SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)

of The Securities Exchange Act of 1934

 

For Quarter Ended June 30, 2001 Commission file number0-16213

| GBC BANCORP
 
(Exact name of registrant as specified in its charter)

California
95-3586596
(State or other jurisdiction of                           (I.R.S. EmployerIdentification No.)

incorporation or organization)

800 West 6th Street, Los Angeles,
California 90017
(Address of principal executive offices)                    (Zip code)

Registrant's telephone number, including area code 213/972-4174
Former name address and former fiscal year, if changed      since last report.
 
Indicate by check mark whether the registrant (1) has filedall reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.

Yes X No _______
Indicate the number of shares outstanding of each of theissuer's classes of common stock, as of the close of the period covered by thisreport.

Common stock, no par value, 11,511,327 shares issued andoutstanding as of June 30, 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

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      .............................................................................
11
Item 3.
Qualitative and Quantative Disclosures about Market      Risk
32
PART II -
OTHER INFORMATION      ......................................................................
35
Item 1.
Legal Proceedings      ..................................................................................
36
Item 2.
Changes In Securities      .............................................................................
36
Item 3.
Default Upon Senior      Securities........................................................
36
Item 4.
Submission Of Matters To A Vote Of Securities Holders      .....................
36
Item 5.
Other Information      ...................................................................................
37
Item 6.
Exhibits And Reports On Form 8-K      ......................................................
37
PART III -
SIGNATURES      .......................................................................................
38
 

 

 

 

PART I - FINANCIAL INFORMATION

 

 

 

<TABLE>

<CAPTION>

GBC BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unauditied)
June 30,
December 31,
(Dollars In Thousands)
2001
 
2000
ASSETS
<S>

<C>

<C>

Cash and Due From Banks
$ 36,276
$ 40,306
Federal Funds Sold and Securities Purchased Under Agreements to Resell
83,750
75,000
Cash and Cash Equivalents
120,026
115,306
Securities Available-for-Sale at Fair Value (Amortized Cost of $875,204      at
June 30, 2001 and $838,302 at December 31, 2000, respectively)
898,158
855,383
Securities Held to Maturity (Fair Value of $720 at June 30, 2001 and
$968 at December 31, 2000, respectively)
720
1,025
Trading Securities
681
4,637
Loans and Leases
1,083,543
969,023
Less: Allowance for Credit Losses
(22,795)
(19,426)
Deferred Loan Fees
(5,236)
(4,085)
Loans and Leases, net
1,055,512
945,512
Bank Premises and Equipment, net
5,745
5,578
Other Real Estate Owned, net
383
1,035
Due From Customers on Acceptances
9,196
6,304
Real Estate Held for Investment
2,977
3,826
Other Investments
15,673
15,444
Accrued Interest Receivable and Other Assets
16,119
15,059
Total Assets
$ 2,125,190
$ 1,969,109
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand
$ 198,388
$ 207,281
Interest Bearing Demand
362,709
389,347
Savings
65,881
69,386
Time Certificates of Deposit of $100,000 or More
912,110
826,157
Other Time Deposits
181,785
182,398
Total Deposits
1,720,873
1,674,569
Borrowings from the Federal Home Loan Bank
113,000
25,000
Subordinated Debt
39,203
39,138
Acceptances Outstanding
9,196
6,304
Accrued Expenses and Other Liabilities
44,260
36,316
Total Liabilities
1,926,532
1,781,327
Stockholders' Equity
Common Stock, No Par or Stated Value;
40,000,000 Shares Authorized; 11,511,327 shares(net of 96,935 shares
held in trust) at June 30, 2001 and 11,557,727 shares (net of 71,007
shares held in trust) at December 31, 2000, respectively
68,597
62,054
Retained Earnings
115,208
114,266
Accumulated Other Comprehensive Income
12,379
9,891
Shares Held in Trust for Deferred Compensation
2,474
1,571
Total Stockholders' Equity
198,658
187,782
Total Liabilities and Stockholders' Equity
$ 2,125,190
$ 1,969,109
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>

<TABLE>

<CAPTION>

GBC BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
For the Six Months Ended
June 30,
June 30,
(In Thousands, Except Share and Per Share Data)
 
2001
 
2000
 
2001
 
2000
<S>
      <C>    
<C>

<C>

<C>

INTEREST INCOME
Loans and Leases, Including Fees
$ 23,468
$ 26,800
$ 46,712
$ 49,243
Securities Available-for-Sale
15,478
12,833
30,821
24,454
Securities Held to Maturity
14
19
30
39
Federal Funds Sold and Securities
Purchased under Agreements to Resell
686
2,212
1,733
3,883
Other
6
6
14
9
Total Interest Income
39,652
41,870
79,310
77,628
INTEREST EXPENSE
Interest Bearing Demand
1,877
3,412
4,786
6,239
Savings
239
487
591
962
Time Certificates of Deposits of $100,000 or More
11,055
10,385
22,756
19,435
Other Time Deposits
2,031
2,555
4,384
4,803
Federal Funds Purchased and Securities
Sold under Repurchase Agreements
9
25
21
34
Borrowings from the Federal Home Loan Bank
1,189
612
1,610
1,225
Subordinated Debt
871
871
1,741
1,741
Total Interest Expense
17,271
18,347
35,889
34,439
Net Interest Income
22,381
23,523
43,421
43,189
Provision (Benefits) for Credit Losses
1,800
(1,500)
7,800
(1,500)
Net Interest Income after Provision (Benefit)
 
 
 
 
for Credit Losses
20,581
25,023
35,621
44,689
NON-INTEREST INCOME
Service Charges and Commissions
2,032
2,269
3,919
4,235
Gain on Sale of Loans, Net
3
2
6
5
Gain on Sale of Fixed Assets
38
3
38
7
Trading Account (Expense)Revenue
(103)
2,831
2,170
8,032
Expense from Other Investments
(44)
(280)
(179)
(282)
Other
630
61
661
128
Total Non-Interest Income
2,556
4,886
6,615
12,125
NON-INTEREST EXPENSE
Salaries and Employee Benefits
5,086
5,698
10,412
11,178
Occupancy Expense
863
880
1,693
1,677
Furniture and Equipment Expense
531
489
1,044
1,004
Loss on Sale of Securities Available-for-Sale
-
104
-
104
Net Other Real Estate Owned (Income)Expense
(437)
(297)
(394)
309
Other
2,243
1,858
4,435
3,737
Reduction of Fair Value of Derivatives
388
-
7,115
-
Total Non-Interest Expense
8,674
8,732
24,305
18,009
Income before Income Taxes
14,463
21,177
17,931
38,805
Provision for Income Taxes
5,658
8,300
6,741
15,080
 
Net Income before Cumulative Effect of a Change in Accounting Principle
8,805
12,877
11,190
23,725
Cumulative Effect of a Change in Accounting Principle
-
-
4,962
-
Net Income
$ 8,805
$ 12,877
$ 16,152
$ 23,725
Earnings Per Share:
Net Income before Cumulative Effect of a Change in Accounting Principle
Basic
$ 0.75
$ 1.12
$ 0.95
$ 2.06
Diluted
0.75
1.10
0.94
2.02
Cumulative Effect of a Change in Accounting Principle
Basic
$ -
$ -
$ 0.42
$ -
Diluted
-
-
0.42
-
Net Income
Basic
$ 0.75
$ 1.12
$ 1.37
$ 2.06
Diluted
0.75
1.10
1.36
2.02
Weighted Average Basic Shares Outstanding
11,728,510
11,517,794
11,759,127
11,517,957
Weighted Average Diluted Shares Outstanding
11,783,009
11,710,200
11,877,633
11,726,439
See Accompanying Notes to Unaudited Consolidated Financial Statements
 

</TABLE>

<TABLE>

<CAPTION>

GBC BANCORP SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'      EQUITY AND  COMPREHENSIVE INCOME
(unaudited)
(In Thousands, Except per Share Amounts)
Accumulated
Other
Total
Common Stock
Retained
Comprehensive
Comprehensive
Stockholders'
 
Shares
 
Amount
 
Earnings
 
Income (Loss)
 
Income (Loss)
 
Equity
<S>

<C>

<C>

<C>

<C>

<C>

<C>

Balance at December 31, 1999
11,523
$ 57,289
$ 84,035
$ (8,286)
$ 133,038
Comprehensive Income
Net Income for the year
38,476
$ 38,476
38,476
Other Comprehensive Income, Net of Tax
Net Changes in Securities Valuation Allowance
18,178
18,178
18,178
Foreign Currency Translation Adjustment
(1)
(1)
(1)
Comprehensive Income
$ 56,654
Stock Issued for Executive Compensation
114
2,401
2,401
Stock Held by Executive Obligation Trust
(71)
(1,571)
1,571
-
Stock Issuance
161
2,975
2,975
Tax Benefit-Stock Options Exercised
960
960
Stock Repurchase
(169)
(3,732)
(3,732)
Cash Dividend- $0.39 per Share
(4,513)
(4,513)
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2000
11,558
$ 62,054
$ 115,837
$ 9,891
$ 187,782
Comprehensive Income
Net Income for the Period
16,152
$ 16,152
16,152
Other Comprehensive Income, Net of Tax
Net Changes in Securities Valuation Allowance
3,402
3,402
3,402
Net Changes in Investment Valuation Allowance
(914)
(914)
(914)
Comprehensive Income
$ 18,640
Stock Issued for Executive Compensation
-
-
-
Stock Held by Executive Obligation Trust
(26)
(903)
903
-
Stock Issuance
425
3,759
3,759
Tax Benefit-Stock Options Exercised
3,687
3,687
Stock Repurchase
(446)
(12,401)
(12,401)
Cash Dividend- $0.24 per Share
(2,809)
(2,809)
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2001
11,511
$ 68,597
$ 117,682
$ 12,379
$ 198,658
</TABLE>

<TABLE>
      <CAPTION>    
Disclosure of Reclassification Amount:
For the Six Months
For the Year
Ended 6/30/2001
Ended 12/31/2000
<S>

<C>

<C>

Net Change of Unrealized Gains on Securities Arising During      Period, Net of Tax
Expense (Benefit) of $2,468 and $8,839 in 2001 and 2000, respectively
$ 3,402
$ 12,185
Less: Reclassification Adjustment for Losses on Securities Included in      Net Income, Net of Tax
 Benefit of $0 and $4,348 in 2001 and 2000, respectively.
-
5,993
Net Change of Unrealized Gains on Securities, Net of Tax
Expense of $2,468 and $13,187 in 2001 and 2000, respectively.
$ 3,402
$ 18,178
See Accompanying Notes to Unaudited Consolidated Financial Statements    </TABLE>    
<TABLE>

<CAPTION>

GBC BANCORP AND SUSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
(In Thousands)
2001
 
2000
<S>
      <C>          <C>    
OPERATING ACTIVITIES
Net Income
$ 16,152
$ 23,725
Adjustments to Reconcile Net Income to Net Cash Provided by Operating      Activities:
Depreciation
630
745
Net (Accretion)/Amortization of Premium/Discounts on Securities
(2,038)
20
Accretion of Discount on Subordinated Notes
65
65
Writedown on Real Estate Held for Investment
849
848
Write-off of Securities
190
-
Provision/(Benefit) for Credit Losses
7,800
(1,500)
Provision for Losses on Other Real Estate Owned
-
389
Amortization of Deferred Loan Fees
(2,144)
(1,866)
Loss on Sale of Securities Available-for-Sale
-
104
Gain on Sale of Other Real Estate Owned
(439)
(116)
Gain on Sale of Fixed Assets
(38)
(7)
Net Increase in Fair Value of Derivative Instruments
(1,446)
-
Net Decrease/(Increase) in Trading Securities
3,956
(384)
Net (Decrease)/Increase in Forward Sales Equity Securities
-
(95)
Net Increase in Accrued Interest Receivable and Other Assets
386
(3,297)
Net Increase in Accrued Expenses and Other Liabilities
9,596
4,073
Other, net
(2)
-
Net Cash Provided by Operating Activities
33,517
22,704
INVESTING ACTIVITIES
Purchases of Securities Available-for-Sale
(146,806)
(169,793)
Proceeds from Maturities of Securities Available-for-Sale
111,752
48,202
Proceeds from Maturities of Securities Held-to-Maturity
305
112
Proceeds from Sales of Securities Available-for-Sale
-
6,762
Net Increase in Loans and Leases
(115,674)
(11,590)
Purchase of Equity Interest in Limited Partnerships
(2,190)
(4,260)
Net Decrease in Other Investments
384
-
Proceeds from Sales of Other Real Estate Owned
1,109
1,186
Purchases of Premises and Equipment
(802)
(903)
Proceeds from Sales of Premises and Equipment
43
8
Net Cash Used by Investing Activities
(151,879)
(130,276)
FINANCING ACTIVITIES
Net (Decrease)/Increase in Demand, Interest Bearing Demand and Savings      Deposits
(39,036)
61,378
Net Increase in Time Certificates of Deposit
85,340
75,429
Net Increase in Federal Funds Purchased and Securities Sold Under      Agreements
to Repurchase
-
8,500
Net Increase in Borrowings from the Federal Home Loan Bank
88,000
-
Repurchase of Company Stock
(12,401)
(3,473)
Cash Dividends Paid
(2,580)
(2,190)
Proceeds from Exercise of Stock Options
2,856
671
Issuance of Stock
903
829
`
`
Net Cash Provided by Financing Activities
123,082
141,144
Net Change in Cash and Cash Equivalents
4,720
33,572
Cash and Cash Equivalents at Beginning of Period
115,306
106,120
Cash and Cash Equivalents at End of Period
$ 120,026
$ 139,692
Supplemental Disclosures of Cash Flow Information
Cash Paid During This Period for
Interest
$ 35,497
$ 35,011
Income Taxes
1,115
9,899
Noncash Investing Activities
Loans Transferred to Other Real Estate Owned at Fair Value
$ 18
$ 21
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
- Basis of Presentation
The accompanying unaudited consolidated financial statementshave been prepared in accordance with generally accepted accounting principlesfor interim financial information and the instructions to Form 10-Q and Article10 of Regulation S-X. Accordingly, they do not include all of the informationand footnotes required by accounting principles generally accepted in the UnitedStates of America for completefinancial statements. In the opinion of management, all adjustments (consistingof normal recurring accruals) considered necessary for a fair presentation ofthe Company's financial condition and results of operations for the interimperiods presented in this Form 10-Q have been included. Operating results forthe interim periods are not necessarily indicative of financial results for thefull year. These unaudited consolidated financial statements should be read inconjunction with the audited consolidated financial statements and notes theretoincluded in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2000.
The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimatesand assumptions that affect the amounts reported in the financial statements andaccompanying notes. Actual results could differ from those estimates.
The financial statements include the accounts of GBC Bancorp(the"Bancorp") and its wholly owned subsidiaries, GBC Venture Capital,Inc., General Bank, (the "Bank"), a California state chartered bank,and the Bank's wholly owned subsidiaries, GBC Insurance Services, Inc., GBCInvestment & Consulting Company, Inc., and GBC Real Estate Investments, Inc.The Bank also holds 90% of the voting stock of GBC Leasing Company, Inc., whichamount is not material.
 
Change of Accounting Principle

On January 1, 2001, the Company adopted Statement ofFinancial Accounting Standards No. 133, "Accounting for DerivativeInstruments and Hedging Activities," ("Statement 133"). On thatdate a transition adjustment of $8,561,000 was recorded. The transitionadjustment is presented net of tax in the amount of $4,962,000 as a cumulativeeffect of a change of accounting principle in the Company's consolidatedstatements of income. The Company has received rights to acquire stock in theform of warrants, as an adjunct to its high technology banking relationships.Most of the warrants contain a cashless exercise provision thereby qualifyingthem as derivatives under Statement 133, requiring they be carried at fairvalue. The amount represents the difference between the carrying value of theCompany's derivatives and their fair value.
Commitments

In the normal course of business, there are variousoutstanding commitments to extend credit which are not reflected in theaccompanying interim consolidated financial statements.
The following is a summary of the Company's commitments and as of June 30, 2001 and December 31, 2000:
<TABLE>
<CAPTION>

 
June 30,
December 31,
(In Thousands)
2001
2000
<S>
<C>
<C>
Undisbursed Commitments
$574,774
$535,208
Standby Letters of Credit
111,464
108,925
Bill of Lading Guarantees
2,451
1,118
Commercial Letters of Credits
79,936
70,154
</TABLE>
Pending Litigation

In the normal course of business, the Company is subject topending and threatened legal actions. In April, 2001 an adverse verbal rulingwas issued with respect to a claim by the Bank against a borrower relating to anon-accrual loan with $3.1 million of principal outstanding at June 30, 2001.This ruling disallowed the Bank's claim for principal and interest withrespect to the loan. The Bank has conferred with its counsel and has appealedthe ruling. Management believes that it's reasonably probable that the rulingwill be overturned and no additional charge-offs nor additions to the allowancefor credit losses have been provided as a result of the ruling. Management doesnot believe that the outcome of other actions where the Company is subject topending and threatened legal action will have a material adverse effect on theCompany's financial condition or results of operations.
Earnings Per Share

Basic earnings per share is determined by dividing net incomeby the weighted average number of shares of common stock outstanding, whilediluted earnings per share is determined by dividing net income by the weightedaverage number of shares of common stock outstanding adjusted for the dilutiveeffect of common stock equivalents. The following table sets forth basic anddiluted earnings per share calculations:

<TABLE>

<CAPTION>

Three Months Ended June 30,
Six Months Ended June 30,
2001
2000
2001
2000
(Dollars in Thousands Except Share and per Share Data)
<S>

<C>

<C>

<C>

<C>

Net Income
$ 8,805
$ 12,877
$ 16,152
$ 23,725
Weighted-average shares:
Basic Shares Outstanding
11,728,510
11,517,794
11,759,127
11,517,957
Dilutive Effect Equivalent Shares Outstanding
54,499
192,406
118,506
208,482
Dilutive Shares Outstanding
11,783,009
11,710,200
11,877,633
11,726,439
Earnings per Share Basic
$ 0.75
$ 1.12
$ 1.37
$ 2.06
Earnings per Share Diluted
$ 0.75
$ 1.10
$ 1.36
$ 2.02
</TABLE>

 

 

 
Quarterly Dividends

In May, 2001, the Company's Board of Directors declared aquarterly common stock cash dividend of $0.12 per share payable on or about July15, 2001 to shareholders of record on June 30, 2001.
Recent Accounting Developments

In July 2001, the Financial Accounting Standards Board (FASB)issued Statement No. 141, "Business Combinations", and Statement No.142, "Goodwill and Other Intangible Assets." Statement 141 requiresthat the purchase method of accounting be used for all business combinationsinitiated after June 30, 2001 as well as all purchase method businesscombinations completed after June 30, 2001. Statement 141 also specifiescriteria intangible assets acquired in a purchase method business combinationmust meet to be recognized and reported apart from goodwill.

Statement 142 will require that goodwill and intangibleassets with indefinite useful lives no longer be amortized, but instead testedfor impairment at least annually accordance with the provisions of Statement142. Statement 142 will also require that intangible assets with definite usefullives be amortized over their respective estimated useful lives to theirestimated residual values, and reviewed for impairment in accordance withStatement 121, "Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to be Disposed Of." As permitted by Statement 142, theCompany plans to adopt the new standard in the first quarter of the fiscal year2002. Upon adoption of Statement 142, the Company will be required to reassessthe useful lives and residual values of all intangible assets acquired inpurchase business combinations, and make any necessary amortization periodadjustments and/or impairment adjustments by the end of the first interim periodafter adoption. Any impairment loss will be measured as of the date of adoptionand recognized as the cumulative effect of a change in accounting principle inthe first interim period. Beginning on January 1, 2002, amortization of goodwilland intangibles with indefinite lives will cease. It is not anticipated that thefinancial impact of this statement will have a material effect on the Company.

In September 2000, the Financial Accounting Standards Boardissued Statement of Financial Accounting Standards No. 140, "Accounting forTransfers and Servicing of Financial Assets and Extinguishments of Liabilities -a replacement of FASB Statement No. 125," which revises the standards foraccounting for securitizations and other transfers of financial assets andcollateral and requires certain disclosures. Although it replaces FASB StatementNo. 125, it carries over most of Statement 125's provisions withoutreconsideration. The accounting provisions are effective for transfers andservicing of financial assets and extinguishments of liabilities occuring afterMarch 15, 2001.  The Company adopted Statement 140 on April 1,2001. The adoption of this statement did not have a materialimpact on the Company's results of operations, financial position, or cashflows.

 

 

 

 

 

 

 

 

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including, withoutlimitation, statements containing the words "indicates,""anticipates," "believes," intends,""expects" and words of similar import, constitute"forward-looking statements" within the meaning of the PrivateSecurities Litigation Reform Act of 1995. Such forward-looking statementsinvolve known and unknown risks, uncertainties and other factors that may causethe actual results, performance or achievements of the Company to be materiallydifferent from any future results, performance or achievements expressed orimplied by such forward-looking statements. Such factors include, among others,the following: general economics and business conditions in those areas in whichthe Company operates; demographic changes; competition; fluctuations in interestrates; changes in business strategy or development plans; changes ingovernmental regulation; credit quality; and other factors referenced herein,including, without limitation, under the captions Provision for Credit Losses,Market Risk, Liquidity and Interest Rate Sensitivity, and Recent AccountingDevelopments. Given these uncertainties, the reader is cautioned not to placeundue reliance on such forward-looking statements. The Company disclaims anyobligation to update any such factors or to publicly announce the results of anyrevisions to any of the forward-looking statements contained herein to reflectfuture events or developments.

OVERVIEW

 

Net income for the second quarter of 2001 was $8,805,000, or$0.75 diluted earnings per share compared to $12,877,000, or $1.10 dilutedearnings per share for the corresponding period of 2000. The $4,072,000decrease, or 31.6% of net income is primarily the result of a $3,300,000increase of the provision for credit losses, a $1,142,000 reduction of netinterest income and a $2,330,000 reduction of non-interest income.

For the six months ended June 30, 2001, net income totaled$16,152,000, a decrease of $7,573,000, or 31.9%, from the $23,725,000 earnedduring the corresponding period of 2000. Diluted earnings per share for the sixmonths ended June 30, 2001 were $1.36, compared to the $2.02 for the same periodof 2000. The decrease in net income was primarily the result of a $9,300,000increase of the provision for credit losses and a $5,510,000 reduction ofnon-interest income, partially offset by a $232,000 increase of net interestincome and a $1,446,000 positive impact on pre-tax income as a result of theadoption of Statement 133, in the year 2001.

For the quarter ended June 30, 2001 and 2000, the annualizedreturn on average assets ("ROA") was 1.72% and 2.75%, respectively,and the annualized return on average stockholders' equity ("ROE")was 17.6% and 35.7%, respectively.

 

For the six months ended June 30, 2001 and 2000, the ROA was1.62% and 2.59%, respectively. For the six months ended June 30, 2001 and 2000,the ROE was 16.5% and 33.8%, respectively.

 

RESULTS OF OPERATIONS

 

Net Interest Income-Quarterly Results

For the quarter ended June 30, 2001 and 2000, net interestincome before the provision/ (benefit) for credit losses decreased $1,142,000 or4.9%, from $23,523,000 to $22,381,000.

Total interest income for the quarter ended June 30, 2001 was$39,652,000, representing a $2,218,000, or 5.3%, decrease from the correspondingquarter of a year ago. The decrease was primarily related to the decline of theyield on earning assets. For the quarter ended June 30, 2001 and 2000, the yieldwas 7.98% and 9.27%, respectively. The 129 basis point decline is primarily dueto the 275 basis point reduction of the prime rate of interest starting onJanuary 4, 2001 with a 50 basis point decline. The daily average prime rate ofinterest was 7.34% and 9.25%, respectively, or a reduction of 191 basis points.The yield on loans and leases declined to 9.05% from 11.68% for the quarterended June 30, 2001 and 2000, respectively. In addition to the decline of theprime rate, the decreases of the yield on loans and leases is attributed to theinterest income recovery of $2,700,000 in the second quarter of 2000. Excludingthis recovery, the decline of the yield on loans and leases was 146 basispoints, to 9.05% from 10.51%. Partially offsetting the reduced yield on averageearning assets was the $176.9 million increase of average earning assets to$1,992.8 million from $1,815.9 million for the quarter ended June 30, 2001 and2000, respectively. Also, the yield on securities for the quarter ended June 30,2001 was 6.98%, as compared to 6.83% for the quarter ended June 30, 2000.

 
**The $176.9 million growth of average interest earningassets was comprised of increases of $117.0 million and $132.9 million for loansand leases and investment securities, respectively, partially offset by a $73.1million decline in average federal funds sold and securities purchased underagreements to resell. The composition of earning assets also helped to mitigatethe decline of the yield. Federal funds sold and securities purchased underagreement to resell, the lowest yielding of earning assets represented 3.2% and7.5% of total average earning assets for the quarter ended June 30, 2001 and2000, respectively.

Total interest expense for the quarter ended June 30, 2001was $17,271,000, representing a $1,076,000, or 5.9%, decrease over thecorresponding quarter of a year ago. The decrease was due to a lower cost offunds. For the quarter ended June 30, 2001 and 2000, the cost of funds was 4.29%and 4.84%, respectively, representing a 55-basis point decline.

The decrease in the cost of funds was primarily the result ofa decrease in interest rates as explained above. The rates paid on allcategories of interest-bearing deposits decreased. For the three months endedJune 30, 2001 and 2000, rates paid on interest-bearing deposits were 4.12% and4.72%, respectively. The following table displays the average balance and ratespaid for the deposit products of the Bank for the quarter ended June 30, 2001and 2000:

 

<TABLE>

<CAPTION>

 
For the      Quarter EndedJune      30,(Dollars In Thousands)
2001
2000<S><C><C>
Interest-bearing demand - Average balance
$362,282
$392,877
Rate
2.08%
3.49%
Savings - Average balance
67,350
76,431
Rate
1.42%
2.56%
Time certificates of deposit
of $100,000 or more - Average balance
871,620
763,622
Rate
5.06%
5.47%
Other time deposits -Average balance
178,513
202,624
Rate
4.68%
5.07%
</TABLE>

Partially offsetting the reduction of the cost of funds wasan increase of average interest bearing liabilities. For the quarter ended June30, 2001 average interest bearing liabilities were $1,614.5 million compared to$1,526.1 million for the corresponding period of a year ago, representing an$88.4 million, or 5.8%, increase. Average time certificates of deposit increased$83.9 million with all other categories reflecting decreases. Other borrowedfunds, represented by advances from the Federal Home Loan Bank, increased by$44.8 million, to an average $94.8 million for the quarter ended June 30, 2001.

The net interest spread is defined as the yield on interestearning assets less the rates paid on interest-bearing liabilities. For thethree months ended June 30, 2001 and 2000, the net interest spread decreased 74basis points to 3.69% from 4.43%, respectively. Excluding the $2,700,000interest income recovery received in the second quarter of 2000, the netinterest spread for the quarter ended June 30, 2000 was 3.84%. Thus, theinterest spread for the second quarter ended June 30, 2001 of 3.69% representeda 15-basis point decrease.

The net interest margin is defined as the annualizeddifference between interest income and interest expense divided by averageinterest earning assets. For the three months ended June 30, 2001 and 2000, thenet interest margin was 4.50% and 5.21%, respectively, representing a decline of71 basis points. Excluding the $2,700,000 interest income recovery referencedabove, the net interest margin for the second quarter ended June 30, 2000 was4.62%. The decline of the net interest spread was partially offset by theincrease of average non-costing funds. For the quarter ended June 30, 2001,average non-interest bearing demand deposits increased $8.7 million and averagestockholders' equity, excluding the unrealized gain/loss, increased $30.6million, compared to the corresponding period of a year ago.

Net Interest Income-Six-Month Results

For the six months ended June 30, 2001, net interest incomebefore the provision for credit losses was $43,421,000, representing a $232,000,or 0.5%, growth over the corresponding period of a year ago.

Total interest income for the six months ended June 30, 2001was $79,310,000 compared to $77,628,000, a $1,682,000, or 2.2%, growth over thecorresponding period of a year ago. The increase is the result of the growth ofaverage interest earning assets offset by the 57 basis point decline of theyield on average earning assets. For the six months ended June 30, 2001 and2000, the yield was 8.21% and 8.80%, respectively.

The net growth of average earning assets was $169.4 millionrepresented by increases of $87.4 million and $138.3 million for loans andleases and investment securities, respectively. The increases were partiallyoffset by a $56.2 million decrease of federal funds sold and securitiespurchased under agreement to resell.

The yields on all categories of earning assets decreased withthe exception of an increased yield on investment securities. For the six monthsended June 30, 2001 and 2000, the yield on loans and leases was 9.37% and10.79%, respectively. As was the case with the quarterly comparison for netinterest income, the loan yield for the six months ended June 30, 2000 of 10.79%included a net interest income recovery of $2,700,000 received in the secondquarter of 2000. Excluding this net interest recovery, the yield on averageearning assets for the six months ended June 30, 2000 was 10.08%.

The decreased yield for the six months ended June 30, 2001compared to the corresponding period of a year ago was due in large measure tothe direction of short-term money market rates. For the six months ended June30, 2001 and 2000, the Bank's daily average prime rate of interest was 7.98%and 8.97%, respectively, a decline of 99 basis points. The Bank's loanportfolio is comprised of approximately 75% prime-based credits.
** **
The yield on securities increased from 6.73% to 7.15% for thesix months ended June 30, 2000 and 2001, respectively. The yield on securitiesincreased 42 basis points mainly due to restructuring of the portfolio duringthe fourth quarter of 2000. The yield on federal funds sold and securitiespurchased under agreements to resell decreased from 6.29% to 5.14% for the sixmonths ended June 30, 2000 and 2001, respectively, and is due to the decline ofmoney market rates.

Total interest expense for the six months ended June 30, 2001and 2000, was $35,889,000 and $34,439,000, respectively, representing a$1,450,000, or 4.2%**,**increase. This increase is due to the growth ofaverage interest bearing liabilities.

The $88.1 million growth of average interest bearingliabilities was largely due to both a $74.3 million growth of interest bearingdeposits and a $14.0 million growth of borrowings from the Federal Home LoanBank. Of the average interest-bearing deposits, the growth was entirely in thetime certificates of deposit of $100,000 or more, in the amount of $108.3million. All other categories of interest bearing deposits reflected decreasestotaling $14.7 million in their average balances comparing the two six-monthperiods ending June 30, 2001 and 2000.

 

The cost of funds decreased 6 basis points to 4.60% from4.66%, for the six-month period ended June 30, 2001 and 2000, respectively. Theannualized costs on all categories of interest bearing deposits reflecteddecreases with the exception of time deposits, which increased to 5.31% from5.17%. Effective January 4, 2001 through June 30, 2001, the Bank's prime ratedeclined 275 basis points causing the decline of annualized costs of depositsother than time deposits. Because of the maturity structure of time deposits theannualized costs of time deposits is not immediately reflected in the cost offunds.

The average balance and the rate paid for the depositproducts were as follows for the six months ended as indicated:

 

<TABLE>

<CAPTION>

                                                                     For the Six Months Ended June 30,

(Dollars In Thousands)                                                            2001             2000
      <S>      <C>      <C>
Interest-bearing demand - Average balance
$ 371,146
$ 375,711
Rate
2.60%
3.34%
 
 
 
Savings - Average balance
$67,919
$78,062
Rate
1.75%
2.48%
 
 
 
Time certificates of deposit
 
 
of $100,000 or more - Average balance
$ 850,927
$ 742,615
Rate
5.38%
5.26%
 
 
 
Other time deposits - Average balance
$ 180,705
$ 200,001
Rate
4.95%
4.83%
 
 
 
</TABLE>
 
 
For the six months ended June 30, 2001 and 2000, the netinterest spread decreased 51 basis points to 3.63% from 4.14%, respectively. Thenet interest spread excluding the interest income recovery of $2,700,000 in theyear 2000 was 3.83% for the first six months of 2000. Past decreases in therates paid on time deposit are not immediately reflected in the cost of fundsdue to the average maturity of these deposits. Accordingly, absent otherfactors, the spread will improve in subsequent quarters.

For the six months ended June 30, 2001 and 2000, the netinterest-margin was 4.50% and 4.89%, respectively. The net interest marginexcluding the interest income recovery of $2,700,000 was 4.59% for the first sixmonths of 2000.

 

Provision for Credit Losses

For the quarter ended June 30, 2001, there was a provisionfor credit losses of $1,800,000, compared to a negative provision of $1,500,000for the corresponding period of a year ago. At quarter-end, the review ofexisting problem loans resulted in $1.3 million of net charge-offs for thequarter.

 

For the six months ended June 30, 2001 and 2000, theprovision / (benefit) for credit losses was $7,800,000 and ($1,500,000),respectively.

The amount of the provision for credit losses is determinedby management and is based upon the quality of the loan portfolio, management'sassessment of the economic environment, evaluations made by regulatoryauthorities, historical loan loss experience, collateral values, assessment ofborrowers' ability to repay, and estimates of potential losses. Please referto the discussion "Allowance for Credit Losses", following.

 

Non-Interest Income

Non-interest income for the quarter ended June 30, 2001totaled $2,556,000, representing a $2,330,000, or 47.7%, decrease over the$4,886,000 for the quarter ended June 30, 2000. This decrease was primarily dueto the decline of trading account revenue (loss) from $2,831,000 to ($103,000)recorded in the second quarter of 2000 and 2001, respectively. Trading accountrevenue is income earned on securities classified as trading account securities.The Company's subsidiary, GBC Venture Capital, ("VC") receivesequity securities which it holds as trading securities primarily from twosources: a distribution from venture capital funds in which it invests and theexercise of warrants acquired through the lending operations of General Bank,its affiliate. The recognition of fair value and ultimate disposition of thesesecurities results in trading account revenue.

Service charges and commissions decreased $237,000, or 10.4%,compared to the corresponding quarter of a year ago. Expense from otherinvestments was $44,000 and $280,000 for the three months ended June 30, 2001and 2000, respectively. Expense from other investments is based on recordingunder the equity method the income or loss as reported by the partnerships ofwhich the Company is a limited partner.

Included in other income for the three months ended June 30,2001 is the receipt of $600,000 from fees associated with a paid-offconstruction loan.

For the six months ended June 30, 2001, non-interest incometotaled $6,615,000, representing a $5,510,000, or 45.4%, decrease compared to$12,125,000 for the six months ended June 30, 2000. As was the case for thequarterly comparison, the reduction of non-interest income was primarily due tothe decrease of trading account revenue. For the six months ended June 30, 2001and 2000, the trading revenue account revenue was $2,170,000 and $8,032,000,respectively.

 

Non-Interest Expense

For the three months ended June 30, 2001, non-interestexpense was $8,674,000, representing a $58,000, or 0.7%, decrease over$8,732,000 for the corresponding period of a year ago. The decrease wasprimarily due to the decline of salaries and employee benefits which decreased$612,000 and is due to the reduction of the incentive compensation and thedeferred compensation expense for the Company's Chairman. The incentivecompensation is also reduced due to the reduced pre-tax earnings for the threemonths ended June 30, 2001 compared to the corresponding period of a year ago.Also contributing to the reduction of non-interest expense is net other realestate owned income which increased $140,000. Offsetting the above decreases wasa reduction of fair value of derivatives of $388,000. This amount represents thedecline of fair valve of derivatives as measured at March 31, 2001 and June 30,2001. As Statement 133 was implemented on January 1, 2001, there was no suchaccount during the year 2000. See also "Cumulative Effect of a Change inAccounting Principle," following. As discussed in the following sectionentitled "Cumulative Effect of a Change in Accounting Principle", asof January 1, 2001, warrants classified as derivatives totaled$8,561,000 pre-tax. The conversion of these warrants and a decline in the valueof the underlying shares caused the majority of the $6,727,000 which wasrecognized as reduction of fair value of derivatives, as of March 31, 2001. Asof June 30, 2001, the fair value of derivatives was $ 1,431,000, requiring a$388,000 further reduction of the fair value of derivatives.

For the quarter ended June 30, 2001, the Company'sefficiency ratio, defined as non-interest expense divided by the sum of netinterest income plus non-interest income, was 33.0%, about the same as the 33.4%for the corresponding period of 2000. The efficiency ratios as reported excludetrading revenue and income (expense) from other investments, the adoption ofStatement 133 and loss on sale of securities.

For the six months ended June 30, 2001, non-interest expensewas $24,305,000, representing a $6,296,000, or 35.0%, increase over the$18,009,000 reported for the corresponding period of a year ago. The increasewas primarily due to the reduction of fair value of derivatives of $7,115,000.

For the six months ended June 30, 2001 and 2000, the Company'sefficiency ratio was 35.8%, comparing favorably to 37.6% for the correspondingperiod of 2000. The computation of the efficiency ratio excludes trading accountrevenue, expense from other investments, loss on sale of securities and theincome statement impact of adopting Statement 133.

 

Provision for Income Taxes

For the quarter ended June 30, 2001 and 2000, the provisionfor income taxes was $5,658,000 and $8,300,000, respectively, representingeffective tax rates of 39.1% and 39.2%. The $2,642,000, or 31.8%, decrease wasprimarily the result of lower pre-tax earnings.

For the six months ended June 30, 2001 and 2000, theprovision for income taxes was $6,741,000, and $15,080,000, respectively,representing 37.6% and 38.9% of pre-tax income. The $8,339,000 decrease wasprimarily the result of lower pre-tax earnings.

Cumulative Effect of a Change in Accounting Principle

On January 1, 2001, the Company adopted Statement ofFinancial Accounting Standards No. 133, "Accounting for DerivativeInstruments and Hedging Activities," ("Statement 133"). On thatdate a transition adjustment of $8,561,000 was recorded. The transitionadjustment is presented net of tax in the amount of $4,962,000 as a cumulativeeffect of a change of accounting principle in the Company's statements ofincome. The Company has received rights to acquire stock in the form ofwarrants, as an adjunct to its high technology banking relationships. Most ofthe warrants contain a cashless exercise provision thereby qualifying them asderivatives under Statement 133, requiring they be carried at fair value. Theamount represents the difference between the carrying value of the Company'sderivatives and their fair value on January 1, 2001.

 

Other Matters

In April 2001, an adverse verbal ruling was issued withrespect to a claim by the Bank against a borrower relating to a non-accrual loanwith $3.1 million of principal outstanding as of June 30, 2001. This rulingdisallowed the Bank's claim for principal and interest with respect to theloan. The Bank has conferred with its counsel and has appealed. Managementbelieves that it is reasonably probable that the ruling will be overturned andno additional charge-offs or additions to the allowance for credit losses willbe required.

 

FINANCIAL CONDITION

As of June 30, 2001, total assets increased $156.1 million,or 7.9%, to $2,125.2 million from $1,969.1 million as of December 31, 2000,representing a record total asset level.

The growth of total assets from December 31, 2000 to June 30,2001 is reflected in a $165.8 million increase in earning assets funded by $46.3million growth of total deposits and by an $88.0 million increase of otherborrowings from the Federal Home Loan Bank.

Loans and Leases

As of June 30, 2001, total loans and leases were $1,083.5million compared to $969.0 million as of December 31, 2000, representing a$114.5 million, or 11.8%, growth. This also represented a record level for totalloans and leases. The growth was represented primarily by increases of thecommercial loan and construction loan portfolios.

Commercial loans reflected an increase of $67.0 million, or14.9%. This growth included $38.6 million of unsecured commercial loans and$28.3 million of trade financing loans. Trade financing loans are made by theBank's Corporate Lending and International Division which, in addition togranting loans to finance the import and export of goods between the UnitedStates and countries in the Pacific Rim, also provides letters of credit andother related services. The Bank does not make loans to foreign banks, foreigngovernments or their central banks, or commercial and industrial loans toentities domiciled outside of the United States, except for the extension ofoverdraft privileges to its foreign correspondent banks on a limited, case bycase, basis. All loan transactions are U.S. dollar denominated.

Construction loans reflected an increase of $69.7 million.

The following table sets forth the amount of loans and leasesoutstanding by category and the percentage of each category to total loans andleases outstanding:

<TABLE>

<CAPTION>

June 30, 2001
December 31, 2000
(In Thousands)
Amount
Percentage
Amount
Percentage
<S>
      <C>          <C>          <C>          <C>    
Commercial
$ 516,449
47.66%
$ 449,484
46.39%
Real Estate - Construction
236,347
21.81%
166,656
17.20%
Real Estate - Conventional
291,887
26.94%
309,834
31.97%
Installment
11
N/A
2
N/A
Other Loans
21,708
2.00%
25,969
2.68%
Leveraged Leases
17,141
1.59%
17,078
1.76%
Total
$ 1,083,543
100.00%
$ 969,023
100.00%
</TABLE>

 

N/A = Percentage less than 0.01

Non-Performing Assets

A certain degree of risk is inherent in the extension ofcredit. Management has credit policies in place to minimize the level of loanlosses and non-performing loans. The Company performs a quarterly assessment ofthe credit portfolio to determine the appropriate level of the allowance.Included in the assessment is the identification of loan impairment. A loan isidentified as impaired when it is probable that interest and principal will notbe collected according to the contractual terms of the loan agreement. Loanimpairment is measured by estimating the expected future cash flows anddiscounting them at the respective effective interest rate or by valuing theunderlying collateral.

The Company has a policy of classifying loans (including animpaired loan) which are 90 days past due as to principal and/or interest asnon-accrual loans unless management determines that the fair value of underlyingcollateral is substantially in excess of the loan amount or other circumstancesjustify treating the loan as fully collectible. After a loan is placed onnon-accrual status, any interest previously accrued, but not yet collected, isreversed against current income. A loan is returned to accrual status only whenthe borrower has demonstrated the ability to make future payments of principaland interest as scheduled, and the borrower has demonstrated a sustained periodof repayment performance in accordance with the contractual terms. Interestreceived on non-accrual loans generally is either applied as principal reductionor reported as recoveries on amounts previously charged off, according tomanagement's judgment as to the collectability of principal.

The following table provides information with respect to theCompany's past due loans, non-accrual loans, restructured loans and other realestate owned, net, as of the dates indicated:

 

 

<TABLE>

<CAPTION>

June 30,
December 31,
(In Thousands)
 
2001
 
2000
<S>
      <C>          <C>    
Loan 90 Days or More Past Due
and Still Accruing
$ 10,455
$ 2,217
Non-accrual Loans
19,911
14,823
Total Past Due Loans
30,366
17,040
Restructured Loans
3,450
4,978
Total Non-performing Loans
33,816
22,018
Other Real Estate Owned, Net
383
1,035
Total Non-Performing Assets
$ 34,199
$ 23,053
</TABLE>

Total non-performing assets increased to $34.2 million, as ofJune 30, 2001, from $23.1 million, as of December 31, 2000, representing a $11.1million, or 48.3%, increase. The majority of this increase was in the categoryof loans 90 days or more past due and still accruing.

Loans 90 Days or More Past Due

Nine borrowers with loans totaling $10.5 million are past due90 days or more but still accruing. One loan at $0.6 million has subsequentlypaid off, while interest is current for loans with outstandings of $5.4 millionand the loans have either been renewed or extension is in process. Interest iscurrent on a loan of $1.5 million and is well secured by real estate but willremain in a matured status while seeking outside financing. For the 9thloan at $3.0 million, the borrower has agreed to bring interest current over thenear term. No loss of either principal or interest is expected on these credits.

Non-Accrual Loans

As of June 30, 2001, non-accrual loans were $19.9 million,representing an increase of $5.1 million, or 34.3%, from year-end 2000.

The following table breaks out the Company's non-accrualloans by category as of June 30, 2001 and December 31, 2000:

<TABLE>

<CAPTION>

(In Thousands)**June 30, 2001**December 31, 2000
<S>      <C>      <C>
Commercial
$14,234
$ 14,823
Real Estate-Construction
5,564
-
Real Estate-Conventional
113
-**Total**$19,911**$14,823
</TABLE>

The non-accrual commercial loans are comprised of 22borrowers, of which only three have non-accrual loans of greater than $1million. The total non-accrual construction loans are comprised primarily of onecredit. There was a $600,000 charge off related to this loan during the secondquarter of 2001.

 

The following table analyzes the net increase in non-accrualloans during the six months ended June 30, 2001:

<TABLE>

<CAPTION>
**Non-Accrual Loans**

(In Thousands)
       <S>      <C>
Balance, December 31, 2000
$14,823
Add: Loans placed on non-accrual
20,165
Less: Charge-offs
(4,570)
Returned to accrual status
(3,673)
Repayments
(6,816)
Transfer to OREO
(18)**Balance, June 30, 2001**$19,911**</TABLE>

Restructured Loans

The balance of restructured loans as of June 30, 2001 was$3.5 million compared to $5.0 million as of December 31, 2000, representing a$1.5 million, or 30.7%, decrease. The decrease was primarily due to the pay-offin full of one restructured loan of $1.5 million in the first quarter of 2001,as well as normal monthly principal repayments received in compliance with theterms of the restructuring. A loan is categorized as restructured if theoriginal interest rate on such loan, the repayment terms, or both, are modifieddue to a deterioration in the financial condition of the borrower. Restructuredloans may also be put on a non-accrual status in keeping with the Bank'spolicy of classifying loans which are 90 days past due as to principal and/orinterest. Restructured loans which are non-accrual loans are not, however,included in the balance of restructured loans, but are included in the total ofnon-accrual loans. As of June 30, 2001, there was one restructured loan of$63,000 on non-accrual status. The weighted average yield of the restructuredloans was 10.25% as of June 30, 2001.

There are no commitments to lend additional funds on any ofthe restructured loans.

Other Real Estate Owned

As of June 30, 2001, other real estate owned, net ofvaluation allowance of $512,000, totaled $383,000. This represents a decrease of$652,000, or 63.0%, from the balance of $1,035,000, net of valuation allowanceof $891,000, as of December 31, 2000. As of June 30, 2001 and December 31, 2000,OREO consisted of 2 properties and 7 properties, respectively. For the sixmonths ended June 30, 2001, five properties were sold for cash netting gains of$439,000.

As of June 30, 2001 the two outstanding OREO properties arephysically located in the Bank's market area. They include one piece of landfor single family residence development and one retail facility. The Companyintends to enter into a partnership to develop the land property.

 

 

 

 

 

The following table sets forth OREO by property type as ofthe dates indicated:

<TABLE>
<CAPTION>

June 30,
December 31,
(In Thousands)
2001
2000
Property Type
<S>
      <C>          <C>    
Land
$ 92
$ 471
Retail Facilities
803
803
Industrial Facilities
-
652
Less: Valuation Allowance
(512)
(891)
Total
$ 383
$ 1,035
</TABLE>

 

Impaired Loans

A loan is identified as impaired when it is probable thatinterest and principal will not be collected according to the contractual termsof the loan agreement. Loan impairment is measured by estimating the expectedfuture cash flows and discounting them at the respective effective interest rateor by valuing the underlying collateral. The following table discloses pertinentinformation as it relates to the Company's impaired loans as of the datesindicated:

<TABLE>

<CAPTION>

(In Thousands)
June 30, 2001
Dec. 31, 2000
<S>      <C>
<C>
Recorded Investment with Related Allowance
$19,341
$9,598
Recorded Investment with no Related Allowance
2,250
3,778
Total Recorded Investment
21,591
13,376
Allowance on Impaired Loans
(5,186)
(2,626)
Net Recorded Investment in Impaired Loans
$16,405
$10,750
</TABLE>

The average balance of impaired loans before the allowancewas $20.5 million for the six months ended June 30, 2001 and $20.4 million forthe year ended December 31, 2000.

For the six months ended June 30, 2001 and 2000, interestincome recognized on impaired loans was $147,000 and $197,000, respectively.

Management cannot predict the extent to which the currenteconomic environment, including the real estate market, may continue to improveor worsen, or the full impact such environment may have on the Bank's loanportfolio. Furthermore, as the Bank's primary regulators review the loanportfolio as part of their routine, periodic examinations of the Bank, theirassessment of specific credits may affect the level of the Bank'snon-performing loans. Accordingly, there can be no assurance that other loanswill not be placed on non-accrual, become 90 days or more past due, have termsmodified in the future, or become OREO.

 

Allowance for Credit Losses

As of June 30, 2001, the balance of the allowance for creditlosses was $22.8 million, representing 2.10% of outstanding loans and leases.This compares to an allowance for credit losses of $19.4 million as of December31, 2000, representing 2.00% of outstanding loans and leases.

The table below summarizes the activity in the allowance forcredit losses (which amount includes the allowance on impaired loans) for thesix months ended as indicated:

<TABLE>

<CAPTION>

(In Thousands)**June 30, 2001**June 30, 2000
<S>      <C>      <C>
Balance, Beginning of Period
$19,426
$19,808
Provision/(Benefit) for Credit Losses
7,800
(1,500)
Charge-offs
(5,348)
(194)
Recoveries
917
2,319
Balance, End of Period
$22,795
$20,433
</TABLE>

As of June 30, 2001, the allowance represents 67.4% and 114%of non-performing loans and of non-accrual loans, respectively. As of December31, 2000, the allowance represented 88.2% and 131% of non-performing and ofnon-accrual loans, respectively. Non-performing loans are reviewed individuallyand management believes they are adequately provided for as of June 30, 2001.

The provision for credit losses is the amount required tomaintain an allowance for credit losses that is adequate to cover probablecredit losses related to specifically identified loans as well as probablecredit losses inherent in the remainder of the loan and lease portfolio.Management evaluates the loan portfolio, the economic environment, historicalloan loss experience, collateral values and assessments of borrowers' abilityto repay, in order to determine the amount of the allowance for credit losses.The balance of the allowance for credit losses is an accounting estimate ofprobable but unconfirmed incurred losses in the Bank's loan portfolio as ofJune 30, 2001. Such an amount is based on ongoing, quarterly assessments of theprobable estimated losses inherent in the loan and lease portfolio, and to alesser extent, unused commitments to provide financing. The Company'smethodology for assessing the appropriateness of the allowance consistsprimarily of the use of a formula allowance.

This formula allowance is calculated by applying loss factorsto outstanding loans and leases and certain unused commitments, in each casebased on the internal risk rating of such loans, pools of loans, leases orcommitments. Changes in risk rating of both performing and nonperforming loansaffect the amount of the formula allowance. Loss factors are based on theCompany's historical loss experience and may be adjusted for significantfactors that, in management's judgement, affect the collectibility of theportfolio as of the evaluation date. Loss factors are described as follows:
Problem graded loan loss factors represent percentages which have proven      accurate over time. Such factors are checked against and supported by      migration analysis which tracks loss experience over a five-year period.
Pass graded loan loss factors are based on the approximate average      annual net charge-off rate over an eight-year period.
Pooled loan loss factors (not individually graded loans) are based on      probable net charge-offs. Pooled loans are loans and leases that are      homogeneous in nature, such as residential mortgage loans and small      business loans.

Management believes that the allowance for credit lossesapproximates the probable but unconfirmed losses existing in the Bank's loanportfolio, as of June 30, 2001.

 

Securities

The Company classifies its securities as held to maturity,trading or Available-for-Sale. Securities classified as held to maturity arethose that the Company has the positive intent and ability to hold untilmaturity. These securities are carried at amortized cost.

Securities that are obtained and held principally for thepurpose of selling them in the near term are classified as trading and arereported at fair value, with unrealized gains and losses included in earnings.Equity securities received upon the exercise of warrants and securitydistributions from venture capital funds are classified as trading.

Securities that could be sold in response to changes ininterest rates, increased loan demand, liquidity needs, capital requirements orother similar factors, are classified as securities available-for-sale. Thesesecurities are carried at fair value, with unrealized gains or losses reflectednet of tax in other comprehensive income.

As of June 30, 2001, the Company recorded net unrealizedgains of $22,954,000 on its available-for-sale portfolio. Accumulated othercomprehensive income includes $13,303,000, representing the net unrealizedgains, net of tax.

The amortized cost, gross unrealized gains, gross unrealizedlosses and fair value of securities at June 30, 2001 and December 31, 2000 wereas follows:

<TABLE>

<CAPTION>

Gross
Gross
(In Thousands)
Amortized
Unrealized
Unrealized
Fair
June 30, 2001
Cost
Gains
Losses
Value
<S>
      <C>          <C>          <C>          <C>    **Securities Held to Maturity
U.S. Government Agencies
$ 720
$ -
$ -
$ 720
Total
$ 720
$ -
$ -
$ 720**Securities Available-for-Sale
U.S. Government Agencies
$ 20,671
$ 923
$ -
$ 21,594
Mortgage Backed Securities
79,770
1,298
19
81,049
Commercial Mortgage Backed Securities
77,586
3,055
-
80,641
Corporate Notes
97,303
6,389
-
103,692
Collateralized Mortgage Obligations
331,437
5,484
342
336,579
Asset Backed Securities
262,787
6,166
-
268,953
Other Securities
5,650
-
-
5,650
Total
$875,204
$23,315
$ 361
$898,158**Trading Account Securities
Equity Issues
$ -
$ -
$ -
$ 681
 
 
 
 
Total
$ -
$ -
$ -
$ 681
Gross
Gross
(In Thousands)
Amortized
Unrealized
Unrealized
Fair
December 31, 2000
Cost
Gains
Losses
Value**Securities Held to Maturity
U.S. Government Agencies
$ 1,025
$ -
$ (57)
$ 968
Collateralized Mortgage Obligations
Total
$ 1,025
$ -
$ (57)
$ 968**Securities Available-for-Sale
U. S. Treasuries
-
-
-
-
U.S. Government Agencies
$ 20,854
$ 526
$ -
$ 21,380
Mortgage Backed Securities
93,147
1,350
235
94,262
Commercial Mortgage Backed Securities
69,504
2,898
-
72,402
Corporate Notes
84,975
955
55
85,875
Collateralized Mortgage Obligations
263,287
3,704
290
266,701
Asset Backed Securities
303,221
3,371
1,041
305,551
Other Securities
3,314
5,898
-
9,212
Total
$ 838,302
$ 18,702
$ 1,621
$ 855,383**Trading Account Securities
Equity Issues
$ -
$ -
$ -
$ 4,637
 
 
 
 
Total
$ -
$ -
$ -
$ 4,637
</TABLE>

 

 

 

 

 

 

As of June 30, 2001, trading securities totaled $681,000 andwere comprised of three equity issues. The equity securities are non-interestbearing instruments.

There were no sales of securities available-for-sale orsecurities held to maturity during the six months ended June 30, 2001. Duringthe six months ended June 30, 2000 there were sales of securities from theAvailable-for-Sale portfolio wherein proceeds of $6.8 million were received anda pre-tax loss of $104,000 incurred. There were no sales of securities held tomaturity during the six months ended June 30, 2001 and 2000.

Other Investments

As of June 30, 2001, other investments totaled $15.7 million.Included in the balance is $9.2 million of investments in various venturecapital funds which in turn invest in technology companies. As of June 30, 2001,undisbursed commitments to invest in these various funds totaled $6.8 million.In addition to seeking an appropriate return from such investments, the Companyseeks to use the investments to increase its high technology banking business.Also included in other investments is a 10% equity interest in an aircraftfinance trust ("AFT") totaling $6.0 million. This amount recorded inthe second quarter of 2001 is the result of adjusting the investment for theBank's share of the unrealized loss included in other comprehensive loss ofAFT's financial statements. The loss is the result of the implementation ofStatement 133 requiring cash flow derivatives be carried at fair value on thebalance sheet. AFT owns a number of aircraft which it leases to differentlessees in various countries. All of these interests- the equity interest in AFTand the partnership interests in venture capital funds - are accounted for bythe equity method.

 

Deposits

The Company's deposits totaled $1,720.9 million as of June30, 2001, representing a $46.3 million, or 2.8%, increase from total deposits of$1,674.6 million as of December 31, 2000. The increase is due to timecertificates of deposit of $100,000 or more which increased $86.0 million. Thisincrease was partially offset by decreases totaling $39.7 million in all otherdeposit categories. Included in the $86.0 million growth of time certificates ofdeposit of $100,000 or more is a $40 million increase of deposits from the Stateof California (the "State") bringing total deposits from the State to$140 million as of June 30, 2001.

There were no brokered deposits outstanding as of June 30,2001 and December 31, 2000. The Company believes that the majority of itsdeposit customers have strong ties to the Bank. Although the Company has asignificant amount of time deposits of $100,000 or more having maturities of oneyear or less, in the past the depositors have generally renewed their depositsat their maturity. Accordingly, the Company believes its deposit source to bestable.

The maturity schedule of time certificates of deposit of$100,000 or more, as of June 30, 2001, is as follows:

<TABLE>

<CAPTION>

(In Thousands)
Amount      <S>      <C>
3 Months or Less
$430,692
Over 3 Months Through 6 Months
271,913
Over 6 Months Through 12 Months
202,272
Over 12 Months
7,233**Total**$912,110
</TABLE>

Other Borrowings

The Bank has obtained advances from the Federal Home LoanBank of San Francisco (the "FHLB") totaling $113.0 million. Theadvances are under an existing line of credit whereby the FHLB has granted theBank a line of credit equal up to 25 percent of its assets.

The maturity schedule of outstanding advances as of June 30,2001 is as follows:

<TABLE>
<CAPTION>
(In Thousands)
Amount
Fixed Rate of Interest      <S>      <C>      <C>
3 Months or Less
$ -
 
Over 3 Months Through 12 Months
10,000
4.71%
Over 1 Year Through 3 Years
103,000
4.66%-5.61%**Total**$ 113,000**4.66%-5.61%
</TABLE>

The total outstanding of $113.0 million of advances as ofJune 30, 2001 has a composite fixed rate of interest of 4.91%.

Subordinated debt is comprised of a $40 million publicoffering issuance of 8.375% subordinated notes due August 1, 2007. Proceeds of$38.7 million, net of underwriting discount of $1.3 million, were received bythe Company at date of issuance. The discount is amortized as a yield adjustmentover the 10-year life of the notes.

 

 

Capital Resources

Stockholders' equity totaled $198.7 million as of June 30,2001, an increase of $10.9 million, or 5.8%, from $187.8 million as of December31, 2000.

An analysis of the change in stockholders' equity is asfollows:

 

 

 

 

 

 

<TABLE>
<CAPTION>
Stockholders' Equity
Amount
(In Thousands)
       <S>      <C>
Balance as of December 31, 2000
$187,782
Repurchase of Stock
(12,401)
Net Income
16,152
Cash Dividends Declared
(2,809)
Change in Securities Valuation, Net of Tax
3,402
Change in Investment Valuation, Net of Tax
(914)
Stock Issuance (Includes $2,856 of stock options      exercised)
3,759
Tax Benefits related to Exercise of Non-qualified Stock      Options
3,687
 
 
Balance as of June 30, 2001
$198,658
</TABLE>

As more fully described in the preceding section entitled OtherInvestments, the Bank has an investment in an aircraft finance trust("AFT"). Because AFT holds cash flow derivatives, upon implementationof Statement 133, AFT reflected accumulated other comprehensive loss of $15.8million, requiring a valuation reserve for the Bank's 10% equity interest.This resulted in the above captioned $914,000 change in investment valuation,net of tax.

On December 20, 1999, the Board of Directors authorized astock repurchase program approving the buy-back of up to $10 million of theCompany's stock. As of April 25, 2001, this program was completed. 384,154shares were repurchased for a total of $10 million at an average cost per shareof $26.03.

In February, 2001, the Board of Directors authorized a stockrepurchase program approving the buy-back of up to 500,000 shares of the Company'sstock. As of August 10, 2001, 299,646 shares had been repurchased at an averagecost of $ 26.65 per share for a total of $8.0 million.

Capital ratios for the Company and for the Bank were asfollows as of the dates indicated:

 

 

<TABLE>

<CAPTION>

 
Well-Capitalized
June 30,
December 31,
 
Requirements
2001
2000<S>      <C>      <C>      <C>**GBC Bancorp
 
 
 
Tier 1 Leverage Ratio
5%
8.71%
8.96%
Tier 1 Risk-Based Capital Ratio
6%
9.47%
10.23%
Total Risk-Based Capital Ratio
10%
12.80%
13.75%**General Bank
 
 
 
Tier 1 Leverage Ratio
5%
9.87%
9.63%
Tier 1 Risk-Based Capital Ratio
6%
10.77%
11.13%
Total Risk-Based Capital Ratio
10%
12.01%
12.26%
</TABLE>

For the six months ended June 30, 2001, the ratio of theCompany's average stockholders' equity to average assets was 9.84%. For theyear ended December 31, 2000, this ratio was 8.12%.
** **
GBC Bancorp Executive Obligation Trust (the"Trust")

In the first quarter of 2000, the Company entered into atrust agreement providing for the Trust with Union Bank of California astrustee. As of June 30, 2001, 96,935 shares of Company stock have been issuedand transferred to the Trust. Such shares represent the earned deferredcompensation of the Company's Chairman.

In the consolidated financial statements, the shares held inthe Trust are reduced from common stock and included as a separate component ofshareholders' equity. As of June 30, 2001, this amount was $2,474,000,representing the cost of the 96,935 shares held in the Trust.

 

Liquidity

Liquidity measures the ability of the Company to meetfluctuations in deposit levels, to fund its operations and to provide forcustomers' credit needs. Liquidity is monitored by management on an on-goingbasis. Asset liquidity is provided by cash and short-term financial instrumentswhich include federal funds sold and securities purchased under agreements toresell, unpledged securities held to maturity maturing within one year andunpledged securities Available-for-Sale. These sources of liquidity amounted to$708.8 million, or 33.4% of total assets, as of June 30, 2001, compared to$785.0 million, or 39.9% of total assets, as of December 31, 2000.

To further supplement its liquidity, the Company hasestablished federal funds lines with correspondent banks and three masterrepurchase agreements with major brokerage companies. In addition, in August of1992, the Federal Home Loan Bank of San Francisco ("FHLB") granted theBank a line of credit equal to 25 percent of assets with payment terms up to 360months. As of June 30, 2001, the Company has $113 million outstanding under thisfinancing facility. Management believes its liquidity sources to be stable andadequate.

As of June 30, 2001, total loans and leases represented 63.0%of total deposits. This compares to 60.8% and 57.9% as of March 31, 2001 andDecember 31, 2000, respectively.

The liquidity of the parent company, GBC Bancorp, isprimarily dependent on the payment of cash dividends by its subsidiary, GeneralBank, subject to the limitations imposed by the Financial Code of the State ofCalifornia. For the six months ended June 30, 2001, the Bank declared cashdividends of $7.0 million to GBC Bancorp.

"GAP" measurement

While no single measure can completely identify the impact ofchanges in interest rates on net interest income, one gauge of interest ratesensitivity is to measure, over a variety of time periods, contractualdifferences in the amounts of the Company's rate sensitive assets and ratesensitive liabilities. These differences, or "gaps", provide anindication of the extent that net interest income may be affected by futurechanges in interest rates. However, these contractual "gaps" do nottake into account timing differences between the repricing of assets and therepricing of liabilities.

A positive gap exists when rate sensitive assets exceed ratesensitive liabilities and indicates that a greater volume of assets thanliabilities will reprice during a given period. This mismatch may enhanceearnings in a rising rate environment and may inhibit earnings when ratesdecline. Conversely, when rate sensitive liabilities exceed rate sensitiveassets, referred to as a negative gap, it indicates that a greater volume ofliabilities than assets will reprice during the period. In this case, a risinginterest rate environment may inhibit earnings and declining rates may enhanceearnings.

"Gap" reports originated as a means to providemanagement with a tool to monitor repricing differences, or "gaps",between assets and liabilities repricing in a specified period, based upon theirunderlying contractual rights. The use of "gap" reports is thuslimited to a quantification of the "mismatch" between assets andliabilities repricing within a unique specified timeframe. Contractual"Gap" reports cannot be used to quantify exposure to interest ratechanges because they do not take into account timing differences betweenrepricing assets and liabilities, and changes in the amount of prepayments.

As of June 30, 2001, there was a cumulative one-year negative"gap" of $596.7 million, down from $667.8 million as of December 31,2000.

The following table indicates the Company's interest ratesensitivity position as of June 30, 2001, and is based on contractualmaturities. It may not be reflective of positions in subsequent periods:

<TABLE>

<CAPTION>

June 30, 2001
INTEREST SENSITIVITY PERIOD
0 to 90
 
91 to 365
 
Over 1 Year
 
Over
 
Non-Interest
 
 
(In Thousands)
 
Days
 
Days
 
to 5 Years
 
5 Years
 
Earning/Bearing
 
Total
<S>

<C>

<C>    
<C>

<C>

<C>    
<C>

Earning Assets
Securities Available-for-Sale
$ 10,856
$ -
$ 124,416
$ 762,886
$ -
$ 898,158
Securities Held to Maturity
-
-
720
-
-
720
Trading Account Securities
-
-
-
-
681
681
Federal Funds Sold & Securities

Purchased Under Agreement to Resell
83,750
-
-
-
-
83,750
Loans and Leases (1) (2)
798,083
24,004
130,546
110,999
-
1,063,632
Non-Earning Assets (2)
-
-
-
-
78,249
78,249
Total Earning Assets
$ 892,689
$ 24,004
$ 255,682
$ 873,885
$ 78,930
$ 2,125,190
Source of Funds for Assets
Deposits:
Demand - N/B
$ -
$ -
$ -
$ -
$ 198,388
$ 198,388
Interest Bearing Demand
362,709
-
-
-
-
362,709
Savings
65,881
-
-
-
-
65,881
TCD'S Under $100,000
86,378
93,540
1,867
-
-
181,785
TCD'S $100,000 and Over
430,692
474,185
7,233
-
-
912,110
Total Deposits
$ 945,660
$ 567,725
$ 9,100
$ -
$ 198,388
$ 1,720,873
Borrowings from the Federal Home Loan Bank
$ -
$ -
$ 113,000
$ -
$ -
$ 113,000
Subordinated Debt
-
-
-
39,203
-
39,203
Other Liabilities
-
-
-
-
53,456
53,456
Stockholders' Equity
-
-
-
-
198,658
198,658
Total Liabilities and
 
 
 
 
 
 
Stockholders' Equity
$ 945,660
$ 567,725
$ 122,100
$ 39,203
$ 450,502
$ 2,125,190
Interest Sensitivity Gap
$ (52,971)
$ (543,721)
$ 133,582
$ 834,682
$ (371,572)
Cumulative Interest Sensitivity
Gap
($52,971)
($596,692)
($463,110)
$371,572
-
Gap Ratio (% of Total Assets)
-2.5%
-25.6%
6.3%
39.3%
-17.5%
Cumulative Gap Ratio
-2.5%
-28.1%
-21.8%
17.5%
0.0%
(1) Loans and leases are before unamortized deferred loan fees and      allowance for credit losses.
(2) Non-accrual loans are included in non-earning assets.
</TABLE>

 

Effective asset/liability management includes maintainingadequate liquidity and minimizing the impact of future interest rate changes onnet interest income. The Company attempts to manage its interest ratesensitivity on an on-going basis through the analysis of the repricingcharacteristics of its loans, securities, and deposits, and managing theestimated net interest income volatility by adjusting the terms of itsinterest-earning assets and liabilities, and through the use of derivatives asneeded.

 

Item 3. Qualitative and Quantatative Disclosures aboutMarket Risk
Market risk

Market risk is the risk of financial loss arising fromadverse changes in market prices and interest rates. The Company's market riskis inherent in its lending and deposit taking activities to the extent ofdifferences in the amounts maturing or degree of repricing sensitivity. Adversechanges in market prices and interest rates may therefore result in diminishedearnings and ultimately an erosion of capital.

Since the Company's profitability is affected by changes ininterest rates, management actively monitors how changes in interest rates mayaffect earnings and ultimately the underlying market value of equity. Managementmonitors interest rate exposure through the use of three basic measurement toolsin conjunction with established risk limits. These tools are the expectedmaturity gap report, net interest income volatility and market value of equityvolatility reports. The gap report details the expected maturity mismatch or gapbetween interest earning assets and interest bearing liabilities over aspecified timeframe. The expected gap differs from the contractual gap reportshown earlier in this section by adjusting contractual maturities for expectedprepayments of principal on loans and amortizing securities as well as theprojected timing of repricing non-maturity deposits. The following table showsthe Company's financial instruments that are sensitive to changes in interestrates categorized by their expected maturity, as of June 30, 2001:

<TABLE>

<CAPTION>

 

Expected Maturity Date June 30, 2001
(Dollars in Thousands)
0 to 90
 
91 to 365
 
Over 1 Year
 
Over
 
 
(In Thousands)
 
Days
 
Days
 
to 5 Years
 
5 Years
 
Total
<S>
      <C>          <C>          <C>          <C>          <C>    
Interest-sensitive Assets:
Securities Available-for-Sale
$ 64,510
$ 171,473
$ 568,191
$ 93,984
$ 898,158
Securities Held to Maturity
720
-
-
-
720
Federal Funds Sold & Securities
Purchased Under Agreements to Resell
83,750
-
-
-
83,750
Loans and Leases (1)
798,083
24,004
130,546
110,999
1,063,632
Total Interest-earning Assets
$ 947,063
$ 195,477
$ 698,737
$ 204,983
$ 2,046,260
Interest-sensitive Liabilities:
Deposits:
Interest Bearing Demand
$ 18,411
$ 55,233
$ 181,079
$ 107,986
$ 362,709
Savings
1,647
4,941
19,764
39,529
65,881
Time Certificates of Deposit
517,070
567,725
9,100
-
1,093,895
Total Deposits
$ 537,128
$ 627,899
$ 209,943
$ 147,515
$ 1,522,485
Borrowing from FHLB
$ -
$ -
$ 113,000
$ -
$ 113,000
Subordinated Debt
-
-
-
39,203
39,203
Total Interest-sensitive Liabilities
$ 537,127
$ 627,899
$ 322,944
$ 186,718
$ 1,674,688
(1) Loans and leases are net of non-accrual loans and before      unamortized deferred loan fees and allowance for credit losses.
</TABLE>

 

 

Expected maturities of assets are contractual maturitiesadjusted for projected payment based on contractual amortization and unscheduledprepayments of principal as well as repricing frequency. Expected maturities fordeposits are based on contractual maturities adjusted for projected rolloverrates and changes in pricing for non-maturity deposits. The Company utilizesassumptions supported by documented analysis for the expected maturities of itsloans and repricing of its deposits and relies on third party data providers forprepayment projections for amortizing securities. The actual maturities of theseinstruments could vary significantly if future prepayments and repricing differfrom the Company's expectations based on historical experience.

The Company uses a computer simulation analysis to attempt topredict changes in the yields earned on assets and the rates paid on liabilitiesin relation to changes in market interest rates. The net interest incomevolatility and market value of equity volatility reports measure the exposure ofearnings and capital respectively, to immediate incremental changes in marketinterest rates as represented by the prime rate change of 100 to 200 basispoints. Market value of portfolio equity is defined as the present value ofassets minus the present value of liabilities and off balance sheet contracts.The table below shows the estimated impact of changes in interest rates on netinterest income and market value of equity as of June 30, 2001:

<TABLE>

<CAPTION>

NET INTEREST
MARKET VALUE OF
CHANGE IN INTEREST
INCOME VOLATILITY
EQUITY VOLATILITY
RATES (BASIS POINTS)
JUNE 30, 2001 (1)
JUNE 30, 2001 (2)
<S>
      <C>          <C>    
+200
3.9%
-9.4%
+100
2.2%
-4.2%
-100
-4.0%
n
-200
-10.5%
-2.9%
(1) The percentage change in this column represents net interest income      of the Company for
12 months in a stable interest rate environment versus the net interest      income in the various
rate scenarios.
(2) The percentage change in this column represents net portfolio value      of the Company in a stable
interest rate environment versus the net portfolio value in the various      rate scenarios.
</TABLE>

 

The Company's primary objective in managing interest raterisk is to minimize the adverse effects of changes in interest rates on earningsand capital. In this regard the Company has established internal risk limits fornet interest income volatility given a 100 and 200 basis point decline in ratesof 10% and 15%, respectively, over a twelve-month horizon. Similarly, risklimits have been established for market value of portfolio equity volatility inresponse to a 100 and 200 basis point increase in rates of 10% and 15%,respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

Item 1. LEGAL PROCEEDINGS

In the normal course of business, the Company is subject topending and threatened legal actions. In April of 2001, an adverse verbal rulingwas issued with respect to a claim by the Bank against a borrower relating to anon-accrual loan with $3.1 million of principal outstanding as of June 30, 2001.This ruling disallowed the Bank's claim for principal and interest withrespect to the loan. The Bank has conferred with its counsel and has appealedthe ruling. It is believed that it is reasonably probable that the ruling willbe overturned, and no additional charge-offs nor additions to the allowance forcredit losses have been provided as a result of the ruling. Management believesthat the outcome of other actions where the Company is subject to pending andthreatened legal action will not have a material adverse effect on the Company'sfinancial condition or results of operations.

 

Item 2. CHANGES IN SECURITIES

There have been no changes in the securities of theRegistrant during the quarter ended June 30, 2001.

 

Item 3. DEFAULT UPON SENIOR SECURITIES

This item is not applicable.

 

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Annual Meeting of Shareholders held on April 19,  2001, a proposal to elect fourteen directors to the Board of Directors of the  Registrant to hold office until the next meeting and until their successors  are elected and qualified was approved by shareholders. This proposal received  the following votes:

<TABLE>
<CAPTION>
 
 
For
Withheld      <S>      <C>      <C>
Benard Chen
10,510,597
22,290
Thomas C.T. Chiu
10,510,597
22,290
Chuang-I Lin
10,491,785
41,102
Ko-Yen Lin
10,510,597
22,290
Ting-Yung Liu
10,510,597
22,290
John Wang
10,500,997
31,890
Kenneth Wang
10,500,997
31,890
Chien-Te Wu
10,443,951
88,936
Julian Wu
10,443,951
88,936
Li-Pei Wu
9,768,158
764,729
Peter Wu
9,768,158
764,729
Ping C. Wu
10,450,097
82,790
Walter Wu
10,510,597
22,290
Chin-Liang Yen
10,510,597
22,290
</TABLE>

In addition, a proposal to approve the incentive compensationplan included in the employment agreement between GBC Bancorp and Peter Wu, theRegistrant's President and Chief Executive Officer, was approved byshareholders. This proposal received the following votes:

<TABLE>

<CAPTION>

For                     Against               Withheld

<S>                   <C>                       <C>

9,903,705        609,204                19,978

</TABLE>

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 11. (Reference footnote 5 of Notes toConsolidated          Financial Statements, Part I, Item 1.)

        b) Reports on Form8-K: None

 

 

PART III - SIGNATURES

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Actof 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized.

 

 

                                               GBC Bancorp

                                                   (Registrant)

 

Dated: August 14,2001            /s/ PeterWu                    

                                                   Peter Wu, President and

                                                   Chief Executive Officer

Dated: August 14,2001            /s/ PeterLowe                        

                                                   Peter Lowe, Executive

                                                   Vice President and

                                                   Chief Financial Officer************************************************ |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|