Magazine article American Banker

L.A. Bank's Expansion Plan Is Stalled by Fed

Magazine article American Banker

L.A. Bank's Expansion Plan Is Stalled by Fed

Article excerpt

GBC Bancorp, a Los Angeles bank that is trying to expand beyond its Taiwanese roots, suffered a setback when the Federal Reserve rejected an acquisition plan.

The Fed this month denied GBC's proposed acquisition of First Public Savings Bank, Los Angeles, for reasons that are still unclear.

GBC, owner of the $1 billionasset General Bank, hoped that the First Public acquisition would be the beginning of a strategy to capitalize on the consolidation wave expected to sweep the state's community banks. The Fed's rejection of the merger plan could hamper expansion efforts down the road.

"We did ask them to withdraw their application," a spokesman for the Federal Reserve Bank of San Francisco said of the merger. "As for the reasons, you'll have to ask the company."

Companies, Fed Don't Agree

But neither company disclosed specifics about the Fed's action.

"We do not agree with our regulators' recommendation," said GBC chairman and chief executive Li-Pei Wu. "But [we] recognize the difficulty of obtaining Federal Reserve approval in the current regulatory environment."

In a written statement, GBC said the Federal Reserve had recommended that GBC not pursue its application to acquire the $250 million-asset First Public, but instead focus its management and financial resources on its subsidiary, General Bank.

Satisfactory CRA Rating

The bank has had Community Reinvestment Act problems in the past, but currently has a satisfactory rating from the Federal Deposit Insurance Corp. …

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