall not adversely affect the interests of the holders of the Debentures then outstanding;

(e)to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Debentures and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

(f)to make any change (other than as elsewhere provided in this paragraph) that does not adversely affect the rights of any Securityholder in any material respect; or

(g)to provide for the issuance of and establish the form and terms and conditions of the Debentures, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or the Debentures, or to add to the rights of the holders of Debentures.

The Trustee is hereby authorized to join with the Bank in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of this Section 9.1 may be executed by the Bank and the Trustee without the consent of the holders of any of the Debentures at the time outstanding, notwithstanding any of the provisions of Section 9.2.

Section 9.2.Supplemental Indentures with Consent of Securityholders. With the consent (evidenced as provided in Section 7.1) of the holders of not less than a majority in aggregate principal amount of the Debentures at the time outstanding affected by such supplemental indenture (voting as a class), the Bank, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures; provided, however, that no such supplemental indenture shall without the consent of the holders of each Debenture then outstanding and affected thereby (i) change the fixed maturity of any Debenture, or reduce the principal amount thereof or any premium thereon, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or make the principal thereof or any interest or premium thereon payable in any coin or currency other than that provided in the Debentures, or impair or affect the right of any Securityholder to institute suit for payment thereof or impair the right of repayment, if any, at the option of the holder, or (ii) reduce the aforesaid percentage of Debentures the holders of which are required to consent to any such supplemental indenture.

Upon the request of the Bank accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid, the Trustee shall join with the Bank in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

Promptly after the execution by the Bank and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, prepared by the Bank, setting forth in general terms the substance of such supplemental indenture, to the

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Securityholders as their names and addresses appear upon the Debenture Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

It shall not be necessary for the consent of the Securityholders under this Section 9.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

Section 9.3.Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Bank and the holders of Debentures shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.4.Notation on Debentures. Debentures authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article IX may bear a notation as to any matter provided for in such supplemental indenture. If the Bank or the Trustee shall so determine, new Debentures so modified as to conform, in the opinion of the Board of Directors of the Bank, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Bank, authenticated by the Trustee or the Authenticating Agent and delivered in exchange for the Debentures then outstanding.

Section 9.5.Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee. The Trustee, subject to the provisions of Sections 6.1 and 6.2, shall, in addition to the documents required by Section 14.6, receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX. The Trustee shall receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article IX is authorized or permitted by, and conforms to, the terms of this Article IX and that it is proper for the Trustee under the provisions of this Article IX to join in the execution thereof.

ARTICLE X.
REDEMPTION OF SECURITIES

Section 10.1.Optional Redemption. The Bank shall have the right (subject to the receipt by the Bank of prior written approval by the FDIC if then required under applicable regulations of the FDIC) to redeem the Debentures, in whole or in part, but in all cases in a principal amount with integral multiples of $1,000.00, on any March 26, June 26, September 26 or December 26 on or after December 26, 2007 (the “Redemption Date”) at the Redemption Price.

Section 10.2.Notice of Redemption; Selection of Debentures. In case the Bank shall desire to exercise the right to redeem all, or, as the case may be, any part of the Debentures, it shall cause to be mailed a notice of such redemption at least 30 and not more than 60 days prior to the Redemption Date to the holders of Debentures so to be redeemed as a whole or in part at their last addresses as the same appear on the Debenture Register. Such mailing shall be by first class mail. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Debenture designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Debenture.

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Each such notice of redemption shall specify the CUSIP number, if any, of the Debentures to be redeemed, the Redemption Date, the Redemption Price at which Debentures are to be redeemed, the place or places of payment, that payment will be made upon presentation and surrender of such Debentures, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. If less than all the Debentures are to be redeemed the notice of redemption shall specify the numbers of the Debentures to be redeemed. In case the Debentures are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Debenture, a new Debenture or Debentures in principal amount equal to the unredeemed portion thereof will be issued.

Prior to 10:00 a.m. New York City time on the Redemption Date or Special Redemption Date, as applicable, the Bank will deposit with the Trustee or with one or more paying agents an amount of money sufficient to redeem on the Redemption Date or the Special Redemption Date, as applicable, all the Debentures so called for redemption at the appropriate Redemption Price or Special Redemption Price, together with accrued interest to the Redemption Date or Special Redemption Date, as applicable.

If all, or less than all, the Debentures are to be redeemed, the Bank will give the Trustee notice not less than 45 nor more than 60 days, respectively, prior to the Redemption Date or Special Redemption Date, as applicable, as to the aggregate principal amount of Debentures to be redeemed and the Trustee shall select, in such manner as in its sole discretion it shall deem appropriate and fair, the Debentures or portions thereof (in integral multiples of $1,000.00) to be redeemed.

Section 10.3.Payment of Debentures Called for Redemption. If notice of redemption has been given as provided in Section 10.2, the Debentures or portions of Debentures with respect to which such notice has been given shall become due and payable on the Redemption Date and at the place or places stated in such notice at the applicable Redemption Price, together with interest accrued to the Redemption Date and on and after said date (unless the Bank shall default in the payment of such Debentures at the Redemption Price, together with interest accrued to said date) interest on the Debentures or portions of Debentures so called for redemption shall cease to accrue. On presentation and surrender of such Debentures at a place of payment specified in said notice, such Debentures or the specified portions thereof shall be paid and redeemed by the Bank at the applicable Redemption Price, together with interest accrued thereon to the Redemption Date.

Upon presentation of any Debenture redeemed in part only, the Bank shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the Bank, a new Debenture or Debentures of authorized denominations, in principal amount equal to the unredeemed portion of the Debenture so presented.

ARTICLE XI.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 11.1.Bank May Consolidate, etc., on Certain Terms.  Nothing contained in this Indenture or in the Debentures shall prevent any consolidation or merger of the Bank with or into any other Person (whether or not affiliated with the Bank) or successive consolidations or mergers in which the Bank or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property or capital stock of the Bank or its successor or successors as an entirety, or substantially as an entirety, to any other Person (whether or not affiliated with the Bank, or its successor or successors) authorized to acquire and operate the same; provided, however, that the Bank hereby covenants and agrees that, upon any such consolidation, merger (where the Bank is not the surviving corporation), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (and premium, if any) and interest on all of the Debentures in accordance with their terms,

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according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be kept or performed by the Bank, shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Bank shall have been merged, or by the entity which shall have acquired such property.

Section 11.2.       Successor Entity to be Substituted. In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest on all of the Debentures and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Bank, such successor entity shall succeed to and be substituted for the Bank, with the same effect as if it had been named herein as the Bank, and thereupon the predecessor entity shall be relieved of any further liability or obligation hereunder or upon the Debentures. Such successor entity thereupon may cause to be signed, and may issue in its own name, any or all of the Debentures issuable hereunder which theretofore shall not have been signed by the Bank and delivered to the Trustee or the Authenticating Agent; and, upon the order of such successor entity instead of the Bank and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate and deliver any Debentures which previously shall have been signed and delivered by the officers of the Bank, to the Trustee or the Authenticating Agent for authentication, and any Debentures which such successor entity thereafter shall cause to be signed and delivered to the Trustee or the Authenticating Agent for that purpose. All the Debentures so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debentures theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debentures had been issued at the date of the execution hereof.

Section 11.3.        Opinion of Counsel to be Given to Trustee. The Trustee, subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition to the Opinion of Counsel required by Section 9.5, an Opinion of Counsel as conclusive evidence that any consolidation, merger, sale, conveyance, transfer or other disposition, and any assumption, permitted or required by the terms of this Article XI complies with the provisions of this Article XI.

ARTICLE XII.
SATISFACTION AND DISCHARGE OF INDENTURE

Section 12.1.        Discharge of Indenture. When

(a)the Bank shall deliver to the Trustee for cancellation all Debentures theretofore authenticated (other than any Debentures which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.6) and not theretofore canceled, or

(b)all the Debentures not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within 1 year or are to be called for redemption within 1 year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Bank shall deposit with the Trustee, in trust, funds, which shall be immediately due and payable, sufficient to pay at maturity or upon redemption all of the Debentures (other than any Debentures which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.6) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due to such date of maturity or redemption date, as the case may be, but

37

excluding, however, the amount of any moneys for the payment of principal of, and premium, if any, or interest on the Debentures (1) theretofore repaid to the Bank in accordance with the provisions of Section 12.4, or (2) paid to any state or to the District of Columbia pursuant to its unclaimed property or similar laws,

and if in the case of either clause (a) or clause (b) the Bank shall also pay or cause to be paid all other sums payable hereunder by the Bank, then this Indenture shall cease to be of further effect except for the provisions of Sections 2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall survive until such Debentures shall mature and be paid. Thereafter, Sections 6.6 and 12.4 shall survive, and the Trustee, on demand of the Bank accompanied by an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with, and at the cost and expense of the Bank, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture. The Bank agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Debentures.

Section 12.2.        Deposited Moneys to be Held in Trust by Trustee. Subject to the provisions of Section 12.4, all moneys deposited with the Trustee pursuant to Section 12.1 shall be held in trust in a non-interest bearing account and applied by it to the payment, either directly or through any paying agent (including the Bank if acting as its own paying agent), to the holders of the particular Debentures for the payment of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal, and premium, if any, and interest.

Section 12.3.        Paying Agent to Repay Moneys Held. Upon the satisfaction and discharge of this Indenture all moneys then held by any paying agent of the Debentures (other than the Trustee) shall, upon demand of the Bank, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such moneys.

Section 12.4.        Return of Unclaimed Moneys. Any moneys deposited with or paid to the Trustee or any paying agent for payment of the principal of, and premium, if any, or interest on Debentures and not applied but remaining unclaimed by the holders of Debentures for 2 years after the date upon which the principal of, and premium, if any, or interest on such Debentures, as the case may be, shall have become due and payable, shall, subject to applicable escheatment laws, be repaid to the Bank by the Trustee or such paying agent on written demand; and the holder of any of the Debentures shall thereafter look only to the Bank for any payment which such holder may be entitled to collect, and all liability of the Trustee or such paying agent with respect to such moneys shall thereupon cease.

ARTICLE XIII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS

Section 13.1.        Indenture and Debentures Solely Corporate Obligations. No recourse for the payment of the principal of or premium, if any, or interest on any Debenture, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Bank in this Indenture or in any supplemental indenture, or in any such Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, officer or director, as such, past, present or future, of the Bank or of any successor Person of the Bank, either directly or through the Bank or any successor Person of the Bank, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures.

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ARTICLE XIV.
MISCELLANEOUS PROVISIONS

Section 14.1.       Successors. All the covenants, stipulations, promises and agreements of the Bank in this Indenture shall bind its successors and assigns whether so expressed or not.

Section 14.2.       Official Acts by Successor Entity. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Bank shall and may be done and performed with like force and effect by the like board, committee, officer or other authorized Person of any entity that shall at the time be the lawful successor of the Bank.

Section 14.3.        Surrender of Bank Powers. The Bank by instrument in writing executed by authority of at least 2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Bank and thereupon such power so surrendered shall terminate both as to the Bank, and as to any permitted successor.

Section 14.4.        Addresses for Notices, etc. Any notice, consent, direction, request, authorization, waiver or demand which by any provision of this Indenture is required or permitted to be given, made, furnished or served by the Trustee or by the Securityholders on or to the Bank may be given or served in writing by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Bank, with the Trustee for the purpose) to the Bank, 3200 Wilshire Boulevard, Los Angeles, California 90010, Attention: Brian E. Cho. Any notice, consent, direction, request, authorization, waiver or demand by any Securityholder or the Bank to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the office of the Trustee, addressed to the Trustee, 225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103 Attention: Vice President, Corporate Trust Department, with a copy to State Street Bank and Trust Company, P.O. Box 778, Boston, Massachusetts 02102-0778, Attention: Paul D. Allen, Corporate Trust Department. Any notice, consent, direction, request, authorization, waiver or demand on or to any Securityholder shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the address set forth in the Debenture Register.

Section 14.5.        Governing Law. This Indenture and each Debenture shall be deemed to be a contract made under the law of the State of New York, and for all purposes shall be governed by and construed in accordance with the law of said State, without regard to conflict of laws principles thereof.

Section 14.6.        Evidence of Compliance with Conditions Precedent. Upon any application or demand by the Bank to the Trustee to take any action under any of the provisions of this Indenture, the Bank shall furnish to the Trustee an Officers’ Certificate stating that in the opinion of the signers all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not in the opinion of such person, such condition or covenant has been complied with.

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Section 14.7.       Non-Business Days. In any case where the date of payment of interest on or principal of the Debentures will be a day that is not a Business Day, the payment of such interest on or principal of the Debentures need not be made on such date but may be made on the next succeeding Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the original date of payment, and no interest shall accrue for the period from and after such date.

Section 14.8.       Table of Contents, Headings, etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

Section 14.9.        Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 14.10.      Separability. In case any one or more of the provisions contained in this Indenture or in the Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Debentures, but this Indenture and such Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

Section 14.11.      Assignment. The Bank will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly owned Subsidiary of the Bank, provided that, in the event of any such assignment, the Bank will remain liable for all such obligations. Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns. In addition, the obligations of the Bank may be assigned in accordance with Section 11.3. This Indenture may not otherwise be assigned by the parties hereto.

ARTICLE XV.
SUBORDINATION OF DEBENTURES

Section 15.1.        Agreement to Subordinate. The Bank covenants and agrees, and each holder of Debentures by such Securityholder’s acceptance thereof likewise covenants and agrees, that all Debentures shall be issued subject to the provisions of this Article XV; and each holder of a Debenture, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

The payment by the Bank of the principal of, and premium, if any, and interest on all Debentures shall, to the extent and in the manner hereinafter set forth, be subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Bank, whether outstanding at the date of this Indenture or thereafter incurred.

No provision of this Article XV shall prevent the occurrence of any default or Event of Default hereunder.

Section 15.2.        Default on Senior Indebtedness. In the event and during the continuation of any default by the Bank in the payment of principal, premium, interest or any other payment due on any Senior Indebtedness of the Bank following any grace period, or in the event that the maturity of any Senior Indebtedness of the Bank has been accelerated because of a default and such acceleration has not

40

been rescinded or canceled, then, in either case, no payment shall be made by the Bank with respect to the principal (including redemption) of, or premium, if any, or interest on the Debentures.

In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee when such payment is prohibited by the preceding paragraph of this Section 15.2, such payment shall, subject to Section 15.7, be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, but only to the extent that the holders of the Senior Indebtedness (or their representative or representatives or a trustee) notify the Trustee in writing within 90 days of such payment of the amounts then due and owing on the Senior Indebtedness and only the amounts specified in such notice to the Trustee shall be paid to the holders of Senior Indebtedness.

Section 15.3.       Liquidation, Dissolution, Bankruptcy. Upon any payment by the Bank or distribution of assets of the Bank of any kind or character, whether in cash, properly or securities, to creditors upon any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding up of or relating to the Bank, whether voluntary or involuntary, all amounts due upon all Senior Indebtedness of the Bank shall first be paid in full, or payment thereof provided for in money in accordance with its terms, before any payment is made by the Bank, on account of the principal (and premium, if any) or interest on the Debentures. In the event of any such proceedings, any payment by the Bank, or distribution of assets of the Bank of any kind or character, whether in cash, property or securities, which the Securityholders or the Trustee would be entitled to receive from the Bank, except for the provisions of this Article XV, shall be paid by the Bank, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Securityholders or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, as calculated by the Bank) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money’s worth, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before any payment or distribution is made to the Securityholders or to the Trustee.

In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Bank of any kind or character, whether in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee before all Senior Indebtedness is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Bank, for application to the payment of all Senior Indebtedness, remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness.

For purposes of this Article XV, the words “cash, property or securities” shall not be deemed to include shares of stock of the Bank as reorganized or readjusted, or securities of the Bank or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article XV with respect to the Debentures to the payment of all Senior Indebtedness, that may at the time be outstanding, provided that (i) such Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or

41

readjustment, and (ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Bank with, or the merger of the Bank into, another corporation or the liquidation or dissolution of the Bank following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article XI of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article XI of this Indenture. Nothing in Section 15.2 or in this Section shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.6 of this Indenture.

Section 15.4.       Subrogation. Subject to the payment in full of all Senior Indebtedness, the Securityholders shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities of the Bank, applicable to such Senior Indebtedness until the principal of (and premium, if any) and interest on the Debentures shall be paid in full. For the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of any cash, property or securities to which the Securityholders or the Trustee would be entitled except for the provisions of this Article XV, and no payment over pursuant to the provisions of this Article XV to or for the benefit of the holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as between the Bank, its creditors other than holders of Senior Indebtedness of the Bank, and the holders of the Debentures be deemed to be a payment or distribution by the Bank to or on account of such Senior Indebtedness. It is understood that the provisions of this Article XV are and are intended solely for the purposes of defining the relative rights of the holders of the Securities, on the one hand, and the holders of such Senior Indebtedness, on the other hand.

Nothing contained in this Article XV or elsewhere in this Indenture or in the Debentures is intended to or shall impair, as between the Bank, its creditors other than the holders of Senior Indebtedness, and the holders of the Debentures, the obligation of the Bank, which is absolute and unconditional, to pay to the holders of the Debentures the principal of (and premium, if any) and interest on the Debentures as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Debentures and creditors of the Bank, other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the holder of any Debenture from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XV of the holders of such Senior Indebtedness in respect of cash, property or securities of the Bank, received upon the exercise of any such remedy.

Upon any payment or distribution of assets of the Bank referred to in this Article XV, the Trustee, subject to the provisions of Article VI of this Indenture, and the Securityholders shall be entitled to conclusively rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, delivered to the Trustee or to the Securityholders, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other indebtedness of the Bank, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XV.

Section 15.5.        Trustee to Effectuate Subordination. Each Securityholder by such Securityholder’s acceptance thereof authorizes and directs the Trustee on such Securityholder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XV and appoints the Trustee such Securityholder’s attorney-in-fact for any and all such purposes.

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Section 15.6.       Notice by the Bank. The Bank shall give prompt written notice to a Responsible Officer of the Trustee at the Principal Office of the Trustee of any fact known to the Bank that would prohibit the making of any payment of monies to or by the Trustee in respect of the Debentures pursuant to the provisions of this Article XV. Notwithstanding the provisions of this Article XV or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Debentures pursuant to the provisions of this Article XV, unless and until a Responsible Officer of the Trustee at the Principal Office of the Trustee shall have received written notice thereof from the Bank or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least 2 Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Debenture), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within 2 Business Days prior to such date.

The Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee or representative on behalf of such holder), to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article XV, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XV, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

Section 15.7.        Rights of the Trustee; Holders of Senior Indebtedness. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XV in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article XV, and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Article VI of this Indenture, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Securityholders, the Bank or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.

Nothing in this Article XV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.6.

Section 15.8.        Subordination May Not Be Impaired. No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Bank, or by any act or failure to act,

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in good faith, by any such holder, or by any noncompliance by the Bank, with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Securityholders, without incurring responsibility to the Securityholders and without impairing or releasing the subordination provided in this Article XV or the obligations hereunder of the holders of the Debentures to the holders of such Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any Person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Bank, and any other Person.

Signatures appear on the following page

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written.

WILSHIRE STATE BANK
By	/s/ Brian Cho
Name:		Brian Cho
Title:		SVP/CFO
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as
Trustee
By	/s/ Paul D. Allen
Name:		Paul D. Allen
Title:		Vice President

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EXHIBIT A

FORM OF JUNIOR SUBORDINATED DEBENTURE

[FORM OF FACE OF SECURITY]

[TO BE INCLUDED IN THE TEMPORARY DEBENTURE ONLY - THIS DEBENTURE IS A TEMPORARY DEBENTURE FOR PURPOSES OF REGULATION S UNDER THE SECURITIES ACT (AS DEFINED BELOW). NEITHER THIS TEMPORARY DEBENTURE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW. NO BENEFICIAL OWNERS OF THIS TEMPORARY DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.]

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION.

THIS OBLIGATION IS SUBORDINATED TO CLAIMS OF DEPOSITORS, IS UNSECURED, AND IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW (INCLUDING 12 U.S.C. 1811 ET SEQ. AND 12 C.F.R. PART 335 PROMULGATED THEREUNDER (THE “STATE NONMEMBER BANK SECURITIES LAWS”)) AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW, INCLUDING THE STATE NONMEMBER BANK SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE BANK, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER, AS APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AS APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, SUBJECT TO THE BANK’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,

A-1

CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE BANK.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974„ AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

Floating Rate Junior Subordinated Debenture

of

Wilshire State Bank

December 19, 2002

Wilshire State Bank, a state nonmember bank organized under the laws of California (the “Bank” which term includes any successor Person under the Indenture hereinafter referred to), for value received promises to pay to Hare & Co. (the “Holder”), as nominee for The Bank of New York, indenture trustee

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under the Indenture dated as of December 19, 2002 among Preferred Term Securities VIII, Ltd., Preferred Term Securities VIII, Inc. and The Bank of New York or registered assigns, the principal sum of ten million dollars ($10,000,000.00) on December 26, 2012, and to pay interest on said principal sum from December 19, 2002, or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for, quarterly in arrears on March 26, June 26, September 26 and December 26 of each year commencing March 26, 2003, at an annual rate equal to 4.51% beginning on (and including) the date of original issuance and ending on (but excluding) March 26, 2003 and at an annual rate for each successive period beginning on (and including) March 26, 2003, and each succeeding Interest Payment Date, and ending on (but excluding) the next succeeding Interest Payment Date (each a “Distribution Period”), equal to 3-Month LIBOR, determined as described below, plus 3.10% (the “Coupon Rate”); provided, however, that prior to December 26, 2007, the Coupon Rate shall not exceed 11.75%, applied to the principal amount hereof; until the principal hereof is paid or duly provided for or made available for payment, and on any overdue principal and (without duplication) on any overdue installment of interest at the same rate per annum, compounded quarterly, from the dates such amounts are due until they are paid or made available for payment. The amount of interest payable for any period will be computed on the basis of the actual number of days in the Distribution Period concerned divided by 360. In the event that any date on which interest is payable on this Debenture is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment, which shall be fifteen days prior to the day on which the relevant Interest Payment Date occurs. Any such interest installment not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such regular record date and may be paid to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on a special record date.

“3-Month LIBOR” as used herein, means the London interbank offered interest rate for three-month U.S. dollar deposits determined by the Trustee in the following order of priority: (i) the rate (expressed as a percentage per annum) for U.S. dollar deposits having a three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination Date (“Telerate Page 3750” means the display designated as “Page 3750” on the Dow Jones Telerate Service or such other page as may replace Page 3750 on that service or such other service or services as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits); (ii) if such rate cannot be identified on the related Determination Date, the Trustee will request the principal London offices of four leading banks in the London interbank market to provide such banks’ offered quotations (expressed as percentages per annum) to prime banks in the London interbank market for U.S. dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on such Determination Date. If at least two quotations are provided, 3- Month LIBOR will be the arithmetic mean of such quotations; (iii) if fewer than two such quotations are provided as requested in clause (ii) above, the Trustee will request four major New York City banks to provide such banks’ offered quotations (expressed as percentages per annum) to leading European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such Determination Date. If at least two such quotations are provided, 3-Month LIBOR will be the arithmetic mean of such quotations; and (iv) if fewer than two such quotations are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the Distribution Period immediately preceding such current Distribution Period. If the rate for U.S. dollar deposits having a three-month maturity that initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination Date is

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superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such Determination Date, then the corrected rate as so substituted on the applicable page will be the applicable 3-Month LIBOR for such Determination Date. As used herein, “Determination Date” means the date that is two London Banking Days (i.e., a business day in which dealings in deposits in U.S. dollars are transacted in the London interbank market) preceding the commencement of the relevant Distribution Period.

The Coupon Rate for any Distribution Period will at no time be higher than the maximum rate then permitted by New York law as the same may be modified by United States law.

All percentages resulting from any calculations on the Debentures will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward)).

The principal of and interest on this Debenture shall be payable at the office or agency of the Trustee (or other paying agent appointed by the Bank) maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made by check mailed to the registered holder at such address as shall appear in the Debenture Register if a request for a wire transfer by such holder has not been received by the Bank or by wire transfer to an account appropriately designated by the holder hereof.

The indebtedness of the Bank evidenced by this Debenture shall be subordinate and junior in right of payment to all claims (including post default interest in the case of liquidation of the Bank) against the Bank, incurred, assumed or guaranteed by the Bank, having the same priority as the Bank’s obligations to its depositors, its obligations under bankers’ acceptances and letters of credit, and its obligations to any other creditors (including its obligations to the Federal Reserve, FDIC, and any rights acquired by the FDIC as a result of loans made by the FDIC to the Bank or the purchase or guarantee of any of its assets by the FDIC pursuant to the provisions of 12 USC § 1823(c), (d) or (e)), whether now outstanding or hereafter incurred, or any higher priority, and the principal, premium, if any, and interest in respect thereof, whether incurred on or prior to the date of this Indenture or thereafter incurred. Notwithstanding the foregoing, the indebtedness of the Bank evidenced by this Debenture shall not be subordinate and junior in right of payment to obligations with respect to which in the instrument creating or evidencing the same, or pursuant to which the same is outstanding, it is provided that such obligations are pari passu, junior or otherwise not superior in right of payment to the Debentures. The obligations that are senior in right of payment to this Debenture shall continue to be senior and be entitled to the subordination provisions irrespective of any amendment, modification or waiver of any term of such senior obligations.

The Debentures may not be repaid in the case of an acceleration due to an Event of Default or voluntarily redeemed without the prior written approval of or, if applicable, written notice to the FDIC. If such approval is necessary, within 30 days after receipt of any declaration of acceleration pursuant to Section 5.1 of the Indenture, the Bank will apply to the FDIC for written approval of repayment prior to maturity. In the event that the Bank obtains such prior written approval, the Bank shall notify the Securityholders, and the Trustee will arrange for prompt payment on the Debentures.

No payment shall at any time be made on account of the principal of this Debenture, unless following such payment the aggregate of the Bank’s shareholders’ equity and capital notes or debentures thereafter outstanding shall be the equal of such aggregate at the date of the original issue of this Debenture, or as otherwise authorized by the California Commissioner of Financial Institutions.

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This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee.

The provisions of this Debenture are continued on the reverse side hereof and such provisions shall for all purposes have the same effect as though fully set forth at this place.

Signatures appear on the following page

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IN WITNESS WHEREOF, the Bank has duly executed this certificate.

WILSHIRE STATE BANK
By
	Name:
	Title:

CERTIFICATE OF AUTHENTICATION

This is one of the Debentures referred to in the within-mentioned Indenture.

State Street Bank and Trust Company of Connecticut, National Association, as Trustee
By:
	Authorized Officer

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[FORM OF REVERSE OF DEBENTURE]

This Debenture is one of the floating rate junior subordinated debentures of the Bank, all issued or to be issued under and pursuant to the Indenture dated as of December 19, 2002 (the “Indenture”), duly executed and delivered between the Bank and the Trustee, to which Indenture reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Bank and the holders of the Debentures. The Debentures are limited in aggregate principal amount as specified in the Indenture.

In addition, the Bank shall have the right to redeem the Debentures, in whole or in part, but in all cases in a principal amount with integral multiples of $1,000.00, on any Interest Payment Date on or after December 26, 2007, at the Redemption Price.

Prior to 10:00 a.m. New York City time on the Redemption Date, the Bank will deposit with the Trustee or with one or more paying agents an amount of money sufficient to redeem on the Redemption Date all the Debentures so called for redemption at the appropriate Redemption Price, together with accrued interest to the Redemption Date.

If all, or less than all, the Debentures are to be redeemed, the Bank will give the Trustee notice not less than 45 nor more than 60 days, respectively, prior to the Redemption Date as to the aggregate principal amount of Debentures to be redeemed and the Trustee shall select, in such manner as in its sole discretion it shall deem appropriate and fair, the Debentures or portions thereof (in integral multiples of $1,000.00) to be redeemed.

Notwithstanding the foregoing, any redemption of Debentures by the Bank shall be subject to the receipt of any and all required regulatory approvals.

In case an Event of Default shall have occurred and be continuing, upon demand of the Trustee, the principal of all of the Debentures shall become due and payable in the manner, with the effect and subject to the conditions provided in the Indenture, including the receipt of any and all required regulatory approvals.

The Indenture contains provisions permitting the Bank and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the Debentures at the time outstanding, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures; provided, however, that no such supplemental indenture shall without the consent of the holders of each Debenture then outstanding and affected thereby (i) change the fixed maturity of any Debenture, or reduce the principal amount thereof or any premium thereon, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or make the principal thereof or any interest or premium thereon payable in any coin or currency other than that provided in the Debentures, or impair or affect the right of any Securityholder to institute suit for payment thereof or impair the right of repayment, if any, at the option of the holder, or (ii) reduce the aforesaid percentage of Debentures the holders of which are required to consent to any such supplemental indenture.

The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the Debentures at the time outstanding on behalf of the holders of all of the Debentures to waive (or modify any previously granted waiver of) any past default or Event of Default, and its consequences, except a default (a) in the payment of principal of, premium, if any, or interest on any of the Debentures or (b) in respect of covenants or provisions hereof which cannot be modified or amended without the consent of the holder of each Debenture affected. Upon any such waiver, the default covered

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thereby shall be deemed to be cured for all purposes of the Indenture and the Bank, the Trustee and the holders of the Debentures shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by the Indenture, said default or Event of Default shall for all purposes of the Debentures and the Indenture be deemed to have been cured and to be not continuing.

In the event of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding up of or relating to the Bank, whether voluntary or involuntary, all such obligations shall be entitled to be paid in full before any payment shall be made on account of the principal of, or premium, if any, or interest, on this Debenture. In the event of any such proceedings, after payment in full of all sums owing on such prior obligations, the holder of this Debenture, together with any obligations of the Bank ranking on a parity with the Debentures, shall be entitled to be paid from the remaining assets of the Bank the unpaid principal thereof and any unpaid premium, if any, and interest before any payment or other distribution, whether in cash, property, or otherwise, shall be made on account of any capital stock or any obligations of the Bank ranking junior to the Debentures. Nothing herein shall impair the obligation of the Bank, which is absolute and unconditional, to pay the principal of and any premium and interest on this Debenture according to its terms.

The Debentures are issuable only in registered, certificated form without coupons and in minimum denominations of $100,000.00 and any multiple of $1,000.00 in excess thereof. As provided in the Indenture and subject to the transfer restrictions and limitations as may be contained herein and therein from time to time, this Debenture is transferable by the holder hereof on the Debenture Register of the Bank. Upon due presentment for registration of transfer of any Debenture at the Principal Office of the Trustee or at any office or agency of the Bank maintained for such purpose as provided in Section 3.2 of the Indenture, the Bank shall execute, the Bank or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in the name of the transferee or transferees a new Debenture for a like aggregate principal amount. All Debentures presented for registration of transfer or for exchange or payment shall (if so required by the Bank or the Trustee or the Authenticating Agent) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Bank and the Trustee or the Authenticating Agent duly executed by the holder or his attorney duly authorized in writing. No service charge shall be made for any exchange or registration of transfer of Debentures, but the Bank or the Trustee may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection therewith.

Prior to due presentment for registration of transfer of any Debenture, the Bank, the Trustee, any Authenticating Agent, any paying agent, any transfer agent and any Debenture registrar may deem the Person in whose name such Debenture shall be registered upon the Debenture Register to be, and may treat him as, the absolute owner of such Debenture (whether or not such Debenture shall be overdue) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Debenture and for all other purposes; and neither the Bank nor the Trustee nor any Authenticating Agent nor any paying agent nor any transfer agent nor any Debenture registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being or upon his order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Debenture.

No recourse for the payment of the principal of or premium, if any, or interest on any Debenture, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Bank in the Indenture or in any supplemental indenture, or in

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any such Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, officer or director, as such, past, present or future, of the Bank or of any successor Person of the Bank, either directly or through the Bank or any successor Person of the Bank, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures.

Capitalized terms used and not defined in this Debenture shall have the meanings assigned in the Indenture dated as of the date of original issuance of this Debenture between the Trustee and the Bank.

THE INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

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EXHIBIT B

FORM OF

REGULATION S CERTIFICATE

January 29, 2003

I, Phillip Hinds, a director of Preferred Term Securities VIII, Ltd., an exempted company with limited liability duly incorporated under the laws of the Cayman Islands (the “Company”), hereby request that State Street Bank and Trust Company of Connecticut, National Association (“State Street”), trustee under that certain Indenture dated as of December 19, 2002 between Wilshire State Bank and State Street (the “Indenture”) deliver a Permanent Debenture (as that term is defined in the Indenture) to The Bank of New York, trustee under that certain Indenture dated as of December 19, 2002 among the Company, Preferred Term Securities VIII, Inc. and The Bank of New York in the form set forth as Exhibit A to the Indenture, without the restrictive legend relating to the Temporary Debenture (as that term is defined in the Indenture). In connection with the delivery of such Permanent Debenture, the Company hereby certifies as follows:

(i)      the Company is not a “U.S. Person” as such term is defined in Rule 902 under the United States Securities Act of 1933, as amended; and

(ii)     the Company has not acquired the Temporary Debenture and will not be acquiring the Permanent Debenture for the account or benefit of any such U.S. Person.

IN WITNESS WHEREOF, I have hereunto signed my name as of the date first written above.

PREFERRED TERM SECURITIES VIII, LTD.

By:

Name:

Title:

B-1

EX-10.15

Exhibit 10.15

STOCK PURCHASE AGREEMENT

by and between

WILSHIRE STATE BANK

and

OSB FINANCIAL SERVICES, INC.

and joined by

OSB DELAWARE FINANCIAL SERVICES, INC.

and

ORANGE SAVINGS BANK, SSB

Dated as of August 5, 2004

TABLE OF CONTENTS

ARTICLE I. PURCHASE AND SALE OF THE SHARES	2
Section 1.01 Acquisition of the Shares	2
Section 1.02 Purchase Price	2
Section 1.03 Closing and Closing Date	2
Section 1.04 Actions to be Taken at the Closing by the Seller	2
Section 1.05 Actions to be Taken at the Closing by the Purchaser	3
Section 1.06 Further Assurances	3
ARTICLE II. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER	3
Section 2.01 Compliance with Representations, Warranties and Agreements	3
Section 2.02 Proceedings and Documents	3
Section 2.03 Governmental and Regulatory Approvals	3
Section 2.04 Closing of the Related Transactions	4
Section 2.05 No Litigation	4
Section 2.06 Retained Assets	4
ARTICLE III. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER	4
Section 3.01 Compliance with Representations, Warranties and Agreements	4
Section 3.02 Proceedings and Documents	5
Section 3.03 Governmental and Regulatory Approvals	5
Section 3.04 Closing of the Related Transactions	5
Section 3.05 Deposit	5
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER	5
Section 4.01 Ownership of the Shares	5
Section 4.02 Organization and Qualification of the Delaware Company and the Seller	6
Section 4.03 Organization and Qualification of the Bank	6
Section 4.04 Authority and Enforceability	6
Section 4.05 No Breach of Contract	6
Section 4.06 Bank Capitalization	6
Section 4.07 Compliance with Applicable Laws	7
Section 4.08 No Consents Necessary	7
Section 4.09 Filing of Tax Returns	7
Section 4.10 Books and Records	7
Section 4.11 Regulatory Compliance	7
Section 4.12 Litigation; Lender Liability	7
Section 4.13 Insurance	8
Section 4.14 Undisclosed Liabilities	8
Section 4.15 Environmental Compliance	8
Section 4.16 Employee Benefit Plans	8
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	8
Section 5.01 Organization and Qualification of the Purchaser	8
Section 5.02 Authority and Enforceability	9
Section 5.03 No Breach of Contract	9
Section 5.04 No Consents Necessary	9
ARTICLE VI. OBLIGATIONS AND COVENANTS OF THE SELLER	9
Section 6.01 Best Efforts	9
Section 6.02 Confidentiality	9
Section 6.03 Compliance with Transfer Requirements	10
Section 6.04 Information for Applications and Statements	10
Section 6.05 Required Acts	10
Section 6.06 Prohibited Acts	10
Section 6.07 Untrue Representations	11
Section 6.08 Litigation and Claims	11
ARTICLE VII. OBLIGATIONS AND COVENANTS OF THE PURCHASER	11
Section 7.01 Best Efforts	11

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Section 7.02 Confidentiality	12
Section 7.03 Information for Applications and Statements	12
Section 7.04 Untrue Representations	12
Section 7.05 Litigation and Claims	12
Section 7.06 Non Solicitation	12
Section 7.07 Purchaser Deposit	13
ARTICLE VIII. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT AND OBLIGATIONS;
INDEMNIFICATION	13
Section 8.01 Survival	13
Section 8.02 Indemnification by the Seller and OSB	13
Section 8.03 Indemnification by the Purchaser	14
Section 8.04 Control of Litigation	14
ARTICLE IX. TERMINATION AND ABANDONMENT	16
Section 9.01 Right of Termination	16
Section 9.02 Notice of Termination	17
Section 9.03 Effect of Termination	17
Section 9.04 Termination Fee	17
ARTICLE X. MISCELLANEOUS	17
Section 10.01 Notices	17
Section 10.02 Entire Agreement	18
Section 10.03 GOVERNING LAW	18
Section 10.04 Severability	18
Section 10.05 Attorneys’ Fees and Costs	19
Section 10.06 Specific Performance	19
Section 10.07 Multiple Counterparts	19
Section 10.08 Rules of Construction	19
Section 10.09 Commissions	19
Section 10.10 Binding Agreement; No Assignment	19
Section 10.11 Time Is Of The Essence	20
Section 10.12 Publicity	20

ii

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of the 5th day of August, 2004, by and between WILSHIRE STATE BANK, a California state chartered bank (the “Purchaser”) and OSB FINANCIAL SERVICES, INC., a Texas corporation (the “Seller”), and joined in by OSB DELAWARE FINANCIAL SERVICES, INC., a Delaware corporation (the “Delaware Company”), and Orange Savings Bank, SSB, a Texas state savings bank (“OSB”).

W I T N E S S E T H:

WHEREAS, the Purchaser is a California state bank with its principal offices in Los Angeles, California;

WHEREAS, the Seller is a Texas corporation and registered bank holding company with its principal offices in Orange, Texas;

WHEREAS, the Seller owns all of the issued and outstanding shares of common stock of the Delaware Company;

WHEREAS, the Delaware Company is a Delaware corporation and registered bank holding company with its principal offices in Dover, Delaware;

WHEREAS, Seller indirectly owns, through the Delaware Company, all of the issued and outstanding shares of common stock of OSB, and all of the issued and outstanding shares of common stock (individually, a “Share,” and collectively, the “Shares”) of Orange Savings Bank of Texas, SSB, a Texas state savings bank with its principal offices located in Mauriceville, Texas (“OSBOT”);

WHEREAS, the Seller desires to cause the Delaware Company to sell the Shares for cash and the Purchaser desires to purchase the Shares from the Seller through the Delaware Company on the terms and conditions contained herein (the “Stock Acquisition”). Upon completion of the Stock Acquisition, the Purchaser shall be entitled to immediately engage in banking business in the State of Texas;

WHEREAS, the Stock Acquisition transaction contemplated by this Agreement is part of a series of integrated transactions by and among the Purchaser, the Seller, the Delaware Company, OSBOT and OSB, which other transactions include the affiliate merger of OSBOT with and into OSB with each of OSBOT and OSB surviving the merger (the “Affiliate Merger Transaction”), OSB’s establishment of branches at the former locations of OSBOT, the relocation by OSBOT of its domicile or main office to a location to be determined by the Purchaser in the city limits of Dallas, Texas, and the merger of OSBOT with and into Purchaser (the Affiliate Merger Transaction, the establishment of branches by OSB, and the relocation of the domicile or head office of OSBOT in the city limits of Dallas, Texas are herein described as the “Related Transactions”), which Related Transactions will be consummated in conjunction with the Closing (as herein defined) of the Stock Acquisition as well as any other transactions described in this Agreement; and

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WHEREAS, the Delaware Company joins this Agreement and appoints the Seller to act on its behalf in consummating the Stock Acquisition Transaction.

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual representations, warranties, covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the conditions set forth below, the parties, intending to be legally bound, undertake, promise, covenant and agree with each other as follows:

ARTICLE I.
PURCHASE AND SALE OF THE SHARES

Section 1.01           Acquisition of the Shares. On the terms and subject to the conditions contained in this Agreement, the Purchaser hereby agrees to purchase and the Seller hereby agrees to sell, convey, transfer and assign the Shares to the Purchaser, free and clear of all liens, security interests, pledges, encumbrances, buy-sell agreements, preemptive rights and adverse claims of every kind and character whatsoever.

Section 1.02           Purchase Price. As consideration for the sale of the Shares, the Purchaser shall pay the Seller the aggregate amount of $3,205,000 (the “Purchase Price”) in cash at the Closing, after consummation of the Related Transactions. At Closing, the Seller shall ensure that OSBOT has Retained Assets (as defined in Section 2.06) with a fair market value equal to $3,500,000, which shall include $500,000 in deposits made by the Purchaser or any of its related entities on or prior to the Closing Date (as defined below).

Section 1.03           Closing and Closing Date. The Stock Acquisition provided for in this Agreement shall be consummated at a closing (the “Closing”) to be held at a time and place mutually agreed upon by the Seller, and the Purchaser, which date (the “Closing Date”) shall be not later than ten (10) days following the receipt of all necessary regulatory, corporate and other approvals necessary for the consummation of the transactions contemplated in this Agreement and the Related Transactions (as required by Section 2.03 and Section 3.03 of this Agreement) and the expiration of any mandatory waiting periods.

Section 1.04           Actions to be Taken at the Closing by the Seller. At the Closing, after the consummation of the Related Transactions, the Seller shall execute and acknowledge (as appropriate) and deliver to the Purchaser such documents and certificates necessary to carry out the terms and provisions of this Agreement, including the following (all of such actions constituting conditions precedent to the Purchaser’s obligations to consummate hereunder):

A.            Certificates evidencing and representing the Shares, duly endorsed in blank or accompanied by stock powers executed in blank. The Shares shall be delivered to the Purchaser free and clear of any and all liens, pledges, security interests, encumbrances, buy-sell agreements, preemptive rights and adverse claims of every kind and character whatsoever.

B.            A certificate, dated as of the Closing Date, executed by the appropriate officers of the Seller, pursuant to which the Seller shall certify that all of the

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representations and warranties made in ARTICLE IV of this Agreement are true and correct in all material respects on and as of the Closing Date as if made on such date.

C.            Charter of OSBOT and authenticated copies of all corporate books and records, including, without limitation, the minute books and stock transfer records, and any other relevant authenticated documents of OSBOT.

D.            The written resignation of all executive officers and directors of OSBOT.

Section 1.05           Actions to be Taken at the Closing by the Purchaser. At the Closing, after the consummation of the Related Transactions, the Purchaser shall deliver to the Seller the Purchase Price for the Shares by one or more wire transfers.

Section 1.06           Further Assurances. At any time and from time to time after the Closing, at the request of any party to this Agreement arid without further consideration, any party so requested shall execute and deliver such other instruments and take such other actions as the requesting party may reasonably deem necessary or desirable in order to effect the transactions contemplated hereby.

ARTICLE II.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER

All obligations of the Purchaser are subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any or all of which may be waived in whole or in part by the Purchaser.

Section 2.01           Compliance with Representations, Warranties and Agreements. All representations and warranties made by the Seller in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing with the same force and effect as if such representations and warranties were made at and as of the Closing. The Seller shall have performed or complied in all material respects with all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by the Seller prior to or at the Closing.

Section 2.02           Proceedings and Documents. All actions, proceedings, instruments and documents required to effectuate this Agreement or incidental hereto shall be satisfactory in substance and form to the Purchaser, and the Purchaser shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request, including certified copies of all resolutions authorizing this Agreement and the transactions contemplated herein.

Section 2.03           Governmental and Regulatory Approvals. The Purchaser and Seller shall have obtained all governmental and regulatory approvals and consents necessary for the consummation of the transactions described in this Agreement on terms and conditions satisfactory to the Purchaser. Such approvals include, without limitation, the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) for the Purchaser to

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acquire control of OSBOT and for OSBOT to move its domicile to Dallas, Texas and to engage in the business of banking at such location and any other location in Texas thereafter.

Section 2.04           Closing of the Related Transactions. OSB and OSBOT shall have executed an Agreement and Plan of Merger (the “Affiliate Merger Agreement”) substantially in the form attached hereto as Exhibit A and shall have obtained the approval of the Texas Savings and Loan Department (the “S&L Department”) for the Affiliate Merger Transaction contemplated therein. Furthermore, the Purchaser and Seller shall have obtained (or caused OSBOT to obtain, as applicable) the approval of the S&L Department for OSBOT to relocate its head office or domicile to a location in the city limits of Dallas, Texas, designated by the Purchaser and for the establishment of a branch of OSBOT at the former main office location. The Seller shall have caused OSB to obtain the approval of the S&L Department for the establishment of branches of OSB at the former offices of OSBOT. The Related Transactions shall have been consummated prior to the Closing of the transactions contemplated by this Agreement.

Section 2.05           No Litigation. No action shall have been taken, and no statute, rule, regulation or order shall have been promulgated, enacted, entered, enforced or deemed applicable to this Agreement or the transactions contemplated hereby by any governmental authority or by any court, including the entry of a preliminary or permanent injunction, that would (a) make this Agreement or the transactions contemplated hereby illegal, invalid or unenforceable, (b) require the divestiture of a material portion of the assets of the Purchaser or OSBOT, except as contemplated by the Related Transactions, (c) impose material limits in the ability of any party to this Agreement to consummate the Agreement or the transactions contemplated hereby, or (d) if this Agreement or the transactions contemplated hereby are consummated, subject the Purchaser or any officer, director, shareholder or employee of the Purchaser to criminal or civil liability. No action or proceeding before any court or governmental authority shall be threatened, instituted or pending that would reasonably be expected to result in any of the consequences referred to in clauses (a) through (d) above.

Section 2.06           Retained Assets. The assets of OSBOT on the Closing Date, after consummation of the Related Transactions, shall consist entirely of cash (collectively, “Retained Assets”) in an amount equal to $3,500,000, which shall include $500,000 in deposits made by the Purchaser or any of its related entities on or prior to the Closing Date.

ARTICLE III.

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER

All obligations of the Seller under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any or all of which may be waived in whole or in part by the Seller:

Section 3.01           Compliance with Representations, Warranties and Agreements. All representations and warranties made by the Purchaser in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing with the same force and effect as if such representations and warranties were made at and as of the

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Closing. The Purchaser shall have performed or complied in all material respects with all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by the Purchaser prior to or at the Closing.

Section 3.02           Proceedings and Documents. All actions, proceedings, instruments and documents required to effectuate this Agreement or incidental hereto shall be satisfactory in substance and form to the Seller, and the Seller shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request, including certified copies of all proceedings authorizing this Agreement and the transactions contemplated hereby.

Section 3.03           Governmental and Regulatory Approvals. The Purchaser and Seller shall have obtained all governmental and regulatory approvals and consents necessary for the consummation of the transactions described in this Agreement on terms and conditions satisfactory to the Seller. Such approvals include, without limitation, the approval of the Federal Reserve for the Purchaser to acquire control of OSBOT and for OSBOT to move its domicile to Dallas, Texas and to engage in the business of banking at such location and any other location in Texas thereafter.

Section 3.04           Closing of the Related Transactions. OSB and OSBOT shall have executed the Affiliate Merger Agreement substantially in the form attached hereto as Exhibit A and shall have obtained the approval of the Texas Savings and Loan Department (the “S&L Department”) for the Affiliate Merger Transaction contemplated therein. Furthermore, the Purchaser and Seller shall have obtained (or caused OSBOT to obtain, as applicable) the approval of the S&L Department for OSBOT to relocate its head office or domicile to a location in the city limits of Dallas, Texas, designated by the Purchaser and for the establishment of a branch of OSBOT at the former main office location. The Seller shall have caused OSB to obtain the approval of the S&L Department for the establishment of branches of OSB at the former offices of OSBOT. The Related Transactions shall have been consummated prior to the Closing of the transactions contemplated by the Agreement.

Section 3.05           Deposit. The Purchaser or any of its related entities shall have deposited $500,000 into a depository account at OSBOT.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby makes the following representations, warranties and covenants to the Purchaser on behalf of itself and of the Delaware Company as of the date of this Agreement and as of the Closing Date.

Section 4.01         Ownership of the Shares. The Seller represents and warrants that it is the sole shareholder of the Delaware Company, and that the Delaware Company is the sole record and beneficial owner of the Shares. The Delaware Company has good and marketable title to the Shares and, on the Closing Date, shall have the absolute right to sell, assign and transfer the Shares free and clear of all liens, security interests, pledges, encumbrances, buy-sell agreements, preemptive rights or adverse claims of any kind or character whatsoever. The Seller represents

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and warrants that upon delivery of the Purchase Price for the Shares in accordance with this Agreement, good and marketable title to such shares shall be delivered to the Purchaser.

Section 4.02           Organization and Qualification of the Delaware Company and the Seller. The Delaware Company is a Delaware corporation and a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and is duly organized, validly existing and in good standing under the laws of the State of Delaware and all laws, rules and regulations applicable to bank holding companies. The Seller is a Texas corporation and a registered bank holding company under the BHCA, and is duly organized, validly existing and in good standing under the laws of the State of Texas and all laws, rules and regulations applicable to bank holding companies. Each of the Delaware Company and the Seller has all requisite corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated and to carry out its obligations under this Agreement.

Section 4.03           Organization and Qualification of the Bank. OSBOT is a Texas state savings bank, duly organized, validly existing and in good standing under the laws of the State of Texas and all laws, rules and regulations applicable to Texas state savings banks. OSBOT has all requisite corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated.

Section 4.04           Authority and Enforceability. The Seller has full legal capacity and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at law or in equity).

Section 4.05           No Breach of Contract. Neither the execution, delivery or performance of this Agreement, nor the consummation of the transactions contemplated hereby, nor the fulfillment of the terms hereof, will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under the Articles or Bylaws of the Seller or OSBOT or of any material agreement, indenture, instrument, lien, charge, encumbrance or undertaking to which any of the Seller or OSBOT is a party or by which any of the properties of the Seller or OSBOT may be bound or affected, and does not cause any lien, charge or other encumbrance to be created or imposed upon any such properties by reason thereof.

Section 4.06           Bank Capitalization. The entire authorized capital stock of OSBOT consists solely of 10,000,000 shares of common stock, par value $1.00 per share, of which 1,261,152 shares are issued and outstanding. There are no (i) other outstanding equity securities of any kind or character, (ii) outstanding subscriptions, options, convertible securities, rights, warrants, calls or other agreements or commitments of any kind issued or granted by, or binding upon, OSBOT to (A) purchase or otherwise acquire any security of or equity interest in OSBOT

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or (B) issue any shares of, restricting the transfer of or otherwise relating to shares of OSBOT’s capital stock. All Shares have been duly authorized, validly issued and are fully paid and nonassessable, and have not been issued in violation of the securities laws of the United States or any other applicable jurisdiction or in violation of the preemptive rights of any person.

Section 4.07           Compliance with Applicable Laws. OSBOT is not in material violation of its Articles or Bylaws, any applicable law, statute or regulation of any governmental agency, board, bureau or body relating to the conduct of its business and maintenance and operation of its properties or in violation or default with respect to any order, writ, injunction, decree or demand of any court or other governmental or regulatory authority, any license or regulation of any governmental agency, or in material default under any indenture, mortgage, lease, agreement or other instrument under which OSBOT is obligated, which violation or default, respectively, would result in a continuing liability of OSBOT that will not be assumed by OSB as part of the Related Transactions.

Section 4.08           No Consents Necessary. Except for such consents and approvals as the Purchaser and the Seller shall attempt to obtain as described in Section 2.03 and Section 3.03 of this Agreement, no consent, approval or order of any governmental or administrative board or body is required for the execution and delivery by the Seller of this Agreement and the delivery of the certificates representing the Shares.

Section 4.09           Filing of Tax Returns. OSBOT has filed or caused to be filed all tax returns required by law to be filed and has paid all taxes that OSBOT believes in good faith were due and payable before they have become delinquent. There is no proposed tax assessment against OSBOT. The amounts set up as provisions for current or deferred taxes on the financial statements are sufficient for the payment of all unpaid taxes (including any interest or penalties) of or on behalf of OSBOT applicable to the periods covered by the financial statements, and all years and periods prior thereto. No income tax liability of OSBOT has been asserted by the Internal Revenue Service or Texas Comptroller of Public Accounts for taxes in excess of those already paid.

Section 4.10           Books and Records. The minute books, stock certificate books and stock transfer ledgers of OSBOT, respectively, are complete and correct in all material respects, and there have been no transactions involving the business of OSBOT that were required to have been set forth therein and that have not been accurately so set forth.

Section 4.11           Regulatory Compliance. All reports, records and other documents or information required to be filed by OSBOT with any regulatory authority, including, without limitation, the FDIC, the S&L Department and the Internal Revenue Service, have been duly and timely filed, and all information and data contained in such reports, records or other documents is true, accurate and correct.

Section 4.12           Litigation; Lender Liability. Except as disclosed on Schedule 4.12, there is no action, lawsuit, claim, proceeding or investigation pending, or threatened against OSBOT or affecting OSBOT at law or in equity, or by or before any Federal, state, local or other governmental department, commission, board, agency or instrumentality, including without

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limitation any actions involving claims against OSBOT or its respective officers or directors. OSBOT is not in default with respect to any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality. Except as disclosed on Schedule 4.12, OSBOT is not presently engaged in any legal action as a defendant against a claim or counterclaim and is not presently engaged in any legal action to recover moneys due to it or damages sustained by it other than as a plaintiff in the normal course of OSBOT’s business.

Section 4.13           Insurance. Set forth on Schedule 4.13 is an accurate and complete list of all policies of insurance, including fidelity and bond insurance, of the Seller and its subsidiaries.

Section 4.14           Undisclosed Liabilities. Except for those liabilities expressly retained by OSBOT under the Affiliate Merger Agreement, on the Closing Date, OSBOT will have no other liabilities, debts or other obligations.

Section 4.15           Environmental Compliance. There are no hazardous materials in, on, underneath or around any real property owned or leased by OSBOT. Neither the Seller, OSBOT nor OSB has received any report or notice from any third party indicating or suggesting that there exists, or may exist, hazardous materials in, on, underneath or around any real property owned or leased by OSBOT. Neither the Seller, OSBOT nor OSB has any knowledge of any notice of violations of the city, county, state, federal, building, zoning, fire, health codes or ordinances, or other governmental regulations filed or issued against any real property owned or leased by OSBOT.

Section 4.16           Employee Benefit Plans. After the Closing, the Purchaser shall have no liability to any person (including without limitation, the Department of Labor, Internal Revenue Service and the Pension Benefit Guaranty Corporation) under or with respect to any Employee Benefit Plan of OSBOT. For purposes of this Agreement, the term “Employee Benefit Plans” means (i) all retirement and deferred compensation plans, including defined benefit, 401(k), savings, thrift, profit sharing, money purchase pensions, ESOP, Simplified Employee Pension and nonqualified deferred compensation plans (e.g., deferred bonus plans, elective deferral plans and supplemental executive plans), (ii) all welfare plans, including life, health, accident, Accidental Death & Dismemberment, dental, vision, disability (long and short term), hospitalization, cafeteria, sick pay policies, unemployment reimbursement other than under state law, and severance pay, (iii) retiree benefits, including medical benefits, (iv) employment agreements and independent contractor arrangements, and (v) stock option plans and (vi) other employee benefits including vacation policies, personal day and noncash arrangements.

ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Section 5.01 Organization and Qualification of the Purchaser. The Purchaser is a California state banking association and is duly organized, validly existing and in good standing under the laws of the State of California and all laws, rules and regulations applicable to California state banking associations. The Purchaser has all requisite corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its

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properties and assets as now owned, leased or operated and to carry out its obligations under this Agreement.

Section 5.02Authority and Enforceability. The Purchaser has full legal capacity and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at law or in equity).

Section 5.03No Breach of Contract. Neither the execution, delivery or performance of this Agreement, nor the consummation of the transactions contemplated hereby, nor the fulfillment of the terms thereof, will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under the Articles or Bylaws of the Purchaser or of any material agreement, indenture, instrument, lien, charge, encumbrance or undertaking to which any of the Purchaser is a party or by which any of the properties of the Purchaser may be bound or affected, and does not cause any lien, charge or other encumbrance to be created or imposed upon any such properties by reason thereof.

Section 5.04No Consents Necessary. Except for such consents and approvals as the Purchaser and the Seller shall attempt to obtain as described in Section 2.03 and Section 3.03 of this Agreement, no consent, approval or order of any governmental or administrative board or body is required for the execution and delivery by the Purchaser of this Agreement and the payment of the Purchase Price for the Shares.

ARTICLE VI.
OBLIGATIONS AND COVENANTS OF THE SELLER

The Seller hereby covenants as set forth in this ARTICLE VI.

Section 6.01Best Efforts. The Seller shall promptly file or cause to be filed all necessary applications to obtain any necessary governmental or regulatory approvals for the transactions described in this Agreement and the Related Transactions, shall promptly respond to all requests for additional information requested in connection with such applications, shall use its best efforts to obtain such approvals in a timely manner, and shall perform or cause to be satisfied each covenant or condition specified in this Agreement to be performed or satisfied by the Seller.

Section 6.02Confidentiality. The Seller shall hold in confidence all information furnished to the Seller by the Purchaser, except as disclosure may be necessary to obtain any governmental or regulatory approvals of the transactions described in this Agreement. In the event this Agreement is terminated, any and all copies of the books and records of the Purchaser received by the Seller shall be returned to the Purchaser.

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Section 6.03Compliance with Transfer Requirements. On or before the Closing Date, the Seller shall take all necessary steps and proceedings to enable it to effect at the Closing a valid, indefeasible sale and transfer of the Shares to the Purchaser.

Section 6.04Information for Applications and Statements. The Seller shall promptly furnish or cause OSBOT to promptly furnish to the Purchaser, within fifteen (15) business days after the Purchaser’s request, all information concerning OSBOT required to be included in any application or filing to be made by the Purchaser to or filed by the Purchaser with any governmental body in connection with the transactions contemplated by this Agreement, or in connection with any related transactions during the pendency of this Agreement, and the Seller represents and warrants that, to the best of its knowledge, all information so furnished for such statements and applications shall be true and correct in all material respects. The Seller shall cause the Delaware Company, OSBOT and OSB to otherwise fully cooperate with the Purchaser in the filing of any applications or other documents necessary to consummate the transactions contemplated by this Agreement.

Section 6.05Required Acts. Prior to the Closing, the Seller shall, and shall cause the Delaware Company and OSBOT to, unless otherwise permitted in writing by the Purchaser:

A.operate only in the ordinary course of business and consistent with past banking practices;

B.maintain in full force and effect all insurance policies now in effect or renewals thereof and, except as required by prudent business practices that do not jeopardize insurance coverage, give all notices and present all claims under all insurance policies in due and timely fashion;

C.timely file all reports required to be filed with governmental authorities and observe and conform to all applicable laws, rules, regulations, ordinances, codes, orders, licenses and permits, except those being contested in good faith by appropriate proceedings;

D.timely file all tax returns required to be filed by it and promptly pay all taxes, assessments, governmental charges, duties, penalties, interest and fines that become due and payable, except those being contested in good faith by appropriate proceedings; and

E.withhold from each payment made to each of its employees the amount of all taxes required to be withheld therefrom and pay the same to the proper tax receiving authorities.

Section 6.06Prohibited Acts. Prior to the Closing, the Seller shall not permit the Delaware Company or OSBOT to, without the prior written consent of the Purchaser:

A.change OSBOT’s Articles or Bylaws or its authorized capital stock;

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B.issue, reserve for issuance, grant, sell or authorize the issuance of any shares of OSBOT’s capital stock or other securities or subscriptions, options, warrants, calls, rights or commitments of any kind relating to the issuance thereto;

C.terminate, cancel or surrender any contract, lease or other agreement or suffer any damage, destruction or loss which, in any case or in the aggregate, would result in any continuing liability of OSBOT that will not be assumed by OSB or the Seller as part of the Related Transactions;

D.incur any liabilities, which would not be assumed by OSB under the Affiliate Merger Agreement; or

E.engage in any conduct in violation of the terms and conditions of this Agreement.

Section 6.07Untrue Representations. The Seller shall promptly notify the Purchaser in writing if the Seller becomes aware of any fact or condition that makes untrue, or shows to have been untrue, in any material respect, any representation or warranty made in this Agreement or that results in the Seller’s failure to comply with any covenant, condition or agreement contained in this Agreement.

Section 6.08Litigation and Claims. The Seller shall promptly notify the Purchaser in writing of any litigation, or of any claim, controversy or contingent liability that might be expected to become the subject of litigation, against OSBOT or affecting any of its properties, and the Seller shall promptly notify the Purchaser of any legal action, suit or proceeding or judicial, administrative or governmental investigation, pending or threatened against OSBOT that questions or might question the validity of this Agreement or any actions taken or to be taken by the Seller pursuant hereto or seeks to enjoin or otherwise restrain the transactions contemplated hereby. As soon as possible after the closing, Seller agrees to take all such reasonable action and make such necessary filings in the appropriate courts to substitute OSB for OSBOT and to cause OSBOT to be dismissed with prejudice from any litigation cited on Schedule 4.12, provided, however, Seller and/or OSB shall have no obligation to take any action which, in the sole judgement of Seller’s counsel, would jeopardize Seller’s prospects for prevailing in such litigation.

ARTICLE VII.
OBLIGATIONS AND COVENANTS OF THE PURCHASER

The Purchaser hereby covenants as set forth in this ARTICLE VII:

Section 7.01Best Efforts. The Purchaser shall promptly file or cause to be filed all necessary applications to obtain any necessary governmental or regulatory approvals for the transactions described in this Agreement and the Related Transactions, shall promptly respond to all requests for additional information requested in connection with such applications, shall use its best efforts to obtain such approvals in a timely manner, and shall perform or cause to be satisfied each covenant or condition specified in this Agreement to be performed or satisfied by

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the Purchaser. In the event that it becomes necessary to obtain the approval of its shareholders, the Purchaser shall use its best efforts to obtain such approval.

Section 7.02Confidentiality. The Purchaser shall hold in confidence all information furnished to the Purchaser by the Seller, OSBOT and OSB, except as disclosure may be necessary to obtain any governmental or regulatory approvals of the transactions described in this Agreement. In the event this Agreement is terminated, any and all copies of the books and records of the Seller, the Delaware Company, OSBOT, and OSB received by the Purchaser shall be returned to Seller.

Section 7.03Information for Applications and Statements. The Purchaser shall promptly furnish to the Seller, OSBOT or OSB, within fifteen (15) business days after the date of any request, all information concerning the Purchaser required to be included in any application or filing to be made by the Seller, OSBOT or OSB to or filed by the Seller, OSBOT or OSB with any governmental body in connection with the transactions contemplated by this Agreement, or in connection with any related transactions during the pendency of this Agreement, and the Purchaser represents and warrants that, to the best of its knowledge, all information so furnished for such statements and applications shall be true and correct in all material respects. The Purchaser shall otherwise fully cooperate with the Seller, the Delaware Company, OSBOT and OSB in the filing of any applications or other documents necessary to consummate the transactions contemplated by this Agreement. The Purchaser shall provide copies of the non-public portion of the any regulatory applications to the Seller.

Section 7.04Untrue Representations. The Purchaser shall promptly notify the Seller in writing if the Purchaser becomes aware of any fact or condition that makes untrue, or shows to have been untrue, in any material respect, any representation or warranty made in this Agreement or that results in the Purchaser’s failure to comply with any covenant, condition or agreement contained in this Agreement.

Section 7.05Litigation and Claims. The Purchaser shall promptly notify the Seller of any legal action, suit or proceeding or judicial, administrative or governmental investigation pending or threatened against the Purchaser that questions or might question the validity of this Agreement or any actions taken or to be taken by the Purchaser pursuant hereto or seeks to enjoin or otherwise restrain the transactions contemplated hereby.

Section 7.06Non Solicitation. For a period of two (2) years commencing as of the Closing Date, neither the Purchaser nor the Purchaser’s direct or indirect subsidiaries, nor the Purchaser’s successors-in-interest shall knowingly (i) directly solicit the banking business of any persons who are customers of OSBOT on the Closing Date, including, but not limited to, deposit products, except for general solicitation of banking business which is not specifically targeted to persons who are customers of OSBOT on the Closing Date, or (ii) recruit, hire, or attempt to recruit or hire, directly or by assisting others, any person who is, or within the preceding six (6) months was, an employee of OSBOT. Notwithstanding the foregoing, Purchaser may hire any person who was employed at OSBOT in any capacity other than as an officer, if and only, if such person voluntary seeks employment with Purchaser and Purchaser did not directly or indirectly attempt to recruit or hire such person.

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Section 7.07Purchaser Deposit. On or prior to the Closing Date, the Purchaser or any of its related entities shall deposit $500,000 into a depository account at OSBOT.

ARTICLE VIII.
SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT
AND OBLIGATIONS; INDEMNIFICATION

Section 8.01Survival.    The representations, warranties, obligations, covenants, indemnities and agreements of the Seller and the Purchaser contained in this Agreement shall survive the Closing Date and shall continue thereafter for a period of four (4) years, except for the representations and warranties contained in Section 4.01, Section 4.06, Section 4.09, Section 4.14 and Section 4.15 and the indemnities set forth in Section 8.02C (only with respect to employment related liabilities) which shall survive without limitation.

Section 8.02Indemnification by the Seller and OSB. The Seller and OSB agree, jointly and severally, effective as of the Closing and thereafter, to pay, and to indemnify, save, defend and hold harmless the Purchaser and each of its officers, directors, shareholders and representatives and their respective heirs, successors and assigns (collectively, “Insiders”), from and against, and shall reimburse the Purchaser and its Insiders with respect to, any and all damages, liabilities, losses, obligations, actions, suits, disbursements, claims, deficiencies, penalties, interest, expenses, fines, assessments, charges and costs (including, without limitation, reasonable attorneys’ and expert witness’ fees, costs of investigation and court costs) of every kind (collectively, “Losses”), imposed on, incurred by or asserted against the Purchaser or its Insiders (or any of them) in any way relating to or arising from or out of:

A.a material breach of or in any statement, representation or warranty of the Seller contained in this Agreement, or any schedule, certificate or other document delivered pursuant hereto or as part of the transactions contemplated hereby the result of which, either separately or in the aggregate, causes the Purchaser or its affiliates damage in an amount equal to or in excess of $10,000;

B.any legal, quasi-legal or administrative proceedings of any nature or kind involving the Seller, the Purchaser, Delaware Company, OSB or OSBOT based on (i) actions or omissions of the Seller, the Delaware Company, OSB or OSBOT occurring prior to the Closing Date, or (ii) circumstances relating to the Seller, the Delaware Company, OSB or OSBOT existing at the Closing Date;

C.any undisclosed and/or unforeseen liability of OSBOT (including, without limitation, any liability related to or arising from or out of any employment relationship of OSBOT) that actually or arguably existed prior to the Closing, whether or not such liability is assumed by OSB;

D.a material breach of any covenant of the Seller or the failure of the Seller to perform any material agreement, covenant or obligation of the Seller contained in this Agreement or in any other agreement or document executed pursuant to this Agreement;

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E.any liability arising out of the Affiliate Merger Agreement between OSBOT and OSB; and

F.any liability arising out of an “Environmental Condition.” For purposes of this Agreement, “Environmental Condition” means any condition with respect to soil, surface waters, groundwaters, land, stream sediments, surface or subsurface strata, ambient air and any enviromnental medium comprising or surrounding the real property and tangible personal property ever owned, leased or used by OSBOT prior to and as of the date of this Agreement, and immediately prior to effective time of the Stock Acquisition, whether or not yet discovered or foreseen, which gives rise to any monetary damage, loss, cost or expense or claim, demand or order for or imposing financial liability against Purchaser or OSBOT by any third party.

Section 8.03Indemnification by the Purchaser. The Purchaser hereby agrees, effective as of the Closing, to pay, and to indemnify, save and hold harmless the Seller and each of its Insiders and their respective heirs, successors and assigns from and against, and shall reimburse the Seller and its Insiders with respect to, any and all Losses imposed on, incurred by or asserted against the Seller or its Insiders (or any of them) in any way relating to or arising from or out of:

A.a material breach of or in any statement, representation or warranty of the Purchaser contained in this Agreement, or any schedule, certificate or other document delivered pursuant hereto or as part of the transactions contemplated hereby the result of which, either separately or in the aggregate, causes the Seller or its affiliates damage in an amount equal to or in excess of $10,000;

B.any legal, quasi-legal or administrative proceedings of any nature or kind involving the Purchaser based on actions or omissions occurring or circumstances existing before the Closing Date or any such proceedings involving OSBOT based on actions or omissions occurring or circumstances existing after the Closing Date; and

C.a material breach of any covenant of the Purchaser or the failure of the Purchaser to perform any material agreement, covenant or obligation of the Purchaser contained in this Agreement or in any other agreement or document executed pursuant to this Agreement,

Section 8.04Control of Litigation.

A.Promptly, or in any event within ten (10) calendar days (in the case of service of legal process) or within thirty (30) calendar days (in the case of any other claim), following receipt by any party to be indemnified under the provisions of this ARTICLE VIII (the “Indemnitee”) of notice of any action, suit, proceeding, claim, demand or assessment (each, an “Action”) against the Indemnitee that might give rise to a claim pursuant to Section 8.01, Section 8.02 or Section 8.03, the Indemnitee shall give written notice thereof to the party or parties obligated to provide such indemnification under the provisions of this ARTICLE VIII (collectively, the “Indemnitor”) indicating the nature of such claim, the basis therefor and the estimated amount thereof. Failure to give any notice provided hereunder shall in no way be deemed a forfeiture of any

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Indemnitee’s rights to be indemnified hereunder; provided, however, if the Indemnitor shall have been prejudiced in any material respect by such failure so to notify the Indemnitor, the Indemnitor shall have the right to set off against any amounts payable or that become payable by the Indemnitor under this Agreement the amount by which the Indemnitor has been damaged as a result of the failure so to notify the Indemnitor. A claim for indemnity may, at the option of the Indemnitee, be asserted as soon as any claim has been asserted by a third party in writing, regardless of whether actual harm has been suffered or out-of-pocket expenses incurred.

B.At any time after the Indemnitee gives notice to the Indemnitor of a claim being made against the Indemnitee for which a claim for indemnity is being asserted, to the extent that such claim is not being defended by any third party under the terms of any applicable insurance policy or policies, the Indemnitee shall permit the Indemnitor, at the option and expense of the Indemnitor, to assume the complete defense of such Action with full authority to conduct such defense and to settle or otherwise dispose of the same (except as hereinafter provided), and the Indemnitee will reasonably cooperate in such defense. In order to assume such defense, Indemnitor must notify Indemnitee in writing of its election to do so within ten (10) calendar days following receipt of notice of the claim from Indemnitee; in the event that Indemnitor does not so notify Indemnitee within such ten (10) calendar day period, Indemnitor shall be deemed to have elected not to assume such defense. After notice to the Indemnitee of the Indemnitor’s election to assume the defense of such Action as provided above, the Indemnitor shall be liable to the Indemnitee for such legal or other expenses subsequently incurred at the request of the Indemnitor by the Indemnitee in connection with the defense thereof.

C.The Indemnitor will not, in defense of any such Action, except with the consent of the Indemnitee, consent to the entry of any judgment or enter into any settlement that does not include, as an unconditional term thereof, the release by claimant or plaintiff of Indemnitee from all claims and/or liability in respect thereof

D.As to those Actions with respect to which the Indemnitor does not elect to assume control of the defense, (i) the Indemnitee will afford the Indemnitor an opportunity to participate in such defense, at the Indemnitor’s own cost and expense; (ii) the Indemnitee will not settle or otherwise dispose of any of the same without the consent of the Indemnitor, which consent will not be unreasonably withheld; and (iii) the Indemnitor agrees to reasonably cooperate in such defense.

E.The Indemnitor shall make payments to the Indemnitee, pursuant to the provisions hereof, with respect to Actions of third parties as follows: with respect to out-of-pocket expenses of the Indemnitee, on demand as incurred, and, with respect to amounts and fees owed to third parties, to the extent not paid directly to such third parties by the Indemnitor, on demand at the time of payment by the Indemnitee to such third party.

F.The liability of the Indemnitor hereunder shall be subject to the following limitations:

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(i)Subject to the provisions of 8.04E with respect to out-of-pocket expenses of Indemnitee, the Indemnitor shall pay claims hereunder when a claim against the Indemnitee or its Insiders has been established by a final judgment in litigation with a third party in which the Indemnitor has assumed the defense, or by a settlement with a third party consented to in writing by the Indemnitee; payment of other claims as to which the Indemnitee may contest its liability, or claims not involving third parties, shall be made when the dispute is settled either by litigation or consent;

(ii)payments for amounts due the Indemnitee or its Insiders hereunder shall be paid by either cash or cashier’s check; and

(iii)the Indemnitor shall not be liable for any claims covered by the indemnities under Section 8.01, Section 8.02 and Section 8.03 unless the Indemnitor has been notified of such claims pursuant to Section 8.04 within a period four (4) years from the Closing Date; provided, however, this provision shall not apply to claims under Section 4.01, Section 4.06, Section 4.09, Section 4.14 and Section 4.15 as to which notice may be given at any time.

ARTICLE IX.
TERMINATION AND ABANDONMENT

Section 9.01Right of Tennination. This Agreement and the transactions contemplated hereby may be teiminated and abandoned at any time prior to or at the Closing as follows, and in no other manner:

A.By the mutual consent of the Purchaser and the Seller.

B.By either the Seller or the Purchaser unless, prior to December 31, 2004, (i) the conditions precedent to such parties’ obligations specified in ARTICLE II and ARTICLE III, respectively, hereof have been met or waived in writing and (ii) the Closing shall have been consummated.

C.By either the Purchaser or the Seller if any of the transactions contemplated by this Agreement are disapproved by any regulatory authority whose approval is required to consummate such transactions or if any court of competent jurisdiction or other governmental body shall have issued an order, decree or ruling or taken any other action restraining, enjoining, invalidating or otherwise prohibiting the Agreement or the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and nonappealable.

D.By the Purchaser or Seller if either reasonably determines, in good faith and after consulting with counsel, there is substantial likelihood that any necessary regulatory approval will not be obtained or will be obtained only upon a condition or conditions that make it inadvisable to proceed with the transactions contemplated by this Agreement.

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E.By the Purchaser, if the Seller fails to comply in any material respect with any of its covenants or agreements contained in this Agreement or in any other agreement contemplated hereby and such failure shall not have been cured within a period of thirty (30) calendar days after notice from the Purchaser, or if any of the representations or warranties of the Seller contained herein or therein shall be inaccurate in any material respect.

F.By the Seller, if the Purchaser fails to comply in any material respect with any of its covenants or agreements contained in this Agreement or in any other agreement contemplated hereby and such failure shall not have been cured within a period of thirty (30) calendar days after notice from the Seller, or if any of the representations or warranties of the Purchaser contained herein or therein shall be inaccurate in any material respect.

G.By Purchaser, if Purchaser reasonably determines, in good faith, that an Environmental Condition exists which is reasonably likely to have a material adverse effect on the Purchaser or OSBOT.

Section 9.02Notice of Termination. The power of termination provided for by Section 9.01 hereof may be exercised only by a notice given in writing, as provided in Section 10.01 of this Agreement.

Section 9.03Effect of Termination. Without limiting any other relief to which either party hereto may be entitled for breach of this Agreement, in the event of the termination and abandonment of this Agreement pursuant to the provisions of Section 9.01 hereof, no party to this Agreement shall have any further liability or obligation in respect of this Agreement.

Section 9.04Termination Fee. In the event that (i) this Agreement is terminated by the Purchaser or the Seller other than as permitted in Section 9.01 (such party referred to herein as the “Terminating Party”), or (ii) either the Purchaser or the Seller refuses to permit the consummation of the transactions contemplated by this Agreement within the time periods specified in Section 1.03 (such party referred to herein as the “Breaching Party”), then such Terminating Party or Breaching Party, as the case may be, shall, within three (3) business days following such termination, pay a termination fee to the other party in the amount of $100,000; provided, however, that in the event that the Seller is the Terminating Party or the Breaching Party, as the case may be, the termination fee shall be increased by the amount of any brokerage fees paid or payable by the Purchaser in connection with the transactions contemplated by this Agreement, which amount shall not exceed $20,000.

ARTICLE X.
MISCELLANEOUS

Section 10.01Notices. Any and all payments (other than payments at the Closing), notices, requests, instructions and other communications required or permitted to be given under this Agreement after the date hereof by any party hereto to any other party may be delivered personally or by nationally recognized overnight courier service or sent by mail or (except in the case of payments) by telex or facsimile transmission, at the respective addresses or transmission

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numbers set forth below and shall be effective (a) in the case of personal delivery, telex or facsimile transmission, when received; (b) in the case of mail, upon the earlier of actual receipt or three (3) business days after deposit in the United States Postal Service, first class certified or registered mail, postage prepaid, return receipt requested; and (c) in the case of nationally-recognized overnight courier service, one (1) business day after delivery to such courier service together with all appropriate fees or charges and instructions for such overnight delivery. The parties may change their respective addresses and transmission numbers by written notice to all other parties, sent as provided in this Section 10.01. All communications must be in writing and addressed as follows:

IF TO THE SELLER:

Mr. Darby Byrd

President

OSB Financial Services, Inc.
812 North 16th Street

Orange, Texas 77631

Telecopy: (409) 988-7759

IF TO THE PURCHASER:

Mr. Brian Cho

Wilshire State Bank

3200 Wilshire Boulevard

Los Angeles, California 90010-1302
Telecopy: (213) 427-6584

Section 10.02Entire Agreement. This Agreement is part of a series of integrated transactions between the parties hereto. This Agreement together with the other documents executed by the parties in connection with the Related Transactions shall constitute the entire agreement between the parties hereto with respect to the transactions contemplated hereby. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by the party against which enforcement of the amendment, modification or supplement is sought

Section 10.03GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (INCLUDING THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF TEXAS, WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE OF LAW.

Section 10.04Severability. In the event that any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, then (a) such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were not a part hereof; (b) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid or

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unenforceable provision or by its severance from this Agreement; and (c) there shall be added automatically as a part of this Agreement a provision as similar in terns to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable.

Section 10.05         Attorneys’ Fees and Costs. In the event attorneys’ fees or other costs are incurred to secure performance of any of the obligations herein provided for, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or defense, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred therein.

Section 10.06         Specific Performance. Each of the parties hereto acknowledges that the other parties would be irreparably damaged and would not have an adequate remedy at law for money damages in the event that any of the covenants contained in this Agreement were not performed in accordance with its terms or otherwise were materially breached. Each of the parties hereto therefore agrees that, without the necessity of proving actual damages or posting bond or other security, the other party shall be entitled to temporary or permanent injunction or injunctions to prevent breaches of such performance and to specific enforcement of such covenants in addition to any other remedy to which they may be entitled, at law or in equity.

Section 10.07         Multiple Counterparts. For the convenience of the parties hereto, this Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all counterparts hereof so executed by the parties hereto, whether or not such counterpart shall bear the execution of each of the parties hereto, shall be deemed to be, and shall be construed as, one and the same Agreement. A telecopy or facsimile transmission of a signed counterpart of this Agreement shall be sufficient to bind the party or parties whose signature(s) appear thereon.

Section 10.08         Rules of Construction. The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Each use herein of the masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and vice versa, in each case as the context requires or as it is otherwise appropriate. The word “or” is used in the inclusive sense.

Section 10.09         Commissions. The Seller and the Purchaser agree and represent to each other that there are no commissions due to any broker or any other person relating to the transactions that are the subject of this Agreement, and each party hereto agrees to indemnify and hold harmless the other parties hereto from any commission due as a result of its actions with respect to this transaction.

Section 10.10         Binding Agreement; No Assignment. This Agreement shall be binding upon and inure to the benefit of each party hereto, its successors and assigns. No party to this Agreement shall assign this Agreement, by operation of law or otherwise, in whole or in part, without the prior written consent of the other parties, provided, that the Purchaser may assign its rights under this Agreement to an affiliate or subsidiary.

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Section 10.11         Time Is Of The Essence. With regard to all dates and time periods set forth or referred to in the Agreement, time is of the essence.

Section 10.12         Publicity. Prior to Closing, the Seller and the Purchaser agree to communicate with each other and cooperate with each other prior to any public disclosure of this transaction. The Purchaser and the Seller agree- that no public release or announcement concerning the twins of the transactions contemplated by this Agreement shall be issued by any party without the prior consent of the other parties, except as such release or announcement may be required by law or any agreement to which any party is subject, in which case the party required to make the release or announcement shall allow the other parties reasonable time to comment on such release announcement in advance of such issuance.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Purchaser, the Seller, the Delaware Company, and OSB have caused this Agreement to be executed as of the date first above written.

WILSHIRE STATE BANK,

a California state banking association

/s/ Brian Cho

Brian Cho,

Senior Vice President and Chief Financial Officer

OSB FINANCIAL SERVICES, INC.,

a Texas corporation

/s/ Darby Byrd

Darby Byrd,

President

JOINED BY:

OSB DELAWARE FINANCIAL

SERVICES, INC., a Delaware corporation

/s/ Darby Byrd

Darby Byrd,

President

ORANGE SAVINGS BANK, SSB, a Texas

state savings bank

/s/ Darby Byrd

Darby Byrd,

President and Chief Executive Officer

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EXHIBIT A

AFFILIATE MERGER AGREEMENT

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Merger Agreement”), is made as of the      day of August 2004 by and between Orange Savings Bank, SSB, a Texas state savings bank located in Orange, Texas (“OSB”), and Orange Savings Bank of Texas, a Texas state savings bank located in Mauriceville, Texas (“OSBOT”).

W I T N E S S E T H:

A.            OSB is a Texas state savings bank duly organized and existing under the laws of the State of Texas, having its principal office in the City of Orange, County of Orange, State of Texas, with authorized capital stock consisting of 25,000 shares of common stock, par value $10.00 per share (the “OSB Stock”), all of which are issued and outstanding.

B.            OSBOT is a Texas state savings bank, duly organized and existing under the laws of the Texas, having its principal office in the City of Mauriceville, County of Orange, State of Texas, with authorized capital stock consisting of 10,000,000 shares of common stock, par value $1.00 per share (the “OSBOT Stock”), of which 1,261,152 shares are issued and outstanding;

C.            A majority of the Boards of Directors of each of OSB and OSBOT, pursuant to the authority given by and in accordance with the provisions of Section 92.351 of the Texas Finance Code (“Section 92.351”), have approved this Merger Agreement pursuant to which OSB and OSBOT shall be merged (the “Merger”) and have authorized the execution hereof; and

D.            As and when required by the provisions of this Merger Agreement, all such action as may be necessary or appropriate shall be taken by OSB and OSBOT in order to consummate the Merger.

NOW, THEREFORE, in consideration of the premises, OSB and OSBOT hereby agree that OSB and OSBOT shall be merged on the following terms and conditions:

1.             Merger of OSB and OSBOT. At the Effective Time (as defined in Section 12 of this Merger Agreement), OSB and OSBOT shall be merged pursuant to the provisions of Section 92.351.

2.             Effects of the Merger. At the Effective Time, both OSBOT and OSB shall survive the Merger. At the Effective Time, all rights, title and interests to all real estate and other property owned by OSB and OSBOT, other than $3,500,000 in cash, which amount shall include $500,000 in deposits (the “Deposit”) made by Wilshire Bancorp, Inc., a California corporation, or any its related entities, and the charter, articles of association, bylaws and corporate records of OSBOT (collectively, the “Retained Assets”), shall be allocated to and vested in OSB without reversion or impairment, without further act or deed, and without any transfer or assignment having occurred, but subject to any existing liens or encumbrances thereon. At the Effective Time, OSBOT shall retain solely the right, title and interests to the Retained Assets, with all other real estate and other property being allocated to and vested in OSB at the Effective Time. At the Effective Time, all liabilities and obligations of OSBOT (other than the Deposit) shall be allocated to OSB, and OSB shall be the sole obligor therefor and

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no other party to the Merger shall be liable therefor. At the Effective Time, OSB shall be obligated for the payment of the fair value of any shareholder of OSBOT or OSB who has complied with Article Five of the Texas Business Corporation Act for the recovery of the fair value of his shares.

3.             Title of Banks. The title of OSB will not change as a result of the Merger. The title of OSBOT will not change as a result of the Merger.

4.             Locations. At the Effective Time, (i) the existing principal office of OSB located at 812 North 16th Street, Orange, Texas, shall remain the principal office of OSB following the Merger, (ii) the existing principal office of OSBOT shall be relocated to 12300 Ford Road, Suite 348, Dallas, Texas 75234, (iii) the branches of OSB existing immediately prior to the Merger shall remain branches of OSB after consummation of the Merger, and (iv) the former location of the principal office and all of the branches of OSBOT existing immediately prior to the Merger will become branch offices of OSB.

5.             Articles of Association and Bylaws. The respective Articles of Association and Bylaws of OSBOT and OSB will not change as a result of the Merger.

6.             Directors and Officers. The officers and directors of OSBOT and OSB shall remain as the officers and directors for their respective entities following the Merger.

7.             Conversion of OSB Stock and OSBOT Stock. At the Effective Time, all shares of OSBOT Stock outstanding at the Effective Time shall remain outstanding and held by the holder thereof as of the Effective Time. At the Effective Time, all shares of OSB Stock outstanding at the Effective Time shall remain outstanding and held by the holder thereof as of the Effective Time.

8.             Shareholder Approval. This Merger Agreement shall be submitted for approval to the sole shareholder of OSB and to the sole shareholder of OSBOT by written consent. Upon approval by the sole shareholder of OSB and the sole shareholder of OSBOT, this Merger Agreement shall be made effective as soon as practicable thereafter in the manner provided in Section 12 hereof.

9.             Conditions to Consummation of the Merger. All obligations of the parties under this Merger Agreement are subject to the receipt of all necessary regulatory approvals prior to the Effective Time.

10.           Termination. This Merger Agreement may be terminated and abandoned at any time prior to the Effective Time, whether before or after action thereon by the shareholder of OSB and OSBOT.

11.           Waiver, Amendment and Modification. Any of the terms or conditions of this Merger Agreement may be waived at any time, whether before or after action thereon by the shareholder of OSB or OSBOT, by the party that is entitled to the benefits thereof. This Merger Agreement may be modified or amended at any time, whether before or after action thereon by

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the shareholder of OSB or OSBOT, by action of both OSB and OSBOT. Any waiver, modification or amendment of this Merger Agreement shall be in writing.

12.           Effective Time. Subject to the terms and conditions specified in this Merger Agreement and upon satisfaction of all requirements of law, the Merger shall become effective at the opening of business on the date specified in the certificate of merger to be issued by the Texas Savings and Loan Department, such time being herein called the “Effective Time.”

13.           Multiple Counterparts. For the convenience of the parties hereto, this Merger Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all counterparts hereof so executed by the parties hereto, whether or not such counterpart shall bear the execution of each of the parties hereto, shall be deemed to be, and shall be construed as, one and the same Merger Agreement. A telecopy or facsimile transmission of a signed counterpart of this Merger Agreement shall be sufficient to bind the party or parties whose signature(s) appear thereon.

14.           Governing Law. THIS MERGER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

15.           Further Assurances. Each party hereto agrees from time to time, as and when requested by the other party hereto, or by its successors or assigns, to execute and deliver, or cause to be executed and delivered, all such deeds and instruments and to take or cause to be taken such further or other acts, either before or after the Effective Time, as may be deemed necessary or desirable in order to vest in and confirm to OSBOT title to and possession of any assets of OSB acquired or to be acquired by reason of or as a result of the Merger and otherwise to carry out the intent and purposes hereof, and the officers and directors of the parties hereto are fully authorized in the name of their respective corporate names to take any and all such actions.

16.           Assignment. This Merger Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but no party to this Merger Agreement shall assign this Merger Agreement, by operation of law or otherwise, in whole or in part, without the prior written consent of the other parties. Any assignment made or attempted in violation of this Section 16 shall be void and of no effect.

17.           Severability. In the event that any provision of this Merger Agreement is held to be illegal, invalid or unenforceable under present or future laws, then (a) such provision shall be fully severable and this Merger Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were not a part hereof; (b) the remaining provisions of this Merger Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid or unenforceable provision or by its severance from this Merger Agreement; and (c) there shall be added automatically as a part of this Merger Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable.

18.           Specific Performance. Each of the parties hereto acknowledges that the other parties would be irreparably damaged and would not have an adequate remedy at law for money

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damages in the event that any of the covenants contained in this Merger Agreement were not performed in accordance with its terms or otherwise were materially breached. Each of the parties hereto therefore agrees that, without the necessity of proving actual damages or posting bond or other security, the other party shall be entitled to temporary and/or permanent injunction or injunctions to prevent breaches of such performance and to specific enforcement of such covenants in addition to any other remedy to which they may be entitled, at law or in equity.

19.           Rules of Construction. Descriptive headings as to the contents of particular sections are for convenience only and shall not control or affect the meaning, construction or interpretation of any provision of this Merger Agreement. Each use herein of the masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and vice versa, in each case as the context requires or as it is otherwise appropriate.

20.           Articles, Sections, Exhibits and Schedules. All articles and sections referred to herein are articles and sections, respectively, of this Merger Agreement and all exhibits referred to herein are exhibits attached to this Merger Agreement. Any and all schedules, exhibits, annexes, statements, reports, certificates or other documents or instruments referred to herein or attached hereto are and shall be incorporated herein by reference hereto as though fully set forth herein verbatim.

21.           Binding Effect. All of the terms, covenants, representations, warranties and conditions of this Merger Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto and their respective successors, representatives and permitted assigns. Nothing expressed or referred to herein is intended or shall be construed to give any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Merger Agreement, or any provision herein contained, it being the intention of the parties hereto that this Merger Agreement, the assumption of obligations and statements of responsibilities hereunder, and all other conditions and provisions hereof are for the sole benefit of the parties to this Merger Agreement and for the benefit of no other person. Nothing in this Merger Agreement shall act to relieve or discharge the obligation or liability of any third party to any party to this Merger Agreement, nor shall any provision give any third party any right of subrogation or action over or against any party to this Merger Agreement.

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IN WITNESS WHEREOF, OSB and OSBOT have caused this Merger Agreement to be executed by their duly authorized officers as of the date first written above.

ORANGE SAVINGS BANK, SSB
By:
	Darby Byrd, President and Chief Executive Officer
ORANGE SAVINGS BANK OF TEXAS, SSB
By:
	Darby Byrd, Chief Executive Officer

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SCHEDULE 4.12

LITIGATION

None

EX-12.1

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Exhibit 12.1

Ratio of Earnings to Fixed Charges
(Dollars in Thousands)

	Year Ended December 31,
	2008			2007			2006			2005			2004
Excluding interest on deposits		3.87	x		6.86	x		10.48	x		11.51	x		19.05	x
Including interest on deposits		1.62	x		1.58	x		1.86	x		2.35	x		2.86	x
Net income	$	26,473		$	26,806		$	33,941		$	27,759		$	19,458
Income tax provisions		16,282			17,309			21,803			18,753			13,024
Income before income taxes		42,755			44,115			55,744			46,512			32,482
Cumulative effect of change in accounting principles		(1,876	)		(82	)		—			—			—
Adjusted income before income taxes	$	40,879		$	44,033		$	55,744		$	46,512		$	32,482
Interest on deposits	$	51,912		$	68,766		$	58,943		$	29,914		$	15,663
Interest on other borrowings		14,102			7,520			5,880			4,427			1,800
Preferred stock dividends		155			—			—			—			—
Total fixed charges and preferred stock dividends, including interest on deposits	$	66,169		$	76,286		$	64,823		$	34,341		$	17,463
Total fixed charges and preferred stock dividends, excluding interest on deposits	$	14,257		$	7,520		$	5,880		$	4,427		$	1,800

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Ratio of Earnings to Fixed Charges (Dollars in Thousands)

EX-21

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EXHIBIT 21

WILSHIRE BANCORP, INC.

LIST OF WHOLLY OWNED SUBSIDIARIES

1.

Wilshire State Bank, a California state chartered commercial bank

2.

Wilshire Statutory Trust I, a Connecticut Statutory Trust

3.

Wilshire Statutory Trust II, a Connecticut Statutory Trust

4.

Wilshire Statutory Trust III, a Connecticut Statutory Trust

5.

Wilshire Statutory Trust IV, a Connecticut Statutory Trust

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WILSHIRE BANCORP, INC. LIST OF WHOLLY OWNED SUBSIDIARIES

EX-23.1

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EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We consent to the incorporation by reference in Registration Statement No. 333-119526 on Form S-8 of our reports dated March 12, 2009, relating to the consolidated financial statements of Wilshire Bancorp, Inc. and the effectiveness of Wilshire Bancorp, Inc.'s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Wilshire Bancorp, Inc. for the year ended December 31, 2008.

/s/ Deloitte & Touche LLP

Los Angeles, California
March 12, 2009

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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Joanne Kim, certify that:

1.

I have reviewed this annual report on Form 10-K of Wilshire Bancorp, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	WILSHIRE BANCORP, INC.
Date: March 12, 2009		By:	/s/ JOANNE KIM Joanne Kim Chief Executive Officer

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CERTIFICATION OF CHIEF EXECUTIVE OFFICER

EX-31.2

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EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Alex Ko, certify that:

1.

I have reviewed this annual report on Form 10-K of Wilshire Bancorp, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	WILSHIRE BANCORP, INC.
Date: March 12, 2009		By:	/s/ ALEX KO Alex Ko Chief Financial Officer

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CERTIFICATION OF CHIEF FINANCIAL OFFICER

EX-32.1

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EXHIBIT 32.1

CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report on Form 10-K of Wilshire Bancorp, Inc. (the "Bank") for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Joanne Kim, as Chief Executive Officer of the Company, and Alex Ko, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	WILSHIRE BANCORP, INC.
Date: March 12, 2009	By:	/s/ JOANNE KIM Joanne Kim Chief Executive Officer
Date: March 12, 2009	By:	/s/ ALEX KO Alex Ko Chief Financial Officer

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CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002