United Commercial Bank
Encyclopedia
United Commercial Bank (Chinese: 聯合銀行) was an overseas Chinese bank
in the United States
, based in San Francisco, CA. It was a subsidiary of UCBH Holdings. Founded in 1974 as United Federal Savings and Loan Association, it changed its name to United Savings Bank, and finally United Commercial Bank in 1998. It had operations and branches located in the San Francisco Bay Area, Sacramento, Stockton, Los Angeles and Orange Counties, New York
, Boston
, Greater Seattle Area, Hong Kong
, Atlanta
, Houston
, Shanghai
and two representative branches in Taipei
, Taiwan
and Shenzhen
, China
. United Commercial Bank was closed by regulators on November 6, 2009; it was the 120th U.S. bank to fail in 2009, and it had $11.2 billion in assets at the time of the bank failure
.
. The purchase was a $205 million cash purchase. The BDB acquisition gave UCB "a banking license in China -- a 'rare and hard-to-come-by' asset that makes it easier to operate and expand in that country, said RBC Capital Markets analyst Joe Morford. It has full-service offices in Shanghai, Hong Kong and Shantou, China."
The California Department of Financial Institutions closed United Commercial Bank on November 6, 2009, and appointed the Federal Deposit Insurance Corporation
as the bank's receiver. The Bank's operations were merged into East West Bank
of Pasadena, California
. The bank, which took on $299 million preferred stock
Troubled Asset Relief Program (TARP) funding from the United States Treasury in 2008 -- which is now a loss to the Treasury -- is also expected to cost the FDIC some $1.4 billion in losses, the bulk of the losses on about $7.7 billion of UCB's assets acquired by East West.
UCB before the FDIC intervention also "was tainted by a financial scandal that resulted in a shake-up of its top management. [It] announced in September [2009] that its financial reports could not be trusted because of the 'deliberate and improper actions and omissions of certain bank officers,' who had understated losses in 'an apparent desire to downplay deteriorating financial conditions.' The company's longtime chief executive, Thomas S. Wu, resigned in September, [as did] its chief operating officer."
UCBH, "East West and Cathay General Bancorp of Los Angeles ... vied for years to become the largest of the banks focused on the Chinese American market. East West, which had $12.5 billion in assets at last report, agreed to acquire $10.2 billion of United Commercial's $11.2 billion in assets. That would put the combined bank, at almost $23 billion in assets, ahead of L.A.-based City National as the largest bank based in Southern California. At last report, City National had $18.4 billion in assets." The combined UCBH/East West would also far outrank Cathay, which had total assets of $11.39 billion in 2009. The stock market and East West (at least initially and through Nov. 11 ) has seen the acquisition of UCBH as "highly accretive," and shares of East West (EWBC.O) jumped as much as 57 % to touch a high of $13.57 on the first day of trading after the acquisition. Minsheng Banking Corp, a private Chinese bank, applied to the Federal Reserve Board to acquire UCB in the weeks before the FDIC and EWB actions, but the Fed either turned it down or failed to expedite what can be a several-month approval process. Minsheng's bid could have saved the U. S. government $1.7 billion, between the nearly $300 million TARP funds and the $1.4 billion FDIC losses.
Overseas Chinese Banks
Overseas Chinese banks excelled in commerce, finance, and many other industries. They created many banks originally to remit money back to China but now they cater to the people of their adopted countries. These overseas Chinese banks contributed to a large extent to the development of the...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, based in San Francisco, CA. It was a subsidiary of UCBH Holdings. Founded in 1974 as United Federal Savings and Loan Association, it changed its name to United Savings Bank, and finally United Commercial Bank in 1998. It had operations and branches located in the San Francisco Bay Area, Sacramento, Stockton, Los Angeles and Orange Counties, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
, Greater Seattle Area, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, Atlanta
Atlanta, Georgia
Atlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
, Houston
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
, Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
and two representative branches in Taipei
Taipei
Taipei City is the capital of the Republic of China and the central city of the largest metropolitan area of Taiwan. Situated at the northern tip of the island, Taipei is located on the Tamsui River, and is about 25 km southwest of Keelung, its port on the Pacific Ocean...
, Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
and Shenzhen
Shenzhen
Shenzhen is a major city in the south of Southern China's Guangdong Province, situated immediately north of Hong Kong. The area became China's first—and one of the most successful—Special Economic Zones...
, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. United Commercial Bank was closed by regulators on November 6, 2009; it was the 120th U.S. bank to fail in 2009, and it had $11.2 billion in assets at the time of the bank failure
Bank failure
A bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities. More specifically, a bank usually fails economically when the market value of its assets declines to a value that is...
.
Corporate history
On January 11, 2007, UCBH announced that it was acquiring The Chinese American Bank with branch locations in Manhattan, New York and Flushing, New York. The deal was expected to close in the second quarter of 2007. On March 27, 2007, it was announced that UCBH would acquire Business Development Bank of ShanghaiShanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
. The purchase was a $205 million cash purchase. The BDB acquisition gave UCB "a banking license in China -- a 'rare and hard-to-come-by' asset that makes it easier to operate and expand in that country, said RBC Capital Markets analyst Joe Morford. It has full-service offices in Shanghai, Hong Kong and Shantou, China."
The California Department of Financial Institutions closed United Commercial Bank on November 6, 2009, and appointed the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
as the bank's receiver. The Bank's operations were merged into East West Bank
East West Bank
East West Bank is a Chinese American bank in the state of California in the United States. It has 119 branch locations in northern and southern California, Georgia, Massachusetts, New York, Texas, Washington, two overseas branches in Hong Kong, one each in Shanghai and Shantou and representative...
of Pasadena, California
Pasadena, California
Pasadena is a city in Los Angeles County, California, United States. Although famous for hosting the annual Rose Bowl football game and Tournament of Roses Parade, Pasadena is the home to many scientific and cultural institutions, including the California Institute of Technology , the Jet...
. The bank, which took on $299 million preferred stock
Preferred stock
Preferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
Troubled Asset Relief Program (TARP) funding from the United States Treasury in 2008 -- which is now a loss to the Treasury -- is also expected to cost the FDIC some $1.4 billion in losses, the bulk of the losses on about $7.7 billion of UCB's assets acquired by East West.
UCB before the FDIC intervention also "was tainted by a financial scandal that resulted in a shake-up of its top management. [It] announced in September [2009] that its financial reports could not be trusted because of the 'deliberate and improper actions and omissions of certain bank officers,' who had understated losses in 'an apparent desire to downplay deteriorating financial conditions.' The company's longtime chief executive, Thomas S. Wu, resigned in September, [as did] its chief operating officer."
UCBH, "East West and Cathay General Bancorp of Los Angeles ... vied for years to become the largest of the banks focused on the Chinese American market. East West, which had $12.5 billion in assets at last report, agreed to acquire $10.2 billion of United Commercial's $11.2 billion in assets. That would put the combined bank, at almost $23 billion in assets, ahead of L.A.-based City National as the largest bank based in Southern California. At last report, City National had $18.4 billion in assets." The combined UCBH/East West would also far outrank Cathay, which had total assets of $11.39 billion in 2009. The stock market and East West (at least initially and through Nov. 11 ) has seen the acquisition of UCBH as "highly accretive," and shares of East West (EWBC.O) jumped as much as 57 % to touch a high of $13.57 on the first day of trading after the acquisition. Minsheng Banking Corp, a private Chinese bank, applied to the Federal Reserve Board to acquire UCB in the weeks before the FDIC and EWB actions, but the Fed either turned it down or failed to expedite what can be a several-month approval process. Minsheng's bid could have saved the U. S. government $1.7 billion, between the nearly $300 million TARP funds and the $1.4 billion FDIC losses.
UCBH acquisitions
- Golden Coin Savings & Loan Association (1992)
- Asian American Bank & Trust Company (2005)
- Summit National Bank (2006)
- The Chinese American BankChinese American BankThe Chinese American Bank was an overseas Chinese bank in the United States headquartered in New York City, with branch offices in Chinatown, Manhattan and in Chinatown, Flushing....
(2007) - Business Development Bank Ltd. (2007)
See also
- Bank failureBank failureA bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities. More specifically, a bank usually fails economically when the market value of its assets declines to a value that is...
- List of largest U.S. bank failures
- Federal Deposit Insurance CorporationFederal Deposit Insurance CorporationThe Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
- Financial crisis of 2007–2010
- 2008-2009 bank failures in the United States
- List of acquired or bankrupt United States banks in the late 2000s financial crisis