GBC Bancorp Announces Quarterly Earnings of $7.0 Million, or $0.53 Diluted Earnings Per Share; Year-to-Date Net Income of $13.6 Million, or $1.01 Diluted Earnings Per Share

Business Wire, July 9, 1999

LOS ANGELES--(BUSINESS WIRE)--July 9, 1999--

GBC Bancorp, parent company of General Bank, Friday announced net income for the quarter ended June 30, 1999 of $7,016,000, or $0.53 diluted earnings per share, as compared to $6,843,000, or $0.48 diluted earnings per share for the second quarter of 1998.

Net income for the six months, 1999, was $13,581,000, or $1.01 diluted earnings per share, as compared to $13,474,000, or $0.94 diluted earnings per share, for the same period of 1998. Diluted earnings per share for the six months ended June 30, 1999, increased 7.4 percent from the comparable period of 1998.

The $107,000, or 0.8 percent, increase in year-to-date net income from the same period of 1998 was caused by the combined $2.9 million increase of net interest income and non-interest income being offset by a $2.0 million increase in the provision for credit losses and a $0.6 million increase in non-interest expense. Return on average equity for the quarter was 18.0 percent, as compared to 17.4 percent for the same period of 1998. Return on average equity for the year was 17.2 percent, as compared to 17.6 percent for the same period of 1998.

As previously announced, General Bank has taken title to the primary collateral from a $12.6 million loan placed on non-accrual in November, 1998. This caused an increase of OREO of $8.6 million and a $2.3 million charge-off was also recorded.

"We are pleased that net income remained at a high level and that the loan portfolio has continued to grow," said Li-Pei Wu, chairman and chief executive officer. "Total assets at quarter-end were $1,707 million, marking the first time assets have exceeded $1,700 million. Total deposits were $1,437 million, also a record, and total stockholders' equity was $152 million. Gross loans and leases were a record $849 million at quarter-end, and were up $25 million from March 31, 1999."

On June 11, 1999, the company announced a Dutch Auction self-tender offer for up to 2 million shares of the company's common stock, representing approximately 16 percent of its outstanding shares. The tender price range will be from $18 to $22 per share. This offer was commenced on June 16, 1999, and is scheduled to expire at 11:59 p.m. EDT on Wednesday, July 14, 1999, unless extended by the company.

The Tier 1 leverage ratio at June 30, 1999, was 9.23 percent, as compared to 9.75 percent at Dec. 31, 1998. The company's capital ratios remain well in excess of regulatory requirements. Book value per share at June 30, 1999 was $11.89, unchanged from Dec. 31, 1998.

For the quarter ended June 30, 1999, net interest income was $17,570,000, up 5 percent from the $16,684,000 for the same period of 1998. Year-to-date net interest income was $35,297,000, which was $2,644,000, or 8.1 percent, higher than the same period of 1998. This was caused by an increase in average earning assets of $134 million, or 8.9 percent. The net interest spread in the second quarter of 1999 of 3.52 percent was lower than the 3.64 percent realized in the first quarter of 1999, due primarily to a decline in the yield on earning assets.

The net interest spread for the six months ended June 30, 1998 was about the same as the spread for the comparable period of 1998. A 48 basis point decline of the yield on earning assets from 1998 to 1999 was virtually matched by a 49 basis point decline in the cost of funds.

Non-interest income was $1,943,000 in the second quarter, 1999, up $131,000, or 7.2 percent, from the same period of 1998. For the year, non-interest income was $3,795,000, up $210,000, or 5.9 percent, from the same period of 1998.

Total non-interest expense was $7,781,000 for the second quarter, 1999, up $275,000, or 3.7 percent, from the same period of 1998. For the year, non-interest expense was $15,376,000, up $566,000, or 3.8 percent, from the same period of 1998. For the year, the company's efficiency ratio (non-interest expense divided by the sum of net interest income plus non-interest income) was 39.3 percent, as compared to 40.9 percent for the same period of 1998.

Loans and leases were $849 million at June 30, 1999, up $60 million from Dec. 31, 1998. Average earning assets for the quarter were up $118 million, or 7.7 percent, from the same period of 1998, with an increase in average loans and leases of $142 million and an increase of average securities of $9 million, which were partially offset by a decline in average fed funds sold and securities purchased under agreements to resell of $32 million.

A $500,000 provision for credit losses was recorded for the second quarter, 1999, bringing the year-to-date expense to $2,000,000. This compares to no expense recorded for the first six months of 1998. Net charge-offs were $1.9 million for the second quarter, 1999, bringing the year-to-date net charge-offs to $2.3 million. Non-accrual loans and net other real estate owned on June 30, 1999 was $53.3 million, down $2.9 million from March 31, 1999, and up $25.6 million from the $27.7 million on Dec. 31, 1998. The allowance for loan losses was $19.1 million at June 30, 1999, as compared to $19.4 million at Dec. 31, 1998. The allowance was 2.25 percent of loans and leases at June 30, 1999 and 2.46 percent at Dec. 31, 1998.