Borrower’s Woes Not Expected to Hurt GBC

One of General Bank’s largest borrowers is about to file for bankruptcy, but any potential write-off will not affect the bank’s capital levels, the bank’s Los Angeles-based holding company, GBC Bancorp, said. GBC Chairman Li-Pei Wu said the borrower, a computer-related company, had $12.6 million in outstanding loans backed by property and equipment appraised at $18 million. Wu said the property would be reappraised to determine if any write-off was necessary. “Sometimes the book [value] doesn’t matter,” Wu said. A partial or full write-off would hurt the company’s profitability but should not affect the bank’s capital or cushion against future losses, he said. Last month, General Bank said its third-quarter income rose 34% to $7.9 million from a year ago. As of Sept. 30, the bank had risk-based capital levels of 16.71% of assets and core capital of 12.51% of assets. Banks with risk-based capital above 10% and core capital above 6% are considered “well-capitalized” by federal bank regulators. General Bank, with 16 branch offices in Los Angeles, San Diego and Silicon Valley, has assets of $1.6 billion and specializes in commercial, real estate and construction lending.