UCBH Holdings Inc. has entered into deals with state and federal regulators to "strengthen and stabilize" the California-based bank as its top two executives resigned.
The company mostly serves the Chinese community, especially in California cities such as Los Angeles and San Francisco. UCBH's results have suffered the past several quarters on increased loan-loss provisions.
In its plan with regulators, UCBH will write up a three-year plan and get consent from the Federal Deposit Insurance Corp. and California Department of Financial Institutions before opening any new branches or paying dividends. UCBH is required to assess management and fix weaknesses there and in board supervision, as well as any problems in capital levels, loan valuations reserves, quality of loans and lending practices and liquidity.
More details of the plan will be included in a filing with the Securities and Exchange Commission.
UCBH said it expects to finalize a similar deal with the Federal Reserve of San Francisco by the end of the month.
Meanwhile, the company said its review of impairment losses found weaknesses in internal controls, as well as improper behavior by some bank officers, apparently done to downplay how much financial conditions were deteriorating.
Doreen Woo Ho will succeed Thomas S. Wu as president and chief executive on an acting basis. No successor was named for Chief Operating Officer Ebrahim Shabudin, who also served as chief credit officer, a position which is also unfilled.
Meanwhile, Chief Financial Officer Craig On will return to his former position as deputy CFO when a successor is found.
All appointments need to be approved by regulators.
UCBH shares were recently down 0.8% at $1.18. The stock is down 83% this year.