Asia may be in the midst of its worst financial crisis in decades, but L.A.-based Chinese-American banks are thriving.

The three largest local Chinese-American Banks East West Bank, Cathay Bancorp Inc. and GBC Bancorp each had strong earnings gains for the quarter ended Sept. 30, and each has posted double-digit growth since the start of the year.

"The Chinese-American banks cater to Los Angeles, not foreign nations," said Steve Didion, an analyst at Hoefer & Arnett. "Their stocks may have been battered by events in Asia, but their performance has not."

San Marino-based East West Bank, which has 23 branches, has shown the fastest growth reporting third-quarter net income of $4.7 million, compared with $3.1 million for the like period a year earlier. In the first three quarters of the year, the bank's net income increased 42 percent over the like period a year earlier.

"East West Bank's consistently strong results reflect our ongoing strategy to grow our niche high-margin business," said Dominic Ng, East West's chairman, president and CEO, in a statement when the results were released.

Ng was unable to comment on the bank's recent performance because East West is in the midst of a "quiet period" as it prepares to be listed on Nasdaq. Ng led a management buyout last summer, issuing stock to a pool of investors at that time that will soon be listed.

East West's key niches are commercial mortgage lending and trade financing, specifically imports.

GBC Bancorp, meanwhile, reported net income of $7.9 million, compared with $5.8 million in the like period a year ago. Cathay Bancorp, the holding company of Cathay Bank, posted net income of $6.3 million, up from $5.4 million a year earlier.

Despite the strong earnings, stock prices have reflected the volatility overseas.

GBC fell steadily from April, when it traded as high as $33, to September, when it was under $19. Last week it stood near $24. Cathay plunged from $48 in June to as low as $19 in September. Since then, it has rebounded to around $37.

One reason Chinese-American banks are doing so well is that they often steer clear of Asia.

East West Bank, for example, counts only one exporter among its loan recipients. And with the devaluation of many Asian currencies, the strong focus on local importers has paid off.

"Our customers benefit from Asia's disaster," said Li-Pei Wu, chairman and chief executive of GBC Bancorp. Importers account for about 90 percent of the bank's trade finance business, he said.

The fact that Taiwan and China have been less economically impacted than Korea and Thailand also works in favor of the local banks.

"The business we do is mostly importers of goods from Asia, mostly from China, Taiwan and Hong Kong," said Dunson Cheng, president of Cathay Bancorp.

The resilience is also rooted in strong ties to the local Chinese-American community. "We are financing immigrants," said Wu. "We are not financing foreign companies or the citizens of foreign countries."

For example, property prices in the San Gabriel Valley remain strong, in part due to money coming in from Taiwan and China. That's good news for the Chinese-American banks, which typically demand commercial property as collateral for the loans they make.

A strong property market not only improves the quality of outstanding loans, it helps support the bank's bottom line in case of default.

"You inevitably are going to have situations where you are going to have to foreclose," said Didion. "And when that happens, it's nice to have a strong property market to unload the real estate."

GBC's share price fell steeply last week after an L.A.-based high-tech firm to which it had loaned $12 million filed for bankruptcy. But the filing is not likely to have a "significant impact" on earnings, because the loan was guaranteed by commercial property worth $8 million and equipment with a book value exceeding $10 million.

Financing commercial real estate is a growing business for the Chinese-American Banks.

Cheng said his bank is in the midst of a promotional campaign aimed at securing more commercial mortgage business, which has become more plentiful following the retreat of so-called "conduit lenders" such as brokerages and insurance companies in recent months.

Meanwhile, the Chinese-American banks are attempting to diversify by moving into the general banking industry. This year, East West Bank has made a push into low-income housing developments that receive government tax credits.

And following the theory that entrepreneurial immigrants typically follow a similar business model, GBC is lending to immigrants from non-Asian countries.

"We no longer rely on our Asian connections," said Wu. "Our niche is to finance immigrants in general, because immigrants from Iran or Armenia have the same characteristics as immigrants from China and Taiwan."

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