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UCBH names acting CEO after irregularities are found

The parent of United Commercial Bank will restate earnings after an internal probe reveals that some officers improperly modified loans and misrepresented data to auditors. Two top executives quit.

September 09, 2009|Bloomberg News

The parent of United Commercial Bank, which caters to Chinese American customers, replaced its chief executive and said it would restate earnings after an internal probe found that some officers improperly modified loans and misrepresented data to auditors.

The company, San Francisco-based UCBH Holdings Inc., said Doreen Woo Ho, who joined the firm in January from Wells Fargo & Co., was named acting CEO, succeeding Thomas Wu, who quit. Chief Credit Officer Ebrahim Shabudin also quit, UCBH said.

The lender said it had entered into an enforcement agreement with state and federal banking regulators.

UCBH shares fell 17 cents, or 14%, to $1.02 on the news.

"Two years ago, this was a really highflying bank," said Joseph Gladue, an analyst at B. Riley & Co. More recently "they've been experiencing a lot of trouble, particularly in construction loans in California," he said.

UCBH said its earnings restatement would boost its second-quarter provision for loan losses as much as $60 million.

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