By all accounts Li Pei Wu, chairman and chief executive of Los Angeles' General Bank, shouldn't have much to worry abouut. His bank has been one of the best performing and fastest growing in Southern California and has survived the real estate debacle there comparatively well.

But the pessimism in his voice shows how much the California economy has soured even the most successful community bankers. "I've been in banking for 25 years, most of them in Alaska," Mr. Wu said in a phone interview this week. "We went through the post-pipeline recession there and the oil shock of the 1970s, and I've been a banker here since 1982.

"I've never seen a situation as bad as this one."

General Bank, with $929 million in assets, has had a relatively good loan-loss history, compared with those of other banks its size in California. Though 35% of its assets are in commercial real estate and construction, General Bank ha just 3% in the nonperforming category. It remains very profitable, with a 1.58% ROA, and core capital is better than 8%. Mr. Wu attributes the performance partly to requiring two sources of repayment on most real estate loans.

Still, income for the first nine months was $9.9 million, down from #10.7 million a year before. Loan-loss provisions were $5 million, up $3 million, and chargeoffs $1.4 million, up from $800,000.

But the worst is behind General and its competitors, Mr. Wu said. "The situation appears to have stabilized," he said, but there are "still some problems among certain property segments, particularly hotel properties" and around San Diego.

Mr. Wu added that a full-blown recovery is not around the corner, and that when it will come depends on contingencies such as the success of the North American Free Trade Agreement and health-care reform. "Ironically, one thing that could help this region is the rebuilding of housing after the fires this fall," he said. "There are 1,300 houses or so that insurance money is going to pay to rebuild."

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