e10vq

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended September 30, 2007.


o		Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to .

Commission File Number: 000-24947

UCBH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware		94-3072450

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

555 Montgomery Street, San Francisco, California		94111

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (415) 315-2800

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

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

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

As of October 31, 2007, the Registrant had 104,362,428 shares of common stock, par value $0.01 per share, outstanding.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in Thousands, Except Share and Par Value Amounts)
(Unaudited)


	September 30,			December 31,
	2007			2006
ASSETS
Noninterest bearing cash	$	91,443		$	112,343
Interest bearing cash		176,128			92,049
Federal funds sold		144,110			150,027


Cash and cash equivalents		411,681			354,419

Securities purchased under agreements to resell		200,000			175,000
Investment and mortgage-backed securities available for sale, at fair value		1,492,589			2,149,456
Investment and mortgage-backed securities held to maturity, at cost (fair value of $277,192 and $295,446 at September 30, 2007, and December 31, 2006, respectively)		274,547			290,673
Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments		126,393			110,775
Loans held for sale, net		189,388			142,861
Loans held in portfolio		7,698,531			6,635,660
Allowance for loan losses		(68,540	)		(62,015	)


Loans held in portfolio, net		7,629,991			6,573,645

Accrued interest receivable		60,370			50,803
Premises and equipment, net		145,097			115,610
Goodwill		286,729			226,780
Core deposit intangibles, net		23,804			28,325
Mortgage servicing rights, net		12,195			13,273
Other assets		228,347			114,794


Total assets	$	11,081,131		$	10,346,414


LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest bearing deposits	$	842,958		$	767,714
Interest bearing deposits		6,938,137			6,435,131


Total deposits		7,781,095			7,202,845


Securities sold under agreements to repurchase		500,000			401,600
Short-term borrowings and federal funds purchased		177,335			654,636
Subordinated debentures		406,646			240,549
Accrued interest payable		27,984			21,018
Long-term borrowings		1,134,139			906,651
Other liabilities		112,254			133,044


Total liabilities		10,139,453			9,560,343


Commitments and contingencies (Note 15)
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.01 par value, 180,000,000 shares authorized at September 30, 2007, and December 31, 2006; 103,920,862 and 99,448,181 shares issued and outstanding at September 30, 2007, and December 31, 2006, respectively		1,039			994
Additional paid-in capital		418,350			341,616
Retained earnings		541,458			464,616
Accumulated other comprehensive loss		(19,169	)		(21,155	)


Total stockholders’ equity		941,678			786,071


Total liabilities and stockholders’ equity	$	11,081,131		$	10,346,414

See accompanying notes to consolidated financial statements.

-1-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)


	Three months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Interest and dividend income:
Loans	$	151,580		$	114,752		$	426,495		$	331,926
Investment and mortgage-backed securities:
Taxable		20,460			16,220			64,631			44,895
Nontaxable		3,611			2,686			10,212			8,062
FHLB Stock		917			1,313			2,714			2,308
Federal funds sold and deposits with banks		2,842			1,682			8,526			3,920
Securities purchased under agreements to resell		3,341			1,239			7,834			1,239


Total interest and dividend income		182,751			137,892			520,412			392,350


Interest expense:
Deposits		72,195			56,702			206,702			150,797
Securities sold under agreements to repurchase		3,631			1,908			10,312			2,829
Short-term borrowings and federal funds purchased		3,324			1,523			12,993			8,167
Subordinated debentures		6,138			3,095			15,942			8,845
Long-term borrowings		13,539			8,540			37,973			23,958


Total interest expense		98,827			71,768			283,922			194,596


Net interest income		83,924			66,124			236,490			197,754
Provision for loan losses		3,010			936			6,156			2,492


Net interest income after provision for loan losses		80,914			65,188			230,334			195,262


Noninterest income:
Commercial banking fees		5,188			3,682			15,140			11,193
Service charges on deposits		1,815			1,006			5,061			2,658
Gain (loss) on sale of securities, net		702			208			3,780			206
Gain on sale of SBA loans, net		855			704			2,265			2,306
Gain on sale of multifamily and commercial real estate loans, net		1,532			5,212			4,954			13,361
Equity loss in other equity investments		(900	)		(253	)		(2,164	)		(761	)
Acquisition termination fee		—			—			—			5,000
Other		1,630			409			4,156			1,211


Total noninterest income		10,822			10,968			33,192			35,174


Noninterest expense:
Personnel		24,405			19,900			71,943			66,372
Occupancy		5,510			4,400			15,535			11,815
Data processing		2,009			2,257			6,647			7,584
Furniture and equipment		2,139			1,862			6,530			5,297
Professional fees and contracted services		1,944			2,428			5,615			8,223
Deposit insurance		560			194			1,154			600
Communication		796			284			2,298			788
Core deposit intangible amortization		918			668			3,321			1,690
Gain on extinguishment of subordinated debentures and borrowings		—			—			—			(360	)
Other general and administrative		5,297			5,426			17,249			15,289


Total noninterest expense		43,578			37,419			130,292			117,298


Income before income tax expense		48,158			38,737			133,234			113,138
Income tax expense		17,337			13,167			47,168			38,743


Net income	$	30,821		$	25,570		$	86,066		$	74,395


Earnings per share:
Basic	$	0.30		$	0.27		$	0.85		$	0.79
Diluted	$	0.29		$	0.26		$	0.82		$	0.76

See accompanying notes to consolidated financial statements.

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UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income
(Dollars in Thousands, Except Share and Per Share Amounts)
(Unaudited)


										Accumulated
					Additional					Other			Total
	Common Stock				Paid-In		Retained			Comprehensive			Stockholders’			Comprehensive
	Shares		Amount		Capital		Earnings			Loss ⁽¹⁾			Equity			Income (Loss)
Balance at December 31, 2005		94,037,878	$	940	$	247,340	$	375,220		$	(19,986	)	$	603,514

Net income		—		—		—		74,395			—			74,395		$	74,395
Other comprehensive income, net of tax benefit of $1,036		—		—		—		—			(1,420	)		(1,420	)		(1,420	)

Comprehensive income		—		—		—		—			—			—		$	72,975

Stock options exercised, including related tax benefit		518,476		6		5,775		—			—			5,781
Stock compensation charge		—		—		1,504		—			—			1,504
Cash dividend of $0.060 per share		—		—		—		(8,498	)		—			(8,498	)


Balance at September 30, 2006		94,556,354	$	946	$	254,619	$	441,117		$	(21,406	)	$	675,276


Balance at December 31, 2006		99,448,181	$	994	$	341,616	$	464,616		$	(21,155	)	$	786,071

Net income		—		—		—		86,066			—			86,066		$	86,066
Other comprehensive income, net of tax liability of $1,304		—		—		—		—			1,986			1,986			1,986

Comprehensive income		—		—		—		—			—			—		$	88,052

Stock options exercised, including related tax benefit		761,101		8		8,075		—			—			8,083
Stock compensation charge		—		—		2,550		—			—			2,550
Cash dividend of $0.09 per share		—		—		—		(9,224	)		—			(9,224	)
Shares issued in connection with acquisition of CAB Holding, LLC		3,711,580		37		66,109		—			—			66,146

Balance at September 30, 2007		103,920,862	$	1,039	$	418,350	$	541,458		$	(19,169	)	$	941,678


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

See accompanying notes to consolidated financial statements.

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UCBH HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)


	Nine Months Ended September 30,
	2007			2006
Cash flows from operating activities:
Net income	$	86,066		$	74,395
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		6,156			2,492
Amortization of net deferred loan fees, purchase premiums and discounts		(9,293	)		(7,257	)
Amortization of net securities premiums and discounts		1,613			(97	)
Federal Home Loan Bank stock dividend		(2,445	)		(1,605	)
Amortization of intangibles		6,155			3,738
Depreciation and amortization of premises and equipment		8,032			6,677
Gain on sale of loans originated in held in portfolio, securities, and other assets, net		(8,777	)		(13,621	)
Lower of cost or market adjustment on loans held for sale		101			(150	)
Equity loss in other equity investments		2,130			616
Stock compensation expense, net of tax benefit related to nonqualified stock option grants		2,549			1,386
Excess tax benefit from stock option exercises		(1,233	)		—
Loss on extinguishment of secured borrowings		—			(360	)
Other, net		11			716
Changes in operating assets and liabilities:
Decrease in loans originated in held for sale		14,469			24,582
Increase in accrued interest receivable		(8,023	)		(7,632	)
Decrease (increase) in other assets		11,438			(16,804	)
Increase in accrued interest payable		3,810			4,508
Decrease (increase) in other liabilities		(31,301	)		11,235


Net cash provided by operating activities		81,458			82,819


Cash flows from investing activities:
Net cash acquired from purchase of CAB Holding, LLC		33,647			—
Payment of acquisition related expenditures		(734	)		(399	)
Purchase of securities purchased under agreements to resell		(200,000	)		(175,000	)
Proceeds from maturity of securities purchased under agreements to resell		175,000			—
Investment and mortgage-backed securities, available for sale:
Principal payments and maturities		1,431,700			125,739
Purchases		(1,537,665	)		(239,962	)
Sales		639,321			96,777
Called		92,943			1,800
Investment and mortgage-backed securities, held to maturity:
Principal payments and maturities		7,293			12,054
Purchases		—			(750	)
Called		8,895			—
Proceeds from redemption of Federal Home Loan Bank stock		10,483			5,883
Purchase of Federal Home Loan Bank stock		(11,730	)		(19,150	)
Proceeds from redemption of Federal Reserve Bank stock		1,267			—
Funding of other equity investments		(7,679	)		(2,030	)
Proceeds from the sale of loans originated in held in portfolio		311,145			634,409
Proceeds from the sale of real estate owned		238			—
Loans originated in held in portfolio funded and purchased, net of principal collections		(1,251,256	)		(826,815	)
Purchases of premises and other equipment		(6,881	)		(5,863	)
Other investing activities, net		1,076			431


Net cash used in investing activities		(302,937	)		(392,876	)


Cash flows from financing activities:
Net increase in demand deposits, NOW, money market and savings accounts		152,895			130,354
Net increase (decrease) in time deposits		112,066			(13,251	)
Net decrease in short-term borrowings		(477,301	)		(123,410	)
Proceeds from securities sold under agreements to repurchase		349,267			300,000
Payments of securities sold under agreements to repurchase		(250,867	)		—
Proceeds from issuance of subordinated debentures		166,238			—
Proceeds from long-term borrowings		386,712			79,386
Principal payments of long-term borrowings		(159,262	)		(48,876	)
Proceeds from stock option exercises		6,851			3,867
Excess tax benefit from stock option exercises		1,233			—
Payment of cash dividend on common stock		(9,091	)		(8,012	)


Net cash provided by financing activities		278,741			320,058


Net increase in cash and cash equivalents		57,262			10,001
Cash and cash equivalents at beginning of period		354,419			203,065


Cash and cash equivalents at end of period	$	411,681		$	213,066

See accompanying notes to consolidated financial statements.

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UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)

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

		*Basis of Presentation and Principles of Consolidation*

		The unaudited interim consolidated financial statements include the accounts of UCBH Holdings, Inc. (“UCBH”), the bank holding company of United Commercial Bank (“UCB”), and its consolidated subsidiaries (collectively referred to as the “Company”, “we”, “us” and “our”). The consolidated results exclude eleven special purpose trusts owned by UCBH, which were created for issuing guaranteed preferred beneficial interests in UCBH’s junior subordinated debentures. In accordance with Financial Accounting Standards Board (the “FASB”) Interpretation No. (“FIN”) 46R, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51, these special purpose trusts are excluded from the consolidated results as UCBH is not considered to be the primary beneficiary of these trusts. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the unaudited consolidated financial statements contain all adjustments consisting only of a normal and recurring nature, which are considered necessary for a fair presentation of the financial condition and results of operations for such periods. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

		The unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q pursuant to Rule 10-01, “Interim Financial Statements”, of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited consolidated financial statements do not include all of the disclosures required by GAAP for complete financial statements. The December 31, 2006, consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. Results as of and for the three and nine months ended September 30, 2007, are not necessarily indicative of results that may be expected for any other interim period or the year as a whole.

		The results of operations for the three and nine months ended September 30, 2007, include the results of operations of Summit Bank Corporation, which was acquired on December 29, 2006, and The Chinese American Bank, which was acquired on May 23, 2007.

		*Use of Estimates in Preparation of Financial Statements*

		The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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 estimated results.

		*Reclassification*

		Certain reclassifications have been made to prior periods’ consolidated financial statements to conform to the September 30, 2007, presentation.

		*Allowance for Loan Losses*

		The allowance for loan losses represents our estimate of the losses that are inherent in the loans held in portfolio. Similarly, loans held for sale are excluded from any of the information included in Note 8, “Loans Held in Portfolio and Allowance for Loan Losses”. UCB continuously monitors the quality of its loan portfolio and maintains an allowance for loan losses sufficient to absorb losses inherent in the portfolio.

-5-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		In determining the general allowance, UCB applies loss factors, differentiated by an internal credit risk rating system, to its major loan portfolio categories (based primarily on loan type). The loss factors are developed from actual historic losses, and reflect comparative analysis with peer group loss rates and expected losses, which is in turn based on estimated probabilities of default and loss given default. Additionally, loss factors incorporate qualitative adjustments that reflect an assessment of internal and external influences on credit quality that have not yet been reflected in the historical loss or risk-rating data. These influences may include elements such as portfolio credit quality trends and changes in concentrations, growth, or credit underwriting. UCB’s qualitative adjustments also include an economic surcharge factor to adjust loss factors in recognition of the impact various macro-economic factors have on portfolio performance. The quantitative analysis also resulted in establishing a minimum loss factor for each of the major loan portfolio categories to better reflect minimum inherent loss in all portfolios including those with limited historic loss experience.

		UCB also estimates a reserve related to unfunded commitments and other off-balance sheet credit exposure. In assessing the adequacy of this reserve, UCB uses an approach similar to the approach used in the development of the allowance for loan losses. The reserve for unfunded commitments is included in other liabilities on the statement of financial position.

2.		Recent Accounting Pronouncements

		*Fair Value Option for Financial Assets and Financial Liabilities*

		In February 2007, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115. SFAS No. 159 provides entities with an option to report selected financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS No. 159 effective January 1, 2008. In connection therewith, management of the Company does not expect the adoption of SFAS No. 159 to have a material impact on the Company’s financial position or results of operations.

		*Fair Value Measurements*

		In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 clarifies the principle 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. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company will adopt SFAS. No 157 effective January 1, 2008. In connection therewith, management of the Company does not expect the adoption of SFAS No. 157 to have a material impact on the Company’s financial position or results of operations. The Company is, however, in the process of evaluating the various valuation models and methodologies that the Company will need to implement, in order to comply with the disclosure requirements of SFAS No. 157.

		*Accounting for Uncertainty in Income Taxes*

		In July 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for income tax uncertainties that have been recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires that the Company recognize in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on

-6-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		the technical merits of the position. FIN 48 also provides additional guidance on accounting for tax uncertainties, including derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company adopted the provisions of FIN 48 effective January 1, 2007. The impact of adopting FIN 48 resulted in a cumulative effect adjustment of $3.0 million with a $2.6 million decrease in goodwill, and an offsetting $2.6 million decrease in current taxes payable. There were no cumulative effect adjustments to the Company’s opening retained earnings as of January 1, 2007. Additionally, in connection with the adoption of FIN 48, the Company will continue to classify interest and penalties related to unrecognized tax positions as components of interest expense.

		*Accounting for Servicing of Financial Assets*

		In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140. SFAS No. 156 permits entities to choose either to measure loan servicing rights subsequent to initial valuation at fair value and report changes in fair value in earnings or to amortize the servicing rights in proportion to and over the estimated net servicing income or loss and assess the loan servicing rights for impairment or the need for an increased obligation. SFAS No. 156 also clarifies when a servicer should separately recognize servicing assets and liabilities, requires that all separately recognized assets and liabilities be initially measured at fair value, if practicable, permits a one-time reclassification of available for sales securities to trading securities by an entity with recognized servicing rights and requires additional disclosures for all separately recognized servicing assets and liabilities. SFAS No. 156 is effective as of the beginning of an entity’s fiscal year that begins after September 15, 2006. In accordance with SFAS No. 156, the Company has initially measured mortgage servicing rights at fair value and will continue to subsequently amortize its mortgage servicing rights based on estimated future net servicing income, with quarterly assessments for impairment. The Company adopted the provisions of SFAS No. 156 effective January 1, 2007. The adoption did not have a material impact on the Company’s financial position or results of operations.

		*Accounting for Certain Hybrid Financial Instruments*

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

3.		Business Combinations

		*CAB Holding, LLC*

		UCBH and CAB Holding, LLC (“CAB”), the holding company of The Chinese American Bank, a New York state-chartered bank, entered into an Agreement and Plan of Merger dated as of January 10, 2007. On May 23, 2007, UCBH completed its acquisition of CAB for a total consideration of approximately $132.6 million consisting of 3,711,580 shares of UCBH’s common stock valued at $66.1 million and $66.5 million in cash, which includes direct acquisition costs of $1.5 million. The results of CAB’s operations have been included in the consolidated financial statements since that date.

-7-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

The purchase price, including direct acquisition costs, has been allocated to the assets acquired and liabilities assumed based on fair values at the acquisition date. The allocation of purchase price at the date of acquisition was as follows (dollars in thousands):


Cash and due from banks	$	21,372
Federal funds sold		78,700
Investment and mortgage-backed securities available for sale		64,882
Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments		1,128
Loans held in portfolio, net		167,838
Premises and equipment		31,701
Goodwill		63,565
Core deposit intangibles		6,600
Other assets		17,667


Total assets acquired		453,453


Deposits		311,669
Other liabilities		9,213


Total liabilities assumed		320,882


Total allocation of purchase price	$	132,571

		The purchase price allocation reflected above is preliminary and subject to final determination of valuation of the fair value of assets acquired and liabilities assumed. The Company expects to finalize the valuation in the fourth quarter of 2007 and does not expect this to have a material impact on the Company’s financial position or results of operations.

		*Business Development Bank Ltd.*

		On March 26, 2007, UCB entered into two agreements to purchase the Business Development Bank Ltd. (“BDB”), a wholly foreign owned enterprise established and existing under the laws of the People’s Republic of China, for a total consideration of $205.0 million in cash. The parties to the agreements may terminate the transaction for various reasons prior to the consummation of the acquisition. This acquisition will provide the Company with bank branches in Shanghai and Shantou, China and representative offices in Beijing and Guangzhou, China, which will in turn accelerate the implementation of the Company’s Greater China expansion strategy. The transaction is subject to both U.S. regulatory and China Banking Regulatory Commission approvals and is anticipated to close in the fourth quarter of 2007. BDB had total assets of $242.8 million, total loans of $214.2 million and total deposits of $20.1 million as of September 30, 2007.

4.		Investment Agreement

		On October 7, 2007, UCBH and China Minsheng Banking Corp., Ltd., a Chinese joint stock commercial bank (“Minsheng”), entered into an Investment Agreement (the “Investment Agreement”), pursuant to which Minsheng will acquire 9.9% (calculated on a post closing basis) of the outstanding shares of UCBH common stock in two phases, with a mutual option to increase Minsheng’s ownership to 20.0% (calculated on a post closing basis).

-8-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		In the first phase, which is anticipated to close in the fourth quarter of 2007, UCBH will issue approximately 5.4 million shares of its common stock to Minsheng at a price per share of $17.79, representing the 90-day average UCBH closing price as of the close on September 28, 2007. In the second phase, which is anticipated to close in 2008, Minsheng will increase its ownership to 9.9% through, at the discretion of UCBH, a combination of the purchase of secondary shares and/or the issuance of primary shares. By June 30, 2009, conditioned upon mutual agreement and regulatory approvals, Minsheng may increase its share ownership to 20.0% through, at the discretion of UCBH, a combination of the purchase of secondary shares and/or the issuance of primary shares.

5.		Cash and Due from Banks

		UCB is required to maintain cash reserves in a noninterest-bearing account at the FRB of San Francisco. Through the FRB, the cash in this account in excess of UCB’s reserve requirement (“Federal Funds”) is available for overnight and one day period sales to other institutions with accounts at the FRB. UCB received interest on these sales at the prevailing federal funds rate. At September 30, 2007, and December 31, 2006, the reserve requirement was $12.2 million and $7.6 million, respectively.

6.		Securities Purchased Under Agreements to Resell

		Information regarding outstanding securities purchased under agreements to resell (the “Resell Agreements”) as of and for the nine months ended September 30, 2007, and as of and for the year ended December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Average balance outstanding	$	157,967		$	62,740
Maximum amount outstanding at any month end period		200,000			175,000
Balance outstanding at end of period		200,000			175,000
Weighted average interest rate during the period		6.61	%		7.41	%
Weighted average interest rate at end of period		6.77	%		7.37	%
Weighted average remaining term to maturity at end of period (in years)		9.6			9.6

7.		Investment and Mortgage-Backed Securities

		At the end of each month, UCB adjusts the carrying value of its Available for Sale (“AFS”) Investment Securities Portfolio to reflect the current fair value of each security. The Held to Maturity (“HTM”) Investment Securities Portfolio is carried at amortized cost. At the time a security is purchased, UCB classifies the security as either AFS or HTM. Securities are classified as HTM if management has the positive intent and ability to hold such securities to maturity.

-9-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

The amortized cost and approximate market value of investment and mortgage-backed securities classified as AFS and HTM, along with the portions of the portfolio with unrealized loss positions at September 30, 2007, were as follows (dollars in thousands):


			Gross		Gross					Less Than 12 Months					12 Months or More					Total
	Amortized		Unrealized		Unrealized			Market		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description	Cost		Gains		Losses			Value		Value		Losses			Value		Losses			Value		Losses
Investment securities available for sale:
Agency Preferred Stock	$	18,516	$	—	$	(801	)	$	17,715	$	17,715	$	(801	)	$	—	$	—		$	17,715	$	(801	)
Collateralized debt obligations		33,481		—		(3,924	)		29,557		21,267		(3,714	)		8,290		(210	)		29,557		(3,924	)
U.S. Government sponsored enterprises notes		487,968		1,289		(1,986	)		487,271		—		—			108,938		(1,986	)		108,938		(1,986	)
Municipals		61,952		23		(1,711	)		60,264		56,399		(1,711	)		—		—			56,399		(1,711	)
Other		10,000		—		(419	)		9,581		9,581		(419	)		—		—			9,581		(419	)


Total investment securities available for sale		611,917		1,312		(8,841	)		604,388		104,962		(6,645	)		117,228		(2,196	)		222,190		(8,841	)


Mortgage-backed securities available for sale:
FNMA		394,124		3		(11,596	)		382,531		25,625		(228	)		356,302		(11,368	)		381,927		(11,596	)
GNMA		78,549		16		(2,931	)		75,634		—		—			75,147		(2,931	)		75,147		(2,931	)
FHLMC		246,929		31		(8,011	)		238,949		—		—			234,065		(8,011	)		234,065		(8,011	)
Other		194,364		446		(3,724	)		191,086		24,237		(10	)		153,407		(3,714	)		177,644		(3,724	)


Total mortgage-backed securities available for sale		913,966		496		(26,262	)		888,200		49,862		(238	)		818,921		(26,024	)		868,783		(26,262	)


Total investment and mortgage-backed securities available for sale		1,525,883		1,808		(35,103	)		1,492,588		154,824		(6,883	)		936,149		(28,220	)		1,090,973		(35,103	)


Investment securities held to maturity:
Municipal securities		213,877		5,010		(113	)		218,774		11,325		(107	)		415		(6	)		11,740		(113	)


Mortgage-backed securities held to maturity:
FNMA		4,138		—		(182	)		3,956		—		—			3,956		(182	)		3,956		(182	)
GNMA		56,106		—		(2,050	)		54,056		—		—			54,056		(2,050	)		54,056		(2,050	)
FHLMC		425		—		(19	)		406		—		—			406		(19	)		406		(19	)


Total mortgage-backed securities held to maturity		60,669		—		(2,251	)		58,418		—		—			58,418		(2,251	)		58,418		(2,251	)


Total investment and mortgage-backed securities held to maturity		274,546		5,010		(2,364	)		277,192		11,325		(107	)		58,833		(2,257	)		70,158		(2,364	)

Total securities	$	1,800,429	$	6,818	$	(37,467	)	$	1,769,780	$	166,149	$	(6,990	)	$	994,982	$	(30,477	)	$	1,161,131	$	(37,467	)

As of September 30, 2007, the net unrealized loss on securities was $30.6 million. The net unrealized loss on securities that are available for sale was $33.3 million. Net of a tax benefit of $14.1 million, the unrealized $19.2 million loss is included in other comprehensive loss as a reduction to stockholders’ equity. The $2.6 million net unrealized gain between the carrying value and market value of securities that are held to maturity has not been recognized in the consolidated financial statements for the three and nine months ended September 30, 2007. Additionally, certain securities that UCB holds have unrealized losses that extend for periods in excess of twelve months. These securities are comprised primarily of U.S. Government sponsored enterprise notes, mortgage-backed securities and municipal securities. Mortgage-backed securities consist primarily of securities guaranteed by FNMA, GMNA and FHLMC, as well as certain collateralized mortgage obligations. These securities are collateralized by residential mortgage loans and may be prepaid at par prior to maturity. The unrealized losses on the mortgage-backed securities resulted from rising interest rates subsequent to purchase. The unrealized losses will decline as interest rates fall to the purchase yield and as the securities approach contractual or expected maturity. Management does not believe that there have been any deteriorations of credit quality that would contribute to any impairment of these securities.

-10-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		The Company’s investments in CDOs are backed by trust preferred securities issued by banks, insurance companies, and REITs. Of those investments, two CDO investments totaling $20.0 million are backed primarily by the trust preferred securities of REITs and have an unrealized loss of $3.6 million. Both investments are ‘AA’ rated and have not been downgraded by any rating agency, and management believes the credit support in the deal structures is adequate to protect contractual interest and principal payments.

		The municipal securities are issued by states and their political subdivisions in the U.S. These securities either have bond insurance or guarantees that provide investment grade ratings of AAA, AA or A. Although certain securities were downgraded during the quarter ended September 30, 2007, management has performed additional analysis on a security by security basis and has concluded that there is no other than temporary impairment associated with these securities. The unrealized losses will decline as interest rates fall to the purchase yield and as the securities approach contractual or expected maturity.

		Since UCB has the intent and ability to hold its available-for-sale securities until recovery of the par amount, which could be at maturity, UCB has concluded that the decline in value on these securities is temporary.

-11-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

The amortized cost and approximate market value of investment and mortgage-backed securities classified as AFS and HTM, along with the portions of the portfolio with unrealized loss positions at December 31, 2006, were as follows (dollars in thousands):


			Gross		Gross					Less Than 12 Months					12 Months or More					Total
	Amortized		Unrealized		Unrealized			Market		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description	Cost		Gains		Losses			Value		Value		Losses			Value		Losses			Value		Losses
Investment securities available for sale:
Collateralized debt obligations	$	38,445	$	5	$	(316	)	$	38,134	$	14,888	$	(113	)	$	8,296	$	(203	)	$	23,184	$	(316	)
U.S. Government sponsored enterprises notes		588,621		120		(5,701	)		583,040		263,885		(1,566	)		125,194		(4,135	)		389,079		(5,701	)
U.S. Government sponsored enterprises discount notes		249,024		61		—			249,085		—		—			—		—			—		—
U.S. Treasury Bills		73,183		17		—			73,200		—		—			—		—			—		—
Municipals		58,325		—		—			58,325		—		—			—		—			—		—
Commercial paper		49,952		—		—			49,952		—		—			—		—			—		—
Other		10,000		—		(125	)		9,875		9,875		(125	)		—		—			9,875		(125	)


Total investment securities available for sale		1,067,550		203		(6,142	)		1,061,611		288,648		(1,804	)		133,490		(4,338	)		422,138		(6,142	)


Mortgage-backed securities available for sale:
FNMA		515,711		391		(13,405	)		502,697		148,236		(3,025	)		284,506		(10,380	)		432,742		(13,405	)
GNMA		87,866		—		(3,261	)		84,605		—		—			78,742		(3,261	)		78,742		(3,261	)
FHLMC		313,991		140		(9,847	)		304,284		7,424		(32	)		255,779		(9,815	)		263,203		(9,847	)
Other		200,832		16		(4,589	)		196,259		—		—			171,423		(4,589	)		171,423		(4,589	)


Total mortgage-backed securities available for sale		1,118,400		547		(31,102	)		1,087,845		155,660		(3,057	)		790,450		(28,045	)		946,110		(31,102	)


Total investment and mortgage-backed securities available for sale		2,185,950		750		(37,244	)		2,149,456		444,308		(4,861	)		923,940		(32,383	)		1,368,248		(37,244	)


Investment securities held to maturity:
Municipal securities		222,638		6,750		(30	)		229,358		4,531		(24	)		416		(6	)		4,947		(30	)


Mortgage-backed securities held to maturity:
FNMA		4,372		—		(172	)		4,200		—		—			4,200		(172	)		4,200		(172	)
GNMA		63,122		—		(1,755	)		61,367		—		—			61,367		(1,755	)		61,367		(1,755	)
FHLMC		541		—		(20	)		521		—		—			521		(20	)		521		(20	)


Total mortgage-backed securities held to maturity		68,035		—		(1,947	)		66,088		—		—			66,088		(1,947	)		66,088		(1,947	)


Total investment and mortgage-backed securities held to maturity		290,673		6,750		(1,977	)		295,446		4,531		(24	)		66,504		(1,953	)		71,035		(1,977	)


Total securities	$	2,476,623	$	7,500	$	(39,221	)	$	2,444,902	$	448,839	$	(4,885	)	$	990,444	$	(34,336	)	$	1,439,283	$	(39,221	)

As of December 31, 2006, the net unrealized loss on securities was $31.7 million. The net unrealized loss on securities that are available for sale was $36.5 million. Net of a tax benefit of $15.3 million, the unrealized $21.2 million loss is included in other comprehensive loss as a reduction to stockholders’ equity. The $4.8 million net unrealized gain between the carrying value and market value of securities that are held to maturity has not been recognized in the consolidated financial statements for the year ended December 31, 2006.

-12-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

8.		Loans Held for Sale

		The components of loans held for sale as of September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30,		December 31,
	2007		2006
Commercial:
Secured by real estate — nonresidential	$	187,863	$	141,348
Business		1,135		1,203


Total commercial loans		188,998		142,551


Consumer:
Residential mortgage (one to four family)		390		310


Loans held for sale ⁽¹⁾	$	189,388	$	142,861


⁽¹⁾		Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts of $371,000 and $213,000 at September 30, 2007, and December 31, 2006, respectively.

9.		Loans Held in Portfolio and Allowance for Loan Losses

		The components of loans held in portfolio as of September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Commercial:
Secured by real estate — nonresidential	$	2,619,291		$	2,341,572
Secured by real estate — multifamily		1,341,407			1,275,594
Construction		1,486,581			1,054,302
Business		1,689,750			1,461,322


Total commercial loans		7,137,029			6,132,790


Consumer:
Residential mortgage (one-to-four family)		496,934			448,895
Other ⁽¹⁾		64,568			53,975


Total consumer loans		561,502			502,870


Loans held in portfolio ⁽²⁾		7,698,531			6,635,660
Allowance for loan losses		(68,540	)		(62,015	)


Net loans held in portfolio	$	7,629,991		$	6,573,645


(1)		Amount includes deposit overdrafts of $8.5 million and $999,000 at September 30, 2007, and December 31, 2006, respectively.

(2)		Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts of $21.7 million and $25.8 million at September 30, 2007, and December 31, 2006, respectively.

-13-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

The activity in the allowance for loan losses and allowance for losses related to unfunded commitments for the three and nine months ended September 30, 2007 and 2006, were as follows (dollars in thousands):


	Three Months Ended September 30, 2007									Three Months Ended September 30, 2006
				Allowance for									Allowance for
				Losses –			Total						Losses –		Total
	Allowance for			Unfunded			Allowance for			Allowance for			Unfunded		Allowance for
	Loan Losses			Commitments			Losses			Loan Losses			Commitments		Losses
Balance at beginning of period	$	67,739		$	4,968		$	72,707		$	59,035		$	5,224	$	64,259
Provision for losses		3,094			(84	)		3,010			(68	)		1,004		936
Loans charged off		(3,100	)		—			(3,100	)		(2,507	)		—		(2,507	)
Recoveries of loans previously charged off		807			—			807			170			—		170
Adjustment — acquired through business combinations		—			—			—			—			—		—


Balance at end of period	$	68,540		$	4,884		$	73,424		$	56,630		$	6,228	$	62,858


	Nine Months Ended September 30, 2007									Nine Months Ended September 30, 2006
				Allowance for									Allowance for
				Losses –			Total						Losses –		Total
	Allowance for			Unfunded			Allowance for			Allowance for			Unfunded		Allowance for
	Loan Losses			Commitments			Losses			Loan Losses			Commitments		Losses
Balance at beginning of period	$	62,015		$	6,833		$	68,848		$	64,542		$	3,402	$	67,944
Provision for losses		8,105			(1,949	)		6,156			(334	)		2,826		2,492
Loans charged off		(6,474	)		—			(6,474	)		(7,990	)		—		(7,990	)
Recoveries of loans previously charged off		1,069			—			1,069			412			—		412
Adjustment — acquired through business combinations		3,825			—			3,825			—			—		—


Balance at end of period	$	68,540		$	4,884		$	73,424		$	56,630		$	6,228	$	62,858

		During the nine months ended September 30, 2007, the allowance for loan losses increased $6.5 million from the balance at December 31, 2006. The increase is due to $3.8 million of allowance for loan losses acquired in connection with the purchase of CAB, an increase in specific valuation allowances associated with impaired loans, and growth in the Company’s loan portfolio. These increases were offset by a $6.4 million reduction from changes in loss factors, improved risk ratings on certain classified loans, and a $5.4 million reduction attributable to net loan charge-offs.

		The reserve for unfunded commitments, which is included in other liabilities on the balance sheet, decreased $1.9 million from December 31, 2006. The decrease was primarily a result of the change in the loss factor of $3.7 million.

-14-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

10.		Borrowings

		*Securities Sold Under Agreements to Repurchase*

		Information regarding outstanding securities sold under agreements to repurchase (the “Repurchase Agreements”) as of and for the nine months ended September 30, 2007, and as of and for the year ended December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Average balance outstanding	$	336,902		$	162,124
Maximum amount outstanding at any month end period		500,000			401,600
Balance outstanding at end of period		500,000			401,600
Weighted average interest rate during the period		4.13	%		3.56	%
Weighted average interest rate at end of period		3.92	%		3.71	%
Weighted average remaining term to maturity at end of period (in years)		8.5			6.1

		During January 2007, the five Repurchase Agreements amounting to $101.6 million assumed by UCB in connection with the Summit Bank Corporation acquisition matured.

		*Long-Term and Short-Term Borrowings*

		Information regarding outstanding long-term and short-term borrowings as of and for the nine months ended September 30, 2007, and as of and for the year ended December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Short-term borrowings:
Federal Home Loan Bank advances and other short-term borrowings:
Average balance outstanding	$	307,908		$	224,234
Maximum amount outstanding at any month end period		637,787			654,636
Balance outstanding at end of period		147,335			654,636
Weighted average interest rate during the period		5.45	%		4.52	%
Weighted average interest rate at end of period		5.29	%		5.21	%
Weighted average remaining term to maturity at end of period (in years)		0.03			—

Long-term borrowings:
Federal Home Loan Bank advances:
Average balance outstanding	$	1,078,786		$	683,978
Maximum amount outstanding at any month end period		1,181,142			906,651
Balance outstanding at end of period		1,134,139			906,651
Weighted average interest rate during the period		4.69	%		4.89	%
Weighted average interest rate at end of period		4.62	%		4.72	%
Weighted average remaining term to maturity at end of period (in years)		6.13			5.4

UCB maintains a secured credit facility with the FHLB against which UCB may take advances. The terms of this credit facility requires UCB to maintain in safekeeping with the FHLB eligible collateral of at least 100% of outstanding advances. Short-term borrowings with the FHLB totaled $90.0 million at September 30, 2007, and $534.2 million at December 31, 2006. At September 30, 2007, the advances were secured with $18.2 million of securities and $4.16 billion of loans, and at December 31, 2006, $41.6 million of securities and $3.34 billion of loans secured the advances. At September 30, 2007, credit availability under this facility was approximately $1.37 billion.

-15-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

11.		Earnings Per Share

		The antidilutive outstanding stock options of UCBH common stock that were excluded from the computation of diluted earnings per share for the three months ended September 30, 2007 and 2006, were 7,324,096 shares and 7,067,105 shares, respectively, and for the nine months ended September 30, 2007 and 2006, were 7,484,231 shares and 6,744,105 shares, respectively. The stock options of UCBH common stock are considered antidilutive if assumed proceeds per share exceed the average market price of UCBH’s common stock during the relevant periods. Assumed proceeds include proceeds from the exercise of stock options of UCBH common stock, as well as unearned compensation and certain deferred tax benefits related to stock options.

		The reconciliation of the numerators and denominators of basic and diluted earnings per share for the three and nine months ended September 30, 2007 and 2006, is as follows (dollars in thousands, except shares and per share amounts):


	Income		Shares		Per Share		Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
	Three Months Ended September 30, 2007						Three Months Ended September 30, 2006
Net income — basic	$	30,821		103,834,048	$	0.30	$	25,570		94,523,317	$	0.27
Effect of stock options		—		2,926,270				—		3,455,335


Net income — diluted	$	30,821		106,760,318	$	0.29	$	25,570		97,978,652	$	0.26


	Nine Months Ended September 30, 2007					Nine Months Ended September 30, 2006
Net income — basic	$	86,066	101,709,167	$	0.85	$	74,395	94,357,245	$	0.79
Effect of stock options		—	3,097,833				—	3,617,184


Net income — diluted	$	86,066	104,807,000	$	0.82	$	74,395	97,974,429	$	0.76

12.		Stock-Based Compensation

		The Company has one stock option plan, the 2006 Equity Incentive Plan, as amended (the “Plan”). The Plan was approved by its stockholders and provides for the granting of stock-based compensation awards, including options, to eligible officers, employees and directors of the Company. Stock option awards are approved by UCBH’s Board of Directors and are granted at the fair market value of UCBH’s common stock on the date of the grant. The options vest over a period determined at the time the options are granted, generally three years of continuous service, and have a maximum term of ten years. Certain options awards provide for accelerated vesting if there is a change in control, as defined in the Plan. As of September 30, 2007, the Company had 3,508,450 shares of common stock reserved for the issuance of options under the Plan.

		The Company used the modified prospective method of adoption. Under this adoption method, compensation expense recognized subsequent to adoption includes (a) compensation cost for all share-based payments granted prior to but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. Awards granted after January 1, 2006 are valued at fair value in accordance with provisions of SFAS No. 123R and recognized on a straight-line basis over the service periods of each award. No share-based employee compensation cost has been reflected in the Company’s results of operations prior to the adoption of SFAS No. 123R and the results for prior periods have not been restated. The Company estimated forfeiture rates for the first nine months of 2007 based on its historical experience.

-16-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		In order to estimate the fair value of stock options, the Company used the Black-Scholes option valuation model, which was developed for use in estimating the fair value of publicly traded options which have no vesting restrictions and are fully transferable. Option valuation models require the input of highly subjective assumptions and these assumptions can vary over time.

		Options outstanding under the Company’s stock option plan as of September 30, 2007 and changes during the three and nine months ended September 30, 2007 were as follows (dollars in thousands, except weighted average exercise price):


						Weighted									Weighted
				Weighted		Average							Weighted		Average
				Average		Remaining		Aggregate					Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic		Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value		Shares			Price		Term		Value
	Three Months Ended September 30, 2007									Nine Months Ended September 30, 2007
Options outstanding, beginning of period		14,527,320		$	12.93						14,834,395		$	12.78

Granted		119,000			16.66						695,400			17.55
Exercised		(176,624	)		5.20						(761,101	)		9.00
Canceled		(18,000	)		19.21						(212,200	)		21.43
Forfeited		(17,433	)		17.74						(122,231	)		17.83


Options outstanding, end of period		14,434,263		$	13.04		5.52	$	73,400		14,434,263		$	13.04		5.52	$	73,400


Shares exercisable end of period		13,029,968		$	12.55		5.15	$	73,106		13,029,968		$	12.55		5.15	$	73,106

		The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by all the option holders had all option holders exercised their respective options on September 30, 2007. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

		The aggregate intrinsic value of options exercised during the three months ended September 30, 2007 and 2006 was $2.2 million and $785,000, respectively and $7.2 million and $5.6 million during the nine months ended September 30, 2007 and 2006, respectively. Cash received from option exercises for the nine months ended September 30, 2007 and 2006 was $6.9 million and $3.9 million, respectively. The tax benefit realized for the tax deductions from option exercises for the nine months ended September 30, 2007 and 2006 totaled $1.2 million and $1.9 million, respectively.

-17-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

The range of exercise prices for options outstanding at September 30, 2007 is as follows:


			Weighted		Weighted				Weighted
			Average		Average				Average
	Options		Exercise		Remaining		Options		Exercise
Exercise Price	Outstanding		Price		Life		Exercisable		Price
$1.88-$1.99		1,278,392	$	1.88		1.34		1,278,392	$	1.88
$2.00-$5.99		121,824		2.91		2.50		121,824		2.91
$6.00-$6.99		3,698,206		6.15		3.57		3,698,206		6.15
$7.00-$8.99		263,308		7.21		4.26		263,308		7.21
$9.00-$10.99		518,334		10.11		5.11		518,334		10.11
$11.00-$12.99		298,233		12.38		5.57		298,233		12.38
$13.00-$15.99		480,164		15.00		6.42		421,166		14.89
$16.00-$18.09		1,992,268		17.33		8.30		857,535		17.15
$18.10-$19.99		5,227,734		18.84		6.76		5,017,170		18.84
$20.00-$21.99		555,800		21.04		7.32		555,800		21.04


Total/Average		14,434,263		13.04		5.52		13,029,968		12.55

		As of September 30, 2007, there was $8.0 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested options under the Plan. Such cost is expected to be recognized in less than three years. The total fair value of options that vested was $229,000 and $2.3 million during the three and nine months ended September 30, 2007, respectively. No options vested during the three and nine months ended September 30, 2006.

13.		Income Tax Expense

		The Company adopted the provisions of FIN 48 on January 1, 2007. The impact of adopting FIN 48 was a cumulative effect adjustment of $3.0 million with a $2.6 million decrease in goodwill, and an offsetting $2.6 million decrease in current taxes payable. There were no cumulative effect adjustments to the Company’s opening retained earnings as of January 1, 2007. The Company accrued $459,000 in interest expense and no liability for penalties as of September 30, 2007. Additionally, in connection with the adoption of FIN 48, the Company will continue to classify interest and penalties related to unrecognized tax positions as components of interest expense.

		The fiscal years 2004 through 2006 remain open for Internal Revenue Service audit purposes, the years 2003 through 2006 remain open for California Franchise Tax Board purposes and the years 2004 through 2006 remain open for New York State, New York City and Massachusetts purposes.

14.		Related Party Transactions

		Several members of the Board of Directors and executive officers of the Company have deposits with UCB that are made in the ordinary course of business with the same terms and conditions, including interest rates, as those prevailing at the same time for comparable transactions with other customers. The total deposits for these related parties were $3.5 million and $6.7 million at September 30, 2007, and December 31, 2006, respectively. Additionally, UCB has adopted a policy that prohibits loans or extensions of credit to members of the Board of Directors and affiliated persons of the Company, and their related interests.

-18-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

15.		Derivative Financial Instruments and Financial Instruments with Off-Balance Sheet Risk

		The contractual or notional amounts of derivative financial instruments and financial instruments with off-balance sheet risk as of September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Commitments to extend credit:
Consumer (including residential mortgage)	$	87,916		$	88,648
Commercial (excluding construction)		1,406,188			1,150,599
Construction		1,067,347			889,294
Letters of credit		155,028			140,684
Foreign exchange contracts receivable		(674,734	)		(385,301	)
Foreign exchange contracts payable		675,659			220,515
Put options to buy		5,128			5,329
Put options to sell		(5,128	)		(5,329	)
Interest rate swap contract		—			25,000
Interest rate floor contract		25,000			25,000
Unfunded CRA investment commitments		6,480			3,623


Total	$	2,748,884		$	2,158,062

16.		Contingent Liabilities

		The Company is subject to pending or threatened actions and proceedings arising in the normal course of business. The Company has recorded accruals for losses related to those matters that it considers to be probable and that can be reasonably estimated. Although the ultimate amount of liability that may result from those matters for which the Company has recorded accruals is not ascertainable in advance, the Company believes that any amounts exceeding the Company’s recorded accruals should not materially affect the Company’s financial position or results of operations.

17.		Supplemental Cash Flow Information

		The supplemental cash flow information for the nine months ended September 30, 2007 and 2006, was as follows (dollars in thousands):


	2007		2006
Cash paid during the period for:
Interest	$	281,399	$	190,087
Income taxes		51,974		48,552

Noncash investing and financing activities:
Stock warrants acquired with issuance of commercial loans	$	—	$	(129	)
Income tax benefit from stock options exercised		—		1,914
Transfer of loans from held for sale to held in portfolio		56,719		80,469
Transfer of loans to held for sale from held in portfolio		159,218		381,757
Transfer of other real estate owned to other assets from loans held in portfolio		1,604		—
Loan securitization:
Loans originated in held in portfolio sold		—		176,143
Mortgage-backed securities acquired		—		(174,721	)
Mortgage servicing rights acquired		—		(1,422	)

-19-

UCBH HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements-Continued
(Unaudited)

		The acquisition of CAB involved the recording of certain noncash activities. See Note 3 for a breakdown of CAB assets and liabilities acquired.

18.		Segment Information

		The Company designates the internal organization that is used by management for making operating decisions and assessing performance as the source of its reportable segments. The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting. The Company has determined that it has two reportable segments, “Domestic Banking” and “Other”. “Other” segment consists of the Company’s Hong Kong operations, UCB Investment Services, Inc., UCB Securities Corporation and UCB Asset Management, Inc. The “UCBH Holdings, Inc.” column consists of UCBH, which reflects the holding company activities. The intersegment column consists of the UCBH and UCB elimination units, which reflects the elimination of intersegment transactions. Substantially all interest income was earned in the United States and in Hong Kong, China.

		The following is segment information for the three and nine months ended September 30, 2007 and 2006 (dollars in thousands):


								UCBH
	Domestic					Total		Holdings,
	Banking		Other			Segments		Inc.			Intersegment			Consolidated
Three months ended September 30, 2007:
Total interest and dividend income	$	168,386	$	22,245		$	190,631	$	—		$	(7,880	)	$	182,751
Net interest income (expense)		85,018		4,234			89,252		(5,384	)		56			83,924
Net income (loss)		33,748		1,668			35,416		30,765			(35,360	)		30,821

Three months ended September 30, 2006:
Total interest and dividend income	$	133,871	$	6,774		$	140,645	$	—		$	(2,753	)	$	137,892
Net interest income (expense)		67,065		2,178			69,243		(3,119	)		—			66,124
Net income (loss)		27,650		1,235			28,885		25,570			(28,885	)		25,570

Nine months ended September 30, 2007:
Total interest and dividend income	$	501,118	$	39,321		$	540,439	$	3		$	(20,030	)	$	520,412
Net interest income (expense)		241,586		9,942			251,528		(15,094	)		56			236,490
Net income (loss)		95,960		2,794			98,754		86,012			(98,700	)		86,066

Nine months ended September 30, 2006:
Total interest and dividend income	$	381,453	$	17,468		$	398,921	$	—		$	(6,571	)	$	392,350
Net interest income (expense)		201,436		5,229			206,665		(8,911	)		—			197,754
Net income (loss)		82,756		(658	)		82,098		74,395			(82,098	)		74,395

19.		Subsequent Events

		On July 26, 2007, UCBH’s Board of Directors declared a quarterly cash dividend of $0.030 per share of common stock. The dividend will be paid on October 12, 2007, to stockholders of record as of September 30, 2007. Also, on October 25, 2007, UCBH’s Board of Directors declared a quarterly cash dividend of $0.030 per share of common stock. The dividend will be paid on January 11, 2008, to stockholders of record as of December 31, 2007.

		In October 2007, UCBH securitized $402 million in commercial real estate mortgages in a private label guaranteed mortgage securitization issued through United Commercial Mortgage Securities, LLC. UCBH has retained all of the resulting securities from the securitization transaction and has classified such securities as AFS. The securitization

-20-

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

FORWARD LOOKING STATEMENTS

This document, including information included or incorporated by reference in this document, contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events and include, among other things:

•

statements with respect to UCBH Holdings, Inc. and its consolidated subsidiaries’ (collectively, the “Company”) beliefs, plans, objectives, goals, guidelines, expectations, anticipations, and future financial condition, results of operations and performance; and

•

statements preceded or identified by words, such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will”, “should”, “could”, “projects” and “may”, “might” or words of similar import.

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

•

the Company’s ability to successfully execute its business plans and achieve its objectives;

•

changes in political and economic conditions, including the economic effects of terrorist attacks against the United States and related events;

•

changes in financial market conditions, either nationally, internationally or locally in areas in which the Company conducts its operations;

•

expansion into new market areas;

•

fluctuations in the equity and fixed-income markets;

•

changes in interest rates and the effects on the Company’s net interest margin;

•

loan growth rates;

•

asset and liability sensitivity of our balance sheet;

•

acquisitions and integration of acquired businesses;

•

deterioration in asset or credit quality;

•

increases in the levels of losses, customer bankruptcies, claims and assessments;

•

deposit renewals and ability to attract and retain core deposits;

•

tax rates and the related estimated tax credits;

•

changes in the availability of capital;

•

continuing consolidation in the financial services industry;

•

new litigation or changes in existing litigation;

•

success in gaining regulatory approvals, when required;

•

changes in consumer spending and savings habits;

•

increased competitive challenges and expanding product and pricing pressures among financial institutions, whether banks, investment banks, insurance companies or others, in the Company’s markets;

•

technological changes;

•

demographic changes;

•

legislation or regulatory changes which adversely affect the Company’s operations and businesses;

•

the Company’s ability to meet regulatory requirements; and

•

critical accounting policies and estimates and the impact of changes in accounting principles generally accepted in the United States of America.

-22-

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

MANAGEMENT OVERVIEW

UCBH Holdings, Inc. (“UCBH”) and its consolidated subsidiaries (collectively referred to as the “Company”, “we”, “us” or “our”) is a bank holding company headquartered in San Francisco, California with total assets of $11.08 billion. The Company’s operations are conducted primarily through its banking subsidiary, United Commercial Bank (“UCB”). UCB operates through seventy-four offices and branches in the United States and Asia and is a leader in providing financial services to Asians in the United States. At September 30, 2007, we had seventy domestic branches and offices: twenty-nine in Northern California, twenty-two in Southern California, five in the Atlanta metropolitan area, three in the Boston metropolitan area, eight in the New York metropolitan area, two in the Seattle metropolitan area and a branch in Houston. UCB also has a branch in Hong Kong and representative offices in Shanghai and Shenzhen, China; and Taipei, Taiwan.

The Company’s primary or “core” business consists of providing commercial and retail banking services to both individuals and companies in markets with high concentration of Asians. We believe that this core banking business performed well during the nine months ended September 30, 2007 as the general economic environment in these markets has improved. However, the challenges presented by the general interest rate environment that we must work within did impact the Company’s performance during the nine months ended September 30, 2007.

The Company reported earnings for the three months ended September 30, 2007, of $30.8 million or $0.29 per diluted share. This compares with $25.6 million or $0.26 per diluted share for the three months ended September 30, 2006, and $28.2 million or $0.27 per diluted share for the three months ended June 30, 2007. Return on average equity (“ROE”) was 13.37% and return on average assets (“ROA”) was 1.15% for the three months ended September 30, 2007, compared with a ROE of 15.51% and ROA of 1.24% for the three months ended September 30, 2006, and a ROE of 12.90% and a ROA of 1.10% for the three months ended June 30, 2007.

CORPORATE DEVELOPMENTS

Acquisition of CAB Holding, LLC. UCBH and CAB Holding, LLC (“CAB”), the holding company of The Chinese American Bank, a New York state-chartered bank, entered into an Agreement and Plan of Merger dated as of January 10, 2007. On May 23, 2007, UCBH completed its acquisition of CAB for a total consideration of approximately $132.6 million consisting of 3,711,580 shares of UCBH’s common stock valued at $66.1 million and $66.5 million in cash, which includes direct acquisition costs of $1.5 million. The results of CAB’s operations have been included in the consolidated financial statements since that date.

-23-


Cash and due from banks	$	21,372
Federal funds sold		78,700
Investment and mortgage-backed securities available for sale		64,882
Federal Home Loan Bank stock, Federal Reserve Bank stock and other equity investments		1,128
Loans held in portfolio, net		167,838
Premises and equipment		31,701
Goodwill		63,565
Core deposit intangibles		6,600
Other assets		17,667


Total assets acquired		453,453


Deposits		311,669
Other liabilities		9,213


Total liabilities assumed		320,882


Total allocation of purchase price	$	132,571

The purchase price allocation reflected above is preliminary and subject to final determination of valuation of the fair value of assets acquired and liabilities assumed. The Company expects to finalize the valuation in the fourth quarter of 2007 and does not expect this to have a material impact on the Company’s financial position or results of operations.

Acquisition of Business Development Bank Ltd. On March 26, 2007, UCB entered into two agreements to purchase the Business Development Bank Ltd. (“BDB”), a wholly foreign owned enterprise established and existing under the laws of the People’s Republic of China, for a total consideration of $205.0 million in cash. The parties to the agreements may terminate the transaction for various reasons prior to the consummation of the acquisition. This acquisition will provide the Company with bank branches in Shanghai and Shantou, China and representative offices in Beijing and Guangzhou, China, which in turn will accelerate the implementation of the Company’s Greater China expansion strategy. The transaction is subject to both U.S. regulatory and China Banking Regulatory Commission approvals and is anticipated to close in the fourth quarter of 2007. BDB had total assets of $242.8 million, total loans of $214.2 million and total deposits of $20.1 million at September 31, 2007.

Investment Agreement with China Minsheng Banking Corp., Ltd. On October 7, 2007, UCBH and China Minsheng Banking Corp., Ltd., a Chinese joint stock commercial bank (“Minsheng”), entered into an Investment Agreement (the “Investment Agreement”), pursuant to which Minsheng will acquire 9.9% of shares of UCBH common stock in two phases, with a mutual option to increase Minsheng ownership to 20.0%.

In the first phase, which is anticipated to close in the fourth quarter of 2007, UCBH will issue approximately 5.4 million shares of its common stock to Minsheng at a price per share of $17.79, representing the 90-day average UCBH closing price as of the close on September 30, 2007. In the second phase, which is anticipated to close in 2008, Minsheng will increase its ownership to 9.9% (calculated on a post closing basis) through, at the discretion of UCBH, a combination of the purchase of secondary shares and/or the issuance of primary shares. By June 30, 2009, conditioned upon mutual agreement and regulatory approvals, Minsheng may increase its share ownership to 20.0% (calculated on a post closing basis) through, at the discretion of UCBH, a combination of the purchase of secondary shares and/or the issuance of primary shares.

-24-

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

Other than as discussed below, the Company has made no significant changes in its critical accounting policies and significant estimates from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

Allowance for Loan Losses

The allowance for loan losses represents our estimate of the losses that are inherent in the loans held in portfolio. UCB continuously monitors the quality of its loans held in portfolio and maintains an allowance for loan losses sufficient to absorb losses inherent in the loans held in portfolio. At September 30, 2007, UCB’s total allowance for loan losses was $68.5 million, which represented 0.89% of loans held in portfolio.

UCB’s methodology for assessing the adequacy of the allowance for loan losses includes the evaluation of two distinct components: a general allowance applied to loans held in portfolio categories as a whole and a specific reserve for loans deemed impaired. Loans that are determined to be impaired are excluded from the general allowance analysis of the loans held in portfolio and are assessed individually.

In determining the general allowance, UCB applies loss factors, differentiated by an internal credit risk rating system, to its major loan portfolio categories (based primarily on loan type). UCB’s risk rating system is applied at the individual loan level within each of the major loan portfolio categories. The credit quality of the loan portfolio is regularly assessed through ongoing review.

The loss factors are developed from actual historic losses, and reflect comparative analysis with peer group loss rates and expected losses, which are in turn based on estimated probabilities of default and loss given default. Additionally, loss factors incorporate qualitative adjustments that reflect an assessment of internal and external influences on credit quality that have not yet been reflected in the historical loss or risk-rating data. These influences may include elements such as portfolio credit quality trends and changes in concentrations, growth, or credit underwriting. UCB’s qualitative adjustments also include an economic surcharge factor to adjust loss factors in recognition of the impact various macro-economic factors have on portfolio performance. The quantitative analysis also resulted in establishing a minimum loss factor for each of the major loan portfolio categories to better reflect minimum inherent loss in all portfolios including those with limited historic loss experience.

UCB regularly assesses the loss factors that are applied to loan portfolio categories on a quarterly basis, and as part of the assessment concluded during the nine months ended September 30, 2007, UCB effected further refinements in the determination of certain loss factors. In addition, UCB performs its annual allowance methodology review during the second quarter of each year. The annual methodology review primarily addresses the approaches, assumptions, and data inputs used in the quantitative support for the loss factors, and focused primarily on the continued development of the expected loss approach.

The factor refinement in the third quarter 2007 included the effects of both the regular quarterly qualitative factor assessment and the completion of the annual allowance methodology review during the second quarter of 2007, which resulted in a revision and net reduction of the loss factors applicable to various pass rated portfolio segments.

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

During the nine months ended September 30, 2007, the allowance for loan losses increased $6.5 million from the balance at December 31, 2006. The increase is due to $3.8 million of allowance for loan losses acquired in connection with the purchase of The Chinese American Bank, an increase in specific valuation allowances associated with impaired loans, and growth in the Company’s loan portfolio. These increases were offset by a $6.4 million reduction from changes in loss factors and a $5.4 million reduction attributable to net loan charge-offs.

-25-

UCB also estimates a reserve related to unfunded commitments and other off-balance sheet credit exposure. In assessing the adequacy of this reserve, UCB uses an approach similar to the approach used in the development of the allowance for loan losses. The reserve for unfunded commitments is included in other liabilities on the statement of financial position.

The reserve for unfunded commitments, which is included in other liabilities on the balance sheet, decreased $1.9 million from December 31, 2006. The decrease was primarily a result of the change in the loss factor of $3.7 million.

There are numerous components that enter into the evaluation of the allowance for loan losses. Some are quantitative while others require UCB to make qualitative judgments. Although UCB believes that its processes for determining an appropriate level for the allowance for loan losses adequately address all of the components to estimate inherent credit losses, the processes and their elements include features that may be susceptible to significant change. Any unfavorable differences between the actual outcome of credit-related events and UCB’s estimates and projections could require an additional allowance for loan losses, which would negatively impact the Company’s results of operations in future periods. UCB continually monitors and evaluates its allowance for loan losses methodology, seeking to refine and enhance the processes used to estimate incurred losses in our loan portfolios as appropriate.

Income Taxes

The provision for income taxes is based on income reported for financial statement purposes and differs from the amount of taxes currently payable, because certain income and expense items are reported for financial statement purposes in different periods than those for tax reporting purposes.

The Company accounts for income taxes using the asset and liability approach, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is established, when necessary, to reduce the deferred tax assets to the amount that is more likely than not to be realized.

As part of the computation of the income tax provision, estimates and assumptions must be made regarding the deductibility of certain expenses and the treatment of tax contingencies. There is a possibility that these estimates and assumption may be disallowed as part of an audit by the various taxing authorities that the Company is subject to. Any differences between items taken as deductions in our tax provision computations and those allowed by the taxing authorities could result in additional income tax expense in future periods.

The Company adopted the provisions of FIN 48 effective January 1, 2007. See management’s discussion over “recent accounting pronouncements” for management’s evaluation of FIN 48.

Recent Accounting Pronouncements

Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115. SFAS No. 159 provides entities with an option to report selected financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS No. 159 effective January 1, 2008. In connection therewith, management of the Company does not expect the adoption of SFAS No. 159 to have a material impact on the Company’s financial position or results of operations.

-26-

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 clarifies the principle 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. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company will adopt SFAS. No 157 effective January 1, 2008. In connection therewith, management of the Company does not expect the adoption of SFAS No. 157 to have a material impact on the Company’s financial position or results of operations. The Company is, however, in the process of evaluating the various valuation models and methodologies that the Company will need to implement, in order to comply with the disclosure requirements of SFAS No. 157.

Accounting for Uncertainty in Income Taxes

In July 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for income tax uncertainties that have been recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires that the Company recognize in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. FIN 48 also provides additional guidance on accounting for tax uncertainties, including derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company adopted the provisions of FIN 48 effective January 1, 2007. The impact of adopting FIN 48 resulted in a cumulative effect adjustment of $3.0 million with a $2.6 million decrease in goodwill, and an offsetting $2.6 million decrease in current taxes payable. There were no cumulative effect adjustments to the Company’s opening retained earnings as of January 1, 2007. Additionally, in connection with the adoption of FIN 48, the Company will continue to classify interest and penalties related to unrecognized tax positions as components of interest expense.

Accounting for Servicing of Financial Assets

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140. SFAS No. 156 permits entities to choose either to measure servicing rights subsequent to initial valuation at fair value and report changes in fair value in earnings or to amortize the servicing rights in proportion to and over the estimated net servicing income or loss and assess the servicing rights for impairment or the need for an increased obligation. SFAS No. 156 also clarifies when a servicer should separately recognize servicing assets and liabilities, requires that all separately recognized assets and liabilities be initially measured at fair value, if practicable, permits a one-time reclassification of available for sales securities to trading securities by an entity with recognized servicing rights and requires additional disclosures for all separately recognized servicing assets and liabilities. SFAS No. 156 is effective as of the beginning of an entity’s fiscal year that begins after September 15, 2006. In accordance with SFAS No. 156, the Company has initially measured mortgage servicing rights at fair value and will continue to subsequently amortize its mortgage servicing rights based on estimated future net servicing income, with quarterly assessments for impairment. The Company adopted the provisions of SFAS No. 156 effective January 1, 2007. The adoption did not have a material impact on the Company’s financial position or results of operations.

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Accounting for Certain Hybrid Financial Instruments

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

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RESULTS OF OPERATIONS

Financial Highlights (Dollars in Thousands, Except Per Share Amounts)


	Three Months Ended September 30,												Nine Months Ended September 30,
							Increase (Decrease)												Increase (Decrease)
	2007			2006			Amount			%			2007			2006			Amount			%
Operating Data:
Total interest and dividend income	$	182,751		$	137,892		$	44,859			32.53	%	$	520,412		$	392,350		$	128,062			32.64	%
Total interest expense		98,827			71,768			27,059			37.70			283,922			194,596			89,326			45.90

Net interest income		83,924			66,124			17,800			26.92			236,490			197,754			38,736			19.59
Provision for loan losses		3,010			936			2,074			221.58			6,156			2,492			3,664			147.03

Net interest income after provision for loan losses		80,914			65,188			15,726			24.12			230,334			195,262			35,072			17.96
Total noninterest income		10,822			10,968			(146	)		(1.33	)		33,192			35,174			(1,982	)		(5.63	)
Total noninterest expense		43,578			37,419			6,159			16.46			130,292			117,298			12,994			11.08

Income before income tax expense		48,158			38,737			9,421			24.32			133,234			113,138			20,096			17.76
Income tax expense		17,337			13,167			4,170			31.67			47,168			38,743			8,425			21.75

Net income	$	30,821		$	25,570		$	5,251			20.54		$	86,066		$	74,395		$	11,671			15.69


Per Share Data:
Basic earnings per share	$	0.30		$	0.27		$	0.03			11.11	%	$	0.85		$	0.79		$	0.06			7.59	%
Diluted earnings per share		0.29			0.26			0.03			11.54			0.82			0.76			0.06			7.89
Dividends declared per share		0.030			0.030			—			—			0.090			0.090			—			—

Select Operating Ratios:
Return on average assets		1.15	%		1.24	%		(9)	*		(7.26	)%		1.11	%		1.22	%		(11)	*		(9.02	)%
Return on average equity		13.37			15.51			(214	)		(13.80	)		13.30			15.68			(238	)		(15.18	)
Efficiency ratio ⁽¹⁾		45.99			48.54			(255	)		(5.25	)		48.31			50.36			(205	)		(4.07	)
Noninterest expense to average assets		1.63			1.81			(18	)		(9.94	)		1.69			1.93			(24	)		(12.44	)
Average equity to average assets		8.60			7.96			64			8.04			8.38			7.80			58			7.44
Dividend payout ratio ⁽²⁾		10.34			11.54			(120	)		(10.40	)		10.98			11.84			(86	)		(7.26	)
Net loan charge-offs to average loans held in portfolio		0.12			0.16			(4	)		(25.00	)		0.10			0.17			(7	)		(41.18	)
Interest rate spread ⁽³⁾		2.96			2.94			2			0.68			2.86			3.04			(18	)		(5.92	)
Net interest margin ⁽³⁾		3.44			3.43			1			0.29			3.35			3.49			(14	)		(4.01	)


	September 30,			December 31,			Increase (Decrease)
	2007			2006			Amount			%
Financial Condition and Other Data:
Loans held in portfolio, net	$	7,629,991		$	6,573,645		$	1,056,346			16.07	%
Securities purchased under agreements to resell		200,00			175,000			25,000			14.29
Securities available for sale		1,492,589			2,149,456			(656,867	)		(30.56	)
Securities held to maturity		274,547			290,673			(16,126	)		(5.55	)
Total assets		11,081,131			10,346,414			734,717			7.10
Deposits		7,781,095			7,202,845			578,250			8.03
Securities sold under agreements to repurchase		500,000			401,600			98,400			24.50
Subordinated debentures		406,646			240,549			166,097			69.05
Short-term borrowings and federal funds purchased		177,335			654,636			(477,301	)		(72.91	)
Long-term borrowings		1,134,139			906,651			227,488			25.09
Total liabilities		10,139,453			9,560,343			579,110			6.06
Stockholders’ equity		941,678			786,071			155,607			19.80
Nonperforming assets		36,858			15,198			21,660			142.52
Ratio of stockholders’ equity to total assets		8.50	%		7.60	%		90	*		11.84

Asset Quality Data:
Loan delinquency ratio		1.06	%		0.84	%		22	*		26.19	%
Nonperforming assets to total assets		0.33			0.15			18			120.00
Nonperforming loans to loans held in portfolio		0.42			0.19			23			121.05
Allowance for loan losses to loans held in portfolio		0.89			0.93			(4	)		(4.30	)
Allowance for loan losses to nonperforming loans		210.73			503.73			(293	)		(58.17	)
Total loan to deposit ratio		101.37			94.11			726			7.71

Regulatory Capital Ratios:
United Commercial Bank and subsidiaries:
Tier 1 risk-based capital		9.72	%		9.67	%		5	*		0.52	%
Total risk-based capital		11.88			10.53			135			12.82
Tier 1 leverage		8.59			9.30			(71	)		(7.63	)
UCBH Holdings, Inc. and subsidiaries:
Tier 1 risk-based capital		10.03			9.86			17			1.72
Total risk-based capital		12.19			10.72			147			13.71
Tier 1 leverage ratio		8.86			9.50			(64	)		(6.74	)


⁽¹⁾		Represents noninterest expense divided by the total of our net interest income before provision for loan losses and our noninterest income.

⁽²⁾		Dividends declared per share as a percentage of diluted earnings per share.

⁽³⁾		Calculated on a tax equivalent basis. Interest income from tax-exempt investment securities calculated on a tax equivalent basis was $5.6 million and $4.1 million for the three months ended September 30, 2007 and 2006, respectively.

*		Basis point

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Three Months Ended September 30, 2007, Compared to Three Months Ended September 30, 2006

The consolidated net income of the Company for the three months ended September 30, 2007, increased by $5.3 million, or 20.5%, to $30.8 million, compared to $25.6 million for the same period in 2006. The annualized ROE and ROA ratios for the three months ended September 30, 2007, were 13.37% and 1.15%, respectively. These amounts compare with the ROE ratio of 15.51% and the ROA ratio of 1.24% for the three months ended September 30, 2006. The declines in the ratios are reflective of the growth rates of assets and equity that exceeded the growth in net income, primarily as a result of the Company’s expansion and the Summit Bank Corporation (“Summit”) and CAB Acquisitions that were consummated on December 29, 2006, and May 23, 2007, respectively. The efficiency ratio was 45.99% for the three months ended September 30, 2007, compared with 48.54% for the same period in 2006. The decrease in the efficiency ratio is reflective of the growth in net interest income that exceeded the growth in noninterest expense, resulting from the increase in average interest-earning assets. Diluted earnings per share were $0.29 and $0.26 for the three months ended September 30, 2007 and 2006, respectively.

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Net Interest Income and Net Interest Margin. The following table reflects the distribution of average assets, liabilities and stockholders’ equity, as well as the amounts of interest income and resultant yields earned from average interest-earning assets, and the amounts of interest expense and resultant rates paid on average interest-bearing liabilities for the three months ended September 30, 2007 and 2006 (dollars in thousands):


	Three Months Ended September 30, 2007								Three Months Ended September 30, 2006
						Average								Average
				Interest		Yields						Interest		Yields
	Average			Income/		Earned/			Average			Income/		Earned/
	Balance			Expense		Rates Paid			Balance			Expense		Rates Paid
Nontaxable equivalent basis:
Interest-earning assets
Loans ⁽¹⁾⁽²⁾	$	7,644,342		$	151,580		7.93	%	$	6,082,253		$	114,752		7.55	%
Taxable securities ⁽³⁾		1,617,076			20,460		5.06			1,326,243			16,220		4.89
Tax exempt securities ⁽³⁾		275,532			3,611		5.24			224,155			2,686		4.79
FHLB Stock		71,995			917		5.09			53,780			1,313		9.77
Securities purchased under agreements to resell		184,239			3,341		7.25			66,304			1,239		7.47
Other		193,961			2,842		5.86			134,479			1,682		5.00


Total interest-earning assets		9,987,145			182,751		7.32			7,887,214			137,892		6.99
Noninterest-earning assets		726,893			—					393,819			—


Total assets	$	10,714,038		$	182,751				$	8,281,033		$	137,892


Interest-bearing liabilities:
Deposits:
NOW, checking and money market accounts	$	1,561,262		$	13,640		3.49		$	1,375,736		$	12,055		3.51
Savings accounts		741,573			1,750		0.94			687,193			2,376		1.38
Time deposits		4,492,421			56,804		5.06			3,700,199			42,271		4.57


Total interest-bearing deposits		6,795,256			72,194		4.25			5,763,128			56,702		3.94
Securities sold under agreements to repurchase		371,556			3,631		3.91			214,130			1,908		3.56
Short-term borrowings and federal funds purchased		257,645			3,324		5.16			123,595			1,523		4.93
Long- term borrowings		1,151,958			13,539		4.70			696,942			8,540		4.90
Subordinated debentures		334,123			6,138		7.35			150,520			3,095		8.22


Total interest-bearing liabilities		8,910,538			98,826		4.44			6,948,315			71,768		4.13
Noninterest-bearing deposits		810,440			—					558,512			—
Other noninterest-bearing liabilities		71,259			—					114,831			—
Stockholders’ equity		921,801			—					659,375			—


Total liabilities and stockholders’ equity	$	10,714,038		$	98,826				$	8,281,033		$	71,768


Net interest-earning assets/net interest income/net interest rate spread ⁽⁴⁾	$	1,076,607		$	83,925		2.88	%	$	938,899		$	66,124		2.86	%


Net interest margin ⁽⁵⁾							3.36	%							3.35	%


Ratio of interest-earning assets to interest-bearing liabilities		1.12	x							1.14	x


Tax equivalent basis:
Total interest-earning assets ⁽⁶⁾	$	9,987,145		$	184,696		7.40	%	$	7,887,214		$	139,338		7.07	%
Total interest-bearing liabilities		8,910,538			98,826		4.44			6,948,315			71,768		4.13


Net interest-earning assets/net interest income/net interest rate spread ⁽⁴⁾	$	1,076,607		$	85,870		2.96	%	$	938,899		$	67,570		2.94	%


Net interest margin ⁽⁵⁾							3.44	%							3.43	%


Average cost of deposits:
Total interest-bearing deposits	$	6,795,256		$	72,194		4.25	%	$	5,763,128		$	56,702		3.94	%
Noninterest-bearing deposits		810,440			—					558,512			—


Total deposits	$	7,605,696		$	72,194		3.80	%	$	6,321,640		$	56,702		3.59	%


⁽¹⁾		Nonaccrual loans are included in the table for computation purposes; however, interest for such loans is recognized on a cash basis.

⁽²⁾		Average loans include loans held for sale.

⁽³⁾		Average yield on investment securities is computed using historical cost balances; the yield information does not give effect to changes in fair value that are reflected as a component of stockholders’ equity.

⁽⁴⁾		Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

⁽⁵⁾		Net interest margin represents net interest income divided by average interest-earning assets.

⁽⁶⁾		Interest income from nontaxable securities has been adjusted to a tax equivalent basis using a statutory Federal income tax rate of 35.0%. Interest income from nontaxable investment securities calculated on a tax equivalent basis was $5.6 million and $4.1 million for the three months ended September 30, 2007 and 2006, respectively.

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The increase in net interest income for the three months ended September 30, 2007, compared to the same period in 2006 was principally due to a $2.10 billion increase in average interest-earning assets, which resulted primarily from organic loan growth along with increases resulting from the Summit and CAB acquisitions. The average cost of deposits increased 21 basis points from 3.59% for the three months ended September 30, 2006, to 3.80% for the three months ended September 30, 2007, as a result of an increase in market interest rates during the past twelve months, the change in the composition of deposits and the procurement of certificates of deposit from brokers. These factors were partially offset by a 38 basis point increase in average loan yields reflecting the timing of the repricing of adjustable-rate loans, as well as the continued change in our loan portfolio mix. The yield on taxable securities also increased for the three months ended September 30, 2007, compared to the same period in 2006 as a result of purchases of higher-yielding securities during 2007.

The net interest margin of 3.44%, on a tax equivalent basis, for the three months ended September 30, 2007, remained consistent at 3.43% with the three months ended September 30, 2006.

Provision for Loan Losses. The provision for loan losses for the three months ended September 30, 2007 is reflective of loan growth, changes in the mix of the loan portfolio, reductions in certain historical and qualitative loss factors, increases in specific reserves and in classified loans, and charge-offs, all of which combined resulted in a net increase in the provision as compared with 2006. See “Credit Risk Management” for more information on how we determine the appropriate level for the allowances for loan losses and unfunded lending commitments.

Noninterest Income. Noninterest income decreased by $146,000, or 1.3%, to $10.8 million for the quarter ended September 30, 2007, compared with $11.0 million for the corresponding quarter of 2006. The decrease reflected a reduction in gain on sale of loans and a higher equity loss in other equity investments, largely offset by an increase in commercial banking fees and service charges on deposits. The reduction in the gain on sale of loans of $3.5 million, or 59.7%, reflected the planned decrease in volume of loan sales in the third quarter of 2007. UCB had an increase of equity losses in other equity investments to $900,000 for the three months ended September 30, 2007, from $253,000 for the same period in 2006, primarily attributable to equity losses from the Community Reinvestment Act (“CRA”) qualified investments. UCB increased its commercial banking fees to $5.2 million for the three months ended September 30, 2007, compared to $3.7 million for the same period in 2006. The $1.5 million increase in commercial banking fees reflects the increased activities in the trade finance, consumer loan portfolios and fee based products. Service charges on deposits increased to $1.8 million for the three months ended September 30, 2007, compared to $1.0 million for the same period in 2006.

Noninterest Expense. Noninterest expense increased $6.2 million, or 16.5%, for the three months ended September 30, 2007, compared to the same period in 2006. For the three months ended September 30, 2007, personnel expenses increased $4.5 million, or 22.6%. The increase in personnel expenses reflects the additional staffing required to support the growth of UCB’s commercial banking business, the opening of new branches earlier during the year, the additional staffing resulting from the Summit and CAB acquisitions and the expansion of UCB’s infrastructure to support a larger and growing organization. Personnel expenses also included $933,000 in stock compensation expense for the three months ended September 30, 2007, compared to $642,000 for the same period in 2006. Occupancy expenses increased $1.1 million, or 25.2%, for the three months ended September 30, 2007, compared to the same period in 2006 as a result of the opening of new branches and the acquisition of Summit in December, 2006 and the CAB acquisition in May 2007. Core deposit intangible amortization increased $250,000, or 37.4%, for the three months ended September 30, 2007, compared to the same period in 2006 as a result of the additional amortization of the core deposit intangibles associated with the Summit and CAB acquisitions.

Income Tax Expense. The effective tax rate for the three months ended September 30, 2007, was 36.0%, compared with 34.0% for the three months ended September 30, 2006. The reduced tax rate in 2006 reflects the utilization of Enterprise Zone tax credits. The effective tax rates are generally lower than the combined federal and state statutory rate of 42.0%, primarily due to federal and state tax credits and incentives, tax-exempt income, and the net impact of our operating in multiple tax jurisdictions, both within and outside of the United States of America.

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Nine Months Ended September 30, 2007, Compared to Nine Months Ended September 30, 2006

The consolidated net income of the Company for the nine months ended September 30, 2007, increased by $11.7 million, or 15.7%, to $86.1 million, compared to $74.4 million for the same period in 2006. The annualized ROE and ROA ratios for the nine months ended September 30, 2007, were 13.30% and 1.11%, respectively. These amounts compare with the ROE ratio of 15.68% and the ROA ratio of 1.22% for the nine months ended September 30, 2006. The declines in the ratios are reflective of the growth rates of assets and equity that exceeded the growth in net income, primarily as a result of the Company’s expansion and the Summit acquisition that was consummated on December 29, 2006 and the CAB acquisition on May 23, 2007. The efficiency ratio was 48.31% for the nine months ended September 30, 2007, compared with 50.36% for the same period in 2006. The decrease in the efficiency ratio is reflective of the growth in net interest income that exceeded the growth in noninterest expense, resulting from the increase in average interest-earning assets. Diluted earnings per share were $0.82 for the nine months ended September 30, 2007, compared with $0.76 for the same period in 2006.

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Net Interest Income and Net Interest Margin. The following table reflects the distribution of average assets, liabilities and stockholders’ equity, as well as the amounts of interest income and resultant yields earned from average interest-earning assets, and the amounts of interest expense and resultant rates paid on average interest-bearing liabilities for the nine months ended September 30, 2007 and 2006 (dollars in thousands):


	Nine Months Ended September 30, 2007								Nine Months Ended September 30, 2006
						Average								Average
				Interest		Yields						Interest		Yields
	Average			Income/		Earned/			Average			Income/		Earned/
	Balance			Expense		Rates Paid			Balance			Expense		Rates Paid
Nontaxable equivalent basis:
Interest-earning assets
Loans ⁽¹⁾⁽²⁾	$	7,246,407		$	426,495		7.85	%	$	6,077,145		$	331,926		7.28	%
Taxable securities ⁽³⁾		1,708,250			64,631		5.04			1,247,969			44,895		4.80
Tax exempt securities ⁽³⁾		274,657			10,212		4.96			224,898			8,062		4.78
FHLB Stock		71,281			2,714		5.08			48,765			2,308		6.31
Securities purchased under agreements to resell		157,418			7,834		6.64			22,344			1,239		7.39
Other		181,524			8,526		6.26			110,620			3,920		4.72


Total interest-earning assets		9,639,537			520,412		7.20			7,731,741			392,350		6.77
Noninterest-earning assets		658,425			—					377,070			—


Total assets	$	10,297,962		$	520,412				$	8,108,811		$	392,350


Interest-bearing liabilities:
Deposits:
NOW, checking and money market accounts	$	1,517,049		$	38,994		3.43		$	1,297,232		$	29,748		3.06
Savings accounts		716,378			5,484		1.02			720,637			6,767		1.25
Time deposits		4,347,191			162,224		4.98			3,658,284			114,282		4.17


Total interest-bearing deposits		6,580,618			206,702		4.19			5,676,153			150,797		3.54
Securities sold under agreements to repurchase		336,902			10,312		4.08			101,831			2,829		3.70
Short-term borrowings and federal funds purchased		314,047			12,993		5.52			246,143			8,167		4.42
Long- term borrowings		1,078,786			37,973		4.69			654,684			23,958		4.88
Subordinated debentures		281,299			15,942		7.56			149,046			8,845		7.91


Total interest-bearing liabilities		8,591,652			283,922		4.41			6,827,857			194,596		3.80
Noninterest-bearing deposits		747,186			—					533,698			—
Other noninterest-bearing liabilities		96,431			—					114,485			—
Stockholders’ equity		862,693			—					632,771			—


Total liabilities and stockholders’ equity	$	10,297,962		$	283,922				$	8,108,811		$	194,596


Net interest-earning assets/net interest income/net interest rate spread ⁽⁴⁾	$	1,047,885		$	236,490		2.79	%	$	903,884		$	197,754		2.97	%


Net interest margin ⁽⁵⁾							3.27	%							3.41	%


Ratio of interest-earning assets to interest-bearing liabilities		1.12	x							1.13	x


Tax equivalent basis:
Total interest-earning assets ⁽⁶⁾	$	9,639,537		$	525,911		7.27	%	$	7,731,741		$	396,691		6.84	%
Total interest-bearing liabilities		8,591,652			283,922		4.41			6,827,857			194,596		3.80


Net interest-earning assets/net interest income/net interest rate spread ⁽⁴⁾	$	1,047,885		$	241,989		2.86	%	$	903,884		$	202,095		3.04	%


Net interest margin ⁽⁵⁾							3.35	%							3.49	%


Average cost of deposits:
Total interest-bearing deposits	$	6,580,618		$	206,702		4.19	%	$	5,676,153		$	150,797		3.54	%
Noninterest-bearing deposits		747,186			—					533,698			—


Total deposits	$	7,327,804		$	206,702		3.76	%	$	6,209,851		$	150,797		3.24	%


⁽¹⁾		Nonaccrual loans are included in the table for computation purposes; however, interest for such loans is recognized on a cash basis.

⁽²⁾		Average loans include loans held for sale.

⁽³⁾		Average yield on investment securities is computed using historical cost balances; the yield information does not give effect to changes in fair value that are reflected as a component of stockholders’ equity.

⁽⁴⁾		Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

⁽⁵⁾		Net interest margin represents net interest income divided by average interest-earning assets.

⁽⁶⁾		Interest income from nontaxable securities has been adjusted to a tax equivalent basis using a statutory federal income tax rate of 35.0%. Interest income from nontaxable investment securities calculated on a tax equivalent basis was $15.7 million and $12.4 million for the nine months ended September 30, 2007 and 2006, respectively.

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The increase in net interest income for the first nine months of 2007 compared to 2006 was principally due to a $1.91 billion increase in average interest-earning assets, which resulted primarily from organic loan growth and the previously discussed Summit and CAB acquisitions. The average cost of deposits increased 52 basis points from 3.24% for the nine months ended September 30, 2006, to 3.76% for the nine months ended September 30, 2007, as a result of an increase in market interest rates during the past twelve months and the change in the composition of deposits. These factors were partially offset by a 57 basis point increase in average loan yields reflecting the timing of the repricing of adjustable-rate loans, as well as the continued change in our loan portfolio mix. The yield on taxable securities yield also increased in the first nine months of 2007 compared to the first nine months of 2006 as a result of the purchase of higher-yielding securities during 2007.

The decline in the net interest margin for the first nine months of 2007 compared to the first nine months of 2006 reflects the impact of increased costs of money market accounts and certificates of deposit resulting from higher market interest rates, the runoff of savings accounts due to the current market interest rates, the change in the composition of deposits and the procurement of costlier certificates of deposit from brokers, all of which were partially offset by higher loan yields.

Provision for Loan Losses. The provision for loan losses for 2007 is reflective of loan growth, changes in the mix of the loan portfolio, reductions in certain historical and qualitative loss factors, increases in specific reserves and in classified loans, and charge-offs, all of which together resulted in a net increase in the provision as compared with 2006. See “Credit Risk Management” for more information on how we determine the appropriate level for the allowances for loan losses and unfunded lending commitments.

Noninterest Income. Noninterest income decreased by $2.0 million, or 5.6%, for the nine months ended September 30, 2007, compared to the nine months ended September 30, 2006. Additional explanations of variances follow.

Commercial banking fees increased to $15.1 million for the nine months ended September 30, 2007, compared to $11.2 million for the same period in 2006, a 35.3% increase. The increase reflects the growth in trade finance activity, other commercial banking fees and increase in fees from UCB Investment Services, Inc. Gain on sale of securities increased to $3.8 million for the nine months ended September 30, 2007, from $206,000 for the same period of 2006. Additionally, UCB had an increase in equity losses in other equity investments to $2.2 million for the nine months ended September 30, 2007 from $761,000 for the same period in 2006 primarily attributable to CRA qualified investments. Also, noninterest income for the nine months ended September 30, 2006 included the $5.0 million acquisition termination fee from Great Eastern Bank received in the first quarter of 2006.

Noninterest Expense. Noninterest expense increased $13.0 million, or 11.1%, for the nine months ended September 30, 2007, compared to the nine months ended September 30, 2006. Explanations previously provided for the quarterly changes also apply to the year-to-date changes. Additional explanations of variances follow.

For the nine months ended September 30, 2007, occupancy expenses increased $3.7 million or 31.5% related to the acquisitions of Summit in December 2006 and CAB in May 2007. Core deposit intangible amortization increased $1.6 million, or 96.5%, for the nine months ended September 30, 2007 compared to the same period in 2006 as a result of the additional amortization of the deposit intangibles primarily associated with the Summit and CAB acquisitions. Other general and administrative expenses increased by $2.0 million, or 12.8%, for the nine months ended September 30, 2007 compared to the same period in 2006 primarily as a result of increased merchant card expenses, foreign exchange losses, marketing related expenses and bank service fees.

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Income Tax Expense. The effective tax rate for the nine months ended September 30, 2007, was 35.4%, compared with 34.2% for the nine months ended September 30, 2006. The reduced tax rate in 2006 reflects the utilization of Enterprise Zone tax credits. The effective tax rates are generally lower than the combined federal and state statutory rate of 42.0%, primarily due to federal and state tax credits and incentives, tax-exempt income, and the net impact of our operating in multiple tax jurisdictions, both within and outside of the United States.

BALANCE SHEET ANALYSIS

Investment Securities

At the end of each month, UCB adjusts the carrying value of its Available for Sale (“AFS”) Investment Securities Portfolio to reflect the current fair value of each security. The Held to Maturity (“HTM”) Investment Securities Portfolio is carried at amortized cost. At the time a security is purchased, UCB classifies the security as either AFS or HTM. The securities are classified as HTM if management has the positive intent and ability to hold such securities to maturity.


			Gross		Gross					Less Than 12 Months					12 Months or More					Total
	Amortized		Unrealized		Unrealized			Market		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description	Cost		Gains		Losses			Value		Value		Losses			Value		Losses			Value		Losses
Investment securities available for sale:
Agency Preferred Stock	$	18,516	$	—	$	(801	)	$	17,715	$	17,715	$	(801	)	$	—	$	—		$	17,715	$	(801	)
Collateralized debt obligations		33,481		—		(3,924	)		29,557		21,267		(3,714	)		8,290		(210	)		29,557		(3,924	)
U.S. Government sponsored enterprises notes		487,968		1,289		(1,986	)		487,271		—		—			108,938		(1,986	)		108,938		(1,986	)
Municipals		61,952		23		(1,711	)		60,264		56,399		(1,711	)		—		—			56,399		(1,711	)
Other		10,000		—		(419	)		9,581		9,581		(419	)		—		—			9,581		(419	)


Total investment securities available for sale		611,917		1,312		(8,841	)		604,388		104,962		(6,645	)		117,228		(2,196	)		222,190		(8,841	)


Mortgage-backed securities available for sale:
FNMA		394,124		3		(11,596	)		382,531		25,625		(228	)		356,302		(11,368	)		381,927		(11,596	)
GNMA		78,549		16		(2,931	)		75,634		—		—			75,147		(2,931	)		75,147		(2,931	)
FHLMC		246,929		31		(8,011	)		238,949		—		—			234,065		(8,011	)		234,065		(8,011	)
Other		194,364		446		(3,724	)		191,086		24,237		(10	)		153,407		(3,714	)		177,644		(3,724	)


Total mortgage-backed securities available for sale		913,966		496		(26,262	)		888,200		49,862		(238	)		818,921		(26,024	)		868,783		(26,262	)


Total investment and mortgage-backed securities available for sale		1,525,883		1,808		(35,103	)		1,492,588		154,824		(6,883	)		936,149		(28,220	)		1,090,973		(35,103	)


Investment securities held to maturity:
Municipal securities		213,877		5,010		(113	)		218,774		11,325		(107	)		415		(6	)		11,740		(113	)


Mortgage-backed securities held to maturity:
FNMA		4,138		—		(182	)		3,956		—		—			3,956		(182	)		3,956		(182	)
GNMA		56,106		—		(2,050	)		54,056		—		—			54,056		(2,050	)		54,056		(2,050	)
FHLMC		425		—		(19	)		406		—		—			406		(19	)		406		(19	)


Total mortgage-backed securities held to maturity		60,669		—		(2,251	)		58,418		—		—			58,418		(2,251	)		58,418		(2,251	)


Total investment and mortgage-backed securities held to maturity		274,546		5,010		(2,364	)		277,192		11,325		(107	)		58,833		(2,257	)		70,158		(2,364	)

Total securities	$	1,800,429	$	6,818	$	(37,467	)	$	1,769,780	$	166,149	$	(6,990	)	$	994,982	$	(30,477	)	$	1,161,131	$	(37,467	)

The investment portfolio decreased by $673.0 million from December 31, 2006. This decrease is primarily due to the sale and maturity of securities available for sale.

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As of September 30, 2007, the amortized cost and the market value of the available for sale investment securities portfolio were $1.53 billion and $1.49 billion, respectively. The total net of tax unrealized loss on these securities was $19.2 million and is reflected as accumulated other comprehensive loss in stockholders’ equity. The difference between the carrying value and market value of securities that are held to maturity, aggregating a net unrealized gain of $2.6 million, has not been recognized in the financial statements as of September 30, 2007. Additionally, certain securities that UCB holds have unrealized losses that extend for periods in excess of twelve months. These securities are comprised primarily of U.S. Government sponsored enterprise notes, mortgage-backed securities and municipal securities. The U.S. Government sponsored enterprise notes are issued by one of the several government sponsored enterprises, such as FNMA, Government National Mortgage Association (“GNMA”) or Federal Home Loan Bank. The unrealized losses associated with these securities resulted from rising interest rates subsequent to purchase. The unrealized losses will decline as interest rates fall to the purchased yield and as the securities approach maturity. Management does not believe that there have been any deteriorations of credit quality that would contribute to any impairment of these securities.

The amortized cost and approximate market value of investment and mortgage-backed securities classified as available for sale and held to maturity, along with the portions of the portfolio with unrealized loss positions at December 31, 2006, were as follows (dollars in thousands):


			Gross		Gross					Less Than 12 Months					12 Months or More					Total
	Amortized		Unrealized		Unrealized			Market		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description	Cost		Gains		Losses			Value		Value		Losses			Value		Losses			Value		Losses
Investment securities available for sale:
Collateralized debt obligations	$	38,445	$	5	$	(316	)	$	38,134	$	14,888	$	(113	)	$	8,296	$	(203	)	$	23,184	$	(316	)
U.S. Government sponsored enterprises notes		588,621		120		(5,701	)		583,040		263,885		(1,566	)		125,194		(4,135	)		389,079		(5,701	)
U.S. Government sponsored enterprises discount notes		249,024		61		—			249,085		—		—			—		—			—		—
U.S. Treasury Bills		73,183		17		—			73,200		—		—			—		—			—		—
Municipals		58,325		—		—			58,325		—		—			—		—			—		—
Commercial paper		49,952		—		—			49,952		—		—			—		—			—		—
Other		10,000		—		(125	)		9,875		9,875		(125	)		—		—			9,875		(125	)


Total investment securities available for sale		1,067,550		203		(6,142	)		1,061,611		288,648		(1,804	)		133,490		(4,338	)		422,138		(6,142	)


Mortgage-backed securities available for sale:
FNMA		515,711		391		(13,405	)		502,697		148,236		(3,025	)		284,506		(10,380	)		432,742		(13,405	)
GNMA		87,866		—		(3,261	)		84,605		—		—			78,742		(3,261	)		78,742		(3,261	)
FHLMC		313,991		140		(9,847	)		304,284		7,424		(32	)		255,779		(9,815	)		263,203		(9,847	)
Other		200,832		16		(4,589	)		196,259		—		—			171,423		(4,589	)		171,423		(4,589	)


Total mortgage-backed securities available for sale		1,118,400		547		(31,102	)		1,087,845		155,660		(3,057	)		790,450		(28,045	)		946,110		(31,102	)


Total investment and mortgage-backed securities available for sale		2,185,950		750		(37,244	)		2,149,456		444,308		(4,861	)		923,940		(32,383	)		1,368,248		(37,244	)


Investment securities held to maturity:
Municipal securities		222,638		6,750		(30	)		229,358		4,531		(24	)		416		(6	)		4,947		(30	)


Mortgage-backed securities held to maturity:
FNMA		4,372		—		(172	)		4,200		—		—			4,200		(172	)		4,200		(172	)
GNMA		63,122		—		(1,755	)		61,367		—		—			61,367		(1,755	)		61,367		(1,755	)
FHLMC		541		—		(20	)		521		—		—			521		(20	)		521		(20	)


Total mortgage-backed securities held to maturity		68,035		—		(1,947	)		66,088		—		—			66,088		(1,947	)		66,088		(1,947	)


Total investment and mortgage-backed securities held to maturity		290,673		6,750		(1,977	)		295,446		4,531		(24	)		66,504		(1,953	)		71,035		(1,977	)


Total securities	$	2,476,623	$	7,500	$	(39,221	)	$	2,444,902	$	448,839	$	(4,885	)	$	990,444	$	(34,336	)	$	1,439,283	$	(39,221	)

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Loans

The components of UCB’s loans held in portfolio for each major loan category at September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Commercial:
Secured by real estate — nonresidential	$	2,619,291		$	2,341,572
Secured by real estate — multifamily		1,341,407			1,275,594
Construction		1,486,581			1,054,302
Business		1,689,750			1,461,322


Total commercial		7,137,029			6,132,790


Consumer:
Residential mortgage (one-to-four family)		496,934			448,895
Other		64,568			53,975


Total consumer		561,502			502,870


Loans held in portfolio ⁽¹⁾		7,698,531			6,635,660
Allowance for loan losses		(68,540	)		(62,015	)


Loans held in portfolio, net	$	7,629,991		$	6,573,645


⁽¹⁾		Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts of $21.7 million and $25.8 million at September 30, 2007, and December 31, 2006, respectively.

During the nine months ended September 30, 2007, loans held in portfolio increased by $1.06 billion. This increase resulted primarily from organic growth in commercial loans and loans resulting from the CAB acquisition, which were offset by a transfer of commercial real estate loans of $137.3 million from held in portfolio to held for sale. Commercial loans at September 30, 2007, increased 16.4% from the December 31, 2006, balance. Consumer loans increased 11.66% at September 30, 2007, from the December 31, 2006, balance.

At September 30, 2007, and December 31, 2006, UCB had cash secured loans of $254.7 million and $292.0 million, respectively, which were primarily commercial business loans.

UCB continues to earmark certain SBA loans as held for sale. Although UCB has the intent and ability to hold commercial real estate loans for the foreseeable future or until maturity or pay-off, UCB will periodically sell certain commercial real estate loans from held in portfolio, in order to manage its loan concentration. When a determination is made to sell loans, such loans are classified as held for sale. During the nine months ended September 30, 2007, UCB transferred $159.2 million of loans from held in portfolio to held for sale. UCB also transferred at the lower of cost or market value, $56.7 million of loans that did not attract a potential buyer or meet our pricing requirements from held for sale to held in portfolio during the nine months ended September 30, 2007. The loans held for sale for each major loan category at September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):

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	September 30,		December 31,
	2007		2006
Commercial:
Secured by real estate — nonresidential	$	187,863	$	141,348
Business		1,135		1,203


Total commercial		188,998		142,551


Consumer:
Residential mortgage (one-to-four family)		390		310


Loans held for sale ⁽¹⁾	$	189,388	$	142,861


⁽¹⁾		Amounts reflect net unamortized deferred loan fees of $371,000 and $213,000 at September 30, 2007, and December 31, 2006, respectively.

Consistent with UCB’s stated long-term objectives, UCB will continue to systematically reduce its concentration in commercial real estate loans while increasing its concentration in commercial business loans.

Loan commitments related to loans held for sale and held in portfolio for the three and nine months ended September 30, 2007 and 2006, were as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Loans held for sale:
Commercial:
Secured by real estate — nonresidential	$	12,535	$	6,263	$	36,433	$	39,188

Consumer:
Residential mortgage (one-to-four family)		278		1,846		1,956		3,097


Total loans held for sale commitments ⁽¹⁾		12,813		8,109		38,389		42,285


Loans held in portfolio:
Commercial:
Secured by real estate — nonresidential		287,020		211,040		820,479		583,092
Secured by real estate — multifamily		80,655		30,204		304,176		164,440
Construction		276,102		301,446		955,765		787,304
Business		258,712		325,799		826,273		888,564


Total commercial loans		902,489		868,489		2,906,693		2,423,400


Consumer:
Residential mortgage (one-to-four family)		47,823		24,457		125,289		70,817
Other		12,040		7,832		30,072		24,377


Total consumer loans		59,863		32,289		155,361		95,194


Total loans held in portfolio commitments ⁽¹⁾		962,352		900,778		3,062,054		2,518,594


Total loan commitments ⁽¹⁾	$	975,165	$	908,887	$	3,100,443	$	2,560,879


⁽¹⁾		Amounts do not reflect commitments related to loan participations.

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

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thereafter. The components of gross loans held in portfolio by interest type for each major loan category at September 30, 2007, were as follows (dollars in thousands):


			Intermediate
	Adjustable		Fixed		Fixed		Total
Commercial:
Secured by real estate — nonresidential	$	943,261	$	437,028	$	1,256,337	$	2,636,626
Secured by real estate — multifamily		373,720		832,479		132,165		1,338,364
Construction		1,384,312		—		108,995		1,493,307
Business		1,545,400		5,112		139,364		1,689,876


Total commercial		4,246,693		1,274,619		1,636,861		7,158,173


Consumer:
Residential mortgage (one-to-four family)		59,543		233,658		204,203		497,404
Other		60,513		—		4,181		64,694


Total consumer		120,056		233,658		208,384		562,098


Gross loans held in portfolio ⁽¹⁾	$	4,366,749	$	1,508,277	$	1,845,245	$	7,720,271


⁽¹⁾		Amounts do not reflect net deferred loan fees, purchase premiums and discounts of $21.7 million at September 30, 2007.

Adjustable-rate loans increased $617.6 million from December 31, 2006, to September 30, 2007. Intermediate fixed-rate loans increased $64.2 million from December 31, 2006, to September 30, 2007. Fixed-rate loans increased $377.0 million from December 31, 2006, to September 30, 2007.

Deposits

The balances and rates paid for categories of deposits at September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30, 2007					December 31, 2006
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
NOW, checking and money market accounts	$	2,444,064		2.08	%	$	2,194,176		2.18	%
Savings accounts		988,721		2.20			942,672		2.14
Time deposits:
Less than $100,000		1,476,320		4.61			1,410,162		4.60
$100,000 or greater		2,871,990		4.98			2,655,835		4.91


Total time deposits		4,348,310		4.86			4,065,997		4.80


Total deposits	$	7,781,095		3.65	%	$	7,202,845		3.66	%

Deposits have traditionally been UCB’s primary source of funding to use in its lending and investment activities. At September 30, 2007, 55.88% of UCB’s deposits were time deposits, 31.41% were negotiable order of withdrawal (“NOW”) accounts, demand deposits and money market accounts, and 12.71% were savings accounts. By comparison, at December 31, 2006, 56.45% of UCB’s deposits were time deposits, 30.46% were NOW accounts, demand deposits and money market accounts, and 13.09% were savings accounts. With the exception of state and federal government entities contributing 6.0% and 6.4% to total deposits as of September 30, 2007, and December 31, 2006, respectively, no other material portion of UCB’s deposits were from or were dependent upon any one customer, source or industry. State of California certificates of deposits are collateralized by certain investment securities of UCB.

Included in time deposits at September 30, 2007, are $2.87 billion of deposits of $100,000 or greater, compared to $2.66 billion at December 31, 2006. Such deposits made up 36.91% of total deposits at September 30, 2007, compared to 36.87% at December 31, 2006. Also included in time deposits are $186.9 million and $179.3 million of brokered deposits at September 30, 2007, and December 31, 2006, respectively.

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Borrowings

Borrowings as of and for the nine months ended September 30, 2007, and the year ended December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Securities sold under agreements to repurchase:
Average balance outstanding	$	336,902		$	162,124
Maximum amount outstanding at any month end period		500,000			401,600
Balance outstanding at end of period		500,000			401,600
Weighted average interest rate during the period		3.66	%		3.56	%
Weighted average interest rate at end of period		3.92	%		3.71	%
Weighted average remaining term to maturity at end of period (in years)		8.5			6.1

Short-term borrowings:
FHLB advances and other short-term borrowings:
Average balance outstanding	$	307,908		$	224,234
Maximum amount outstanding at any month end period		637,787			654,636
Balance outstanding at end of period		147,335			654,636
Weighted average interest rate during the period		5.45	%		4.52	%
Weighted average interest rate at end of period		5.29	%		5.21	%
Weighted average remaining term to maturity at end of period (in years)		0.03			—

Long-term borrowings:
FHLB advances:
Average balance outstanding	$	1,078,786		$	683,978
Maximum amount outstanding at any month end period		1,181,142			906,651
Balance outstanding at end of period		1,134,139			906,651
Weighted average interest rate during the period		4.69	%		4.89	%
Weighted average interest rate at end of period		4.62	%		4.72	%
Weighted average remaining term to maturity at end of period (in years)		6.13			5.4

Securities sold under agreements to repurchase are recorded net of certain reverse repurchase agreements. FIN 41, Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements—an interpretation of APB Opinion No. 10 and a modification of FASB Interpretation No. 39, allows for the netting of repurchase agreements and reverse repurchase agreements if certain conditions are met. These conditions were met for two reverse repurchase agreements totaling $100.0 million as of September 30, 2007.

UCB maintains a secured credit facility with the FHLB of San Francisco, Seattle and Boston (collectively referred to as “FHLB”) against which UCB may take advances. The terms of this credit facility requires UCB to maintain in safekeeping with the FHLB eligible collateral of at least 100% of outstanding advances. Short-term borrowings with the FHLB totaled $90.0 million at September 30, 2007, and $534.2 million at December 31, 2006. At September 30, 2007, the advances were secured with $18.2 million of securities and $4.16 billion of loans, and at December 31, 2006, $41.6 million of securities and $3.34 billion of loans secured the advances. At September 30, 2007, credit availability under this facility was approximately $1.37 billion.

Subordinated Debentures

UCBH formed or acquired special purpose trusts in 1997, 2001, 2002, 2005, 2006, and 2007 for the purpose of issuing guaranteed preferred beneficial interests in its junior subordinated debentures (the “Capital Securities”) and investing the proceeds thereof in the junior subordinated debentures issued by UCBH. Payment of distributions out of the monies held by the trusts and payments on liquidation of the trusts or the redemption of the Capital Securities are guaranteed by UCBH to the extent the trusts have funds available. The obligations of UCBH under the guarantees and the junior subordinated debentures are subordinate and junior in right of payment to all indebtedness of UCBH and will be structurally subordinated to all liabilities and obligations of UCBH’s subsidiaries. UCBH had $406.6 million and $240.5 million of subordinated debentures outstanding at September 30, 2007, and December 31, 2006, respectively.

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On September 28, 2007, UCB issued $75.0 million aggregate principal amount of subordinated debentures due September 30, 2017. The purchase agreement is dated as of September 28, 2007 and is made between United Commercial Bank, as borrower, and USB Capital Funding Corp., as lender. The subordinated debentures bear interest at a variable rate per annum equal to the 3-month LIBOR plus 1.50%. The Subordinated Debt is intended to qualify as Tier 2 capital under applicable rules and regulations promulgated by the State of California and the FDIC.

Junior Subordinated Debentures

On June 21, 2007, UCB issued $50.0 million aggregate principal amount of junior subordinated debentures due September 15, 2022. The debentures were issued pursuant to Floating Rate Junior Subordinated Debentures (the Debentures), dated June 21, 2007 between UCB, as issuer, and Wilmington Trust Company, as Trustee. The Debentures bear interest at a variable rate per annum equal to the 3-month LIBOR plus 1.34%.

Under applicable regulatory guidelines, the Debentures qualify as Tier 2 capital. The Debentures have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Debentures are subordinated to claims of depositors and all other creditors of UCB, are unsecured and are ineligible as collateral for a loan by UCB.

RISK ELEMENTS

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

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

•		Enterprise Risk Management Committee, which reviews credit, operational, market and liquidity risk;

•		Credit Risk Management Committee, which reviews credit policies, products and problem assets risk;

•		Market Risk Management Committee, which reviews securities, loans and borrowings to assess yield, and interest rate and market risk; and

•		Operational Risk Management Committee, which reviews those risks not covered by the Credit Risk Management and Market Risk Management Committees.

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

Credit Risk Management

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

Effective management of credit risk is essential in maintaining a safe and sound financial institution. We have in place a set of formal loan policies and procedures, which provide UCB with a framework for consistent loan underwriting and a basis for sound credit decisions. In addition, UCB has a well-defined set of standards for evaluating its loan portfolio and management utilizes a comprehensive loan grading system to identify the risk potential in the portfolio. Loans are periodically reviewed with regard to the borrower’s ability to repay the loan

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during which a risk grade is assigned to the loan. The reviews include evaluations of various factors including, the borrower’s debt capacity and financial flexibility, the borrower’s earnings, the sources of repayment, the level and nature of any contingencies, the quality of any collateral, and the industry in which the borrower operates. The reviews also address an evaluation of historical information as well as subjective assessments and interpretations. Further, an independent internal credit review function periodically conducts reviews of UCB’s lending operations and loan portfolios. These reviews are designed to place an emphasis on the early detection of problem credits so that action plans can be developed and implemented on a timely basis to mitigate any potential losses.

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

Another aspect of UCB’s credit risk management strategy is to maintain diversification in loans held in portfolio. The components of UCB’s loans held in portfolio by amount and percentage of gross loans held in portfolio for each major loan category at September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30, 2007				December 31, 2006
	Amount		%		Amount		%
Commercial:
Secured by real estate — nonresidential	$	2,619,291		34.02	$	2,341,572		35.29
Secured by real estate — multifamily		1,341,407		17.42		1,275,594		19.22
Construction		1,486,581		19.31		1,054,302		15.89
Business		1,689,750		21.95		1,461,322		22.02


Total commercial		7,137,029		92.70		6,132,790		92.42


Consumer:
Residential mortgage (one-to-four family)		496,934		6.45		448,895		6.76
Other		64,568		0.85		53,975		0.82


Total consumer		561,502		7.30		502,870		7.58


Loans held in portfolio ⁽¹⁾	$	7,698,531		100.00	$	6,635,660		100.00


⁽¹⁾		Amounts reflect net unamortized deferred loan fees, purchase premiums and discounts of $21.7 million and $25.8 million at September 30, 2007, and December 31, 2006, respectively.

UCB actively monitors the levels of loans as a percentage of its loans held in portfolio and of its risk-based capital. Consistent with our planned long-term objectives, UCB will continue to systematically reduce the concentration in commercial and multifamily real estate loans, while increasing the portfolio of commercial business loans. During the nine months ended September 30, 2007, $217.2 million in commercial real estate loans were sold. Additionally, $137.3 million of commercial real estate loans were transferred from held in portfolio to held for sale, in an effort to further reduce UCB’s concentration of commercial real estate loans.

UCB also manages its loans held in portfolio to avoid the risk of undue concentration of credits in a particular industry, trade group or property type. UCB has no significant exposure to highly leveraged transactions or to any individual customer or counterparty.

Nonperforming Assets

Nonperforming assets include nonaccrual and restructured loans from loans held in portfolio and other real estate owned (“OREO”), but exclude any loans held for sale. Loans are generally placed on nonaccrual status when a loan becomes 90 days past due as to principal and interest, unless the loan is both well secured and in the process of collection. Loans may be placed on nonaccrual earlier if, in management’s opinion, the full and timely collection of principal or interest becomes uncertain. When a loan is placed on nonaccrual status, any accrued but unpaid interest is reversed and charged against interest income. UCB charges off loans when it determines that collection becomes unlikely. OREO is acquired primarily through or in lieu of foreclosure on loans secured by real estate.

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UCB’s nonperforming assets from loans held in portfolio and OREO as of September 30, 2007, and December 31, 2006, were as follows (dollars in thousands):


	September 30,			December 31,
	2007			2006
Commercial loans:
Secured by real estate — nonresidential	$	6,592		$	5,604
Secured by real estate — multifamily		2,247			—
Construction		9,221			—
Business		14,063			6,339


Total commercial loans		32,123			11,943


Consumer loans:
Residential mortgage (one-to-four family)		354			368
Other		48			—


Total consumer loans		402			368


Total nonaccrual loans from loans held in portfolio		32,525			12,311
Other real estate owned		4,333			2,887


Total nonperforming assets	$	36,858		$	15,198


Nonperforming assets to total assets		0.33	%		0.15	%
Nonaccrual loans to loans held in portfolio		0.42			0.19
Nonperforming assets to loans held in portfolio and other real estate owned		0.48			0.23

Loans held in portfolio	$	7,698,531		$	6,635,660
Gross interest income recognized on impaired loans		84			80
Gross interest income not recognized on nonaccrual loans		1,126			676
Accruing loans contractually past due 90 days or more		17,456			4,339
Loans classified as troubled debt restructurings and not included above		8,489			8,614

The level of UCB’s nonperforming assets increased as of September 30, 2007, compared to December 31, 2006. The increase was a result primarily of $17.9 million of construction and commercial loan moving into nonaccrual status.

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

At September 30, 2007, and December 31, 2006, UCB’s investment in loans that were considered to be impaired was $46.5 million and $12.0 million, respectively. Estimated losses on impaired loans are added to the allowance for loan losses through the provision for loan losses. At September 30, 2007, the allowance for loan losses included $5.7 million for impaired loans with a $22.5 million recorded investment. At December 31, 2006, the allowance included $1.4 million for impaired loans with a recorded investment of $6.9 million.

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

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Allowances for Credit Losses

Allowance for Loan Losses. The components of the allowance for loan losses and allowance for losses related to unfunded commitments for the three and nine months ended September 30, 2007 and 2006, were as follows (dollars in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Balance at beginning of period:
Allowance for loan losses	$	67,739		$	59,035		$	62,015		$	64,542
Allowance for losses — unfunded commitments		4,968			5,224			6,833			3,402


Total allowance for losses at beginning of period		72,707			64,259			68,848			67,944

Acquired allowance for loan losses		—			—			3,825			—
Provision for loan losses		3,010			936			6,156			2,492
Charge-offs:
Commercial:
Secured by real estate — nonresidential		(50	)		(340	)		(66	)		(792	)
Secured by real estate — multifamily		(59	)		—			(59	)		—
Business		(2,991	)		(2,162	)		(6,340	)		(7,143	)


Total commercial		(3,100	)		(2,502	)		(6,465	)		(7,935	)

Consumer:
Other		—			(5	)		(9	)		(55	)


Total charge-offs		(3,100	)		(2,507	)		(6,474	)		(7,990	)


Recoveries:
Commercial:
Secured by real estate — nonresidential		943			—			954			128
Business		(136	)		152			112			252


Total commercial		807			152			1,066			380

Consumer:
Other		—			18			3			32


Total recoveries		807			170			1,069			412


Net charge-offs		(2,293	)		(2,337	)		(5,405	)		(7,578	)


Total allowance for losses at end of period		73,424			62,858			73,424			62,858


Allowance for loan losses		68,540			56,630			68,540			56,630
Allowance for losses — unfunded commitments		4,884			6,228			4,884			6,228


Total allowance for losses at end of period	$	73,424		$	62,858		$	73,424		$	62,858


Allowance for loan losses to loans held in portfolio		0.89	%		0.97	%		0.89	%		0.97	%
Net charge-offs to average loans held in portfolio		0.12			0.16			0.10			0.17

During the nine months ended September 30, 2007, the allowance for loan losses increased $6.5 million from the balance at December 31, 2006. The increase is due primarily to $3.8 million of allowance for loan losses acquired in connection with the CAB acquisition, an increase in specific valuation allowances associated with impaired loans, and growth in the Company’s loan portfolio. These increases were offset by a $6.4 million reduction from changes in loss factors and a $5.4 million reduction attributable to net-loan charge-offs.

If interest rates rise, additional pressure may be placed on our borrowers’ abilities to meet their contractual loan obligations, which may result in future increases to the allowance for loan losses and, in turn, higher provisions for loan losses. In addition, it is probable that the allowance for loan losses may increase in future quarters if we are successful in implementing our strategies for loan growth and for changing the mix of the commercial loan portfolio to reduce multifamily and commercial real estate loans and increase construction and commercial business loans. These latter two loan types generally contain higher credit risk attributes.

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Allowance for Unfunded Commitments. UCB also estimates a reserve related to unfunded commitments and other off-balance sheet credit exposure. In assessing the adequacy of this reserve, UCB uses an approach similar to the approach used in the development of the allowance for loan losses. The overall reserve decreased $1.9 million from December 31, 2006. The decrease was primarily a result of the change in the loss factor of $3.7 million. The reserve for unfunded commitments is included in other liabilities on the statement of financial position. Commitments to extend credit at September 30, 2007, and December 31, 2006, were $2.56 billion and $2.12 billion, respectively.

Market Risk Management

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

Interest rate risk is one of the most significant risks to which UCB is regularly exposed and is managed centrally in the Corporate Treasury function. It is the primary driver behind our market risk exposure and affects both the values of our financial assets and the interest we earn and pay out. A sudden and substantial change in interest rates could negatively affect our earnings if the rates of interest UCB earns on its loans and investments do not change at the same speed, to the same extent, or on the same basis as the interest rates UCB pays on its deposits and borrowings.

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

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

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

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

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

The percentage change in UCB’s NPV and net interest income, assuming an immediate change in interest rates of plus or minus 100 and 200 basis points, at September 30, 2007, has not changed substantially from December 31, 2006.

Operational Risk Management

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

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

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

Liquidity Risk

Liquidity Management. Liquidity is managed centrally for both UCBH and UCB. UCBH’s cash requirements consist primarily of debt service, operating expenses, income taxes and dividends to stockholders. UCBH’s cash needs are routinely met through dividends from UCB, investment income and debt issuances. UCB’s cash requirements consist primarily of funding loans and deposit maintenance such as interest payments and deposit withdrawals. UCB’s primary source of funding is its core deposits.

Operational cash flows, while constituting a potential funding source for the Company, are typically not large enough to provide funding in the amounts that fulfill the needs of UCBH and UCB. As a result, the Company utilizes other sources at its disposal to manage its liquidity needs.

For the nine months ended September 30, 2007, UCBH received $20.5 million in dividends from UCB. At September 30, 2007, $275.9 million of dividend capacity was available for UCB to pay UCBH without obtaining regulatory approval. The dividend capacity is dependent upon the continued profitability of UCB and on no significant changes taking place in the current regulatory environment. While we have no current expectation that these two conditions will change, should a change take place in the future, the source of funding to UCBH may become more limited or even unavailable.

As mentioned earlier, UCB’s primary source of funding is its deposits. For the nine months ended September 30, 2007, deposit increases resulted in net cash inflows of $578.3 million. Our liquidity may be adversely affected by unexpected withdrawals of deposits, which would require us to seek alternative funding sources, such as federal funds and other borrowings.

UCB maintains borrowing lines with numerous correspondent banks and brokers, and several agreements to repurchase securities sold with major brokerage houses to supplement its supply of lendable funds and to manage liquidity. In addition, the FHLB allows member banks to borrow against their eligible loans to help meet liquidity requirements. These borrowings are generally secured with mortgage loans and/or securities with a market value at

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least equal to outstanding balances. In addition to loans and securities, advances from the FHLB are typically secured by a pledge of FHLB stock that UCB holds. UCB had $1.22 billion and $1.43 billion of FHLB advances outstanding at September 30, 2007, and December 31, 2006, respectively. At September 30, 2007, UCB had $1.37 billion of additional FHLB borrowings available for future borrowing capacity. At September 30, 2007, UCB had $500.0 million of securities sold under agreements to repurchase. The Company also has a $35.0 million unsecured borrowing line with Wells Fargo Bank. As of September 30, 2007, no advances had been drawn against this line.

At September 30, 2007, the Company had $90.0 million of FHLB short-term, fixed-rate advances that mature within one year. The $1.13 billion in FHLB long-term advances mature between November 14, 2007, and November 30, 2020. As of September 30, 2007, $1.02 billion of these advances may be terminated at the option of the FHLB. For the nine months ended September 30, 2007, the activity in short-term FHLB borrowings resulted in a net cash outflow of $444.2 million, and activity in long-term borrowings resulted in net cash inflows of $230.7 million. Borrowings from the FHLB may increase in the future depending on availability of funds from other sources. However, UCB must maintain its FHLB membership to continue to access this source of funding. In addition, the FHLB may terminate the advances at quarterly intervals at specified periods ranging from three to five years beyond the original advance dates. In the event the FHLB decides to exercise this option, UCB would need to repay the advances using other funding sources.

UCB periodically sells loans that it has originated, which sales may provide an alternative source of funding. During the nine months ended September 30, 2007, loan sales provided $349.2 million in cash inflows. We expect that loan sales will continue to be a tool that we use for liquidity management purposes, as well as to manage our geographical loan concentrations.

While not considered a primary source of funding, the Company’s investment securities activities can also provide or use cash, depending on the investment strategy being used for the portfolio. During the nine months ended September 30, 2007, investment securities activities resulted in a decrease in investment securities holdings and a net cash inflow of $642.5 million. Our current strategy is to continue reducing our investment securities portfolio, which will result in continued cash inflows.

Maturing balances in the various loan portfolios also provide additional flexibility in managing cash flows. In most situations, however, loan growth has resulted in cash outflows from a funding standpoint. For the nine months ended September 30, 2007, loan growth resulted in a net cash outflow of $3.29 billion. With the loan growth that we have experienced over the past year, we expect that our lending operations will continue to be a use of funds rather than a source.

CAPITAL MANAGEMENT

The Company’s Board of Directors is ultimately responsible for approving the policies associated with capital management. The primary goal of our capital management program is to maintain UCB (on a consolidated basis) and the Company at the “well capitalized” level under the regulatory framework for prompt corrective action. As of September 30, 2007, both UCB and the Company exceeded the minimum total risk-based, Tier 1 risked-based and Tier 1 leverage ratios to be considered “well capitalized”.

UCB also manages its risk-based capital levels through internal loan securitizations. In such securitizations, UCB has typically exchanged either multifamily or residential (one-to-four family) mortgage loans for securities issued by FNMA. During the third quarter ended September 30, 2007, UCB executed its first commercial real estate guaranteed mortgage securitization, with the resultant collateralized mortgage-backed securities issued through United Commercial Mortgage Securities, LLC.

Residential (one-to-four family) mortgages are generally included in the 50% risk weighted category for risk-based capital purposes. Multifamily loans may receive either a 50% or 100% risk weighting depending on specific loan criteria. Commercial real estate loans are generally included in the 100% risk weighted category for risk-based capital purposes. FNMA securities and collateralized mortgage-backed securities, however, are classified at a 20% risk weight.

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These internal securitizations do not have a cash flow impact on UCB, since selected loans from its loan portfolio are exchanged for FNMA securities or collateralized mortgage-backed securities. Such securities are supported by exactly the same loans that had previously been held in UCB’s portfolio. The securities are generally included in the available for sale investment securities portfolio.

In October 2007, UCBH securitized $402 million in commercial real estate mortgages in a private label guaranteed mortgage securitization issued through United Commercial Mortgage Securities, LLC. UCBH has retained all of the resulting securities from the securitization transaction and has classified such securities as AFS. UCBH does not intend to sell any of these securities in the foreseeable future.

Total stockholders’ equity at September 30, 2007, was $941.7 million, an increase of 19.8% over the $786.1 million at December 31, 2006. The increase reflects the retention of earnings and the issuances of new shares of stock in connection with the Company’s recent acquisitions. UCB’s and the Company’s total risk-based, Tier 1 risk-based and Tier 1 leverage ratios at September 30, 2007, and December 31, 2006, were as follows:


	September 30,			December 31,
	2007			2006
United Commercial Bank:
Tier 1 leverage		8.59	%		9.30	%
Tier 1 risk-based capital		9.72			9.67
Total risk-based capital		11.88			10.53

UCBH Holdings, Inc. and subsidiaries:
Tier 1 leverage		8.86	%		9.50	%
Tier 1 risk-based capital		10.03			9.86
Total risk-based capital		12.19			10.72

The decline in the Tier 1 leverage ratios over the past year relates primarily to the Company’s acquisitions, which increased risk–weighted assets, off-balance sheet exposures and goodwill at a rate that outpaced the growth in Tier 1 equity.

UCBH has paid quarterly dividends on its common stock since 2000. UCBH paid out dividends of $0.09 per share for a total payment of $9.1 million for the nine months ended September 30, 2007. The payment of dividends during 2007 had the effect of reducing the Company’s Tier 1 leverage ratio by 9 basis points and the total risk-based capital ratio by 9 basis points.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures regarding market risks in our portfolio, see the discussion under “Market Risk Management” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

At the end of the period covered by this report, UCBH Holdings, Inc. (“UCBH”; UCBH, United Commercial Bank and United Commercial Bank’s wholly owned subsidiaries are collectively referred to as the “Company”) carried out an evaluation, under the supervision and with the participation of the Company’s management, including UCBH’s Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended. Based on this evaluation, UCBH’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. There have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to pending or threatened actions and proceedings arising in the normal course of business. In the opinion of management, the ultimate disposition of all pending or threatened actions and proceedings will not have a material adverse effect on the Company’s results of operations or financial condition.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which could materially affect our business, financial condition and/or future operating results.

As of September 30, 2007, there have been no material changes to the risk factors presented in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

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

On May 23, 2007, UCBH Holdings, Inc. (“UCBH”) completed its acquisition of CAB Holding, LLC (the “Company”), the holding company of Chinese American Bank. In connection with the acquisition, UCBH paid CAB International Holding Limited, the sole member of the Company (“CABI”), an aggregate consideration of approximately $132.6 million, consisting of 3,711,580 unregistered shares of UCBH common stock (the “UCBH Shares”) valued at $66.1 million and $66.5 million in cash in exchange for all of the issued and outstanding membership interests of the Company. The UCBH Shares were issued to CABI pursuant to the private placement exemption from registration provided in Rule 506 of Regulation D, promulgated under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Simultaneously with the execution of the Agreement and Plan of Merger on January 10, 2007 for the acquisition of CAB (the “Merger Agreement”), UCBH entered into a registration rights, lock-up and standstill agreement with CABI and Dr. Paul Shi H. Huang, the sole shareholder of CABI (the “Rights Agreement”). The Rights Agreement provides for certain registration rights and limitations with respect to resale of the UCBH Shares as well as certain limitations on CABI’s acquisition of other shares of UCBH common stock. Pursuant to the Merger Agreement and the Rights Agreement, UCBH will file a Securities Act registration statement with respect to CABI’s resale of the UCBH Shares.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

The following proposals and the related votes thereon were made at UCBH Holdings, Inc.’s (“UCBH”) annual stockholders’ meeting held on May 17, 2007:


	Votes		Votes		Votes		Brokers
Description of Proposal	For		Against		Abstained		Non-Votes
1. Election of Directors:
Pin Pin Chau		90,959,451		1,201,241		2,211		—
Dr. Godwin Wong		90,746,021		1,058,770		358,113		—
Thomas S. Wu		89,735,679		2,070,085		357,137		—

2. Approval of the amendments to the UCBH Holdings, Inc. Amended and Restated 2006 Equity Incentive Plan (formerly known as the UCBH Holdings, Inc. 1998 Stock Option plan)		59,223,317		23,794,057		472,909		8,672,721

3. Approval of the stockholder proposal relating to the declassification of the Board of Directors of UCBH Holdings, Inc. of terms of its Board of Directors to require that all Directors stand for election annually		74,577,276		8,428,985		484,022		8,672,721

4. Ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company		91,743,430		139,175		280,299		—

Item 5. Other Information

None.

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Item 6. Exhibits

Index to Exhibits


Exhibit		Incorporated by Reference					Filed
Number	Exhibit Description	Form	File No.	Exhibit		Filing Date	Herewith
2.1	Agreement and Plan of Merger by and among UCBH Holdings, Inc. (“Buyer”), UCBH Merger Sub, Inc., a wholly owned subsidiary of Buyer, and Pacifica Bancorp, Inc. dated May 23, 2005	10-Q	000-24947		2.1	August 9, 2005

2.2	Agreement and Plan of Merger by and among UCBH Holdings, Inc. (“Buyer”), United Commercial Bank, a wholly owned subsidiary of Buyer, and Asian American Bank & Trust Company dated August 2, 2005	10-Q	000-24947		2.2	November 9, 2005

2.3	Agreement and Plan of Merger by and among UCBH Holdings, Inc. (“Buyer”), United Commercial Bank, a wholly owned subsidiary of Buyer, and Great Eastern Bank dated October 13, 2005	S-4	000-24947		2.1	December 12, 2005

2.4	Agreement and Plan of Merger by and among UCBH Holdings, Inc. (“Buyer”), UCB Merger, LLC, a wholly owned subsidiary of Buyer, and Summit Bank Corporation dated September 18, 2006	10-Q	000-24947		2.4	November 14, 2006

2.5	Agreement and Plan of Merger by and among UCBH Holdings, Inc. (“Buyer”), UCB Merger II, LLC, a wholly owned subsidiary of Buyer, CAB Holding, LLC, CAB International Holding Limited, and Dr. Paul Shi H. Huang dated January 10, 2007	10-Q	000-24947		2.5	May 10, 2007

2.6	Sale and Purchase Agreement among United Commercial Bank, Charoen Pokphand Group Co., Ltd., M. Thai Group Limited and DEG — Deutsche Investitions und Entwicklungsgesellschaft mbH dated March 26, 2007	10-Q	000-24947		2.6	May 10, 2007

2.7	Agreement for Transfer of Equity Interest in Business Development Bank Limited by and among Kasikornbank Public Co., Ltd., Charoen Pokphand Group Company Limited and United Commercial Bank dated March 26, 2007	10-Q	000-24947		2.7	May 10, 2007

3.1	Second Amended and Restated Certificate of Incorporation of UCBH Holdings, Inc.	10-Q	000-24947		3.1	May 10, 2004

3.2	Amended and Restated Bylaws of UCBH Holdings, Inc., as amended and restated	8-K	000-24947		3.1	March 29, 2007

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Index to Exhibits


Exhibit		Incorporated by Reference					Filed
Number	Exhibit Description	Form	File No.	Exhibit		Filing Date	Herewith
3.3	Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (filed as Exhibit A to Exhibit 4.7 hereto)	8-K	000-24947		1	January 29, 2003

4.0	Form of Stock Certificate of UCBH Holdings, Inc.	S-1	333-58325		4.0	July 1, 1998

4.1	Indenture of UCBH Holdings, Inc., dated April 17, 1998, between UCBH Holdings, Inc. and Wilmington Trust Company, as trustee	S-4	333-58335		4.1	July 1, 1998

4.2	Form of Certificate of Series B Junior Subordinated Debenture	S-4	333-58335		4.2	July 1, 1998

4.3	Certificate of Trust of UCBH Trust Co.	S-4	333-58335		4.3	July 1, 1998

4.4	Amended and Restated Declaration of Trust of UCBH Trust Co.	S-4	333-58335		4.4	July 1, 1998

4.5	Form of Series B Capital Security Certificate for UCBH Trust Co.	S-4	333-58335		4.5	July 1, 1998

4.6	Form of Series B Guarantee of the Company relating to the Series B Capital Securities	S-4	333-58335		4.6	July 1, 1998

4.7	Rights Agreement dated as of January 28, 2003	8-K	000-24947		1	January 29, 2003

4.8	Indenture of UCBH Holdings, Inc., dated September 22, 2005, between UCBH Holdings, Inc. and Wilmington Trust Company, as trustee	10-Q	000-24947		2.2	November 9, 2005

4.9	Indenture between UCBH Holdings, Inc. and Wilmington Trust Company, as trustee, dated December 15, 2006	10-K	000-24947		4.9	March 1, 2007

4.10	Junior subordinated indenture between UCBH Holdings, Inc. and Wilmington Trust Company, as trustee, dated December 28, 2006	10-K	000-24947		4.10	March 1, 2007

4.11	Junior Subordinated Indenture between Summit Bank Corporation and The Bank of New York, as trustee, dated September 30, 2003	10-K	000-24947		4.11	March 1, 2007

4.12	Registration Rights, Lockup and Standstill Agreement by and among UCBH Holdings, Inc., CAB International Holding Limited and Dr. Paul Shi H. Huang	10-Q	000-24947		4.12	May 10, 2007

4.13	Floating Rate Junior Subordinated Debentures between United Commercial Bank and Wilmington Trust Company, as Trustee, dated June 21, 2007	10-Q	000-24947		4.13	August 9, 2007

4.14	Subordinated Debenture Purchase Agreement between USB Capital Funding Corp. and United Commercial Bank, dated as of September 28, 2007						ü

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Index to Exhibits


Exhibit		Incorporated by Reference					Filed
Number	Exhibit Description	Form	File No.	Exhibit		Filing Date	Herewith
10.1	Employment Agreement between UCBH Holdings, Inc., United Commercial Bank and Thomas S. Wu	10-Q	000-24947		10.1	November 9, 2004

10.2	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and Jonathan H. Downing	8-K	000-24947		10.2	June 13, 2005

10.3	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and Sylvia Loh as well as certain other Executive Vice Presidents of UCBH Holdings, Inc. or United Commercial Bank	10-Q	000-24947		10.3	November 9, 2004

10.4	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and Ka Wah (Tony) Tsui as well as certain other Senior Vice Presidents of UCBH Holdings, Inc. or United Commercial Bank	10-Q	000-24947		10.4	November 9, 2004

10.5	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and Daniel Gautsch	8-K	000-24947		10.1	June 8, 2005

10.6	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and Dennis Wu	8-K	000-24947		10.1	June 13, 2005

10.7	Form of Change in Control Agreement among UCBH Holdings, Inc., United Commercial Bank and certain Senior Vice Presidents of UCBH Holdings, Inc. or United Commercial Bank	10-Q	000-24947		10.1	April 27, 2006

10.8	UCBH Holdings, Inc. Amended and Restated 2006 Equity Incentive Plan, (formerly known as UCBH Holdings, Inc. 2006 Equity Incentive Plan)	S-8	333-143774		4.2	June 15, 2007

10.9	UCBH Holdings, Inc. Senior Executive Annual Incentive Plan	10-Q	000-24947		10.9	August 9, 2006

10.10	Form of Indemnification Agreement of UCBH Holdings, Inc.	8-K	000-24947		10.1	May 17, 2007

10.11	Form of Indemnification Agreement of United Commercial Bank	8-K	000-24947		10.2	May 17, 2007

10.12	Post Retirement Compensation Agreement between Pin Pin Chau, Chief Executive Officer of Summit Bank Corporation, and Summit Bank Corporation dated December 20, 2004	10-K	000-24947		10.12	March 1, 2007

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	Page
PART I
Item 1 Financial Statements		1
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3 Quantitative and Qualitative Disclosures About Market Risk		49
Item 4 Controls and Procedures		49

PART II
Item 1 Legal Proceedings		50
Item 1A Risk Factors		50
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		50
Item 3 Defaults Upon Senior Securities		50
Item 4 Submission of Matters to a Vote of Security Holders		51
Item 5 Other Information		51
Item 6 Exhibits		52

SIGNATURES		56
EXHIBIT 4.14
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.0


	UCBH HOLDINGS, INC.
Date: November 9, 2007	/s/ Thomas S. Wu
	Thomas S. Wu
	Chairman, President and Chief Executive Officer (Principal Executive Officer)

Date: November 9, 2007	/s/ Dennis Wu
	Dennis Wu
	Director, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)