UNITED STATES OF AMERICA
BEFORE THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.
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Written
Agreement by and between
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Docket
No. 09-128-WA/RB-HC
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San Francisco,
California
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FEDERAL RESERVE
BANK OF
SAN FRANCISCO
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San Francisco,
California
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WHEREAS,
UCBH Holdings, Inc., San Francisco, California
(“UCBH”), a registered bank holding company, owns and
controls United Commercial Bank, San Francisco, California (the
“Bank”), a state chartered nonmember bank, and various
nonbank subsidiaries;
WHEREAS,
it is the common goal of UCBH and the Federal Reserve Bank of San
Francisco (the “Reserve Bank”) to maintain the
financial soundness of UCBH so that UCBH may serve as a source of
strength to the Bank;
WHEREAS,
UCBH and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the “Agreement”); and
WHEREAS,
on September 9, 2009, the board of directors of UCBH, at a
duly constituted meeting, adopted a resolution authorizing and
directing Joseph J. Jou to enter into this Agreement on behalf of
UCBH, and consenting to compliance with each and every provision of
this Agreement by UCBH and its institution-affiliated parties, as
defined in sections 3(u) and
1
8(b)(3) of the
Federal Deposit Insurance Act, as amended (the “FDI
Act”) (12 U.S.C. §§ 1813(u) and
1818(b)(3)).
NOW,
THEREFORE, UCBH and the Reserve Bank agree as follows:
1.
The board of directors of UCBH shall
take appropriate steps to ensure that the Bank complies with any
order, or other supervisory action, entered into with the
Bank’s federal or state regulators.
2.
Within 60 days of this
Agreement, UCBH shall submit to the Reserve Bank an acceptable
written plan to maintain sufficient capital at UCBH, on a
consolidated basis, and at the Bank, as a separate legal entity on
a stand-alone basis. The plan shall, at a minimum, address,
consider, and include:
(a) The
consolidated organization’s and the Bank’s current and
future capital requirements, including compliance with the Capital
Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure
and Tier 1 Leverage Measure, Appendices A and D of
Regulation Y of the Board of Governors of the Federal Reserve
System (the “Board of Governors”)(12 C.F.R.
Part 225, App. A and D) and the applicable capital adequacy
guidelines for the Bank issued by the Bank’s federal
regulator;
(b) the
adequacy of the Bank’s capital in relation to its risk
profile, taking into account the volume of criticized and
classified credits, migration analysis of loan grades,
concentrations of credit, allowance for loan and lease losses
(“ALLL”), current and projected asset growth, and
projected retained earnings;
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(c) the
results of loan portfolio stress tests that are backtested and
updated on a quarterly basis to reflect changes in loss experience,
changes in the economic outlook, and changes in other model
assumptions;
(d) the
source and timing of additional funds necessary to fulfill the
consolidated organization’s and the Bank’s future
capital requirements;
(e) supervisory
requests for additional capital at the Bank or the requirements of
any supervisory action imposed on the Bank by its federal or state
regulator; and
(f) the
requirements of section 225.4(a) of Regulation Y of the Board
of Governors (12 C.F.R. § 225.4(a)) that UCBH serve as a
source of strength to the Bank.
3.
UCBH shall notify the Reserve Bank,
in writing, no more than 30 days after the end of any quarter
in which UCBH’s consolidated capital ratios or the
Bank’s capital ratios (total risk-based, tier 1 risk-based,
or leverage) fall below the plan’s minimum ratios. Together
with the notification, UCBH shall submit an acceptable written plan
that details the steps UCBH will take to increase its and/or the
Bank’s capital ratios above the plan’s
minimums.
Dividends
and Distributions
4.
(a)
UCBH shall not declare or pay any
dividends without the prior written approval
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