EXHIBIT 99.1
Press Release dated April 23, 2003
For Information Contact | ||
At Greater Bay Bancorp: | At Silverman Heller Associates: | |
David L. Kalkbrenner, President and CEO | Philip Bourdillon/Gene Heller | |
(650) 614-5767 | (310) 208-2550 | |
Steven C. Smith, EVP, CAO and CFO | ||
(650) 813-8222 |
FOR IMMEDIATE RELEASE
GREATER BAY BANCORP REPORTS
NET INCOMEOF $25 MILLION
FORTHE FIRST QUARTEROF 2003
- Credit Quality Stable -
PALO ALTO, Calif., April 23, 2003– Greater Bay Bancorp (Nasdaq:GBBK), an $8.0 billion in assets financial services holding company, today announced results for the first quarter of 2003.
For the first quarter of 2003, Greater Bay Bancorp’sNET INCOME was $25.1 million, or $0.45 per diluted share, compared to $27.6 million, or $0.52 per diluted share, for the first quarter of 2002. Based onNET INCOMEfor the first quarter of 2003, Greater Bay Bancorp’s return on average equity was 14.66%, return on average assets was 1.28%, and efficiency ratio was 60.65% (55.28% excluding the income and expenses of ABD Insurance and Financial Services (“ABD”)). For the first quarter of 2002,NET INCOME resulted in a return on average equity of 20.38%, a return on average assets of 1.39%, and an efficiency ratio of 45.41% (42.91% excluding ABD).
At March 31, 2003, Greater Bay Bancorp’stotal assets were $8.0 billion. From March 31, 2002 to March 31, 2003,total loans grew to $4.7 billion, a 5% annualized growth rate,total investments, primarily mortgage-backed securities, decreased 21% to $2.6 billion, andtotal deposits increased 10% to $5.5 billion. The net deposit growth for the year included a reduction of $60.2 million of institutional deposits. Excluding that decrease, core deposits grew by $540.8 million or 13% in the first quarter of 2003 versus the first quarter of 2002.
Greater Bay Bancorp’snet interest marginfor the first quarter of 2003 was 4.33% compared to 4.36% for the fourth quarter of 2002 and 4.71% for the first quarter of 2002. While the average net interest margin remained relatively flat for the quarter, the end-of-period net interest margin declined to 4.20%.
Non-interest income for the first quarter of 2003 increased to $44.8 million from $22.6 million in the first quarter of 2002, primarily due to an additional two-and-one-half months of ABD revenue, as Greater Bay Bancorp acquired ABD in March 2002 under the purchase accounting method.
Operating expenses increased by $8.2 million during the first quarter of 2003 from the fourth quarter of 2002. Fourth-quarter operating expenses were reduced by a $5.0 million nonrecurring reduction in
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Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
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accrual estimates. On a comparable basis, operating expenses increased by approximately $3.2 million, which were primarily the result of the seasonal impact of payroll tax and benefit costs, and increased consulting and other expenses related to the Company’s focus on enterprise-wide risk management.
The decline in net income from the prior year was slightly more than anticipated due to a reduction in margin compression caused by the reduction in market interest rates, and an operating expense increase related to our previously identified emphasis on enterprise-wide risk management. The first quarter of 2003 also included two-and-one-half months of ABD operating expenses that were not included in the first quarter of 2002, due to the fact that ABD was acquired under the purchase accounting method on March 12, 2002. These operating expense increases were partially offset by increased non-interest income, including additional ABD revenue, and a lower provision for loan losses reflecting reduced net loan charge-offs.
Credit Quality Overview
Net charge-offs in the first quarter of 2003 were $6.3 million, or 0.54% of average annualized loans, compared to 1.40% a year ago. Nonperforming assets of $40 million for the first quarter of 2003 remained relatively flat compared to $38 million at the end of 2002. The ratio of nonperforming assets to total assets was 0.51% at March 31, 2003, compared to 0.47% at December 31, 2002 and 0.35% at March 31, 2002. The allowance for loan losses was $130 million or 2.74% of total loans at March 31, 2003, compared to $130 million or 2.70% at December 31, 2002 and $125 million or 2.78% at March 31, 2002.
During the past nine months, total commitments in our Shared National Credit (“SNC”) portfolio have been reduced by $102 million and the funded amount has been reduced by $75 million. The total SNC non-relationship portfolio as of March 31, 2003 had commitments of only $35 million and a funded amount of $32 million. Subsequent to quarter-end, the Company further reduced its SNC non-relationship loan portfolio by selling a loan with a net book value of $3.4 million for $3.5 million, resulting in a recovery of $100,000.
Mr. Kalkbrenner commented, “Despite the challenging economic environment, our relationship banking philosophy and effective credit management efforts have resulted in low levels of net charge-offs and nonperforming assets compared to our peer group. Our real estate loan portfolio continued to perform well during the first quarter of 2003, and with a strong loan-loss reserve, we believe we are well-positioned to weather current economic conditions.”
Interest Rate Risk Management
The Company continues to proactively manage its interest rate risk exposure in this uncertain economic market environment to ensure that it is positioned for long-term success compared to short-term earnings goals that would not be sustainable in a rising interest rate environment. The Company’s current strategy, which is continually reviewed in relationship to market conditions, includes a gradual reduction of the investment securities portfolio. This strategy will continue to reduce current net interest income in the near-term, but will position it to take advantage of an improving economy and rising market interest rates over the longer term. Because the balance sheet is
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Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
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positioned to be more asset sensitive, the Company’s net interest margin will continue to be pressured in the event of a continuing flat-to-declining interest rate environment.
Capital Overview
The capital ratios of Greater Bay Bancorp and each of its subsidiary banks continue to be above the well-capitalized guidelines established by the bank regulatory agencies. Earnings for the last four quarters, cumulatively, have exceeded a 20% return on average equity, and when combined with the Company’s interest rate risk strategy of reducing the investment securities portfolio, primarily mortgage-backed securities, increased the tangible equity to asset ratio to 6.69% at March 31, 2003 from 4.99% at March 31, 2002 and 6.40% at December 31, 2002. The Company’s leverage ratio also increased during the first quarter of 2003 to 9.18% from 8.61% in the fourth quarter of 2002 and 7.67% one year ago, while the total risk-based capital ratio increased to 13.34% at March 31, 2003 from 12.97% at December 31, 2002 and 11.99% at March 31, 2002.
While the strategic acquisition of ABD in 2002 caused an initial decline in our capital ratios, the Company’s ability to deliver above average shareholder returns during a period of economic stress, coupled with its balance sheet management strategy, has had the effect of increasing capital ratios to peer levels at the end of the first quarter of 2003. When the Company’s capital ratios are compared to those of the top 75 U.S. Banks (by asset size) at December 31, 2002, the Company (ranked 61st by asset size) had tangible equity, leverage, tier 1 and total risk-based capital ratios equal to or exceeding the top 75 U.S. Banks’ average ratios.
Mr. Kalkbrenner commented, “We realize capital management is a key element in managing a bank safely and that solid capital levels allow more flexibility in managing risk while ensuring that we focus on opportunities to enhance shareholder value.”
Regulatory Update
The Company continues to make progress in complying with all aspects of the Cure Agreement with the Federal Reserve Board and believes it is on schedule to meet all of the requirements of the agreement in a timely manner.
Outlook and Business Drivers
Considering the uncertainty of current economic conditions and its impact on the San Francisco Bay Area, the Company does not believe there is adequate visibility to provide specific guidance for the balance of 2003; however, we are providing the following outlook information:
• | Average loan growth – continued focus on quality and relationships – the Company anticipates that commercial loan growth will exceed peer competitors |
• | Average deposit growth – commensurate with its relationship philosophy, the Company is committed to expanding its deposit base and selectively adding new clients – the Company anticipates that growth will exceed peer competitors |
• | Net interest margin – continued pressure due to economic conditions – considering current economic outlook, the Company anticipates slight margin compression |
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Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
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throughout 2003 without market interest rate reductions – if market interest rates decline, the Company would expect continued margin pressure. For every 25 basis point decline in market interest rates, the net interest margin will decline 10 basis points to 20 basis points, depending on the mix of assets and liabilities |
• | Credit Quality – continued aggressive management of credit risk, and based on the current outlook, the Company believes net charge-offs will be in the range of 60 basis points to 70 basis points for the year 2003 |
• | Earnings – due to the potential impact of current economic conditions on business growth, and the uncertain impact of the market interest rate environment on the Company’s net interest margin, the Company believes it does not have the forward looking visibility to provide full-year earnings-per-share guidance. |
Greater Bay Bancorp through its eleven subsidiary banks, Bank of Petaluma, Bank of Santa Clara, Bay Area Bank, Bay Bank of Commerce, Coast Commercial Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank, Peninsula BankofCommerce and San Jose National Bank, along with its operating divisions, serves clients throughout Silicon Valley, San Francisco, the San Francisco Peninsula, the East Bay Region, the North Bay Region and the Central Coastal Region. ABD Insurance and Financial Services, a wholly owned subsidiary of Greater Bay Bancorp, provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States.
Investors have the opportunity to listen to the conference call live over the Internet through CompanyBoardroom at http://www.companyboardroom.com on Wednesday, April 23, 2003 at 8:00 a.m. Pacific time. Investors should go to the CompanyBoardroom web site 15 minutes prior to the start of the call, as it may be necessary to download audio software to hear the conference call. A replay of the conference call will be available on the CompanyBoardroom web site for 7 days and via telephone through April 30, 2003 by dialing (800) 642-1687 or (706) 645-9291 and providing Conference ID 9611736.
Safe Harbor
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements relate to the Company’s current expectations regarding future operating results, net interest margin, net loan charge-offs, growth in loans and deposits, compliance with the Cure Agreement and the strength of the local economy. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions at the international, national and local levels and increased competition among financial service providers on the Company’s results of operations, the Company’s ability to maintain its net interest spread, and the quality of the Company’s earning assets; (2) any difficulties that may be encountered in integrating newly acquired businesses and in realizing operating efficiencies; (3) government regulation; and (4) the other risks set forth in the Company’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2002.
For additional information and press releases about Greater Bay Bancorp, visit the Company’s web site athttp://www.gbbk.com.
-Financial Tables Follow-
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Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
Page 5 of 8
GREATER BAY BANCORP
MARCH 31, 2003 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
Mar 31 2003 | Dec 31 2002 | Sept 30 2002 | Jun 30 2002 | Mar 31 2002 | ||||||||||||||||
Cash and Due From Banks | $ | 243,684 |
| $ | 300,514 |
| $ | 271,774 |
| $ | 265,033 |
| $ | 206,487 |
| |||||
Investments |
| 2,556,106 |
|
| 2,576,986 |
|
| 2,966,302 |
|
| 3,181,788 |
|
| 3,215,112 |
| |||||
Loans: | ||||||||||||||||||||
Commercial |
| 1,974,656 |
|
| 2,067,142 |
|
| 2,007,389 |
|
| 1,997,960 |
|
| 1,901,577 |
| |||||
Term Real Estate—Commercial |
| 1,642,560 |
|
| 1,610,277 |
|
| 1,529,582 |
|
| 1,500,972 |
|
| 1,466,686 |
| |||||
Total Commercial |
| 3,617,216 |
|
| 3,677,419 |
|
| 3,536,971 |
|
| 3,498,932 |
|
| 3,368,263 |
| |||||
Construction & Land |
| 704,041 |
|
| 710,990 |
|
| 715,351 |
|
| 728,795 |
|
| 697,899 |
| |||||
Real Estate—Other |
| 247,335 |
|
| 251,665 |
|
| 282,894 |
|
| 292,474 |
|
| 251,021 |
| |||||
Consumer and Other |
| 165,650 |
|
| 166,331 |
|
| 174,797 |
|
| 178,809 |
|
| 196,111 |
| |||||
Deferred Loan Fees, Net |
| (15,044 | ) |
| (15,245 | ) |
| (16,102 | ) |
| (16,354 | ) |
| (14,917 | ) | |||||
Total Loans |
| 4,719,198 |
|
| 4,791,160 |
|
| 4,693,911 |
|
| 4,682,656 |
|
| 4,498,377 |
| |||||
Allowance for Loan Losses |
| (129,818 | ) |
| (129,613 | ) |
| (128,429 | ) |
| (126,092 | ) |
| (125,331 | ) | |||||
Total Loans, Net |
| 4,589,380 |
|
| 4,661,547 |
|
| 4,565,482 |
|
| 4,556,564 |
|
| 4,373,046 |
| |||||
Goodwill and Other Intangibles |
| 191,580 |
|
| 191,903 |
|
| 170,642 |
|
| 171,915 |
|
| 173,587 |
| |||||
Other Assets |
| 378,256 |
|
| 344,777 |
|
| 343,799 |
|
| 350,922 |
|
| 361,793 |
| |||||
Total Assets | $ | 7,959,006 |
| $ | 8,075,727 |
| $ | 8,317,999 |
| $ | 8,526,222 |
| $ | 8,330,025 |
| |||||
Deposits: | ||||||||||||||||||||
Demand, Non-Interest Bearing | $ | 1,114,447 |
| $ | 1,028,672 |
| $ | 984,327 |
| $ | 933,486 |
| $ | 934,150 |
| |||||
NOW, MMDA and Savings |
| 2,658,502 |
|
| 2,673,973 |
|
| 2,693,242 |
|
| 2,555,057 |
|
| 2,271,837 |
| |||||
Time Certificates, $100,000 and over |
| 803,328 |
|
| 829,717 |
|
| 809,519 |
|
| 807,033 |
|
| 826,178 |
| |||||
Other Time Certificates |
| 945,483 |
|
| 739,911 |
|
| 956,821 |
|
| 1,003,550 |
|
| 1,009,047 |
| |||||
Total Deposits |
| 5,521,760 |
|
| 5,272,273 |
|
| 5,443,909 |
|
| 5,299,126 |
|
| 5,041,212 |
| |||||
Other Borrowings |
| 1,335,406 |
|
| 1,737,243 |
|
| 1,840,423 |
|
| 2,209,356 |
|
| 2,313,428 |
| |||||
Trust Preferred Securities |
| 204,000 |
|
| 204,000 |
|
| 203,000 |
|
| 223,000 |
|
| 218,000 |
| |||||
Other Liabilities |
| 186,670 |
|
| 165,502 |
|
| 163,310 |
|
| 169,311 |
|
| 176,688 |
| |||||
Total Liabilities |
| 7,247,836 |
|
| 7,379,018 |
|
| 7,650,642 |
|
| 7,900,793 |
|
| 7,749,328 |
| |||||
REIT Preferred Securities |
| 15,650 |
|
| 15,650 |
|
| 15,650 |
|
| 15,650 |
|
| 15,650 |
| |||||
Convertible Preferred Stock |
| 80,441 |
|
| 80,900 |
|
| 72,500 |
|
| 72,500 |
|
| 72,500 |
| |||||
Shareholders’ Equity |
| 615,079 |
|
| 600,159 |
|
| 579,207 |
|
| 537,279 |
|
| 492,547 |
| |||||
| 695,520 |
|
| 681,059 |
|
| 651,707 |
|
| 609,779 |
|
| 565,047 |
| ||||||
Total Liabilities and Shareholders’ Equity | $ | 7,959,006 |
| $ | 8,075,727 |
| $ | 8,317,999 |
| $ | 8,526,222 |
| $ | 8,330,025 |
| |||||
Average Quarterly Total Loans, excluding Nonaccrual | $ | 4,716,930 |
| $ | 4,702,111 |
| $ | 4,641,680 |
| $ | 4,541,191 |
| $ | 4,439,279 |
| |||||
Average Quarterly Investments | $ | 2,412,634 |
| $ | 2,676,653 |
| $ | 3,183,293 |
| $ | 3,202,106 |
| $ | 3,098,595 |
| |||||
Average Quarterly Interest Earning Assets | $ | 7,129,564 |
| $ | 7,378,764 |
| $ | 7,824,973 |
| $ | 7,743,297 |
| $ | 7,537,874 |
| |||||
Average Quarterly Deposits | $ | 5,342,679 |
| $ | 5,534,618 |
| $ | 5,443,742 |
| $ | 5,194,555 |
| $ | 5,055,141 |
| |||||
Average Quarterly Interest Bearing Liabilities | $ | 6,080,198 |
| $ | 6,376,908 |
| $ | 6,715,291 |
| $ | 6,721,689 |
| $ | 6,438,579 |
| |||||
Average Quarterly Assets | $ | 7,939,810 |
| $ | 8,219,625 |
| $ | 8,474,179 |
| $ | 8,413,187 |
| $ | 8,028,660 |
| |||||
Average Quarterly Equity | $ | 694,109 |
| $ | 667,716 |
| $ | 632,589 |
| $ | 598,254 |
| $ | 549,300 |
| |||||
Total Regulatory Capital | ||||||||||||||||||||
Tier I or Leverage Capital | $ | 711,170 |
| $ | 691,048 |
| $ | 678,606 |
| $ | 640,207 |
| $ | 602,839 |
| |||||
Total Capital | $ | 785,488 |
| $ | 765,526 |
| $ | 753,986 |
| $ | 736,378 |
| $ | 701,039 |
| |||||
Nonperforming Assets | ||||||||||||||||||||
Nonaccrual Loans | $ | 37,285 |
| $ | 37,750 |
| $ | 47,695 |
| $ | 42,349 |
| $ | 27,837 |
| |||||
OREO |
| 3,000 |
|
| 397 |
|
| 930 |
|
| 509 |
|
| 972 |
| |||||
Total Nonperforming Assets | $ | 40,285 |
| $ | 38,147 |
| $ | 48,625 |
| $ | 42,858 |
| $ | 28,809 |
| |||||
Greater Bay Trust Company Assets | $ | 598,885 |
| $ | 607,244 |
| $ | 598,481 |
| $ | 641,884 |
| $ | 644,216 |
|
Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
Page 6 of 8
GREATER BAY BANCORP
MARCH 31, 2003 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
First Quarter 2003 | Fourth Quarter 2002 | Third Quarter 2002 | Second Quarter 2002 | First Quarter 2002(1) | ||||||||||||||||
Interest Income | $ | 107,344 |
| $ | 116,936 |
| $ | 128,259 |
| $ | 130,792 |
| $ | 129,425 |
| |||||
Interest Expense |
| 31,177 |
|
| 35,917 |
|
| 40,622 |
|
| 42,145 |
|
| 41,871 |
| |||||
Net Interest Income Before Provision for Loan Losses |
| 76,167 |
|
| 81,019 |
|
| 87,637 |
|
| 88,647 |
|
| 87,554 |
| |||||
Provision for Loan Losses |
| 6,495 |
|
| 7,000 |
|
| 27,776 |
|
| 9,000 |
|
| 16,000 |
| |||||
Net Interest Income After Provision for Loan Losses |
| 69,672 |
|
| 74,019 |
|
| 59,861 |
|
| 79,647 |
|
| 71,554 |
| |||||
Non-interest Income: | ||||||||||||||||||||
Insurance Agency Commissions & Fees |
| 30,642 |
|
| 23,664 |
|
| 26,359 |
|
| 27,601 |
|
| 10,891 |
| |||||
Depositor Service Fees |
| 2,831 |
|
| 2,786 |
|
| 2,771 |
|
| 2,762 |
|
| 2,828 |
| |||||
Loan and International Banking Fees |
| 2,038 |
|
| 2,309 |
|
| 2,124 |
|
| 2,273 |
|
| 2,527 |
| |||||
Trust Fees |
| 757 |
|
| 922 |
|
| 844 |
|
| 894 |
|
| 906 |
| |||||
ATM Fees |
| 406 |
|
| 574 |
|
| 629 |
|
| 628 |
|
| 583 |
| |||||
Gain on Sale of Loans |
| 1,543 |
|
| 1,999 |
|
| 2,049 |
|
| 210 |
|
| 496 |
| |||||
Gains on Investments and early retirement of CODES (2) |
| 2,023 |
|
| 2,247 |
|
| 14,835 |
|
| 3,004 |
|
| 347 |
| |||||
Other Income |
| 4,524 |
|
| 3,510 |
|
| 5,786 |
|
| 2,138 |
|
| 4,014 |
| |||||
Total Non-interest Income |
| 44,764 |
|
| 38,011 |
|
| 55,397 |
|
| 39,510 |
|
| 22,592 |
| |||||
Operating Expenses: | ||||||||||||||||||||
Salaries |
| 39,543 |
|
| 38,222 |
|
| 37,296 |
|
| 36,054 |
|
| 26,046 |
| |||||
Deferred Loan Origination Costs |
| (3,051 | ) |
| (3,580 | ) |
| (3,479 | ) |
| (3,745 | ) |
| (2,986 | ) | |||||
Benefits |
| 8,940 |
|
| 7,093 |
|
| 5,950 |
|
| 6,338 |
|
| 5,515 |
| |||||
Total Compensation and Benefits |
| 45,432 |
|
| 41,735 |
|
| 39,767 |
|
| 38,647 |
|
| 28,575 |
| |||||
Occupancy and Equipment |
| 9,642 |
|
| 10,225 |
|
| 10,035 |
|
| 10,267 |
|
| 8,838 |
| |||||
Professional Services & Legal |
| 4,962 |
|
| 2,835 |
|
| 2,462 |
|
| 1,915 |
|
| 1,689 |
| |||||
Telephone, postage and supplies |
| 1,746 |
|
| 2,020 |
|
| 1,827 |
|
| 1,918 |
|
| 1,633 |
| |||||
Marketing and promotion |
| 1,115 |
|
| 681 |
|
| 1,605 |
|
| 1,617 |
|
| 1,452 |
| |||||
Data Processing |
| 1,251 |
|
| 1,350 |
|
| 1,145 |
|
| 1,196 |
|
| 1,129 |
| |||||
Client Services |
| 344 |
|
| 480 |
|
| 433 |
|
| 557 |
|
| 647 |
| |||||
FDIC Insurance and Assessments |
| 498 |
|
| 491 |
|
| 409 |
|
| 417 |
|
| 463 |
| |||||
Other Real Estate, Net |
| 1 |
|
| 20 |
|
| 119 |
|
| — |
|
| — |
| |||||
Amortization of Intangibles |
| 1,671 |
|
| 1,658 |
|
| 1,650 |
|
| 1,650 |
|
| 562 |
| |||||
Other Expenses |
| 6,227 |
|
| 3,189 |
|
| 3,740 |
|
| 5,866 |
|
| 4,561 |
| |||||
| 72,889 |
|
| 64,684 |
|
| 63,192 |
|
| 64,050 |
|
| 49,549 |
| ||||||
Costs related to the Early Retirement of Trust Preferred Securities (TPS) |
| — |
|
| — |
|
| — |
|
| 975 |
|
| — |
| |||||
REIT Preferred Securities expense |
| 453 |
|
| 421 |
|
| 465 |
|
| 464 |
|
| 464 |
| |||||
Total Operating Expenses |
| 73,342 |
|
| 65,105 |
|
| 63,657 |
|
| 65,489 |
|
| 50,013 |
| |||||
Income Before Income Taxes |
| 41,094 |
|
| 46,925 |
|
| 51,601 |
|
| 53,668 |
|
| 44,133 |
| |||||
Income Tax Expense |
| 15,997 |
|
| 16,259 |
|
| 19,131 |
|
| 20,132 |
|
| 16,531 |
| |||||
Net Income | $ | 25,097 |
| $ | 30,666 |
| $ | 32,470 |
| $ | 33,536 |
| $ | 27,602 |
| |||||
(1) | The Company acquired ABD Insurance and Financial Services (ABD) on March 12, 2002 which is accounted for under the purchase accounting method. |
(2) | CODES (Zero Coupon Convertible Contingent Debt Securities) |
Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
Page 7 of 8
GREATER BAY BANCORP
MARCH 31, 2003 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
Mar 31 2003 | Dec 31 2002 | Sept 30 2002 | Jun 30 2002 | Mar 31 2002 | ||||||||||||||||
Loan to Deposit Ratio |
| 85.47 | % |
| 90.87 | % |
| 86.22 | % |
| 88.37 | % |
| 89.23 | % | |||||
Core Bank Loan to Deposit Ratio (1) |
| 69.75 | % |
| 74.24 | % |
| 70.53 | % |
| 71.49 | % |
| 72.26 | % | |||||
Ratio of Allowance for Loan Losses to: | ||||||||||||||||||||
Average Loans |
| 2.73 | % |
| 2.73 | % |
| 2.74 | % |
| 2.75 | % |
| 2.81 | % | |||||
End of Period Loans |
| 2.74 | % |
| 2.70 | % |
| 2.73 | % |
| 2.68 | % |
| 2.78 | % | |||||
Total Nonperforming Assets |
| 322.25 | % |
| 339.77 | % |
| 264.12 | % |
| 294.21 | % |
| 435.04 | % | |||||
Ratio of Provision for Loan Losses to Average Loans, annualized |
| 0.55 | % |
| 0.59 | % |
| 2.35 | % |
| 0.79 | % |
| 1.45 | % | |||||
Total Nonperforming Loans to Total Loans |
| 0.79 | % |
| 0.79 | % |
| 1.02 | % |
| 0.90 | % |
| 0.62 | % | |||||
Total Nonperforming Assets to Total Assets |
| 0.51 | % |
| 0.47 | % |
| 0.58 | % |
| 0.50 | % |
| 0.35 | % | |||||
Ratio of Quarterly Net Charge-offs to Average Loans, annualized |
| 0.54 | % |
| 0.49 | % |
| 2.15 | % |
| 0.72 | % |
| 1.40 | % | |||||
Ratio of YTD Net Charge-offs to YTD Average Loans, annualized |
| 0.54 | % |
| 1.19 | % |
| 1.43 | % |
| 1.05 | % |
| 1.40 | % | |||||
Loan Growth, current quarter to prior year quarter |
| 4.91 | % |
| 6.57 | % |
| 7.17 | % |
| 9.01 | % |
| 7.08 | % | |||||
Loan Growth, current quarter to prior quarter, annualized |
| -6.09 | % |
| 8.22 | % |
| 0.95 | % |
| 16.43 | % |
| 0.24 | % | |||||
Loan Growth, YTD annualized |
| -6.09 | % |
| 6.57 | % |
| 5.89 | % |
| 8.39 | % |
| 0.24 | % | |||||
Deposits Growth, current quarter to prior year quarter |
| 9.53 | % |
| 5.66 | % |
| 11.71 | % |
| 8.60 | % |
| 4.74 | % | |||||
Deposits Growth, current quarter to prior quarter, annualized |
| 19.19 | % |
| -12.51 | % |
| 10.84 | % |
| 20.52 | % |
| 4.16 | % | |||||
Deposits Growth, YTD annualized |
| 19.19 | % |
| 5.66 | % |
| 12.16 | % |
| 12.49 | % |
| 4.16 | % | |||||
Revenue Growth, current quarter to prior year quarter |
| 9.79 | % |
| 28.64 | % |
| 62.56 | % |
| 46.25 | % |
| 30.91 | % | |||||
Revenue Growth, current quarter to prior quarter, annualized (2) |
| 6.48 | % |
| -66.58 | % |
| 46.06 | % |
| 65.59 | % |
| 77.22 | % | |||||
Net Interest Income Growth, current quarter to prior year quarter |
| -13.01 | % |
| -2.20 | % |
| 13.38 | % |
| 18.79 | % |
| 20.46 | % | |||||
Net Interest Income Growth, current quarter to prior quarter, annualized (3) |
| -24.29 | % |
| -29.96 | % |
| -4.52 | % |
| 5.01 | % |
| 23.06 | % | |||||
Average Earning Assets to Average Total Assets |
| 89.80 | % |
| 89.77 | % |
| 92.34 | % |
| 92.04 | % |
| 93.89 | % | |||||
Average Earning Assets to Average Interest-Bearing Liabilities |
| 117.26 | % |
| 115.71 | % |
| 116.52 | % |
| 115.20 | % |
| 117.07 | % | |||||
Capital Ratios: | ||||||||||||||||||||
Tangible Equity to Tangible Assets (4) |
| 6.69 | % |
| 6.40 | % |
| 6.10 | % |
| 5.43 | % |
| 4.99 | % | |||||
Leverage |
| 9.18 | % |
| 8.61 | % |
| 8.17 | % |
| 7.77 | % |
| 7.67 | % | |||||
Tier 1 Risk Based Capital |
| 12.08 | % |
| 11.71 | % |
| 11.35 | % |
| 10.66 | % |
| 10.31 | % | |||||
Total Risk Based Capital |
| 13.34 | % |
| 12.97 | % |
| 12.61 | % |
| 12.26 | % |
| 11.99 | % | |||||
Risk Weighted Assets | $ | 5,887,156 |
| $ | 5,900,325 |
| $ | 5,979,732 |
| $ | 6,005,431 |
| $ | 5,845,147 |
| |||||
Book Value Per Share | $ | 11.88 |
| $ | 11.64 |
| $ | 11.26 |
| $ | 10.50 |
| $ | 9.75 |
| |||||
Tangible Book Value Per Share (4) | $ | 10.04 |
| $ | 9.79 |
| $ | 9.66 |
| $ | 8.86 |
| $ | 8.06 |
| |||||
Total Shares Outstanding |
| 51,774,074 |
|
| 51,577,795 |
|
| 51,442,027 |
|
| 51,192,359 |
|
| 50,501,861 |
| |||||
(1) | Includes the eleven core banking divisions and excludes ABD, Matsco, Capco, Pacific Business Funding and Corporate Finance. |
(2) | The revenue contraction in Q4 2002 compared to Q3 2002, annualized was primarily due to a decrease of $12.6 million in gains on investments and early retirement of CODES. |
(3) | The net interest income contraction in the Q1 2003 and Q4 2002 compared to prior quarters, annualized was primarily due to a reduction in investments due to de-leveraging the balance sheet. |
(4) | Tangible Equity includes Shareholders' Equity, Convertible Preferred Stock and REIT Preferred Securities, less Goodwill and Other Intangibles. |
Greater Bay Bancorp’s First Quarter 2003 Earnings Results
April 23, 2003
Page 8 of 8
GREATER BAY BANCORP
MARCH 31, 2003 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
First Quarter 2003 | Fourth Quarter 2002 | Third Quarter 2002 | Second Quarter 2002 | First Quarter 2002 | ||||||||||||||||
GAAP EPS | ||||||||||||||||||||
Net Income Per Share | ||||||||||||||||||||
Basic (1) | $ | 0.46 |
| $ | 0.57 |
| $ | 0.61 |
| $ | 0.64 |
| $ | 0.54 |
| |||||
Diluted (2) | $ | 0.45 |
| $ | 0.57 |
| $ | 0.60 |
| $ | 0.62 |
| $ | 0.52 |
| |||||
Weighted Average Common Shares Outstanding |
| 51,735,000 |
|
| 51,547,000 |
|
| 51,339,000 |
|
| 50,685,000 |
|
| 50,204,000 |
| |||||
Weighted Average Common & Common Equivalent Shares Outstanding (2) |
| 52,161,000 |
|
| 54,135,000 |
|
| 54,504,000 |
|
| 54,500,000 |
|
| 53,026,000 |
| |||||
GAAP Ratios | ||||||||||||||||||||
Return on Period Average Assets, annualized |
| 1.28 | % |
| 1.48 | % |
| 1.52 | % |
| 1.60 | % |
| 1.39 | % | |||||
Return on Period Average Equity, annualized |
| 14.66 | % |
| 18.22 | % |
| 20.36 | % |
| 22.48 | % |
| 20.38 | % | |||||
Net Interest Margin – Average Earning Assets |
| 4.33 | % |
| 4.36 | % |
| 4.44 | % |
| 4.59 | % |
| 4.71 | % | |||||
Operating Expense Ratio |
| 3.75 | % |
| 3.14 | % |
| 2.98 | % |
| 3.12 | % |
| 2.53 | % | |||||
Efficiency Ratio |
| 60.65 | % |
| 54.70 | % |
| 44.50 | % |
| 51.10 | % |
| 45.41 | % | |||||
NON-GAAP Ratios | ||||||||||||||||||||
Net Interest Margin – Average Earning Assets (Excluding TPS interest |
| 4.61 | % |
| 4.61 | % |
| 4.68 | % |
| 4.85 | % |
| 4.98 | % | |||||
TPS Interest Expense (3) | $ | 4,807 |
| $ | 4,635 |
| $ | 4,665 |
| $ | 5,025 |
| $ | 4,980 |
| |||||
Efficiency Ratio (Excluding the operating results of ABD) |
| 55.28 | % |
| 44.85 | % |
| 35.52 | % |
| 43.93 | % |
| 42.91 | % | |||||
ABD Total Revenue | $ | 30,862 |
| $ | 23,698 |
| $ | 26,569 |
| $ | 28,078 |
| $ | 11,057 |
| |||||
ABD Operating Expense | $ | 23,556 |
| $ | 22,345 |
| $ | 22,288 |
| $ | 21,520 |
| $ | 7,495 |
|
(1) | Net income available to common shareholders is based on total net income less preferred dividends of $1.5 million for Q1 2003, $1.3 million for Q4, Q3 and Q2 2002, and $263 thousand for Q1 2002. |
(2) | The convertible preferred stock was considered anti-dilutive in Q1 2003, whereby the preferred dividends of $1.5 million divided by the common stock equivalent of the convertible preferred stock of 2,785,000 shares was greater than the diluted earnings per share. Net income available to common shareholders is based on total net income less preferred dividends of $1.5 million for Q1 2003. |
(3) | TPS (Trust Preferred Securities) |