<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
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For Quarter Ended September 30, 1995 Commission file number 0-16213
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GBC BANCORP
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(Exact name of registrant as specified in its charter)
California 95-3586596
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 West 6th Street, Los Angeles, California 90017
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(Address of principal executive offices) (Zip code)
Registrant's telephone number,including area code 213/972-4172
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Former name former address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this report.
Common stock, no par value, 6,666,982 shares issued and outstanding
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as of September 30, 1995.
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1
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION.................................... 3
Item 1. Financial Statements................................... 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations.......................................... 9
PART II - OTHER INFORMATION.......................................26
Item 1. Legal Proceedings......................................27
Item 2. Changes in Securities..................................27
Item 3. Default upon Senior Securities.........................27
Item 4. Submission of Matters to a Vote of
Securities Holders.....................................27
Item 5. Other Information......................................27
Item 6. Exhibits and Reports on Form 8-K.......................27
PART III - SIGNATURES.............................................28
2
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PART I - FINANCIAL INFORMATION
3
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GBC Bancorp and Subsidiaries
Consolidated Statements of Financial Condition
(Unaudited)
<TABLE>
<CAPTION>
September December
(In Thousands) 1995 1994
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(In Thousands)
<S> <C> <C>
ASSETS
Cash and Due From Banks $39,411 $48,260
Federal Funds Sold and Securities Purchased Under
Agreements to Resell 141,600 64,000
Due From Financial Institutions - Time -- 99
Securities Available for Sale, at Market 367,049 357,235
Securities Held to Maturity (Market Value of $91,756
and $81,060 at September 30, 1995 and
December 31, 1994, Respectively) 90,890 83,276
Loans and Leases 485,718 500,990
Less: Allowance for Credit Losses 18,770 23,025
Deferred Loan Fees 3,660 3,689
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Loans and Leases, Net 463,288 474,276
Bank Premises and Equipment, Net 5,901 6,139
Other Real Estate Owned, Net 5,676 5,051
Due From Customers on Acceptances 4,049 5,132
Real Estate Held for Investment 13,297 17,897
Accrued Interest Receivable and Other Assets 17,782 20,237
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Total Assets $1,148,943 $1,081,602
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $120,884 $134,415
Interest Bearing Demand 195,787 197,392
Savings 134,464 154,327
Time Certificates of Deposit of $100,000 or More 376,766 311,562
Other Time Deposits 168,565 136,324
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Total deposits 996,466 934,020
Borrowings from the Federal Home Loan Bank 30,000 30,000
Subordinated Debt 15,000 15,000
Acceptances Outstanding 4,049 5,132
Accrued Expenses and Other Liabilities 8,554 9,767
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Total Liabilities 1,054,069 993,919
Stockholders' Equity:
Common Stock, No Par or Stated Value;
20,000,000 Shares Authorized; 6,666,982 and
6,660,215 Shares Outstanding at September 30, 1995
and December 31, 1994, Respectively 45,468 45,373
Retained Earnings 48,943 46,588
Unrealized Holding Gains/(Losses) on Securities
Available for Sale, Net of Tax 470 (4,271)
Foreign Currency Translation Adjustments (7) (7)
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Total Stockholders' Equity 94,874 87,683
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Total Liabilities and Stockholders' Equity $1,148,943 $1,081,602
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</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
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GBC Bancorp and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(In Thousands, Except Per Share Data) 1995 1994 1995 1994
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<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and Leases, Including Fees $11,989 $12,439 $37,039 $35,645
Securities Available for Sale 5,336 3,560 15,992 9,498
Securities Held to Maturity 1,774 1,606 4,841 4,918
Due from Financial Institutions-Time - 4 5 24
Federal Funds Sold and Securities
Purchased under Agreements to Resell 1,770 959 4,547 2,692
------- ------- ------- -------
Total Interest Income 20,869 18,568 62,424 52,777
INTEREST EXPENSE
Interest Bearing Demand 986 1,061 3,128 3,063
Savings 1,001 566 3,541 1,668
Time Deposits of $100,000 or More 4,633 4,029 12,602 10,468
Other Time Deposits 2,010 1,031 5,706 2,920
Federal Funds Purchased and Securities
Sold under Agreements to Repurchase - - - 360
Borrowings from the Federal Home Loan Bank 360 360 1,064 1,068
Subordinated Debt 399 399 1,197 1,197
------- ------- ------- -------
Total Interest Expense 9,389 7,446 27,238 20,744
Net Interest Income 11,480 11,122 35,186 32,033
Provision for Credit Losses 5,550 7,700 15,650 11,760
------- ------- ------- -------
Net Interest Income after Provision
for Credit Losses 5,930 3,422 19,536 20,273
NON-INTEREST INCOME
Service Charges and Commissions 1,358 1,289 4,131 4,038
Gain on Sale of Loans 72 19 54 68
Gain on Sale of Securities Available for Sale - - - 124
Write Off of Securities Held to Maturity - - - (150)
Gain on Sale of Bank Premises and Equipment - - 9 -
Other Income 130 135 477 355
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Total Non-Interest Income 1,560 1,443 4,671 4,435
NON-INTEREST EXPENSE
Salaries and Employee Benefits 2,574 1,941 7,733 7,023
Occupancy Expense 698 640 2,062 1,912
Furniture and Equipment Expense 422 379 1,213 1,283
Net Other Real Estate Owned Expense 735 818 2,272 2,739
Other Expenses 1,962 1,736 5,984 4,928
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Total Non-Interest Expense 6,391 5,514 19,264 17,885
Income/(Loss) before Provision for Income Taxes 1,099 (649) 4,943 6,823
Provision (Benefit) for Income Taxes 218 (795) 989 1,266
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Net Income $881 $146 3,954 5,557
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------- ------- ------- -------
Earnings Per Share $0.13 $0.02 $0.59 $0.83
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
5
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GBC Bancorp and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
(In Thousands) 1995 1994
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<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $3,954 $5,557
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation 783 1,455
Net Amortization/(Accretion) of Premiums/Discounts
on Securities (2,579) 15
Writedowns on Real Estate Held for Investment 718 7
Provision for Credit Losses 15,650 11,760
Provision for Losses on Other Real Estate Owned 1,218 1,111
Amortization of Deferred Loan Fees (1,882) (2,389)
(Gain)/Loss on Sale of Loans (54) (68)
Gain on Sale of Securities Available for Sale -- (124)
Loss on Write-off of Securities Held to Maturity -- 150
Gain on Sale of Bank Premises and Equipment (9) --
Loss on Sale of Other Real Estate Owned 208 133
Loans Originated for Sale (41,276) (28,068)
Proceeds from Sale of Loans 32,374 26,885
Net Increase in Interest Receivable and Other Assets (657) (848)
Net Decrease in Accrued Expenses and other Liabilities (1,556) (4,240)
Other, Net (16) 34
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Net Cash Provided by Operating Activities 6,876 11,370
INVESTING ACTIVITIES:
Purchases of Securities Available for Sale (380,275) (161,683)
Proceeds from Maturities of Securities Available
for Sale 381,329 65,268
Proceeds from Sales of Securities Available for Sale -- 30,069
Proceeds from Maturities of Securities Held to Maturity 46,452 1,140
Purchases of Securities Held to Maturity (54,158) (12,379)
Net Increase in Loans and Leases (2,366) (8,091)
Proceeds from Sale of Other Real Estate Owned 6,507 8,323
Additions to Other Real Estate Owned -- (236)
Purchases of Bank Premises and Equipment (553) (1,954)
Proceeds from Sale of Bank Premises and Equipment 18 --
Proceeds from Sale of Real Estate Investment 4,235 514
Purchases/Additions to Real Estate Held for Investment (355) (2,746)
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Net Cash Provided/(Used) by Investing Activities 834 (81,775)
</TABLE>
See accompanying notes to consolidated financial statements.
6
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GBC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
(In Thousands) 1995 1994
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<S> <C> <C>
FINANCING ACTIVITIES:
Net Increase/(Decrease) in Demand Deposits $(13,531) $16,363
Net Increase/(Decrease) in Interest-Bearing Demand Accounts (1,605) 17,589
Net Decrease in Savings Deposits (19,863) (647)
Net Increase in Certificates of Deposits 97,445 36,350
Net Decrease in Federal Funds Purchased
and Securities Sold under Agreements to Repurchase -- (24,844)
Cash Dividend Paid (1,599) (1,597)
Proceeds from Exercise of Stock Options 95 45
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Net Cash Provided by Financing Activities 60,942 43,259
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Net Change in Cash and Cash Equivalents 68,652 (27,146)
Cash and Cash Equivalents at Beginning of Period 112,359 105,426
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Cash and Cash Equivalents at End of Period $181,011 $78,280
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Supplemental Disclosures of Cash Flow Information:
Cash Paid during This Period for:
Interest Paid (Net of Capitalized Interest) $23,339 $21,456
Income Taxes 450 4,525
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Noncash Investing Activities:
Loans Transferred to Other Real Estate Owned $8,892 $4,839
Loans to facilitate the sale of Other Real Estate Owned 350 6,373
-------- --------
-------- --------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
7
<PAGE>
GBC BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
In the opinion of management, the consolidated financial statements of
GBC Bancorp and its subsidiaries (the "Company") as of September 30, 1995
and December 31, 1994 and the three and nine months ended September 30,
1995 and 1994, reflect all adjustments (which consist only of normal
recurring adjustments) necessary for a fair presentation. In the
opinion of management, the aforementioned financial statements are
in conformity with general accepted accounting principles.
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS BOARD NO. 114 AS AMENDED
In May 1993, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan", ("SFAS" 114). Under the provisions of SFAS 114, a
loan is considered impaired when, based on current information and events, it
is probable that a creditor will be unable to collect all amounts due
according to the contractual terms of the loan agreement. SFAS 114 requires
creditors to measure impairment of a loan based on the present value of
expected future cash flows discounted at the loan's effective interest rate,
fair value of the loan's collateral, or market value of the loan. If the
measure of the impaired loan is less than the recorded investment in the
loan, a creditor shall recognize an impairment by creating a valuation
allowance with a corresponding charge to the provision for credit losses.
Bank regulators have interpreted SFAS 114 to require that an impaired loan
that is collateral-dependent be carried at or below the fair value of the
loan's collateral. SFAS 114 also applies to restructured loans and changes
the requirement of accounting for loans that are in-substance foreclosures as
foreclosed assets requiring their recognition upon the physical possession of
the underlying collateral by the Bank.
In October 1994 the FASB issued Statement No. 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosures"
("SFAS 118"), that amends SFAS 114 and eliminates its provision regarding how
a creditor should report income on an impaired loan. As a result of the
amendment, creditors may now continue to use existing methods for recognizing
income on impaired loans, including methods that are required by certain
banking regulators. SFAS 118 also clarified the disclosure requirements of
SFAS 114.
8
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Statements 114 and 118 are effective for fiscal years beginning after
December 15, 1994 and the initial adoption is required to be reflected
prospectively. The Company adopted SFAS 114 and SFAS 118 on January 1, 1995.
As a result of adopting SFAS 114 and SFAS 118 and conforming with the
regulators' interpretations of SFAS 114, the Company experienced an increase
in charge-offs. See further discussion in section PROVISION FOR CREDIT LOSSES
in MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, following.
With the exception of four credits, all loans identified as impaired are
on a nonaccrual status. One restructured loan is considered impaired as of
September 30, 1995. Interest payments received on nonaccrual loans generally
are either applied against principal or reported as a recovery of amounts
previously charged-off, according to management's judgment as to the
collectibility of principal.
EARNINGS PER SHARE
Earnings per share are computed based on the weighted average shares
outstanding including common stock equivalents for the periods disclosed.
Because of the price of GBC Bancorp common stock during the three and nine
months ended September 30, 1995, all potential common stock equivalents were
anti-dilutive and accordingly were not included in the weighted average
shares outstanding for these periods.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash and cash equivalents consist of cash and due from banks, due from
financial institutions-time and federal funds sold and securities purchased
under agreements to resell.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
For the nine months ended September 30, 1995, GBC Bancorp earned net
income of $3,954,000, or $0.59 per share. For the corresponding period of a
year ago, the Company earned $5,557,000, or $0.83 per share.
9
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The reduction in net income of $1,603,000, or $0.24 per share is
primarily the result of a $3,890,000 increase in the provision for credit
losses. The increase in the provision was partially offset by a $3,153,000
increase in the net interest income earned during the nine months ended
September 30, 1995 compared to the corresponding period of 1994.
Net income was also negatively impacted by a $1,379,000 increase in
non-interest expense for the nine months ended September 30, 1995 compared to
the corresponding period of 1994.
For the third quarter of 1995, net income was $881,000, or $0.13 per
share compared to $146,000, or $0.02 per share for the third quarter of 1994.
The increased net income for the third quarter of 1995 was primarily due to a
reduced provision for credit losses.
For the nine months ended September 30, 1995 and 1994, the return on
average assets ("ROA") was 0.49% and 0.76%, respectively. For the nine months
ended September 30, 1995 and 1994, the return on average stockholders' equity
("ROE") was 5.68% and 8.21%, respectively. The decline of these ratios is as
explained above.
For the quarter ended September 30, 1995 and 1994, ROA was 0.32% and
0.06%, respectively, and ROE was 3.62% and 0.63%, respectively. Explanation
for the increase of these ratios is as described above.
RESULTS OF OPERATIONS
NET INTEREST INCOME
For the nine months ending September 30, 1995, net interest income before
the provision for credit losses amounted to $35,186,000, an increase of
$3,153,000, or 9.8%, when compared to the same period of 1994.
Total interest income for the nine months ended September 30, 1995 was
$62,424,000 compared to $52,777,000 for the corresponding period of a year
ago. The $9,647,000 increase, or 18.3%, was due to both an increase in the
average earning assets and the yield earned thereon. Average earning assets
for the nine months ending September 30, 1995 and 1994 were $1,013,363,000
and $905,557,000, respectively, representing a $108 million, or 11.9%
increase. The yields on earning assets were 8.24% and 7.79% for the nine
months ending September 30, 1995 and 1994, respectively, representing a 45
basis point increase, or 5.8%.
10
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Total interest expense for the nine months ending September 30, 1995 and
1994 was $27,238,000 and $20,744,000, respectively, representing a
$6,494,000, or 31.3% increase. As was the case for interest income, the
interest expense increase was a function of both an increase in average
interest bearing liabilities and the rates paid thereon. Average interest
bearing liabilities for the nine months ending September 30, 1995 and 1994
were $848,033,000 and $778,878,000, respectively, representing a $69,155,000,
or 8.9% increase. The rates paid on interest bearing liabilities were 4.31%
and 3.56% for the nine months ending September 30, 1995 and 1994,
respectively, representing a 75 basis point increase.
The net interest margin (defined as the difference between interest
income and interest expense divided by average earning assets and annualized)
decreased from 4.73% to 4.63%, for the nine months ending September 30, 1995
compared to the same period of the year earlier.
The net interest spread, defined as the difference between the yield
earned on earning assets and the rates paid on interest bearing deposits,
also declined. The net interest spread for the nine months ended September
30, 1995 and 1994 was 3.93% and 4.23%, respectively.
The declines of the interest margin and interest spread were due in large
measure to a shift in the composition of earning assets, the increase of
average nonaccrual loans in 1995 compared to 1994, and the direction of
interest rates during the nine months ended September 30, 1995, compared to
the corresponding period of a year ago.
For the nine months ended September 30, 1995, loans, the Bank's highest
yielding asset, represented 48% of average earning assets with securities
(including federal funds sold and securities purchased under agreements to
resell) representing 52% of average earning assets. For the corresponding
period ended September 30, 1994, loans represented 56% of average earning
assets and securities represented 44% of average earning assets.
For the nine months ended September 30, 1995, average nonaccrual loans
were $49,454,000, an increase of $20,070,000, or 68.3% from $29,384,000 for
the nine months ended September 30, 1994.
During 1994, the prime rate of interest moved from 6.50% to 8.25%,
representing a 175 basis points, or 26.9% increase. During the corresponding
period 1995, the prime rate has increased by 25 basis points. The Bank
obtains higher interest spreads during times of rising interest rates,
because its assets on average, have repriced more rapidly than its
interest-bearing liabilities.
11
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Net interest income before the provision for credit losses for the three
months ending September 30, 1995 and 1994 was $11,480,000 and $11,122,000,
respectively, representing an increase of $358,000 or 3.2%.
Total interest income for the quarter ending September 30, 1995 was
$20,869,000, compared to $18,568,000, or a $2,301,000 increase over the
corresponding quarter of a year ago. The increase was due to both a growth of
average earning assets and an increase in the yields earned thereon.
Total interest expense for the quarters ending September 30, 1995 and
1994 was $9,389,000 and $7,446,000, respectively, representing a $1,943,000
or 26.1% increase. As was the case with interest income, the increase in
interest expense was due to an increase of the average interest bearing
liabilities and an increase in the rates paid thereon.
The net interest margin for the quarters ended September 30, 1995, and
1994 was 4.40% and 4.78%, respectively. For the quarter ended September 30,
1995, the net interest spread was 3.70% compared to 4.23% for the
corresponding period of a year ago. The decrease of the spread was primarily
due to the reasons as explained above for the nine month periods ended
September 30, 1995 and 1994.
PROVISION FOR CREDIT LOSSES
For the nine months ending September 30, 1995, the provision for credit
losses totaled $15,650,000, compared to $11,760,000 for the corresponding
period of 1994, representing an increase of $3,890,000, or 33.1%.
The increase of the provision for credit losses was caused by the
continued effect of the increase in interest rates last year, which
negatively impacted on the recovery of the local economy and the commercial
real estate market. These factors affect the financial capabilities and
liquidity of the Company's borrowers and the valuation of the underlying
collateral supporting the Company's loans. The $15.7 million provision for
credit losses and the $19.9 million of net charge-offs recorded during the
nine months of 1995, also reflect actions taken to implement the regulatory
interpretation of SFAS 114. It is believed that the accounting results in a
conservative valuation of such loans. Additionally, the increase in the
provision is also attributable to the continued increase in the Company's
nonaccrual loans.
For the quarter ending September 30, 1995, the provision for credit
losses totaled $5,550,000 compared to $7,700,000 for the corresponding period
of 1994, representing a decrease of $2,150,000 or
12
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27.9%. The third quarter, 1995, provision reflected in part, the partial
charge-offs of certain loans so that in the future, with contractual
performance, these loans will no longer be criticized by the banking
regulators.
NON-INTEREST INCOME
Non-interest income for the nine months ended September 30, 1995 totaled
$4,671,000 compared to $4,435,000 for the corresponding period of a year ago,
representing a $236,000 or 5.3% increase. The increase is due in part to a
$93,000 growth in service charges and commissions and a $122,000 growth of
other income. Other income includes income from escrow services. For the nine
months ended September 30, 1995, income from escrow services totaled $399,000
compared to $285,000 for the corresponding period of a year ago.
Non-interest income for the quarter ended September 30, 1995 totaled
$1,560,000 compared to $1,443,000 for the corresponding period of a year ago,
representing a $117,000, or 8.1% increase. Increases were in service charges
and commissions and gains on sale of loans.
NON-INTEREST EXPENSE
For the nine months ending September 30, 1995 and 1994 non-interest
expense was $19,264,000 and $17,885,000, representing a $1,379,000, or 7.7%
increase. While there was a $467,000 decrease in net other real estate owned
expense due to reduced operating expenses, this was offset by a $710,000, or
10.1%, increase of salaries and employee benefits and a $1,056,000 increase
of other expenses. The growth in salaries and employee benefits was primarily
the result of an increase in full-time equivalent staff. As of September 30,
1995, there was a full-time equivalent number of employees totaling 312
compared to 279 as of September 30, 1994. The increase in the number of
employees is due primarily to the Bank's expansion in Northern California.
Other expenses increased $1,056,000, or 21.4%, during the nine months
ended September 30, 1995, compared to the year ago period. Other expenses
include various expense categories, with real estate investment expense, and
appraisal expense reflecting the largest dollar increases. Real estate
investment expense increased $358,000 or 62.9%, as a result of the marketing
efforts involved in the sale of the investments and an increase of the
amortization of one of the Bank's low income housing projects.
13
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Appraisal expense increased $188,000 and is due to the increased efforts
at valuing real estate collateral in conformity with SFAS 114 and the
regulators' interpretations thereof.
For the three months ended September 30, 1995 and 1994, non-interest
expense was $6,391,000 and $5,514,000, respectively, representing an
$877,000, or 15.9% increase. The increase was primarily due to increases of
salaries and employee benefits and other expenses. The increase is as
explained above for the nine-month variances.
PROVISION FOR INCOME TAXES
The provision for income taxes for the nine months ending September 30,
1995 was $989,000, representing an effective tax rate of 20%. This effective
tax rate is based on management's assessment of the expected tax rate of
pre-tax income for the year 1995, the year-end timing differences and the
federal income tax credits related to the low-income housing investments. For
the nine months ended September 30, 1994, the provision for income taxes was
$1,266,000, or 18.6% of pre-tax income.
For the quarter ending September 30, 1995 and 1994, the provision
(benefit) for income taxes was $218,000 and $(795,000), respectively. The
benefit amount for the quarter ended September 30, 1994, arose due to the
before-tax loss for the quarter, and adjustment of the year-to-date provision
for income taxes to the effective rate expected for the year.
FINANCIAL CONDITION
LOANS
As of September 30, 1995, total loans and leases amounted to $485,718,000
representing a $15,272,000, or 3.0% decrease from total loans of $500,990,000
outstanding as of December 31, 1994. The decline in loans outstanding was due
to charge-offs totaling $20,214,000 during the nine-month period ended
September 30, 1995. In addition, approximately $9,000,000 of loans were
transferred to other real estate owned at the lower of cost or fair value.
The following table sets forth the amount of loans and leases outstanding
by category and the percentage of each category to the total loans and leases
outstanding for the periods indicated:
14
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<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
(IN THOUSANDS) Amount Percentage Amount Percentage
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial $155,802 32.08% $132,806 26.50%
Real Estate - Construction $60,311 12.42% $60,610 12.10%
Real Estate - Conventional $240,331 49.48% $281,225 56.10%
Installment $246 0.05% $377 0.10%
Other Loans $28,768 5.92% $25,699 5.10%
Leveraged Leases $260 0.05% $273 0.10%
TOTAL $485,718 100.00% $500,990 100.00%
</TABLE>
NONPERFORMING ASSETS
A certain degree of risk is inherent in the extension of credit.
Management believes that it has credit policies in place to assure minimizing
the level of loan losses and nonperforming loans. The Company performs a
quarterly assessment of the credit portfolio to determine the appropriate
level of the allowance. Included in the assessment is the identification of
loan impairment. A loan is identified as impaired when it is probable that
interest and principal will not be collected according to the contractual
terms of the loan agreement. Loan impairment is measured by estimating the
expected future cash flows and discounting them at the respective effective
interest rate or by valuing the underlying collateral.
The Company has a policy of classifying loans (including a loan impaired
under SFAS 114) which are 90 days past due as to principal and/or interest as
nonaccrual loans unless management determines that the fair value of
underlying collateral is substantially in excess of the loan amount or
circumstances justify treating the loan as fully collectible. After a loan is
placed on nonaccrual status, any interest previously accrued, but not yet
collected, is reversed against current income. A loan is returned to accrual
status only when the borrower has demonstrated the ability to make future
payments of principal and interest as scheduled, and the borrower has
demonstrated a sustained period of repayment performance in accordance with
the contractual terms. Interest received on nonaccrual loans generally is
either applied against principal or reported as recoveries on amounts
previously charged-off, according to management's judgment as to the
collectibility of principal.
15
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The following table provides information with respect to the Company's
past due loans, restructured loans and other real estate owned, net, at the
dates indicated:
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPTEMBER 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Loan 90 Days or More Past Due
and Still Accruing $10 $999
Nonaccrual Loans $52,131 $46,672
Total Past Due Loans $52,141 $47,671
Restructured Loans $10,502 $20,865
Total Nonperforming Loans $62,643 $68,536
Other Real Estate Owned, Net $5,676 $5,051
Total Nonperforming Assets $68,319 $ 73,587
</TABLE>
Total nonperforming assets decreased $5,268,000, or 7.16%, from
$73,587,000 as of December 31, 1994 to $68,319,000 as of September 30, 1995.
Non-accrual loans increased by $5,459,000. The increase was the result of
restructured loans becoming non-accrual during 1995, and a $7,700,000 loan
that has become temporarily non-accrual in the third quarter of 1995.
Offsetting these increases to non-accrual loans were $20,214,00 of
charge-offs effected during 1995, the majority of which were on non-accrual
status prior to charge-off.
Commercial real estate and construction loans as a group comprise 89.9%
of the total nonaccrual loans, as of September 30, 1995. Although the value
of the underlying collateral is affected by the high interest rates and
economic factors described above, the collateral nevertheless provides
substantial protection against the loss of principal.
The following table breaks out the Company's nonaccrual loans by category
as of September 30, 1995 and December 31, 1994:
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPTEMBER 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Commercial $5,238 $3,462
Real Estate-Construction $11,536 $14,099
Real Estate-Conventional $35,304 $29,111
Installment -- --
Other Loans $53 --
Total $52,131 $46,672
</TABLE>
Restructured loans consist of six real estate credits with a balance of
$10,502,000 as of September 30, 1995. This compares to $20,865,000 of
restructured loans as of December 31, 1994. The
16
<PAGE>
$10,363,000 net reduction is due to pay-downs, charge-offs, and two loans
being put on nonaccrual status during the nine month period ended September
30, 1995. Restructured loans which are on nonaccrual status are not included
in the balance of restructured loans. There are no commitments to lend
additional funds on any of the restructured loans.
Other real estate owned ("OREO"), net of valuation allowance of $770,000,
totaled $5,676,000 as of September 30, 1995, representing an increase of
$625,000, or 12.37%, over the net balance as of December 31, 1994 of
$5,051,000, net of valuation allowance of $429,000. Additional properties
with fair value of $8,892,000 were added to OREO during the nine months
ending September 30, 1995. Dispositions during the same period were
$7,926,000, with a resulting net loss of $208,000. The net loss is included
in net other real estate owned expense.
As of September 30, 1995, OREO consisted of thirteen properties. The
following table sets forth OREO by property type for the dates as indicated:
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPT. 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
1-4 Family Residential Properties $11 $290
Multi-Family Residential Properties $4,031 $3,689
Commercial Properties $1,608 $414
Land $796 $1,087
Total $6,446 $5,480
Less Valuation Allowance $(770) $(429)
OREO, Net $5,676 $5,051
</TABLE>
The properties are all included in the Bank's market area. As of
September 30, 1995, two properties comprise the land category. The Company
does not intend to develop these properties; rather, it expects to sell the
land undeveloped.
Management cannot predict the extent to which the current economic
environment, including the real estate market, may persist or worsen or the
full impact such environment may have on the Bank's loan portfolio.
Furthermore, as the Bank's primary regulators review the loan portfolio as
part of their routine, periodic examinations of the Bank, their assessment
of specific credits may affect the level of the Bank's nonperforming loans.
Accordingly, there can be no assurance that other loans will not become 90
days or more past due, be placed on nonaccrual, have terms modified in the
future, or become OREO. (See Regulatory Matters section following for further
discussion.)
17
<PAGE>
ALLOWANCE FOR CREDIT LOSSES
SFAS 114, Accounting by Creditors for Impairment of a Loan, as amended by
SFAS 118, was adopted on January 1, 1995. As of September 30, 1995, the
Company had $50,914,000 of recorded investment in impaired loans.
$47,948,000 of impaired loans have a related allowance for credit losses
determined in accordance with SFAS 114 totaling $7,655,000. The amount of
recorded investment in impaired loans for which there is no related allowance
for credit losses determined in accordance with SFAS 114 is $2,966,000.
The table below summarizes the activity in the total allowance for credit
losses for the nine months ended September 30, 1995 and 1994. The amounts
include the allowance on impaired loans determined in accordance with SFAS
114.
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Balance, Beginning of Period $23,025 $11,977
Provision for Credit Losses $15,650 $11,760
Charge-offs $20,214 $3,011
Recoveries $309 $617
Net Charge-offs $19,905 $2,394
Balance, End of Period $18,770 $21,343
</TABLE>
The increase of the provision for credit losses is caused by the continued
effect of the increase in interest rates last year, which impact on the
recovery of the local economy and the commercial real estate market. These
factors affect the financial capabilities and liquidity of the Company's
borrowers and the valuation of the underlying collateral supporting the
Company's loans. The provision and charge-offs largely reflect recent
appraisals of underlying collateral of commercial real estate loans, but do
not necessarily represent realized losses.
As of September 30, 1995, the allowance for credit losses was $18.8
million representing 3.86% of outstanding loans. This compares to an
allowance of $23.0 million as of December 31, 1994, representing 4.60% of the
then outstanding loans. The decline of the allowance, and its percentage of
loans, was due to the charge-offs previously mentioned, as the majority of
the charge-offs were to reduce the book value of collateral-dependent loans
to, or below, the current appraised value of the property. Prior to the
charge-offs, these loans had allowances that represented a substantial
portion of the charge-off. Therefore, management believes that the allowance
for credit losses is
18
<PAGE>
reasonably stated for the possible credit losses inherent in the loan portfolio
at the end of quarter.
SECURITIES
The Company classifies its securities as held to maturity or available
for sale. Securities classified as held to maturity are those that the
Company has the positive intent and ability to hold until maturity. These
securities are carried at amortized cost.
Securities that could be sold in response to changes in interest rates,
increased loan demand, liquidity needs, capital requirements or other similar
factors are classified as securities available for sale. These securities are
carried at market value, with unrealized gains or losses reflected net of tax
in stockholders' equity.
As of September 30, 1995, the Company recorded gross unrealized gains of
$813,000 on its available-for-sale portfolio and the inclusion as a separate
addition to stockholders' equity of $470,000 representing the unrealized
holding gain, net of tax.
The following table summarizes the carrying value of the Company's
securities held to maturity and the securities available for sale as of the
dates indicated:
<TABLE>
<CAPTION>
9/30/95 12/31/94
- --------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) GROSS GROSS GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY
U.S. Treasuries $1,955 -- $(46) $1,909 $1,978 -- $(185) $1,793
U.S. Government Agencies $10,591 -- $(17) $10,574 $10,726 -- $(258) $10,468
Mortgage Backed Securities $16,998 $62 -- $17,060 $19,048 -- $(716) $18,332
State & Municipal Securities $6,926 $194 -- $7,120 $7,322 $124 -- $7,446
Auction Preferred Stock $10,000 -- $10,000 -- -- -- --
Commercial Paper -- -- -- -- $2,999 -- -- $2,999
Collateralized Mortgage Obligations $17,401 -- $(58) $17,343 $14,162 -- $(1,356) $12,806
Asset Backed Securities $27,019 $731 -- $27,750 $27,041 $175 -- $27,216
Total Securities Held to Maturity $90,890 $987 $(121) $91,756 $83,276 $299 $(2,515) $81,060
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
9/30/95 12/31/94
- --------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) GROSS GROSS GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE
U.S. Treasuries $14,895 $61 -- $14,956 $37,556 -- $(67) $37,489
U.S. Government Agencies $213,101 $504 -- $213,605 $194,152 -- $(694) $193,458
Mortgage Backed Securities $47,410 -- $(572) $46,838 $34,141 -- $(2,838) $31,303
Corporate Notes $27,015 $1,138 -- $28,153 $42,018 $136 -- $42,154
Collateralized Mortgage Obligations $54,055 -- $(518) $53,537 $48,228 -- $(3,820) $44,408
Other Securities $9,760 $200 -- $9,960 $8,523 -- $(100) $8,423
Total Securities Available for Sale $366,236 $1,903 $(1,090) $367,049 $364,618 $136 $(7,519) S357,235
</TABLE>
There were no sales of securities available for sale during the nine
months ended September 30, 1995. Proceeds from the sales of securities
available for sale were $1,016,000 during the nine months ended September
30, 1994. There were no sales of securities held to maturity for the nine
months ended September 30, 1995 and 1994.
DEPOSITS
The Company's deposits totaled $996,466,000 as of September, 1995,
representing a $62,446,000, or 6.70%, increase from total deposits of
$934,020,000 as of December 31, 1994. The growth in deposits was in the time
certificate of deposit ("TCD") categories: TCD's of $100,000 or more
increased $65,204,000, or 20.9%, and TCD's of less than $100,000 increased
$32,241,000, or 23.7%. The other deposit categories reflected declines
compared to end-of-year 1994 with savings down $19,863,000, or 12.9%. The
increase in deposits is in part due to the current economic and political
situation in Taiwan.
The Company believes that the majority of its deposit customers have
strong ties to the Bank. There is no large concentration with any major
depositors. Accordingly, the Company believes its deposit source to be stable.
The maturity schedule of time certificates of deposit of $100,000 or more
as of September 30, 1995 is as follows:
20
<PAGE>
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
3 months or less...................... $177,761
Over 3 months through one year........ $197,583
Over one year through 5 years......... $ 1,422
--------
Total................................. $376,766
--------
--------
</TABLE>
REGULATORY MATTERS
In August, 1995, the Bank entered into a Memorandum of Understanding
("MOU") with the FDIC which resulted from the FDIC's examination report of
the Bank dated as of February 21, 1995. As of September 30, 1995, management
believes the Bank was in compliance with the quantitative terms of the MOU,
which include: (a) a $27 million reduction in adversely classified assets
within 120 days following the effective date of the MOU and a $69 million
reduction within one year; (b) a maximum "volatile liability dependence
ratio" of 30% (as of September 30, 1995, the ratio was 12.44%); (c) a minimum
Tier 1 capital ratio (leverage ratio) of 7% (as of September 30, 1995, the
ratio was 9.40%); and (d) a $19.5 million capital injection to the Bank from
its holding company, GBC Bancorp (this injection was made on September 5,
1995). The MOU also provided that the prior written consent of the FDIC would
be required before the Bank could pay cash dividends.
The MOU, among other things, also calls for limitations on new advances
to borrowers with adversely classified or charged off loans, the timely and
proper identification of problem loans and the establishment of a
comprehensive policy for determining the adequacy of the reserves for loan
losses; and the adoption of a written policy regarding internal controls and
procedures.
The Company's Board of Directors received a notification letter, dated
April 25, 1994, from the Federal Reserve Bank of San Francisco (the "Federal
Reserve") that requires the Company to inform the Federal Reserve prior to
its taking any of the following actions: (a) declaring cash or in kind
dividends; (b) incurring debt; (c) repurchasing stock; (d) entering into any
agreements to acquire any entities or portfolios. As of September 30, 1995,
this notification letter remains in effect.
CAPITAL RESOURCES
Stockholders' equity totaled $94,874,000 as of September 30, 1995, an
increase of $7,191,000, or 8.20%, from $87,683,000, as of December
21
<PAGE>
31, 1994. The increase is primarily comprised of the effect of a turnaround
of $4,741,000, net of taxes, from unrealized holding losses on securities
available for sale at year-end 1994 to unrealized gains, and net income of
$3,954,000 for the nine months ended September 30, 1995 less dividends
declared of $1,599,000, for the same nine month period.
The Company's and the Bank's risk-based Tier I capital and total capital,
and leverage ratios are as follows as of the dates indicated:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
September 30, 1995 December 31 , 1994
- ------------------------------------------------------------------------------------------------
(1) (2) GBC Bancorp General Bank GBC Bancorp General Bank
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Risk-Based Capital Ratios:
Tier 1 6% 4% 12.85% 14.23% 13.21% 11.82%
Total 10% 8% 14.51% 15.48% 15.34% 13.07%
Leverage Ratio 5% 4% 8.51% 9.40% 8.69% 7.76%
</TABLE>
(1) Ratio represents the minimum capital ratios required for "well
capitalized" institutions.
(2) Ratio represents the minimum capital ratios required for "adequately
capitalized" institutions.
Management monitors its capital position on an on-going basis and is
committed to maintaining capital at a sufficient level to assure
stockholders, customers and regulators that the Company is financially sound.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Liquidity measures the ability of the Company to meet fluctuations in
deposit levels, to fund its operations and to provide for customers' credit
needs. Asset liquidity is provided by cash and short-term financial
instruments, which include federal funds sold and securities purchased under
agreements to resell, unpledged investment securities maturing within one
year and unpledged securities available for sale. These sources of liquidity
amounted to $500,835,000, or 43.56% of total assets as of September 30, 1995,
compared to $427,484,000, or 39.8% of total assets at December 31, 1994.
To further supplement its liquidity, the Company has established Federal
funds lines with correspondent banks and three master repurchase agreements
with major brokerage companies. In August, 1992
22
<PAGE>
the Federal Home Loan Bank of San Francisco ("FHLB") granted the Bank a line
of credit equal to 25 percent of assets with terms up to 240 months. As of
September 30, 1995 the Company had a $30,000,000 fixed rate advance
outstanding under this financing facility with the FHLB. On October 2, 1995,
the advance matured; it was not renewed by the Bank. Management believes its
liquidity sources to be stable and adequate.
As of September 30, 1995, total loans and leases represented 48.74% of
total deposits; as of December 31, 1994, this ratio was 53.60%
Effective asset/liability management includes maintaining adequate
liquidity and minimizing the impact of future interest rate changes on net
interest income. The Company attempts to manage its interest rate sensitivity
on an on-going basis through the analysis of the repricing characteristics of
its loans, investments, and deposits, and managing the estimated net interest
income volatility by adjusting the terms of its interest-earning assets and
liabilities, and through the use of derivatives as needed. As of September
30, 1995, no such derivative contracts had been entered into for trading or
investment purposes.
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. They have been used
to manage the interest rate risk from the origination of fixed rate
residential mortgage loans. Futures contracts on ten-year Treasury notes are
sold to reduce the impact of increases in interest rates, which affect the
prices for which fixed rate residential mortgages will be sold. The fair
value of the underlying futures contract is expected to move inversely to the
change in fair value of the loans.
The Company never intends to deliver the underlying securities that the
futures contract commits to sell. Rather, it purchases offsetting contracts
to eliminate the obligation. The Company is exposed to the risk that the
fair value of futures contracts, being based upon the value of the ten-year
Treasury note, does not move proportionately with the change in fair value of
the loans being hedged. This basis risk is unpredictable and can result in
economic loss to the Company.
Initial margin requirements and daily calls are met in cash. Futures
contracts have little credit risk as organized exchanges are the
counterparties.
As of September 30, 1995, there were no futures contracts outstanding.
23
<PAGE>
While no single measure can completely identify the impact of changes in
interest rates on net interest income, one gauge of interest rate sensitivity
is to measure, over various time periods, the differences in the amounts of
the Company's rate sensitive assets and rate sensitive liabilities. These
differences, or "gaps", provide an indication of the extent that net interest
income may be affected by future changes in interest rates. However, these
"gaps" do not take into account timing differences between the repricing of
assets and the repricing of liabilities.
A positive gap exists when rate sensitive assets exceed rate sensitive
liabilities and indicates that a greater volume of assets than liabilities
will reprice during a given period. This mismatch may enhance earnings in a
rising rate environment and may inhibit earnings when rates decline.
Conversely, when rate sensitive liabilities exceed rate sensitive assets,
referred to as a negative gap, it indicates that a greater volume of
liabilities than assets will reprice during the period. In this case, a
rising interest rate environment may inhibit earnings and declining rates may
enhance earnings.
The following table indicates the Company's interest rate sensitivity
position as of September 30, 1995; it may not be reflective of positions in
subsequent periods:
24
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995
INTEREST SENSITIVITY PERIOD
--------------------------------------------------------------------------
0 TO 90 91 TO 365 OVER 1 YEAR OVER NON-INTEREST
(IN THOUSANDS) DAYS DAYS TO 5 YEARS 5 YEARS ERNG/BEARING TOTAL
- -------------------------- --------- ---------- ----------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Securities Available for Sale $109,464 $62,289 $111,436 $83,860 -- $367,049
Securities Held to Maturity 10,848 568 41,552 37,922 90,890
Federal Funds Sold 141,600 -- -- -- -- 141,600
Loans (1) (2) 343,488 35,845 24,281 29,973 -- 433,587
Non-Earning Assets (2) -- -- -- -- 115,817 115,817
--------- ---------- ---------- -------- ------------ ----------
Total Assets $605,400 $98,702 $177,269 $151,755 $115,817 $1,148,943
--------- ---------- ---------- -------- ------------ ----------
--------- ---------- ---------- -------- ------------ ----------
Source of Funds for Assets:
Deposits:
Demand $ -- $ -- $ -- $ -- $ 120,884 $ 120,884
Interest Bearing Demand 195,787 -- -- -- -- 195,787
Savings 134,464 -- -- -- -- 134,464
TCD'S Under $100,000 73,446 94,012 1,107 -- -- 168,565
TCD'S $100,000 and Over 177,761 197,583 1,422 -- -- 376,766
--------- ---------- ---------- -------- ------------ ----------
Total Deposits 581,458 291,595 2,529 -- 120,884 996,466
--------- ---------- ---------- -------- ------------ ----------
Other Borrowed Funds 30,000 -- -- -- -- 30,000
Subordinated Debt -- -- 11,250 3,750 -- 15,000
Other Liabilities -- -- -- -- 12,603 12,603
Stockholders' Equity -- -- -- -- 94,874 94,874
--------- ---------- ---------- -------- ------------ ----------
Total Liabilities and
Stockholders' Equity $611,458 $ 291,595 $ 13,779 $3,750 $228,361 $1,148,943
--------- ---------- ---------- -------- ------------ ----------
--------- ---------- ---------- -------- ------------ ----------
Interest Sensitivity Gap $(6,058) $(192,893) $163,490 148,005 $(112,544)
Cumulative Interest Sensivity Gap $(6,058) $(198,951) $(35,461) $112,544 --
Gap Ratio (% of Total Assets) -0.5% -16.8% 14.2% 12.9% -9.8%
Cumulative Gap Ratio -0.5% -17.3% -3.1% 9.8% 0.0%
</TABLE>
(1) Loans are before unamortized deferred loan fees and allowance for loan
losses.
(2) Nonaccrual loans are included in non-earning assets.
25
<PAGE>
PART II - OTHER INFORMATION
26
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
No material legal proceedings to which the Registrant or its subsidiaries
is a party have been initiated or terminated during the quarter ended
September 30, 1995. There have been no significant developments in any
material pending legal proceedings involving the Registrant or its
subsidiaries during this same quarter.
ITEM 2. CHANGES IN SECURITIES
There have been no changes in the securities of the Registrant during the
quarter ended September 30, 1995.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
This item is not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
quarter ended September 30, 1995.
ITEM 5. OTHER INFORMATION
There are no events to be reported under this item.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits: Exhibit 27, Financial Data Schedule
b) Reports on Form 8-K: None.
27
<PAGE>
PART III - SIGNATURES
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GBC Bancorp
(Registrant)
Dated: s/
------------------------ ---------------------------
Li-Pei Wu, Chairman,
President and Chief
Executive Officer
Dated: s/
------------------------ ---------------------------
Peter Lowe, Executive
Vice President and
Chief Financial Officer
29
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0000351710
<NAME> GBC BANCORP
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 39,411
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 141,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 367,049
<INVESTMENTS-CARRYING> 90,890
<INVESTMENTS-MARKET> 91,756
<LOANS> 485,718
<ALLOWANCE> 18,770
<TOTAL-ASSETS> 1,148,943
<DEPOSITS> 996,466
<SHORT-TERM> 30,000
<LIABILITIES-OTHER> 12,603
<LONG-TERM> 15,000
<COMMON> 45,468
0
0
<OTHER-SE> 49,406
<TOTAL-LIABILITIES-AND-EQUITY> 1,148,943
<INTEREST-LOAN> 37,039
<INTEREST-INVEST> 25,385
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 62,424
<INTEREST-DEPOSIT> 24,977
<INTEREST-EXPENSE> 27,238
<INTEREST-INCOME-NET> 35,186
<LOAN-LOSSES> 15,650
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,984
<INCOME-PRETAX> 4,943
<INCOME-PRE-EXTRAORDINARY> 4,943
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,954
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
<YIELD-ACTUAL> 4.63
<LOANS-NON> 52,131
<LOANS-PAST> 10
<LOANS-TROUBLED> 10,502
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 23,025
<CHARGE-OFFS> 20,214
<RECOVERIES> 309
<ALLOWANCE-CLOSE> 18,770
<ALLOWANCE-DOMESTIC> 18,770
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
