Stock Preacher

UCBH Holdings Inc. (NASDAQ: UCBH)(E*)

* Financial status indicator is delinquent: Issuer missed regulatory filing deadline.

UCBH Holdings Inc. (UCBH) is a bank holding company. UCBH conducts its principal business through its wholly owned banking subsidiary, United Commercial Bank (UCB), which makes up substantially all of its consolidated assets and revenues.

UCB is a California state-chartered commercial bank. Through its branch network, the Company provides a range of personal and commercial banking services to small- and medium-sized businesses, business executives, professionals and other individuals. The bank offers multilingual services to all of its customers in English, Cantonese and Mandarin.

The Company was founded in 1974 and is headquartered in San Francisco, California.

Source: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=UCBH , http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=INT&symbol=UCBH.O , http://phx.corporate-ir.net/phoenix.zhtml?c=68162&p=irol-IRHome

Financial Summary

UCBH announced that as part of its effort in restating the Company’s financial statements for the year ended December 31, 2008, and finalizing and issuing the Company’s financial statements for the first and second quarters of 2009, extensive effort is being applied to accurately reflect the credit risk inherent in the loan portfolio. To assist with the effort to reassess a majority of the Company’s loan portfolio, including substantially all of the construction loans, the Company engaged three external loan review firms.

Dow Jones reported that China Minsheng Banking Corporation Ltd. has plans to seek U.S. regulatory approval to increase its stake in UCBH, Bloomberg News reported, citing two unnamed people briefed on the matter. China Minsheng Banking Corporation Ltd. is looking to raise its stake to at least 50% from 9.6% although China Minsheng’s board of directors seems split on the decision the report cited the people as saying. It said they declined to be identified because the talks are private. China Minsheng Banking Corporation Ltd. hopes for more management control of UCBH and would work to help it get rid of some of its non-performing loans, and details of the plan are still being worked out, the people said, according to the report.

UCBH is in dire straits as it tries to shore up capital levels following a cease-and-desist order from U.S. regulators. UCBH, which mainly caters to the Chinese-American community, has to raise the bank’s Tier 1 capital ratio to 10 percent by Dec. 31, under the order issued earlier this month by the U.S. Federal Deposit Insurance Corp (FDIC). Analysts say the company may require as much as $700 million to achieve the required capital levels and avoid a possible takeover by the FDIC.

Source:http://www.reuters.com/finance/stocks/pressReleases?symbol=UCBH.O https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=UCBH

Analyst Consensus

This is the consensus forecast amongst 10 polled investment analysts. Against the UCBH Holdings Inc company.

The eight analysts offering 12-month price targets for UCBH have a median target of 1.50, with a high estimate of 4.00 and a low estimate of 0.50. The median estimate represents a 47.06% increase from the last price of 1.02.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=UCBH.O

Investment Highlights

UCBH, the holding company of United Commercial Bank, today announced that it received a letter from The NASDAQ Stock Market, notifying the Company that it is currently not in compliance with NASDAQ Listing Rule 5250(c)(1) “Obligation to File Periodic Financial Reports” because it did not file its Form 10-Q for the quarter ended June 30, 2009, in a timely manner. The letter was received on August 12, 2009, and is the second such letter sent by NASDAQ to the Company.

On May 22, 2009, the Company announced that it had received a similar letter regarding the late filing of the Company’s Form 10-Q for the quarter ended March 31, 2009. As previously reported in its Form 8-K on May 20, 2009, and Form 8-K/A on June 3, 2009, with the Securities and Exchange Commission, the Company is currently in the process of restating the consolidated financial statements reported in its Form 10-K for the period ended December 31, 2008, and is completing its Form 10-Q for the quarter ended March 31, 2009. In conjunction with these efforts, the Company is also in the process of completing its Form 10-Q for the quarter ended June 30, 2009.

As previously announced, on August 5, 2009, NASDAQ granted the Company a 180-calendar-day exception from the March 31, 2009, Form 10-Q filing deadline, or until November 16, 2009, to regain compliance with the Listing Rule. The Company’s plan for regaining compliance with the Listing Rule, which addresses the filing requirements for its Form 10-Q, is applicable to both the quarters ended March 31, 2009, and June 30, 2009. The Company maintains that it is taking all appropriate actions to regain compliance with the Listing Rule.

Brower Piven, A Professional Corporation in late September announced that a class action lawsuit has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of the publicly traded securities of UCBH during the period between April 24, 2008, and September 8, 2009, inclusive. The complaint accuses the defendants of violations of the Securities Exchange Act of 1934 by virtue of the Company’s failure to disclose during the Class Period that financial statements and information issued by the Company in its press releases, quarterly reports and annual reports for the fiscal year 2008 were false and misleading because UCBH intentionally concealed millions of dollars of loan charge-offs and mounting bad loans. According to the complaint, after, on May 20, 2009, UCBH filed a report on form 8-K stating that, because of accounting improprieties, it would have to restate its financial statements for 2008, and after, on September 8, 2009, UCBH issued a press release that disclosed for the first time the fraud engaged in by defendants (Defendants Wu and Shabudin were forced to resign because of the fraud), the value of UCBH’s stock declined significantly.

Since mid September 2009, there have been no less than 15 class action lawsuits filed on behalf of investors in UCBH who feel they were subjected to significant financial losses by the Company through its “deceptive” financial reporting practices and “blatant fraud” on the part of the Company, its senior management, as well as its executive officers.

The Complaint charges UCBH and certain of its officers, directors and underwriters with violations of the Securities Act of 1933 and Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) the Company had deliberately concealed millions of dollars in bad loans in order to hide the increasing level of non-performing loans and the full extent of the loan losses; (2) the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (”GAAP”); (3) the Company lacked adequate internal and financial controls; and (4) as a result of the foregoing, the Company’s financial and other statements were false and misleading at all relevant times. On April 23, 2009, defendants announced that they were significantly increasing the Company’s loan loss provisions. The increase was requested due to defendants’ failure to properly reserve for loan losses.

On May 20, 2009, the Company announced that it would restate its financial results for 2008 and the first quarter of 2009 because “certain loan impairments, and related reserves and charge-offs associated with specific collateral dependent loans and other real estate owned properties which had been analyzed and recorded during the first quarter of 2009, should have been more appropriately recorded and reflected in the fourth quarter of 2008.” Then, on September 8, 2009, the Company stunned investors when it issued a press release stating that UCBH and Company executives had deliberately concealed millions of dollars in bad loans due to an “apparent desire to downplay deteriorating financial conditions by delaying or abating risk rating downgrades and minimizing the Bank’s overall loan loss allowance.” Upon the release of this news, shares of the Company’s stock fell 14.29% on unusually heavy trading volume. All of the Company’s above-referenced disclosures, taken together, caused UCBH’s stock price to decline by over 60% during the Class Period. Source: Scottrade.com, Reuters.com

Technical Analysis

Source: www.stockcharts.com

Moving Average Price Compare

UCBH is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

MACD

UCBH’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Bollinger Bands

UCBH’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, UCBH is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

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