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Executives

Thomas S. Wu – President and Chief Executive Officer

Craig S. On – Chief Financial Officer

Doug Mitchell – Director of Investor Relations and Capital Management

Doug Sherk – EVC Group, Inc., Investor Relations

Analysts

Aaron Deer - Sandler O'Neill & Partners

Joe Morford - RBC Capital Markets

Erika Penala - Merrill Lynch

Joe Gladue – B. Riley & Co.

James Abbott – FBR Capital Markets

Lana Chan - BMO Capital Markets

Julianna Balicka – KBW

Donald Worthington - Howe Barnes Hoefer & Arnett Inc.

Unidentified Analyst

UCBH Holdings, Inc. (UCBH) Q4 2008 Earnings Call January 23, 2009 11:00 AM ET

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the UCBH Holdings, Inc., fourth quarter 2009 earnings conference call. (Operator Instructions). I would now like to turn the conference over to Mr. Doug Sherk.

Doug Sherk

Thank you for joining us today for the UCBH fourth quarter 2008 conference call and webcast. Before we begin, the company’s release announcing the fourth quarter 2008 results was distributed yesterday after the market close. If for some reason, you haven’t seen a copy of the release and would like one, please feel free to call our office at 415-896-6820, and we’ll get you a copy immediately. There’ll be a 7-day replay of this call beginning approximately 1 hour after we finish this morning. The replay number is 800-405-2236 or for international participants 303-590-3000. Both numbers require the pass code of 11118998 followed by the # sign. Additionally, this call is being broadcast with a slide presentation over the internet and can be accessed via the company’s website at www.ucbh.com.

I would like to remind you that this conference call contains forward looking statements regarding future events or the future financial performance of the company. Such forward-looking statements involve risks and uncertainties and other factors that may cause the actual results, performance, or achievements of the company to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include among other things general economic and business conditions in the areas in which the company operates, demographic changes, competition, fluctuations in market interest rates, changes in business strategies, changes in credit quality and other risks detailed in the documents the company files from time to time with the SEC. We wish to caution you such statements are just predictions and actual results may differ materially. We refer you specifically to the company’s latest form 10-K and 10-Q which have been filed with the SEC.

Now I would like to turn the call over to Mr. Tommy Wu, Chairman, President and Chief Executive Officer of UCBH.

Thomas Wu

We appreciate your attendance this morning for review of our fourth quarter and full year financial results. On the call with me today is Craig S. On, our Chief Financial Officer and Doug Mitchell, our Director of Investor Relations and Capital Management.

As we go through this discussion, we will address certain actions we are taking in proactively managing our operations in face of the unprecedented economical challenges. We will begin with an overview of our fourth quarter financial results. We will then review our loan portfolio and the critical metrics for each of our three largest loan segments, which include construction, commercial business, and commercial real estate. Finally, we will provide updates on several additional financial and business matrices. We will include with our thoughts on current market conditions and our general outlook for 2009. We encourage you to follow our presentation with the slides provided on our webcast, which is available on www.ucbh.com. At the conclusion of our formal remarks, we will take your questions.

Before I turn the call over to Craig to discuss our financial performance in detail, I would like to make a few comments on the market challenges experienced during the fourth quarter and their impact on UCBH. The United States is currently in severe recession, and in response to the dramatic developments in the financial markets during the fourth quarter, home prices have continued to fall. The drop-off in markets proved to be rapid and this in turn had a significant impact on residential construction portfolio, particularly in the distressed areas. Specifically continuous evaluation of the loan portfolio of our local market led us to further increase our reserves for loan losses in response to the credit migration and a resulting increase in our non-performing assets. The weakness in our portfolio continues to be driven by residential construction loans in certain distressed markets, and as we discuss our loan portfolios, we will show you why we remain positive about the performance of our remaining portfolios.

The fourth quarter was also characterized by aggressive capital building and a continued focus on prudent lending practices, while positioning the bank for long-term growth opportunities. Our core franchise continues to operate well, and we continue to support our good customers during these difficult times. Additionally, as we continue to maintain our focus on our strategic goals we have recently hired Doreen Ho as the President of Community Banking. I would speak more about Doreen and this development later in this call.

Now, I would ask Craig to provide an overview of our fourth quarter financial results and full year 2008.

Craig S. On

I would like to start with comments on some of the key financial matrix from the fourth quarter. The effects of the unprecedented economic downturn on credit quality and on the level of interest rates have resulted in a net loss available to common stockholders for the fourth quarter 2008 of $56.5 million or $0.51 per hare. Specifically, there were several major factors that contributed to our results. Our loan loss provision was $112.1 million in the fourth quarter, substantially higher than the third quarter provision of $43.2 million and an amount that was much above our expectations when we ended the third quarter.

The increased provision was primarily due to the further rapid deterioration in residential construction markets in certain areas of California, but also due in part to our further reserving for our commercial real estate and commercial business lending portfolios. While we have not seen significant problems or signs of systemic weakness in either our commercial real estate or commercial business loan portfolios, we have prudently increased our reserves on these portfolios as we anticipate the economy will continue to be challenging in 2009.

The second contributor was a $10.7 million charge in other than temporary impairments. Other than temporary impairments may also be referred to as OTTI during this call. This charge reflected impairments on three collateralized debt obligations or CDOs backed by pooled bank trust preferred securities. This is the first time that we have recorded an impairment on these particular CDOs, and I will explain more on this in a moment.

Our net interest margin decreased 61 basis points from the prior quarter to 2.44%. The decline in the NIM was largely due to the impact of the federal fund rate cuts, which had a greater impact on reducing the yield on our loan portfolio than on reducing the cost of our deposits. In addition, reversal of interest on non-accrual loans in the fourth quarter represented an approximate 31 basis point decline in the NIM for the quarter.

Our higher loan loss provisioning resulted in a $70.2 million increase in the allowance for loan losses. The allowance is now substantially higher at 2.2% of loans held in portfolio compared with 1.36% in the third quarter. Additionally, total reserves to loans held in portfolio, which includes both the allowance for loan losses and the reserves for unfunded commitments and which excludes cash secured loans rose to 2.32% from 1.48% at the end of the third quarter. Net charge-offs for the quarter were $43.6 million compared with $31.1 million in the third quarter. The charge-offs were primarily related to our construction portfolio in the distress markets where conditions continued to deteriorate.

Pursuant to the dramatic deterioration in the markets, nonperforming loans increased to $406.1 million in the fourth quarter from the $232.2 million in the third quarter. The increase was primarily related to a $95.1 million increase in non-performing construction loans and a $69.1 million increase in non-performing commercial business loans associated with predominantly with three loans.

We were successful in managing our loan to deposit ratio to under 100%. In the fourth quarter, this ratio dropped to 94.6% compared with 102.5% in the third quarter of 2008. During the quarter, loans outstanding remained roughly unchanged from the third quarter, and our deposits grew 5.13% over the prior quarter. We successfully raised deposits domestically, and in the latter half of the quarter regained a majority of the deposits that we lost during the third quarter at our Hong Kong branch.

Our capital position was significantly enhanced during the fourth quarter with cash infusions from the U.S. Treasury Department’s Capital Purchase Program and from the completion of the second phase of the China Minsheng investment, both of which Doug would discuss in a few minutes. Our capital position is very strong and at a level that we believe will allow us to manage through the current credit cycle while continuing to pursue our long-term growth strategies.

Year-over-year interest income decreased 1.27% in 2008, a slight reduction reflecting the rapidly declining rate environment and the reversal of interest on non-accrual loans. Loan growth for the year was 8.26%. Fee income including commercial banking and service fee income was up 7.4% year over year.

Even as the Federal Reserve interest rate cuts in the fourth quarter totaling 200 basis points, bringing the full year 2008 total rate cuts to 425 basis points, our 2008, net interest income grew 4.18% over the 2007 level. This was driven by organic balance sheet growth, the acquisition of United Commercial Bank China Ltd. in December 2007, and a 5.86% decline in interest expense. We had previously mentioned our $112.1 million loan loss provision in the quarter bringing year-to-date provisioning to $222.9 million. The increase in the provision reflected continued downward credit migration and higher charge-offs as well as management assessment that additional reserves are appropriate in the current economic slowdown.

Finally, the higher non-interest expenses in 2008 compared to 2007 were primarily due to $7.1 million in other real estate-owned foreclosure expenses, $6.4 million associated with having the UCBC salary and occupancy expenses reflected for the full year as compared to half a month in 2007, and $6.7 million associated with increased professional fees and deposit insurance premiums.

I will summarize the security impairments recognized next, but it is notable that when excluding the nonrecurring effects of the OTTI from 2008, total revenue would have been up slightly year over year reflecting the bank’s strong and sustainable core performance despite a year laden with interest rate cuts and deteriorating credit conditions. As previously mentioned during the fourth quarter, we recognized impairment charges totaling $10.7 million on three collateralized debt obligations backed by pooled bank trust preferred securities. The CDO write-down was a result of rating agency downgrades and was approximately 54% of the carrying value of these securities, bringing the remaining total book value to $9 million. The bank had already taken $10.3 million in OTTI on two read-back CDOs and on the residual tranche of our UCBC MBS Security during the first and second quarters of the year.

We recorded $22.2 million in OTTI charges against our holdings of Fanny Mae and Freddie Mac’s preferred stock during the second and third quarters of the year. Total OTTI in 2008 was $43.1 million, or 66% of the 2008 beginning carrying values of these securities. The remaining total book value of these securities is $22.2 million. As you can see in the chart, 98% of the remaining investment portfolio is in investment grade.

At this point, I would like to turn the call over to Doug who will provide a review of some key credit matrix along with a more detailed discussion of our loan portfolios.

Doug Mitchell

As the fourth quarter progressed, the bank observed a meaningful deterioration in its identified distressed markets in some further softening of real estate markets outside of these distressed areas. I will remind you that we define distressed markets as Nevada and within California as Greater Sacramento, the Central Valley, San Bernardino, Riverside, and Imperial counties as well as the high desert region of LA County.

Our weekly monitoring of these markets including detailed analysis of local market price and absorption trends led us to classify more loans as non-performing in the quarter. Total nonperforming loans in the fourth quarter increased to $406.1 million or 4.68% of total loans outstanding. This is up from 232.2 million or 2.62% of total loans outstanding in the third quarter. The increase was primarily related to a $95.1 million increase in non-performing construction loans and a $69.1 million increase in non-performing commercial business loans.

In the construction portfolio, while the majority of this migration continued to come from the distressed markets, we did notice some weakening in certain acquisition development and construction loans located in and around the San Diego County and in association with select projects in the Los Angeles condominium markets. The commercial business portfolio nonperformers are primarily comprised of 3 loans, which have been adequately reserved. These loans are event-driven and are being aggressively managed collection.

We have not experienced much deterioration in the commercial real estate portfolio, and nonperformers in this portfolio in the fourth quarter were roughly the same as they were in the third quarter. Net charge-offs in the fourth quarter totaled $43.6 million, which was slightly higher than the $31.1 million in third quarter charge-offs. The annualized net loan charge-off ratio for the entire portfolio was 2% in the fourth quarter compared with 1.4% in the third quarter. Construction loan charge-offs were $30.9 million compared with $29.9 million in the third quarter representing 1.55% of the total construction portfolio versus 1.41% in the third quarter. Through the end of 2008, the majority of charge-offs were related to the residential construction loan portfolio located in distressed real estate markets primarily located in California.

Commercial business charge-offs totaled $7.8 million, an increase from $2 million in charge-offs in the third quarter. The increase in commercial business charge-offs is largely related to a single problem loan originally totaling $28 million, which we initially identified in our third quarter conference call. Commercial real estate loan charge-offs were small and dropped slightly to $2.7 million compared with $2.1 million in the third quarter.

Loan delinquencies as a percentage of total loans increased 34 basis points to 3.12% at December 31, 2008, from 2.79% at the end of September 2008. This increase mostly reflects higher loan delinquencies in the commercial real estate portfolio, offset by reduction in construction delinquencies as construction loans migrated to non-performing status due to the sudden further weakness in residential construction markets during the quarter.

Construction loan delinquencies decreased to $104.9 million at December 31, 2008, from $153 million at September 30, 2008, bringing the delinquency ratio on construction loans at the end of fourth quarter to 6.16% compared with 8.72% at the end of September. Of note, collateral support behind the loans appearing in the fourth quarter delinquency figures is much stronger than in prior periods, given the higher observation of completion or near completed projects. Commercial real estate loan delinquencies also increased to $70.9 million from $25.9 million at the end of September 2008. The increase was found in the 30- to 89-day categories, which caused the delinquency ratio to increase from 0.99% at the end of September to 2.77% at year end 2008.

While the delinquencies predominantly come from the distressed markets, the collateral support is very strong and loss content is very small. Some limited delinquency migration was observed in the quarter in the multifamily portfolio; however, multifamily delinquencies as well as those in the consumer portfolios remain low and below historic averages, and the loss potential is very limited. Overall, we still remain cautious regarding the residential construction portfolio.

During the fourth quarter, we observed the market conditions worsen, in particular in California. We continue to monitor the situation closely. We have built out risk management team and maintain the same proactive diligence applied to construction lending to monitoring and management efforts applied to the commercial real estate, commercial business, and all other portfolios. As weakness in the economy persists, we are watchful for changes that indicate problems and we’ll continue to take significant moves to bolster our reserves against future credit deterioration as warranted.

During the fourth quarter, we experienced significant weakness of the housing markets in the distressed areas and further softening in some housing markets contiguous to the distressed markets. The majority of the nonperforming loans continue to be related to residential construction loans that we previously identified; however, the deterioration at the end of the fourth quarter occurred more deeply than we had anticipated. Our construction loan reviews are frequent and diligent. We continue to use targeted independent reviews of our construction loan portfolio to compare risk ratings, assessment of collateral support, and project progress. Based on recent field reports and competitive data, we do not yet believe that conditions in distressed markets are stabilizing, and we will maintain our sharp focus on these loans in these areas.

Our commercial portfolio is diversified by geography and industry. To date, its performance remains on track with the exception of three nonperforming loans previously mentioned. Issues in the portfolio remain account-specific and not systemic; however, in light of the economic cycle and its potential effect on commercial borrowers, we are reviewing this portfolio very diligently as well to ensure that we are staying on top of the credit quality in this area. Our commercial real estate in multifamily portfolios continue to perform relatively well and reflect their strong underwriting; however, we are monitoring these portfolios very closely too.

Senior management meets weekly to review each of the bank’s loan portfolios including the delinquency trends and detailed assessments of all problem loans. The Special Assets Group, which is responsible for day-to-day problem loan management and workout efforts, has also been expanded further. Credit management is regularly stress testing the construction, commercial real estate, and multifamily real estate portfolios, and we are proactively expanding this to commercial lending portfolio as well. Captured in our fourth quarter results and as part of our continuing construction loan reviews that we have undertaken during the entire year of 2008, we just completed a comprehensive review of our construction loans that includes reviewing each credit while addressing current local market conditions, reassessments of collateral support, and project progress. We are proactively reviewing the commercial real estate, commercial business, and multifamily portfolios in a similar fashion.

Finally, as an additional control, we employ independent asset reviews of our portfolios to validate credit quality. During the fourth quarter, such reviews were completed for both the US construction portfolio and our China portfolio. UCB’s efforts since the beginning of 2008 to carefully manage its loan growth in light of the current market conditions have translated to portfolio loan growth effectively flat in the fourth quarter; however, we have previously noted that we remain open for business during these difficult and challenging times and see opportunities to selectively and prudently expand our presence in our key markets.

New credit extended in the fourth quarter totaled $353 million with $148 million coming from commercial business lending and $108 million from commercial real estate lending. Loan commitments to borrowers in Greater China represented approximately 19% of the total fourth quarter new commitments. We anticipate that the contribution from China will continue to benefit us as we carefully target our growth in the region. Additionally, during the fourth quarter, UCB launched its signature home loan program targeting credit-worthy individuals interested in purchasing a home. This program has been well received and is off to a good start.

At this point, I will provide a brief overview of our major loan portfolios starting with the construction loan portfolio. Our loan portfolio totaled $8.7 billion at the end of December. We continued to diversify our exposures both geographically and by product. At the end of 2008, 36% of total loans were located outside of California versus 96% concentrated in California as recently as 2004. Greater China represents 12% of total loans.

The commercial business portfolio is now at 28% of total loans, and we continue to execute on our long-term objectives to leverage our combined United States and China platforms and selectively grow this portfolio. Our construction loan portfolio totaled $2 billion at the end of December and remains diversified by both location and loan type; 15% of the portfolio is comprised of loans on properties in what we have defined as distressed areas. This is down from 17% of the portfolio in the third quarter. Additionally, our concentration to California construction loans dropped further in the fourth quarter as 37% of these loans are now located outside of California, up from 34% in the prior quarter. The credit problems in the portfolio continue to be concentrated in land and acquisition, development, and construction loans, and our exposure to acquisition, development, and construction loans dropped from 20% in the third quarter to 18% in the fourth quarter.

Our commercial business loan portfolio declined slightly to $2.4 billion in the fourth quarter from $2.5 billion in the third quarter. The portfolio is well diversified by location and by industry. We continue to have a significant presence in California, and our commercial lending here is primarily related to trade finance and continues to perform. Greater China represented 35% of the portfolio and contributes to our commercial business loan production. This portfolio has strong collateral support with approximately 80-85% of the commercial loans in Greater China secured by either first liens on real estate or cash. Our strategy of targeting the small and medium-sized enterprises in China is unchanged, and we expect Greater China will continue to be a major area of growth. We will continue to exercise our prudent lending standards in that market.

Our commercial real estate portfolios totaled $2.6 billion at December 31st. It is diversified both geographically and by collateral type. Unlike our construction portfolio, our commercial real estate portfolio has minimal exposure to distressed geographical areas in California and Nevada. On a geographical basis, 41% of the portfolio is outside California and only 2% is located in distressed areas. With a small average loan size of $1.8 million, strong average original LTV of 58.95%, and weighted average maturity of 4.2 years, this portfolio has superior underwriting characteristics. However, in view of overall market conditions, we continue to monitor these exposures closely.

Now, I’d like to turn to a review of our deposit portfolio. Total deposits increased 5.13% to $9 billion at December 31, 2008, from $8.5 billion at the end of September. Year-to-date growth in deposits was 15.24%. The largest increase occurred in the time deposit category. Time deposits were up $621 million in the quarter and reflected the success of several promotions we ran targeted at generating deposits under $100,000. In addition, we recovered the majority of the deposits that left us last quarter in our Hong Kong branch. Deposit guarantees from the Hong Kong Monetary Authority and relationship efforts counteracted the effects of negative press regarding the conditions of the United States financial system that was prevalent during the third quarter.

The decision of the Hong Kong Monetary Authority to guarantee deposits at all registered banks in Hong Kong helped stabilize the local banking system. Non-interest bearing deposits remained largely unchanged from their level at the end of the third quarter. Interest-bearing deposits excluding time deposits declined from $2.1 billion at September 30, 2008, to $2.0 billion at the end of the year. Also deposit growth at UCB China Limited from customers with operations in mainland China has been very positive as we have grown deposits there by 187% during the year.

I would now like to address the company’s capital position and related developments. The bank completed two significant capital raises during the quarter, which substantially increased its already strong capital ratios. On November 14, 2008, we received $298.7 million in new capital under the Treasury Department’s capital purchase program. The funds are treated as Tier 1 capital. Also on December 23, 2008, China Minsheng Bank completed the second phase of its strategic investment in UCBH purchasing 6.2 million new shares of the company for total proceeds of $29.9 million. China Minsheng Bank currently holds a 9.9% interest in the company.

Together, these capital infusions served to substantially boost our capital ratios to well in excess of the regulatory minimums for well-capitalized institutions. Our Tier 1 capital was 12.98% at the end of December, and total risk-based capital was 15.49%. Our capital in excess of the Tier 1 capital minimum is $697 million, and we had $548 million in excess of the total risk-based capital minimums.

Our capital management efforts were very successful during 2008. In addition to the two capital raises during the fourth quarter, earlier in the year, we also closed on the first investment by China Minsheng Bank into UCBH, and we raised $135 million through a public offering of preferred stock in the second quarter. We find that our very strong capital position has helped create a fortress balance sheet versus our peers. With this capital, we believe UCBH is very well positioned to weather the current economic downturn and continue on track with its strategic and business growth plans.

I would now like to turn the call back to Tommy for his discussion of our general outlook for 2009 and our strategy going forward.

Thomas Wu

The operating environment that we experienced in 2008 is unprecedented in the recent history, and we are disappointed by the losses due to rapid deterioration in certain markets during the fourth quarter. Economic conditions that continued to deteriorate throughout the quarter have significantly impacted our financial results. The residual construction lending market has been especially hard hit today. At the time, we remain vigilant about our credit in all of our markets in the United States and in Asia. We have taken actions that we believe are prudent to address potential concerns. We have boosted our reserve ratios to the highest they have ever been, increasing our allowance for loan losses to over 2.2% of total loans.

We have strengthened our capital ratios throughout the year ending the year with total risk-based capital at almost 15.5%. Our capital position is very strong. We have experienced 8.26% loan growth for the year and have been very successful in gathering deposits even as interest rates have dropped dramatically. These efforts have allowed us to grow deposits by 15.24% this year and successfully manage our net loan to deposit ratio to 94.6% as of year end, further enhancing our strong liquidity position as we entered the new year.

We are proactively identifying potential problems and are working aggressively to resolve them. To further these efforts, we have continued to expand our Special Assets Group. Although year-to-date, non-interest expenses have increased due to full year operating results associated with the acquisition of Chinese American Bank in New York and business development in China, we have continued to manage controllable expense throughout the year.

UCB China Limited and our Hong Kong branch continue to attract new customers as the UCBH Greater China franchise grows in Asia. The Greater China operation has fairly grown its loan and deposit portfolio, adding new customers and expanding relationship with existing customers. We continue to use a cautious approach to credit in China, and 85% of the UCB loan portfolio is secured by tangible collaterals. We are very pleased with the Greater China region’s operations, which contributed $11.3 million to our operations in 2008.

Over the past few years, UCBH has invested in its vision to be the leading community banking service in Chinese community. We are the only community bank having a 100% wholly owned in mainland China, now integrated with our national branch network. We have created an unrivaled platform compared to any of our peers. We are positioned to successfully grow the bank in our targeted commercial lending and trade finance markets. We are talking about loan growth, trade fees, and other cross-border services. We are well on our way to being the bank of choice in all of our target markets.

We have closed the first two investments by China Minsheng Bank bringing their investment in UCBH to 9.9%. This strategic partnership will kick in to a high gear in2009 as we expand our current partnership to include coordinated partner services to help both institutions to expand customer relationships and increase market share. We believe this would become a very positive partnership between the two of us. UCB has always been a relationship oriented bank, and unlike some competitors and peers, we have not had to discontinue lending through this difficult and challenging environment. Our customer will remember that it was UCB that stood by them when times were tough.

In pursuit of our goals to become a leader in each of our target market in the US, we have recently appointed Doreen Ho as the President of Community Banking, a newly created position at the bank. In this role, Ms. Ho will lead UCBH’s strategic community banking initiative for all of our domestic US markets. Ms. Ho whose extensive banking experience encompasses consumer lending, global branding and marketing, and retail and business banking comes to us from Wells Fargo Bank. She will provide leadership to our national footprint to become a leader in each of our domestic market in the coming years.

Finally, we ended 2008 with a strong balance sheet. Our loan loss allowance has been consistently built throughout the year and now stands at 2.2% of total loans. This in combination with our very strong capital levels including nearly 15.5% of total risk-based capital and 13% Tier 1 capital has positioned UCB to both weather the current credit cycle and to continue pursuing our long-terms strategic objectives. We are positioned to manage through our near-term credit challenging and not lose sight of the future.

Now, I would like to offer some general thoughts on 2009 and the financial impact that conditions may have on our company. We expect the economy to remain challenging as we look ahead this year. As a result, we will be scrutinizing the credit profiles, collateral, and terms of our loans to new and existing customers to ensure that they perform as expected. We are also closely monitoring the markets where we operate and the industries to which we have exposure, and we will continue to bolster our reserve ratio as required to address challenging market and economic conditions.

A key emphasis will be on deposit generation in our domestic consumer and retail markets using the deposits to fund loan growth and manage liquidity. Doreen is critical in providing leadership in this very important mission. As Craig mentioned, our net loan to deposit ratio is currently at 94.6%, and we will continue target this below 100% in 2009. We have in place a structure for managing liquidity and measuring and monitoring net funding requirements as we continue to focus on this important activity.

While securing new business in this environment will be challenging, we do expect our net interest margin to increase as the year progresses as high cost deposits roll off our books and we build our trade finance both domestically and in Asia. It is extremely difficult to forecast in such a highly uncertain market environment. Based on the best information available to us today and our current judgment, we offer the following outlook for 2009.

Loan growth will be in the range of 4% to 6%. Deposit growth will be in the range of 5% to 8%. Non-interest income growth will be in the range of 6% to 8%, and expense run rate of $50 to $55 million per quarter, and net interest margin of 2.8% to 2.9% at year end, assuming fed funds rate remains stable throughout the year. We also believe based on our understanding of our local markets, macro economic trends, portfolio stress testing, and the comprehensive review of our construction loan portfolio completed in January that the level of quarter provisioned peak in the fourth quarter of 2008.

While 2009 will be challenging, I have confidence in our future. Management has taken the right steps to build the company’s capital strength and reserves throughout 2008. Our unique franchise in China and major port cities in the United States continues to offer excellent opportunities for growth. We have the resources and management experience and expertise to continue to pursue our initiatives to lead in 2009, and I believe that when the year is over, we will report to you on the tremendous progress made in growing our franchise and handling our market share and generating good financial results.

That concludes our formal remarks. Thank you very much again for participating in this call this morning. I will now ask the operator to open the lines for any questions you may have.

Question and Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Aaron Deer from Sandler O'Neill.

Aaron Deer - Sandler O'Neill & Partners

I was just wondering if I could get some detail on the portfolio in New York, especially as it relates to construction, office, and hospitality.

Thomas Wu

Absolutely. Actually we also looked at that 100% during the quarter in terms of the review, and that portfolio is very stable. At this point, we don’t see any weakness in our portfolio at this point.

Aaron Deer - Sandler O'Neill & Partners

Can you provide a sense of what the size of those individual pieces are?

Doug Sherk

When we break down the construction portfolio, mostly you’re looking at commercial construction which does make up the majority of the New York portfolio. I think when you look at the percentage that we have for New York, that is mostly commercial construction with a bit of condo construction in there as well. We don’t have a further breakdown on the hotel, hospitality, or office for you, but we could follow up with you offline.

Aaron Deer - Sandler O'Neill & Partners

I saw the latest stats coming out of the ports of LA and Long Beach show trade activity done like 20% year over year. I am wondering are any of your customers making note of that decline, and how is it impacting them both here and in China.

Thomas Wu

First of all, I think as much as we’ve grown our commercial portfolio nicely in the last couple of years, market share is still very small, and we actually have been in very close contact with our customers regarding their trade activity. Some actually have experienced some slowdown, but the high quality ones are actually experiencing pretty good or stable business at this point because some of the low quality and low-margin importers will probably be having more impact than the higher quality, higher margin business because of the economy. So, we have been monitoring this very carefully, some of the slowdown, and then we will continue to address it by looking at the commitment and looking at the accounts receivable and inventory as well, so these are things that we are planning actually very aggressively to make sure that we continue to feel comfortable with out portfolio performance.

Operator

Our next question comes from the line of Joe Morford from RBC Capital Markets.

Joe Morford - RBC Capital Markets

I had a few questions about the commercial real estate and commercial business portfolios. Doug, you talked about proactively reviewing these portfolios. What exactly does that entail? Is it things like getting updated appraisals and how much of these portfolios have been looked at this point?

Doug Sherk

Joe, it does involve a number of things. In particular, the senior management teams meet weekly on all of our portfolios. We tend to focus on construction because that’s where a lot of the numbers are coming from, but we also do the same for CRE and commercial, so they receive the same level of diligence. We’re looking at industry risk. We are pushing on studies on each of those to make sure we’re keeping ahead of both pressures overall in the industry and on the individual credits, and so, as we go through all of that, the credit team keeps looking at the collateral support that backs up these credits, and we’re doing the same for China. It should be noted that when we review this, it’s not just the domestic portfolio. We’re also talking about the actions we take internationally.

Thomas Wu

Also, we monitor the delinquency trend every week. We look at the current week and how does it compare to the prior week, on the whole portfolio, on construction, CRE, and CNI to make sure that we monitor the credit terms very carefully. For anything over $5 million, we look at it 100% right now.

Joe Morford - RBC Capital Markets

Along those lines, can you give us a little more detail about the three larger commercial business loans that migrated into MPL this quarter, and also what’s driving the increased delinquencies in the CRE portfolio that you cited?

Thomas Wu

On the CNI portfolio, actually one has been identified last quarter and two actually identified this quarter. One had something to do with a patent lawsuit, so actually as soon as we found out, we just graded it as a nonperforming loan. The other one is in the car business. Because the car industry is not doing good, we also downgraded that particular loan as well. Those are the three loans we talked about on the CNI.

Joe Morford - RBC Capital Markets

You talked about increased delinquencies in the commercial real estate portfolio this quarter. I was wondering what was driving that.

Thomas Wu

Basically that was actually two customers in San Diego County that actually have commercial real estate loans. Because the borrower has filed for bankruptcy and that’s why there’s some delinquency, but we looked at the collateral support. It’s 100% well secured, so we’re not worried about any loss on this delinquency at all.

Joe Morford - RBC Capital Markets

Lastly, can you quantify the reserves that you’ve set aside for the commercial real estimate and the CNI or commercial business portfolios this quarter?

Thomas Wu

I don’t have the numbers with me. Joe, can we actually provide the numbers to you offline?

Joe Morford - RBC Capital Markets

Yes. That’ll be fine.

Operator

Our next question comes from the line of Erika Penala from Merrill Lynch.

Erika Penala - Merrill Lynch

Given the recent investor focus on tangible common equity ratios, are you open or how are you thinking about doing a common rate outside of completing the Minsheng partnership?

Thomas Wu

It’s kind of funny and interesting that the analyst community is looking at all this type of ratios from time to time, so one time you look at the tangible common equity and all these kind of things, but let me address your question. I think all ratios are very relevant in banking business. You cannot just look at one ratio this week without the other. The critical ratios for banks particularly in the US in managing our business are Tier 1 and total risk-based capital. Tier 1 and total risk-based capital are the best measures of the specific risks in any banking balance sheet and also portfolio. So if you look at our Tier 1 of 13% and our total risk-based of 15%, that’s the most important ratio we look at when we look at the risks inherent in our portfolio and also our balance sheet. So I think that’s the most important ratio we should be focusing on from the bank’s operation standpoint. We do not have any plans outside of that to issue any comments at this point in time because of very strong capital ratio, but if necessary, we will consider it, but at this point, we don’t have any plans.

Erika Penala - Merrill Lynch

On the margin, could you take me through the math in terms of both from the loan side and from the deposit side? How you see the pricing there supporting the margin expansion, particularly in light of the guidance for the 5% to 8% in deposit growth?

Thomas Wu

We expect the deposit rate to continue to come down as is very obvious right now. I think you’re talking about the CD rate in the 2.5% range at this point in time, so it’s dramatically lower compared to same time last year. Because we actually did some deposit promotion in the second and third quarter of last year, that will be actually maturing in the first and second quarter of this year. That will be re-priced. You are probably talking about between 50 to 75 basis point difference when those will be re-priced. Also at the same time, because we are in such a low-rate environment, all the commercial CNI loan will be sold at a forward rate to protect ourselves in terms of the loan yield of our portfolio in the future. So every single loan being renewed will have a forward rate to be set to protect ourselves in terms of margin dilution, so with all this effort, we believe that going forward, starting from the second quarter of this year, the margin will continue to expand throughout the year, with the assumption that the fed funds rate remains stable.

Erika Penala - Merrill Lynch

In terms of your clients in mainland china, given the different fiscal and monetary stimulus that the government has set forth, is it possible to quantify how much of the businesses to which you lend are tied to local demand versus export activity?

Thomas Wu

I would say over 60% to 65% of the SME financing we are doing in China is actually for exports. The remaining will be domestic consumption, but one thing we also need to understand for the China business, because the domestic consumption is being stimulated, if they see a slowdown in the export business, all they have to do is just actually turn some of their manufacturing of products into a domestic market, because in China, people are very entrepreneurial. They will want to make sure they will continue to do well, particularly in the northern part of China, some of the manufacturers or factories, their products are of very high quality and high margin, so those will continue to do well. In fact, if you look at our portfolio in China, because we did a 100% review of our independent asset group in China in the fourth quarter, and we are satisfied with the asset quality of our portfolio in China, and we anticipate some growth in our portfolio in the Greater China region, but at the same time, we also want to be very cautious as we continue to grow our business because of the global economy.

Operator

Our next question comes from the line of Joe Gladue of B. Riley & Co.

Joe Gladue – B. Riley & Co.

I wanted to talk to you about the deployment of the capital you got in the fourth quarter. You got the investment from the TARP and Minsheng, but loans declined, and most of it apparently, I guess, went into either short-term investments or cash or something. How quickly do you think you will be able to deploy that and leverage it up to make it non-dilutive?

Thomas Wu

In the short term, we actually deployed the capital to investment securities. We are currently leveraged about 2.5 times and are trying to get to the point of breakeven on the TARP money short term, and over the longer term and medium term definitely, we will deploy the capital into our lending activities, but at the same time, we want to be very careful at this point in time because of current economic condition in the US. What we will be doing is to continue to focus on single family lending and multifamily lending, and that’s really what the government wants the banks to do to stimulate the economy in the US. We feel comfortable doing this business because we have a very good experience in our single family portfolio and also multifamily lending. In the short term, we will do this, and then of course at the same time, we will continue to focus on expanding our trade finance business as well.

Joe Gladue – B. Riley & Co.

I just wanted to follow up a little bit on Erika’s question in regards to the margin and specifically on the funding side in the fourth quarter. The overall cost of funds went up a little bit, and while some of that was from the deposit side, I guess on the borrowing side also cost increased a couple of basis points, and I was just wondering what your thoughts are on the outlook of bringing that down a little bit.

Thomas Wu

As I mentioned earlier, the CDs that we brought in in the second and third quarter of last year will be repriced in the first and second quarters of this year. Because the market rates have gone down substantially, we are talking about 50 to 75 basis point differential in the current rate versus the rate we offered last year, so that would help to lower our cost of deposit substantially and should help us throughout the year. I think that will help us to bring down the cost of deposit at least from the CD side. Also, our focus will continue to be actually generating core deposits and low cost deposits throughout the year. That’s exactly the reason why we really want to focus on our community banking activities going forward to really expand customer relationships into more low-cost deposit products, and also the China Minsheng partnership will also help us to do so because we are actually working very closely with the working team over in Beijing from mainland China to put together some products and services to help us to increase the core deposits. For example, we are actually working on a product to allow us to increase the core deposit by offering an exceptional low fee for wire transfer between the US and mainland China provided the remitter and the recipient of the remittance are either customer of UCB in the US and a customer of China Minsheng Bank in China. We are talking about very big differential in remittance fee because of our corresponding banking relationship because of our strategic relationship. That will help us to increase our core deposit and continue to lower our deposit cost, so these are the things that we are actively actually pursuing at this point in time.

Operator

Your next question comes from the line of James Abbott from FBR Capital Markets.

James Abbott – FBR Capital Markets

On the expenses, I think you said $55 was a good run rate?

Thomas Wu

$55 to $58 for the rest of the quarter.

James Abbott – FBR Capital Markets

Last quarter, the outlook was for $51 million, and it came in at $59, and obviously the real estate owned expenses were probably not anticipated, but where did the other costs come from, and what are you able to do about that? What are the levers on the expense base that you can push?

Craig On

The level of the expenses and additional writedowns associated with OREO foreclosures were not anticipated. Other levers are that our professional fees have increased commensurate with just our continuing focus and the comprehensive review that we’re doing on our construction lending. Our appraisal fees have gone up. Because of our stock price creating a situation where our market cap continues to be below our book GAAP equity, we’ve had to do the goodwill impairment analyses, and as part of that whole analysis, we utilized outside consultants to help us do the step 1 and step 2 analyses, so that’s a fairly costly fee that we’ve been paying. In addition to that and it’s more of a timing issue, we also have attorney fees related to some of the workouts that we’ve been doing during the third and fourth quarter, and then the FDIC insurance is actually a lot higher than what it was in the previous year. In the previous year, we had a credit which we were able to offset against expense, but we’re pretty much pure expense this year. We probably didn’t have as great of a fix on that until in the fourth quarter.

Joe Gladue – B. Riley & Co.

The FDIC expense, that’ll increase. Do you have your sense of the basis points that you’ll be paying?

Craig On

You are right. On a run rate perspective, it’s pretty much going to double to 35 basis points from 17 or 18 which we incurred for 2008. The run rate will probably be $12 million or thereabouts for the year.

Joe Gladue – B. Riley & Co.

The timing on the CDs, I may have interpreted this, but it sounded like there was still margin compression to come in the first quarter, so maybe if you can give us some sense on the timing of most of those CDs that came on through the promotions, what the durations were, when they will roll off?

Thomas Wu

We did the CD promotion in the second quarter of last year, for 9-month CDs and 12-month CDs. I think starting toward the end of first quarter, maturity of these CDs will start and we will re-price. First quarter, maybe a little dilution, but then starting from second quarter, there will be pretty strong accretion to the margin. It is also because of the substantial increase in the reversal of interest on non-accrual in the fourth quarter that affects our margins, which we don’t anticipate in the first quarter. So I think the first quarter, maybe a little dilution, but then second quarter when the CD prices start to reprice, and also as I said all the CNI will have a forward rate going forward, so these are the things that are extremely helpful for the year in terms of margin accretions.

Joe Gladue – B. Riley & Co.

My last question is on the reserve net charge-off ratio. Some people look at the reserves to non-performing loans, other companies look at reserves to net charge-offs. You guys are at about 1:1 on reserves to net charge-offs right now, or at least in the fourth quarter. What’s your comfort level? Where do you feel like you need to be on that if you look at that ratio at all?

Doug Sherk

We do look at the ratios, and we look at all of them, of course. The key things that we are focusing on when we look at provisioning are those which precede the charge-off levels. As we go through each of the individual reviews of the loans and determine our necessary provisioning levels, we are capturing our assessment of expected losses associated with each of those loans, and so when we look at the charge-offs relative to reserves, I think one of the things we’ve been talking about across the year is that we’ve undertaken efforts to build the reserves, and so we would have provision levels in excess of charge-offs, and therefore charge-off levels will be below the absolute reserve. I think you mentioned that charge-offs were 1:1 relative to the reserve levels, and I am not sure if you were talking provisions actually there. I think perhaps you were, but we well exceeded our annual provisioning relative to charge-offs, and that’s resulted in the build in the overall reserves.

Joe Gladue – B. Riley & Co.

I was specifically looking at the fourth quarter, and as we roll forward, obviously the environment is worse, so I’m just wondering if charge-offs continue to increase even if it is at a little bit less rate or reduced rate of change but still nonetheless higher, whether the reserve to loan ratio that you have currently is an acceptable margin of error.

Doug Sherk

As we continue to look forward, our philosophy of ensuring that we have adequate reserves to address the current credit cycle is unchanged. It is fair to say that charge-off peaks will lag from provision peaks. At some point in time, it’ll come through that difference, and to address some of those things, when we look at our allowance for loan loss methodology, we also make sure that we apply qualitative risk factors to our assessment of the portfolios that in some degree will take into account anticipated pressures like economic pressure or qualitative assessments of risk ratings, delinquencies, an things like that so that we can keep ourselves ahead of the charge off levels and maintain adequate reserves.

Operator

Your next question comes from the line of Lana Chan from BMO Capital Markets.

Lana Chan - BMO Capital Markets

If you look at the writedowns that you took on the construction loans, particularly in the distressed markets, what would you say that you’ve written down those loans to?

Doug Sherk

If we look at year to date charge-offs, we’ve charged off approximately $113 million over the course of 2008, and most of that is coming out of the residential construction markets. That’s probably the best way for you to get a gauge of what we’ve taken already on the nonperfomers.

Lana Chan - BMO Capital Markets

With your comprehensive review of the loan portfolios, how much of the construction loan and commercial real estate mortgages have you received new appraisals on in the last three to six months?

Thomas Wu

It’s a lot, and also we don’t just count on appraisals, because appraisals take up a couple of weeks to do, and also as I said earlier, we actually look at it on a weekly basis, the whole senior management team with all the credit management folks, based on the current market trends and current price, and all these are actually taken into consideration. So appraisal is good, but for now whatever we see on a weekly basis or the NPH or the current market value on an ongoing and weekly basis, so it’s not just the appraisals. Appraisals are important, but we have all the latest in terms of home prices, the sale in the market, the projects we have in the portfolio. Every single data has been looked at. So I can’t tell you how many, but it’s a lot of places that we look at. That’s why it’s also part of the reason that our professional fee has increased in Q4 because we have to a pay for a lot of appraisals.

Lana Chan - BMO Capital Markets

What do you say that would be the majority of your construction and commercial real estate portfolio?

Thomas Wu

Majority actually, and also we have conducted almost 100% of the construction portfolio, the construction loans over $5 million, 100%, so it’s pretty up to date. That just finished, I think, in the second week of January.

Lana Chan - BMO Capital Markets

We’re seeing also vacancy rates climb pretty significantly in some of the California markets to high-teen range. What have you stress tested your commercial real estate portfolio to in terms of vacancy rates?

Thomas Wu

We actually stress test the whole portfolio on a quarterly basis, and we just finished one. Doug, maybe you can actually provide some color on this one.

Doug Mitchell

Lana, we stress across a variety of vacancy rates, and looking at debt service coverage from that element in particular. We take it up to some extreme levels, the levels for example in Northern California that we are talking about where we get some information that shows it in the teens. Frankly, when you look at some of the history it is not too different from the CRE markets just four years ago, and it’s an interesting note just because a lot of banks, ourselves included, came through that time period in managing through that CRE market with no problem, but that notwithstanding, we do run three major scenarios of a low, moderate, and high risk scenario, and so when we are looking at some of the mid-teens, that is really representing where we see markets today as well, and just like what that indicates for you, and our worst case is push it significantly higher than that.

Operator

Next question comes from Julianna Balicka from KBW.

Julianna Balicka – KBW

Looking at your level of nonperforming loans, the degree of migration in your OREO has been relatively small, so I was kind of wondering what we should be expecting in terms of foreclosure proceedings through the next year or what your disposition plans are on the NPO, not necessarily the ones you identified this quarter but the stuff that was already on there from last quarter.

Doug Mitchell

It’s a little bit difficult to be specific on how things migrate from non-performer to OREO. Philosophically, especially talking about construction loans, our preference just continues to be if we can find opportunities to sell notes, we would like to pursue that, but we do take possession as necessary and have done so over the past quarter. Actually, as we look at some of the disposition of those assets, even coming into the beginning of this year, we’ve actually noticed that there does continue to be interest. We’ve actually closed on, I believe, four OREO sales here just since the end of the year and have a couple of more in the pipeline, some of them quite sizeable, as well as a couple of note sales that we hope to see close before the quarter is out, so we are definitely seeing some cautious liquidity there, but you know the type of migration is a little bit lumpy if you will, and so there is not a smooth trend that I can really highlight for you.

Julianna Balicka – KBW

We should basically be looking at the NPO levels staying fairly elevated for some time then?

Doug Mitchell

I think it’s fair to conclude that we will have higher levels as we run through 2009. The construction loans have a tendency to take longer to work out and to move off the balance sheet.

Julianna Balicka – KBW

That makes sense. In terms of just to follow up on when you were referring to note sales, what kind of bids have you been getting and expecting for problem construction loans?

Doug Mitchell

I have to admit it’s all over the place because it’s so property specific. I can honestly tell you that we’ve had offers come in on things as low as 15 cents on the dollar and as high as 90 cents on the dollar. It just really depends on what project, what asset, and location.

Thomas Wu

If I can add one more color Julianna on that one. If you are talking about land, the value actually is lower, but if you are talking about projects, verticals, almost completion or completed, particularly those condos projects, you are talking about very high bids because those have a high value, so it really depends on the project. The good news is that we are very limited lying around in our portfolio and whatever land loan exposure we had is pretty much already charged off. The way we see right now, the verticals have a lot of value, and we are seeing a pretty aggressive bids on those verticals, particularly some of the almost completed projects on condos.

Julianna Balicka – KBW

On the deposit promotions that you were referencing earlier in the call, what was the dollar amounts or the balances amount that will be re-pricing?

Thomas Wu

We did a couple of promotions last year. I think in the second quarter, we brought in $300 million. Third quarter, we didn’t do much promotion, and fourth quarter, we did some promotion at about 2.8%, so when you are talk about re-pricing, those CDs we brought in in the second quarter of last year, we are talking about 3.5% to 3.6% range, so when we compare it to today, we are offering 2.5%. That’s a huge difference for re-pricing going forward.

Julianna Balicka – KBW

That’s about $300 million, you said, right?

Thomas Wu

Yes.

Operator

The next question comes from Donald Worthington from Howe Barnes Hoefer & Arnett Inc.

Donald Worthington – Howe Barnes Hoefer & Arnett Inc.

In terms of the China Minsheng, what’s your outlook on the possibility of that investment going to the 20%?

Thomas S. Wu

That’s highly possible, but we need determine on the timing because we don’t want to dilute our existing common for no reason, so we want to make sure that the timing will be beneficial to the company as well as to our shareholders.

Donald Worthington – Howe Barnes Hoefer & Arnett Inc.

The construction loan balance has continued to increase. Where would you see that peaking, and do you have any unfunded commitments still in the distress markets that you need to complete?

Thomas S. Wu

Well, for those projects that we feel will be problematic, we actually cancelled the commitment. That’s why we moved them to nonperforming assets. Once we move them to nonperforming assets, we don’t fund anymore. We only will fund those projects which we believe are good projects. We still have some unfunded commitment on construction portfolio, but those are really good projects going forward, and also one thing I want to mention is that when we actually move our projects into nonperforming assets, we are unlike our peers or competitors. We don’t do split rating, because doing split rating on construction project is not the right thing to do in today’s environment, so we just move everything to NPA, so that’s reason why you see our uptake on NPA or our NPA balance on construction may be higher compared to peers or competitors, but then this is a very different strategy in terms of risk rating and in terms of the downgrading, so that’s something that I just want to put in the right perspective for everybody.

Operator

The next question comes from (unidentified analyst)

(Unidentified Analyst)

I am looking to see if you have any effects of the market value of your common stock on any debt covenants or any terms of TARP funding.

Thomas S. Wu

None.

(Unidentified Analyst)

The FHLB facility, I’m looking for if there any restrictions on the use of those borrowings and what the amount outstanding is on that for Q4?

Thomas S. Wu

FHLB borrowing facility is secured by our investment portfolio. There is no restriction at all, so we still have pretty sizable availability from FHLB. I think over $1.5 billion approximately still that will be available to us.

(Unidentified Analyst)

Lastly here, your loan to deposit ratio showed significant improvement obviously quarter over quarter. The old goal had been to get it below that 100% level. Now that it’s below 95%, are we looking at a new target in anyway or are we still judging it based on 100%?

Thomas S. Wu

Well, I think, because we have very strong capital, if your loan to deposit ratio is above 100%, it is difficult to do a lending business because the regulator is going to go after you, so the benchmark will be below 100%. We will continue to make loans in a very prudent manner that will help us to continue to grow our earnings in the future. We are focused so much on credit quality on construction portfolios, yes, because of the economy, because of the market. We are very focused on managing that, but at the same time, we ought to look at beyond this kind of cycle. Once we are out of this cycle, what we should be concerning are the possibilities and opportunities, so if we stop doing business today, all you are doing is just to focus on your problem assets. Then once the cycle is over, your interest earning asset will shrink tremendously, and then you don’t have interest income in the future, so it’s important for us to really focus on two things. Number one, capital, make sure we have a strong capital to grow the balance sheet. Number two is the loan to deposit ratio because we need the deposit to fund loan growth. You can’t just depend on interbank borrowings or FHLB borrowing to fund loan growth. That’s very risky in this environment, so that’s why we are very focused on deposit growth. We really want to continue to make sure that our loan to deposit ratio is below 100% and that will help us to continue to do business on an ongoing basis while we are very focused in addressing the credit issues we are experiencing in the construction lending portfolio.

Operator

The next question comes from Lana Chan from BMO Capital Markets

Lana Chan – BMO Capital Markets

On your private label mortgage backed securities, how much do you have outstanding there, and are there any potential issues with that on marked to market?

Thomas S. Wu

Actually 98% securities are AA and above rating, so we should not anticipate any issues on those securities, and on the other securities, actually when you go back to the chart, we have pretty much written down quite a bit, so there might be some exposure depending on the potential downgrades, but all the other securities should be at this point pretty safe to be honest with you, and Craig, you may have some more color.

Craig S. On

I have to access the information, but our private label as of 12/31/08, the amortized cost was about $161 million. Net mark is about just over $12 million to get a market value of $149 million.

Lana Chan – BMO Capital Markets

When is your next regulatory exam?

Thomas S. Wu

Well, let’s put it this way. We are actually over $10 billion in size. Actually examination is ongoing. So every quarter, every month, we have something specific to look at, credit quality and all this stuff in always ongoing, so I would say it’s an ongoing exercise, which they put us into starting the end of last year.

Operator

I am showing that we have no further questions at this time.

Thomas S. Wu

Again, thank you very much for everybody participating in this call. Should you have any followup questions, please feel free to call anyone of us.

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Source: UCBH Holdings, Inc. Q4 2008 Earnings Call Transcript
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