##### Table of Contents



U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[X]  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|     |  |                                                                                         
|     |  | For the quarterly period ended
 June 30,
2002                                           
|     |  |                                                                                         
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|     |  |                                                                                         
|     |  | For the transition period from ________________________ to
________________________     

Commission File Number: 333-19081

GBC Bancorp, Inc.

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(Exact name of small business issuer as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Georgia                                                        |  | 58-2265327                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer
Identification No.)

165 Nash Street, Lawrenceville, Georgia 30045

---

(Address of principal executive offices)


(770) 995-0000

---

(Issuers telephone number)


N/A

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(Former name, former address and former fiscal year, if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X]  No [  ]

State the number of shares outstanding of each of the issuers classes of
common equity, as of August 1, 2002: 1,711,083; $1 par value

Transitional Small Business Disclosure Format   Yes [  ] No [X]





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TABLE OF CONTENTS



|                               |                                                                                       |                                                            |  |  |  |  |  | 
|------------------------------ | ------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENTS                                                         
|                               |                                                                                       | CONSOLIDATED BALANCE SHEET                                
|                               |                                                                                       | CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|                               |                                                                                       | CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|                               |                                                                                       | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                
|                               | Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II  OTHER INFORMATION   
|                               | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                         
|                               | EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|                               | SIGNATURES                                                                           



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##### Table of Contents



GBC BANCORP, INC. AND
SUBSIDIARY

INDEX

|        |                                                                                               |                                                                                                                                                    |  |    |   |      |  | 
|------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- |  | -- | - | ---- |  | 
|        |                                                                                               |                                                                                                                                                    |  |    |   | Page
|        |                                                                                               |                                                                                                                                                    |  |    |   |     
|PART I  | FINANCIAL INFORMATION                                                                         |                                                                                                                                                    |  |    |  
|       
|        | Item 1.  Financial Statements                                                                 |                                                                                                                                                    |  |    |  
|       
|        |                                                                                               | Consolidated Balance Sheet - June 30, 2002                                                                                                         |  |    | 3 |     
|       
|        |                                                                                               | Consolidated
Statements of Income and Comprehensive Income - Three Months Ended June 30, 2002 and 2001
and Six Months Ended June 30, 2002 and 2001 |  |    | 4 |     
|       
|        |                                                                                               | Consolidated
Statements of Cash Flows - Six Months Ended June 30, 2002 and 2001                                                                    |  |    | 5 |     
|       
|        |                                                                                               | Notes to Consolidated Financial Statements                                                                                                         |  |    | 6 |     
|       
|        | Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                                                                    |  | 7  |  
|       
|PART II | OTHER INFORMATION                                                                             |                                                                                                                                                    |  |    |  
|       
|        | Item 4 - Submission of Matters to a Vote of Security Holders                                  |                                                                                                                                                    |  | 15 |  
|       
|        | Item 6 - Exhibits and Reports on Form 8-K                                                     |                                                                                                                                                    |  | 15 |  
|       
|        | Signatures                                                                                    |                                                                                                                                                    |  | 16 |  





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##### Table of Contents






PART I  FINANCIAL
INFORMATION




ITEM 1. FINANCIAL STATEMENTS




GBC BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(Unaudited)

|                                             |                                                                                                  |                                            |                                      |             |             |  |  | 
|-------------------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------------------------------------ | ----------- | ----------- |  |  | 
|                                             |                                                                                                  |                                            |                                      | Assets      |             |  |  | 
|Cash and due from banks                      |                                                                                                  | $                                          | 2,908,464                            |            
|Federal funds sold                           |                                                                                                  |                                            | 8,295,000                            |            
|Securities available-for-sale, at fair value |                                                                                                  |                                            | 11,661,656                           |            
|Loans                                        |                                                                                                  |                                            | 142,697,406                          |            
|Less allowance for loan losses               |                                                                                                  |                                            | 1,891,611                            |            
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Loans, net                                 |                                      |             | 140,805,795 | 
|Premises and equipment                       |                                                                                                  |                                            | 723,934                              |            
|Other assets                                 |                                                                                                  |                                            | 4,925,848                            |            
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Total assets                               |                                      | $           | 169,320,697 | 
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  |                                            | Liabilities and Stockholders Equity |             |             |  | 
|Deposits                                     |                                                                                                  |                                            |                                      |            
|                                             | Noninterest-bearing                                                                              |                                            | $                                    | 12,349,365  |            
|                                             | Interest-bearing                                                                                 |                                            |                                      | 134,951,861 |            
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Total deposits                             |                                      |             | 147,301,226 | 
|Securities sold under repurchase agreements  |                                                                                                  |                                            | 470,308                              |            
|Other liabilities                            |                                                                                                  |                                            | 959,750                              |            
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Total liabilities                          |                                      |             | 148,731,284 | 
|                                             |                                                                                                  |                                            |                                      |            
|Commitments and contingencies                |                                                                                                  |                                            |                                      |            
|Stockholders equity                         |                                                                                                  |                                            |                                      |            
|                                             | Common stock, par value $1; 3,000,000 shares authorized;
1,711,083 shares issued and outstanding |                                            |                                      | 1,711,083   |            
|                                             | Capital surplus                                                                                  |                                            |                                      | 18,068,980  |            
|                                             | Retained earnings                                                                                |                                            |                                      | 701,172     |            
|                                             | Accumulated other comprehensive income                                                           |                                            |                                      | 108,178     |            
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Total stockholders equity                 |                                      |             | 20,589,413  | 
|                                             |                                                                                                  |                                            |                                      |            
|                                             |                                                                                                  | Total liabilities and stockholders equity |                                      | $           | 169,320,697 | 
|                                             |                                                                                                  |                                            |                                      |            

See Notes to Consolidated Financial Statements.

3



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##### Table of Contents






GBC BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THREE MONTHS ENDED JUNE 30, 2002 AND 2001 AND
SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)

|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |           |           | 
|---------------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------- | ------------------ | --------- | ---------------- | --------- | --------- | --------- | ---- | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                   |                                                                                               |                                                     |           | Three Months Ended |           | Six Months Ended
|                                   |                                                                                               |                                                     |           | June 30,           |           | June 30,        
|                                   |                                                                                               |                                                     |           |                    |           |                 
|                                   |                                                                                               |                                                     |           | 2002               |           | 2001             |           | 2002      |           | 2001
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |     
|Interest income                    |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   | Loans                                                                                         |                                                     | $         | 2,630,086          |           |                  | $         | 2,256,190 |           |      | $         | 5,005,443 |           |   | $         | 4,373,270 |          
|                                   | Taxable securities                                                                            |                                                     |           | 160,999            |           |                  |           | 177,099   |           |      |           | 303,479   |           |   |           | 336,795   |          
|                                   | Federal funds sold                                                                            |                                                     |           | 42,473             |           |                  |           | 69,541    |           |      |           | 94,757    |           |   |           | 245,727   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Total
interest income                               |           |                    | 2,833,558 |                  |           |           | 2,502,830 |      |           |           | 5,403,679 |   |           |           | 4,955,792 | 
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Interest expense                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   | Deposits                                                                                      |                                                     |           | 1,252,480          |           |                  |           | 1,338,143 |           |      |           | 2,481,748 |           |   |           | 2,673,226 |          
|                                   | Securities sold under repurchase agreements                                                   |                                                     |           | 2,789              |           |                  |           | 7,989     |           |      |           | 5,439     |           |   |           | 12,053    |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Total
interest expense                              |           |                    | 1,255,269 |                  |           |           | 1,346,132 |      |           |           | 2,487,187 |   |           |           | 2,685,279 | 
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Net
interest income                                 |           |                    | 1,578,289 |                  |           |           | 1,156,698 |      |           |           | 2,916,492 |   |           |           | 2,270,513 | 
|Provision for loan losses          |                                                                                               |                                                     | 208,874   |                    |           |                  | 38,136    |           |           |      | 366,222   |           |           |   | 153,497   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Net interest income after
provision for loan losses |           |                    | 1,369,415 |                  |           |           | 1,118,562 |      |           |           | 2,550,270 |   |           |           | 2,117,016 | 
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Other income                       |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   | Service charges on deposit accounts                                                           |                                                     |           | 29,637             |           |                  |           | 32,057    |           |      |           | 62,058    |           |   |           | 64,188    |          
|                                   | Other operating income                                                                        |                                                     |           | 62,065             |           |                  |           | 67,881    |           |      |           | 138,855   |           |   |           | 134,824   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               |                                                     | 91,702    |                    |           |                  | 99,938    |           |           |      | 200,913   |           |           |   | 199,012   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Other expenses                     |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   | Salaries and employee benefits                                                                |                                                     |           | 785,979            |           |                  |           | 560,623   |           |      |           | 1,481,292 |           |   |           | 1,102,702 |          
|                                   | Equipment and occupancy expenses                                                              |                                                     |           | 221,735            |           |                  |           | 227,788   |           |      |           | 443,040   |           |   |           | 447,949   |          
|                                   | Other operating expenses                                                                      |                                                     |           | 244,271            |           |                  |           | 238,555   |           |      |           | 535,440   |           |   |           | 469,787   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               |                                                     | 1,251,985 |                    |           |                  | 1,026,966 |           |           |      | 2,459,772 |           |           |   | 2,020,438 |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Income before income taxes                          |           |                    | 209,132   |                  |           |           | 191,534   |      |           |           | 291,411   |   |           |           | 295,590   | 
|Income tax expense                 |                                                                                               |                                                     | 71,660    |                    |           |                  | 72,844    |           |           |      | 85,162    |           |           |   | 114,355   |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Net income                                          |           |                    | 137,472   |                  |           |           | 118,690   |      |           |           | 206,249   |   |           |           | 181,235   | 
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Other comprehensive income (loss): |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   | Unrealized gains (losses) on securities available-
for-sale arising during period, net of tax |                                                     |           | 165,369            |           |                  |           | (24,015   | )         |      |           | 51,382    |           |   |           | 36,382    |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|                                   |                                                                                               | Comprehensive income                                |           | $                  | 302,841   |                  |           | $         | 94,675    |      |           | $         | 257,631   |   |           | $         | 217,617   | 
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Basic earnings per share           |                                                                                               | $                                                   | 0.08      |                    |           | $                | 0.12      |           |           | $    | 0.13      |           |           | $ | 0.19      |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Diluted earnings per share         |                                                                                               | $                                                   | 0.08      |                    |           | $                | 0.12      |           |           | $    | 0.12      |           |           | $ | 0.18      |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          
|Cash dividends per share           |                                                                                               | $                                                   |          |                    |           | $                |          |           |           | $    |          |           |           | $ |          |          
|                                   |                                                                                               |                                                     |           |                    |           |                  |           |           |           |      |           |           |           |   |           |          

See Notes to Consolidated Financial Statements.

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##### Table of Contents



GBC BANCORP, INC. AND
SUBSIDIARY




CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)

|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |             |          |             |           | 
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | ------------------------------------------------------------ | -------- | ----------- | --------- | ----------- | -------- | ----------- | --------- | 
|                                                   |                                                                                   |                                            |                                           |                                                              |          | 2002        |           | 2001       
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|OPERATING ACTIVITIES                               |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   | Net income                                                                        |                                            | $                                         | 206,249                                                      |          |             | $         | 181,235     |         
|                                                   | Adjustments to reconcile net income to net
cash provided by operating activities: |                                            |                                           |                                                              |          |             |           |             |         
|                                                   |                                                                                   | Depreciation                               |                                           |                                                              | 260,636  |             |           |             | 143,258  |            
|                                                   |                                                                                   | Provision for loan losses                  |                                           |                                                              | 366,222  |             |           |             | 153,497  |            
|                                                   |                                                                                   | Gain on sales of other real estate owned   |                                           |                                                              |         |             |           |             | (8,606   | )          
|                                                   |                                                                                   | (Increase) decrease in interest receivable |                                           |                                                              | (155,927 | )           |           |             | 177,911  |            
|                                                   |                                                                                   | Increase (decrease) in interest payable    |                                           |                                                              | (85,947  | )           |           |             | 16,993   |            
|                                                   |                                                                                   | Decrease in taxes payable                  |                                           |                                                              | (167,360 | )           |           |             | (366,495 | )          
|                                                   |                                                                                   | Net other operating activities             |                                           |                                                              | (62,942  | )           |           |             | (194,116 | )          
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   |                                                                                   |                                            |                                           | Net cash provided by operating activities                    |          |             | 360,931   |             |          |             | 103,677   | 
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|INVESTING ACTIVITIES                               |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   | Purchases of securities available-for-sale                                        |                                            |                                           | (4,566,854                                                   | )        |             |           | (7,510,064  | )       
|                                                   | Proceeds from maturities of securities available-for-sale                         |                                            |                                           | 2,307,395                                                    |          |             |           | 7,091,702   |         
|                                                   | Net (increase) decrease in federal funds sold                                     |                                            |                                           | (2,994,000                                                   | )        |             |           | 7,548,000   |         
|                                                   | Net increase in loans                                                             |                                            |                                           | (20,546,374                                                  | )        |             |           | (19,868,302 | )       
|                                                   | Proceeds from sales of other real estate owned                                    |                                            |                                           |                                                             |          |             |           | 539,290     |         
|                                                   | Purchase of premises and equipment                                                |                                            |                                           | (175,035                                                     | )        |             |           | (210,385    | )       
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   |                                                                                   |                                            | Net cash used in investing activities     |                                                              |          | (25,974,868 | )         |             |          | (12,409,759 | )        
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|FINANCING ACTIVITIES                               |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   | Net increase in deposits                                                          |                                            |                                           | 21,376,917                                                   |          |             |           | 11,812,226  |         
|                                                   | Net increase (decrease) in securities sold under repurchase agreements            |                                            |                                           | (115,689                                                     | )        |             |           | 609,569     |         
|                                                   | Net proceeds from sale of common stock                                            |                                            |                                           | 2,913,693                                                    |          |             |           |            |         
|                                                   | Deferred stock offering costs                                                     |                                            |                                           |                                                             |          |             |           | (89,998     | )       
|                                                   | Net increase in subscription deposits                                             |                                            |                                           |                                                             |          |             |           | 698,336     |         
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   |                                                                                   |                                            | Net cash provided by financing activities |                                                              |          | 24,174,921  |           |             |          | 13,030,133  |          
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|Net increase (decrease) in cash and due from banks |                                                                                   |                                            | (1,439,016                                | )                                                            |          |             | 724,051   |            
|Cash and due from banks at beginning of period     |                                                                                   |                                            | 4,347,480                                 |                                                              |          |             | 4,111,520 |            
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|Cash and due from banks at end of period           |                                                                                   | $                                          | 2,908,464                                 |                                                              |          | $           | 4,835,571 |            
|                                                   |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION  |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   |                                                                                   | Cash paid during the period for:           |                                           |                                                              |          |             |           |             |          |            
|                                                   |                                                                                   |                                            |                                           | Interest                                                     |          | $           | 2,573,134 |             |          | $           | 2,668,286 | 
|                                                   |                                                                                   |                                            |                                           | Income taxes                                                 |          | $           | 244,862   |             |          | $           | 480,850   | 
|NONCASH TRANSACTION                                |                                                                                   |                                            |                                           |                                                              |          |             |           |            
|                                                   |                                                                                   |                                            |                                           | Principal balances of loans transferred to other real estate |          | $           |          |             |          | $           | 526,393   | 

See Notes to Consolidated Financial Statements.

5



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##### Table of Contents






GBC BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1.  NATURE OF BUSINESS AND BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial information for GBC Bancorp, Inc. (the
Company) included herein is unaudited; however, such information
reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for
a fair statement of results for the interim period.



| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations for the three and six month periods ended
June 30, 2002 are not necessarily indicative of the results to be
expected for the full year.

NOTE 2.  CURRENT ACCOUNTING DEVELOPMENTS



| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | There are no recent accounting pronouncements that have had, or are
expected to have, a material effect on the Companys financial
statements.

6



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##### Table of Contents



GBC BANCORP, INC. AND SUBSIDIARY




ITEM 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our financial condition and the financial
condition of our bank subsidiary, Gwinnett Banking Company. The purpose of this
discussion is to focus on information about our financial condition and results
of operations that are not otherwise apparent from our consolidated financial
statement. Reference should be made to those statements and the selected
financial data presented elsewhere in this report for an understanding of the
following discussion and analysis.

Forward-Looking Statements

We may from time to time make written or oral forward-looking statements,
including statements contained in our filings with the Securities and Exchange
Commission and its reports to stockholders. Statements made, other than those
concerning historical information, should be considered forward-looking and
subject to various risks and uncertainties. Such forward-looking statements
are made based upon managements belief as well as assumptions made by, and
information currently available to, management pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Our actual
results may differ materially from the results anticipated in forward-looking
statements due to a variety of factors, including governmental monetary and
fiscal policies, deposit levels, loan demand, loan collateral values,
securities portfolio values, interest rate risk management, the effects of
competition in the banking business from other commercial banks, thrifts,
mortgage banking firms, consumer finance companies, credit unions, securities
brokerage firms, insurance companies, money market funds and other financial
institutions operating in our market area and elsewhere, including institutions
operating through the Internet, changes in governmental regulation relating to
the banking industry, including regulations relating to branching and
acquisitions, failure of assumptions underlying the establishment of reserves
for loan losses, including the value of collateral underlying delinquent loans
and other factors. We caution that such factors are not exclusive. We do not
undertake to update any forward-looking statements.

Critical Accounting Policies

We have adopted various accounting policies which govern the application of
accounting principles generally accepted in the United States in the
preparation of our financial statements. Our significant accounting policies
are described in the footnotes to the consolidated financial statements at
December 31, 2001 as filed on our annual report on Form 10-KSB.

Certain accounting policies involve significant judgments and assumptions by us
which have a material impact on the carrying value of certain assets and
liabilities. We consider these accounting policies to be critical accounting
policies. The judgments and assumptions we use are based on historical
experience and other factors, which we believe to be reasonable under the
circumstances. Because of the nature of the judgments and assumptions we make,
actual results could differ from these judgments and estimates which could have
a material impact on our carrying values of assets and liabilities and our
results of operations.

We believe the allowance for loan losses is a critical accounting policy that
requires the most significant judgments and estimates used in preparation of
our consolidated financial statements. Please see the portion of this
discussion that addresses our allowance for loan losses for a description of
our processes and methodology for determining our allowance for loan losses.

7



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Liquidity and Capital Resources

Our liquidity is monitored on a periodic basis by management and State and
Federal regulatory authorities. We monitor our liquidity requirements under
two categories, operational needs and emergency needs. The operational needs
category establishes the cash requirements to sufficiently fund our deposit
reserve requirements and pay operating expenses. The emergency need category
establishes sufficient cash requirements to fund the volatility of deposits.
As determined under these categories, our liquidity as of June 30, 2002 was
considered satisfactory.

At June 30, 2002, our capital ratios were adequate based on regulatory minimum
capital requirements. The minimum capital requirements and the actual capital
ratios on a consolidated and bank-only basis are as follows:

|                           |  |              |       |            |  |             |       |   |  |  |      |  
|-------------------------- |  | ------------ | ----- | ---------- |  | ----------- | ----- | - |  |  | ---- | -
|                           |  | Actual       |       | Regulatory
|                           |  |              |       | Minimum   
|                           |  | Consolidated |       | Bank       |  | Requirement
|                           |  |              |       |            |  |            
|Leverage capital ratios    |  |              | 13.38 | %          |  |             | 12.86 | % |  |  | 4.00 | %
|Risk-based capital ratios: |  |              |       |            |  |             |       |   |  |  |      |  
|Core capital               |  |              | 15.59 |            |  |             | 14.99 |   |  |  | 4.00 |  
|Total capital              |  |              | 16.84 |            |  |             | 16.24 |   |  |  | 8.00 |  

We raised approximately $10.6 million in capital through a public offering that
closed on March 15, 2002. The capital raised from this offering provides a
base for future growth.

In the future, the primary source of funds available to us will be the payment
of dividends by the Bank. Banking regulations limit the amount of the dividend
that may be paid without prior approval of the Banks regulatory agency.
Currently, the Bank could pay us a $206,000 dividend without regulatory
approval.

Off-Balance Sheet Risk

We are a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of our customers. These
financial instruments include commitments to extend credit and standby letters
of credit. Such commitments involve, to varying degrees, elements of credit
risk and interest rate risk in excess of the amount recognized in the balance
sheets.

Our exposure to credit loss in the event of nonperformance by the other party
to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those
instruments. We use the same credit policies in making commitments and
conditional obligations as we do for on-balance sheet instruments. A summary
of our commitments is as follows:

|                             |  |          |            | 
|---------------------------- |  | -------- | ---------- | 
|                             |  | June 30,
|                             |  | 2002    
|                             |  |         
|Commitments to extend credit |  | $        | 53,767,000 | 
|Letters of credit            |  |          | 1,345,000  | 
|                             |  |          |            | 
|                             |  | $        | 55,112,000 | 
|                             |  |          |            | 

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Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Since many
of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The
amount of collateral obtained, if deemed necessary by us upon extension of
credit, is based on our credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by us to guarantee
the performance of a customer to a third party. Those letters of credit are
primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loans to customers. Collateral is required in
instances which we deem necessary.

Related Party Transactions

We lease our main office banking facilities under a noncancelable operating
lease agreement from GBC Properties, LLC, a limited liability company formed by
our organizers. The lease term is for 15 years with the monthly rental payment
adjusting every fifth year for changes in the Consumer Price Index. The lease
agreement requires us to pay normal operating and occupancy expenses of the
facilities.

Financial Condition

Following is a summary of our balance sheets for the periods indicated:

|                                            |  |                        |         |              |  |   |         | 
|------------------------------------------- |  | ---------------------- | ------- | ------------ |  | - | ------- | 
|                                            |  | June 30,               |         | December 31,
|                                            |  | 2002                   |         | 2001        
|                                            |  |                        |         |             
|                                            |  | (Dollars in Thousands)
|Cash and due from banks                     |  | $                      | 2,908   |              |  | $ | 4,347   | 
|Federal funds sold                          |  |                        | 8,295   |              |  |   | 5,301   | 
|Securities                                  |  |                        | 11,662  |              |  |   | 9,327   | 
|Loans, net                                  |  |                        | 140,806 |              |  |   | 120,626 | 
|Premises and equipment                      |  |                        | 724     |              |  |   | 810     | 
|Other assets                                |  |                        | 4,926   |              |  |   | 4,500   | 
|                                            |  |                        |         |              |  |   |         | 
|                                            |  | $                      | 169,321 |              |  | $ | 144,911 | 
|                                            |  |                        |         |              |  |   |         | 
|Deposits                                    |  | $                      | 147,301 |              |  | $ | 125,924 | 
|Securities sold under repurchase agreements |  |                        | 470     |              |  |   | 586     | 
|Other liabilities                           |  |                        | 960     |              |  |   | 983     | 
|Stockholders equity                        |  |                        | 20,590  |              |  |   | 17,418  | 
|                                            |  |                        |         |              |  |   |         | 
|                                            |  | $                      | 169,321 |              |  | $ | 144,911 | 
|                                            |  |                        |         |              |  |   |         | 

Our total assets increased by 17% for the first six months of 2002. Deposit
growth of $21.4 million and proceeds from our common stock offering of $2.9
million was used to fund $20.1 million of loan growth with the remainder
primarily invested in securities. Loan growth continued to be strong as our
loan to deposit ratio has increased to 97% as of June 30, 2002 from 96% as of
December 31, 2001. Our total equity increased by year-to-date net income of
$206,000, proceeds from our common stock offering of $2.9 million, and
increased unrealized gains of securities available-for-sale, net of tax, of
$51,000.

9



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Our securities portfolio, consisting of U.S. Agency and mortgage-backed
securities, amounted to $11.7 million at June 30, 2002. Unrealized gains on
securities amounted to $167,000 at June 30, 2002 as compared to an unrealized
gain of $92,000 at December 31, 2001. Management has not specifically
identified any securities for sale in future periods that, if so designated,
would require a charge to operations if the market value would not be
reasonably expected to recover prior to the time of sale.

We have 74% of our loan portfolio collateralized by real estate located in our
primary market area of Gwinnett County, Georgia and surrounding counties. Our
real estate construction portfolio consists of loans collateralized by loans to
build one- to four-family residential properties. We generally require that
loans collateralized by real estate not exceed 80%-85% of the collateral value.

The remaining 26% of the loan portfolio consists of commercial, consumer, and
other loans. We require collateral commensurate with the repayment ability and
creditworthiness of the borrower.

The specific economic and credit risks associated with our loan portfolio,
especially the real estate portfolio, include, but are not limited to, a
general downturn in the economy which could affect unemployment rates in our
market area, general real estate market deterioration, interest rate
fluctuations, deteriorated or non-existing collateral, title defects,
inaccurate appraisals, financial deterioration of borrowers, fraud, and any
violation of banking protection laws. Construction lending can also present
other specific risks to the lender such as whether the builders can obtain
financing for the construction, whether the builders can sell the home to a
buyer, and whether the buyer can obtain permanent financing. Currently, real
estate values and employment trends in our market area are stable with no
indications of a significant downturn in the local economy.

We attempt to reduce these economic and credit risks not only by adhering to
loan to value guidelines, but also by investigating the creditworthiness of the
borrower and monitoring the borrowers financial position. Also, we establish
and periodically review our lending policies and procedures as well as having
independent loan review. State banking regulations limit exposure by
prohibiting secured loan relationships that exceed 25% of the Banks statutory
capital and unsecured loan relationships that exceed 15% of the Banks
statutory capital.

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Results of Operations For The Three Months Ended June 30, 2002 and 2001 and for
the Six Months Ended June 30, 2002 and 2001

Following is a summary of our operations for the periods indicated.

|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|------------------------- |  | ---------------------- | ----- |  |  |  |  | ---- |  | - | ----- | 
|                          |  | Three Months Ended    
|                          |  | June 30,              
|                          |  |                       
|                          |  | 2002                   |       |  |  |  |  | 2001
|                          |  |                        |       |  |  |  |  |     
|                          |  | (Dollars in Thousands)
|Interest income           |  | $                      | 2,834 |  |  |  |  |      |  | $ | 2,503 | 
|Interest expense          |  |                        | 1,255 |  |  |  |  |      |  |   | 1,346 | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Net interest income       |  |                        | 1,579 |  |  |  |  |      |  |   | 1,157 | 
|Provision for loan losses |  |                        | 209   |  |  |  |  |      |  |   | 38    | 
|Other income              |  |                        | 91    |  |  |  |  |      |  |   | 100   | 
|Other expense             |  |                        | 1,252 |  |  |  |  |      |  |   | 1,027 | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Pretax income             |  |                        | 209   |  |  |  |  |      |  |   | 192   | 
|Income tax                |  |                        | 72    |  |  |  |  |      |  |   | 73    | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Net income                |  | $                      | 137   |  |  |  |  |      |  | $ | 119   | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 

|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|------------------------- |  | ---------------------- | ----- |  |  |  |  | ---- |  | - | ----- | 
|                          |  | Six Months Ended      
|                          |  | June 30,              
|                          |  |                       
|                          |  | 2002                   |       |  |  |  |  | 2001
|                          |  |                        |       |  |  |  |  |     
|                          |  | (Dollars in Thousands)
|Interest income           |  | $                      | 5,403 |  |  |  |  |      |  | $ | 4,956 | 
|Interest expense          |  |                        | 2,487 |  |  |  |  |      |  |   | 2,685 | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Net interest income       |  |                        | 2,916 |  |  |  |  |      |  |   | 2,271 | 
|Provision for loan losses |  |                        | 366   |  |  |  |  |      |  |   | 154   | 
|Other income              |  |                        | 201   |  |  |  |  |      |  |   | 199   | 
|Other expense             |  |                        | 2,460 |  |  |  |  |      |  |   | 2,020 | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Pretax income             |  |                        | 291   |  |  |  |  |      |  |   | 296   | 
|Income tax                |  |                        | 85    |  |  |  |  |      |  |   | 115   | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 
|Net income                |  | $                      | 206   |  |  |  |  |      |  | $ | 181   | 
|                          |  |                        |       |  |  |  |  |      |  |   |       | 

Our net interest income increased by $422,000 and $645,000 for the second
quarter and first six months of 2002, respectively, as compared to the same
periods in 2001. Our net interest margin decreased to 3.85% during the first
six months of 2002 as compared to 4.49% for the first six months of 2001 and
4.25% for the entire year of 2001. The increase in net interest income is due
primarily to the increased volume of average loans and related loan fees. The
decrease in the net interest margin is due to the decrease in yields earned on
loans that decreased to 7.73% in the first six months of 2002 as compared to
10.71% in the first six months of 2001. The cost of funds has decreased as
well as deposits have been able to be repriced as they matured. Our cost of
funds decreased to 4.01% in the first six months of 2002 as compared to 6.24%
in the first six months of 2001.

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The provision for loan losses increased by $171,000 and $212,000 for the second
quarter and first six months of 2002, respectively, as compared to the same
periods in 2001. The amounts provided are due primarily to overall loan
growth, as well as our assessment of the inherent risk in the loan portfolio.
Based upon our evaluation of the loan portfolio, we believe the allowance for
loan losses to be adequate to absorb losses on existing loans that may become
uncollectible. Our evaluation considers significant factors relative to the
credit risk and loss exposure in the loan portfolio, including past due and
classified loans, past experience, underlying collateral values, and current
economic conditions that may affect the borrowers ability to repay. The
allowance for loan losses is evaluated by segmenting the loan portfolio into
unclassified and classified loans. The unclassified loans are further
segmented by loan type with an allowance percentage applied to each type in
order to establish a general allowance for loan losses. The allowance
percentage determined is based upon our experience specifically and the
historical experience of the banking industry generally. The classified loans,
including impaired loans, are analyzed individually in order to establish a
specific allowance for losses. The allowance for loan losses as a percentage
of total loans was 1.33% at June 30, 2002 as compared to 1.25% at December 31,
2001.

Information with respect to nonaccrual, past due and restructured loans is as
follows:

|                                                                                                         |  |                        |       |      |  |   |     | 
|-------------------------------------------------------------------------------------------------------- |  | ---------------------- | ----- | ---- |  | - | --- | 
|                                                                                                         |  | June 30,              
|                                                                                                         |  |                       
|                                                                                                         |  | 2002                   |       | 2001
|                                                                                                         |  |                        |       |     
|                                                                                                         |  | (Dollars in Thousands)
|Nonaccrual loans                                                                                         |  | $                      | 25    |      |  | $ | 0   | 
|Loans contractually past due ninety days or more as to interest
or principal payments and still accruing |  |                        | 3     |      |  |   | 216 | 
|Restructured loans                                                                                       |  |                        | 317   |      |  |   | 0   | 
|Potential problem loans                                                                                  |  |                        | 2,653 |      |  |   | 0   | 
|Interest income that would have been recorded on nonaccrual
and restructured loans under original terms  |  |                        | 13    |      |  |   | 0   | 
|Interest income that was recorded on nonaccrual and restructured loans                                   |  |                        | 10    |      |  |   | 0   | 

Potential problem loans are defined as loans about which we have serious doubts
as to the ability of the borrower to comply with the present loan repayment
terms and which may cause the loan to be placed on nonaccrual status, to become
past due more than ninety days, or to be restructured.

It is our policy to discontinue the accrual of interest income when, in the
opinion of management, collection of interest becomes doubtful. This status is
accorded interest when there is a significant deterioration in the financial
condition of the borrower, full repayment of principal and interest is not
expected and the principal or interest is more than 90 days past due, unless
the loan is both well-secured and in the process of collection.

Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity, or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as
to the ability of such borrowers to comply with the loan repayment terms.

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Information regarding certain loans and allowance for loan loss data is as
follows:

|                                                                              |                          |   |                        |   |      |   |        |   | 
|----------------------------------------------------------------------------- | ------------------------ | - | ---------------------- | - | ---- | - | ------ | - | 
|                                                                              |                          |   | Six Months Ended      
|                                                                              |                          |   | June 30,              
|                                                                              |                          |   |                       
|                                                                              |                          |   | 2002                   |   | 2001
|                                                                              |                          |   |                        |   |     
|                                                                              |                          |   | (Dollars in Thousands)
|Average amount of loans outstanding                                           |                          | $ | 129,457                |   |      | $ | 81,651 |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Balance of allowance for loan losses at beginning of period                   |                          | $ | 1,532                  |   |      | $ | 1,106  |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Loans charged off                                                             |                          |   |                        |   |      |   |        |  
|                                                                              | Commercial and financial |   | $                      | 0 |      |   | $      | 0 | 
|                                                                              | Real estate construction |   |                        | 0 |      |   |        | 0 | 
|                                                                              | Installment              |   |                        | 6 |      |   |        | 0 | 
|                                                                              | Other                    |   |                        | 0 |      |   |        | 0 | 
|                                                                              |                          |   |                        |   |      |   |        |  
|                                                                              |                          |   | 6                      |   |      |   | 0      |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Loans recovered                                                               |                          |   |                        |   |      |   |        |  
|                                                                              | Commercial and financial |   |                        | 0 |      |   |        | 0 | 
|                                                                              | Real estate construction |   |                        | 0 |      |   |        | 0 | 
|                                                                              | Installment              |   |                        | 0 |      |   |        | 0 | 
|                                                                              |                          |   |                        |   |      |   |        |  
|                                                                              |                          |   | 0                      |   |      |   | 0      |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Net charge-offs                                                               |                          |   | 6                      |   |      |   | 0      |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Additions to allowance charged to
operating expense during period             |                          |   | 366                    |   |      |   | 154    |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Balance of allowance for loan losses at end of period                         |                          | $ | 1,892                  |   |      | $ | 1,260  |  
|                                                                              |                          |   |                        |   |      |   |        |  
|Ratio of net loans charged off during the period to
average loans outstanding |                          |   | .01                    | % |      |   | .00    | %
|                                                                              |                          |   |                        |   |      |   |        |  

Other income remained virtually unchanged for the second quarter and first six
months of 2002, respectively. Other income consists of service charges on
deposit accounts, mortgage origination fees, and other miscellaneous fees.

Other expenses increased by $225,000 and $440,000 for the second quarter and
first six months of 2002, respectively, as compared to the same periods in
2001. Salaries and employee benefits have increased by $225,000 and $378,000
during these periods due to an increase in the number of full time equivalent
employees to 36 as of June 30, 2002 from 32 as of June 30, 2001 and to other
annual salary increases. Equipment and occupancy expenses have remained steady
during these periods as branch operations have now been fully operational for a
year. Other operating expenses have increased by $6,000 and $66,000 during
these periods due to our overall growth.

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##### Table of Contents



We have provided for income taxes at an effective tax rate of 29% for the first
six months of 2002 as compared to 39% for the first six months of 2001. The
decrease is due to the nontaxability of income from life insurance policies.

We are not aware of any known trends, events or uncertainties, other than the
effect of events as described above, that will have or that are reasonably
likely to have a material effect on our liquidity, capital resources or
operations. We are also not aware of any current recommendations by the
regulatory authorities which, if they were implemented, would have such an
effect.

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PART II  OTHER INFORMATION




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



| | (a) |  | The annual meeting of the stockholders of the
Company was held on July 16, 2002.          
| | --- |  | ------------------------------------------------------------------------------------------
|
| | (b) |  | The following directors were selected at the
meeting to serve terms for the upcoming year:

|                                                                             |  |                                                                                        
|---------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------
|James B. Ballard
Jerry M. Boles
W.H. Britt
Richard F. Combs
William G. Hayes |  | Douglas A. Langley
Norris J. Nash
Joseph J. Powell
William S. Stanton, Jr.
Larry D. Key



| | (c) |  | An amendment to the 1998 Stock Option Plan to
increase the number of shares reserved for issuance from
180,000 shares to 400,000 shares was approved.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The shares represented at the meeting (1,149,013 or 67.15%)
voted as follows:                                                                        

|                    |  |              |           |              |  |  |           | 
|------------------- |  | ------------ | --------- | ------------ |  |  | --------- | 
|                    |  | Proposal (b) |           | Proposal (c)
|                    |  | # of         |           | # of        
|                    |  | Shares       |           | Shares      
|                    |  |              |           |             
|For                 |  |              | 1,147,913 |              |  |  | 1,079,952 | 
|Against or withheld |  |              | 1,100     |              |  |  | 69,061    | 
|                    |  |              |           |              |  |  |           | 
|Total               |  |              | 1,149,013 |              |  |  | 1,149,013 | 
|                    |  |              |           |              |  |  |           | 




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits.



| |      
| | -----
| | None.

(b)  Reports on Form 8-K.



| |      
| | -----
| | None.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.



|                      |                                      |                                                                                                     
|--------------------- | ------------------------------------ | ----------------------------------------------------------------------------------------------------
|                      | GBC BANCORP, INC.
      (Registrant)
|                     
|DATE:
August 12, 2002 | BY:                                  | /s/ Larry D. Key

Larry D. Key, President and Chief Executive Officer
(Principal Executive Officer) 
|                     
|DATE: August 12, 2002 | BY:                                  | /s/ John Hopkins

John Hopkins, Chief Financial Officer
(Principal Financial and Accounting Officer)

16