Exhibit 99.2
Greater Bay Bancorp slide presentation
for September 19, 2003 RBC Capital Markets conference
Greater Bay Bancorp
RBC Capital Markets
Financial Institutions Conference
September 17-19, 2003
Greater Bay Bancorp
Certain matters discussed in this presentation 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, asset quality, level of loan loss reserves, growth in loans and
deposits, the impact of the S & C acquisition 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 S&C 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.
Company Snapshot
$15 million
Perpetual Preferred
$80 million
Convertible Preferred
Preferred Equity:
$639 million
Common Equity
$111 million
LTM Net Income
$8.1 billion
Assets
$1.1 billion
Market Value*
52 million
Shares Outstanding
GBBK
Nasdaq NM
Greater Bay Bancorp
Company Name
* Calculated using closing price of GBBK stock on 9/4/03
Franchise Overview
Regional Community Banking
Formed in late 1996 with merger of
Cupertino National Bancorp and Mid-
Peninsula Bancorp.
Currently largest independent
community bank holding company
headquartered in Northern California.
Diversified financial services provider.
Proven Ability to Manage
Acquired Businesses
Formation of GBBK $0.6 B
Acquired Growth $3.0 B
Organic Growth $4.5 B
Total Assets $8.1 B
Acquisition Strategy
“Ring the Bay”
Greater Bay now has a presence in all of the key
sub-markets of the San Francisco Bay Area
2003
1996
Successful Acquisition Strategy
14 acquisitions completed since formation, adding $3.0 billion
in assets and extending market reach throughout the San Francisco Bay Area
N/A *
ABD Insurance and Financial Services
03/02
N/A**
Sullivan & Curtis Insurance Brokers
07/03
$285
The Matsco Companies
11/00
$680
San Jose National Bank
12/01
$15
CAPCO Financial Company, Inc.
03/01
$200
Bank of Petaluma
10/00
$400
Bank of Santa Clara
07/00
$400
Coast Commercial Bank
05/00
$250
Mt. Diablo National Bank
01/00
$200
Bay Bank of Commerce
10/99
$200
Bay Area Bank
05/99
$15
Pacific Business Funding
08/98
$150
Golden Gate Bank
05/98
$200
Peninsula Bank of Commerce
12/97
Assets at
Date of Acquisition
$ in Millions
* Gross annual premiums of $1 billion ** Gross annual revenue of $10 million
Diversified Financial Services Provider
Greater Bay Bancorp
Regional
Banking
ABD
Insurance
Specialty
Finance
Trust
Premiums > $1
billion *
Revenue >
$120 million
Offering P&C,
D&O,
Employee
Benefits, 401k
Products
* No underwriting risk
11 Banks
45 Offices
Local Client
Decision
Making
Local
Management
and Board
International/
Trade Finance
Leasing
Factoring
Asset Based
Lending
SBA Lending
Wealth
Management
Private
Banking
Client Focus
Small and mid-sized businesses
Credit needs of $2-$10 million
Professional services firms
Private banking and wealth management
Custom banking for individuals
Relationship-driven real estate investors
and operators
ABD Insurance and Financial Services
We completed the acquisition of ABD
Insurance and Financial Services (the 20th
largest commercial insurance brokerage
agency in the country) in March 2002.
It has been a very successful partnership
and, during the first two quarters of 2003,
ABD provided $58.9 million in fee income.
No underwriting risk.
Product Focus
P & C
D & O
Employee benefits
401K products
Great opportunity for cross selling relationships.
ABD completed the acquisition of Sullivan and
Curtis Insurance Brokers in July 2003. The firm
reports annual revenues of approximately $10
million. The acquisition will be neutral to 2003
earnings and marginally accretive to 2004
earnings.
ABD Insurance and Financial Services
Experienced Senior Management Team
25+
Peggy Hiraoka
EVP, Human Resources
15+
Shawn E. Saunders
EVP, Finance and Accounting
20+
Kenneth Shannon
Chief Risk Officer
30+
Kimberly Burgess
Chief Administrative Officer
25+
Gregg Johnson
Chief Information Officer
25+ Avg.
Community Bank Boards of Directors
90 diversified and seasoned directors
GBB Board of Directors
18 diversified and seasoned directors
Community Bank Presidents
Chief Financial Officer
Chief Operating Officer
Chief Executive Officer
Position
25+
Steven C. Smith
25+ Avg.
20+ Avg.
25+
Byron A. Scordelis
35+
David L. Kalkbrenner
Years Experience
Name
Q2 2003 Financial Highlights
Net Income - $23 million
EPS - $0.41
Return on Average Assets of 1.15%
Return on Average Tangible Assets of 1.18%
Return on Average Common Equity* of 14.62%
Return on Average Tangible Equity** of 17.69%
* Average common equity excludes average convertible preferred stock of $80,441M
** Average tangible equity includes average convertible preferred stock of $80,441M and
excludes average intangibles of $190,440M
Q2 2003 Financial Highlights
Non-interest income $42 million – 36% of Total
Revenue
Core Deposit Growth – 8% year over year
Loan Growth – 1% year over year
Total Assets - $8.1 billion
Despite the challenging economic environment,
our relationship banking philosophy and effective
credit management efforts have resulted in levels
of net charge-offs and non-performing assets in
line with our peer group.
Current outstandings in the non-relationship SNC
portfolio are $28 million and the SNC allowance
for loan and lease losses is $12 million.
Credit Quality
* Custom peer group defined by GBBK – see schedule A
Credit Quality
Q2 2003
Trends in the Level of
Allowance and Charge-offs
Net Charge-offs Peaked in 2002
and are Trending Down
Net Interest Margin
Management in a Volatile Environment
Net Interest Margin
Impact of Further Market Interest Rate Reduction
GBBK is asset sensitive.
Over the last year, MBS portfolio has declined
approximately $675 million as planned.
Investment strategy continues to be to invest in
short duration securities.
Give up current yield for stable value
Position Company to take advantage of rising rates
in 2004 and beyond
Diversified Real Estate Portfolio
Loans by Owner Occupied
RE Term
$1.7 billion, 37% of Loans
RE Construction
$0.5 billion, 14% of Loans
Data as of 6/30/03
Diversified Real Estate Portfolio
Loans by Location (County)
RE Term
$1.7 billion, 37% of Loans
RE Construction
$0.5 billion, 14% of Loans
Financial data as of 6/30/03
Diversified Real Estate Portfolio
Loans by Classification
Data as of 6/30/03
RE Term
$1.7 billion, 37% of Loans
RE Construction
$0.5 billion, 14% of Loans
Capital Strength
13.49%
11.07%
7.97%
7.24%
Peer
Group**
6/30/03
13.55%
12.29%
9.29%
6.91%
GBBK*
6/30/03
10.00%
6.00%
5.00%
N/A
Minimum to be
Well-Capitalized
Leverage Ratio
Total Risk Based Capital
Tier I Risk Based Capital
Tangible Equity Ratio
* Tangible Equity includes Shareholders' Equity, Convertible Preferred Stock and REIT Preferred
Securities, less Goodwill and Other Intangibles.
** Custom peer group defined by GBBK – see schedule A
Our emphasis on increasing capital ratios
during the past year has resulted in a
tangible equity to asset ratio of 6.91%, up
from 5.43% at June 30, 2002.
All other capital ratios are substantially in
excess of regulatory well capitalized
guidelines and peers.
Capital Strength
Economic Capital as a Foundation for
Enterprise-wide Risk Management
We have developed an economic capital allocation
model that incorporates economic factors, historical
factors and our actual operating results to measure
our capital levels in relation to our risk profile.
Results show returns on risk adjusted capital by
business line.
Results provide framework, based on risk appetite
correlated to ratings targets, to determine capital
GBBK can utilize to enhance shareholder returns.
Required Economic Capital Formulated
to GBBK Risk Appetite
This chart provides an initial look at
GBBK’s economic capital position vs.
the economic capital required to
achieve various credit ratings.
GBBK’s Tangible Equity does not
include the value of ABD which
currently is locked up in goodwill, but is
worth more today than when we
acquired ABD in early 2002.
GBBK’s Tangible Equity does not
include an allocation of loan loss
reserves in excess of expected losses –
a very conservative assessment.
(1) Data as of 12/31/02
Return on Risk Adjusted Capital
by Business Unit
19%
$23.1
$489
Total Greater Bay
0%
0
54
Excess Capital
21%
23.1
435
Total Required
9%
0%
0.9
0
40
0
Matsco
Credit Provision in Excess
of Expected Loss
33%
0.2
2
Greater Bay Trust
37%
3.0
32
ABD
21%
$19.0
$361
Core Banks
Risk Adjusted
Return on
Capital (3)
Q2’03
Net
Income (2)
Economic
Capital
Required (1)
($ in millions)
(1)
Required for A / A2 rating
(2)
Net Income rounded to nearest million
(3)
Annualized
Looking Forward:
Our Strategy for 2004 and Beyond
Our Future is a
Reaffirmation of Our Past
The Bay Area economy is mired in an
economic slump which has affected our
state and our nation, but
We believe that this remains one of the
greatest economic regions in the world.
And the Bay Area will remain the focal point
of our strategic future.
“ We are heartened that expectations for the
next six months have improved and are
keeping our fingers crossed that this
growing confidence can produce capital
spending to grease the gears of the
economy and jumpstart positive growth.”
Bay Area Council
Business Confidence Survey
May 2003
Bay Area Dominates Venture
Investment
Regional Investment in the US in Q203 ($1.4 billion)
Source: PwC/Venture Economics/National Venture Capital Association MoneyTreeTM Survey
Our Future is a
Reaffirmation of Our Past
We believe that relationship banking rather
than transactional banking must remain at the
core of our business model.
The local market knowledge of our community
bankers provide an advantage that is difficult to
match.
The strength of our credit portfolio affirms this
belief and defies the skeptics.
We believe that an uncompromising focus on
quality will differentiate us from our peers and is
the key that will deliver superior long-term value
to our shareholders
Credit quality
Operating quality
Attention to detail in serving our clients
Our Future is a
Reaffirmation of Our Past
We understand that this is a business and that
we work for our shareholders.
We have no divine right to exist as a business.
Most efficient competitor sets profit margin for
everyone else.
Our focus must be on factors that deliver quality
results.
Selling money is a commodity business providing
exceptional service is a value business.
Our Future is a
Reaffirmation of Our Past
Strategic Goals
Reaching greater critical mass in
the Company's market areas.
Generating increased fee income through
cross-selling broader services.
Continue to diversify revenue stream.
Continue to mitigate and proactively
manage risk.
Opportunistic market expansion.
Deposit Market Share
Comparable Bay Area Markets
December 1999 to June 2002
8.71%
11.03%
8.56%
10.66%
Wells Fargo Bank
10.41%
11.06%
16.51%
16.90%
Bank of America
15.61%
15.08%
13.12%
6.76%
Greater Bay Bancorp
6/02
12/01
12/00
12/99
Business Savings/MMA
Strategic Goals
Reaching greater critical mass in the
Company's market areas.
Generating increased fee income
through cross-selling broader
services.
Continue to diversify revenue stream.
Continue to mitigate and proactively
manage risk.
Opportunistic market expansion.
Q2 2003 Fee Income
$ in Millions
International/Loan Fees $2.4
Account Analysis/Service Fees 3.0
Insurance Agency Fees 27.9
Trust Fees 0.8
$34.1
Strategic Goals
Reaching greater critical mass in the
Company's market areas.
Generating increased fee income through
cross-selling broader services.
Continue to diversify revenue
stream.
Continue to mitigate and proactively
manage risk.
Opportunistic market expansion.
Non-Interest Income (1)
(1)
As a result of the ABD acquisition in March 2002, the Company’s 2002 results
included insurance agency commissions and fees totaling $88.5 million. There were
no such insurance agency commissions in 2001.
36.4%
$42.3
31.0%
$155.5
12.7%
$44.8
% of Total
Revenue
Total $
% of
Total
Revenue
Total $
% of
Total
Revenue
Total $
Q2 2003
2002
2001
Grow insurance agency fees
Expand wealth management capability
Strategic Goals
Reaching greater critical mass in the
Company's market areas.
Generating increased fee income through
cross-selling broader services.
Continue to diversify revenue stream.
Continue to mitigate and
proactively manage risk.
Opportunistic market expansion.
Mitigate and Proactively Manage Risk
Enterprise-wide Risk Management
Economic Capital Analysis
Concentration Analysis
Focus on Relationships
Strategic Goals
Reaching greater critical mass in the
Company's market areas.
Generating increased fee income through
cross-selling broader services.
Continue to diversify revenue stream.
Continue to mitigate and proactively
manage risk.
Opportunistic market expansion.
Opportunistic Market
Expansion
De novo regional offices
Upscale retail banking
Acquisitions of community banks,
insurance agencies and wealth
management companies
Market Concerns About GBBK
The Northern California economy, the state
deficit, the dot com fall-out and the technology
industry in Silicon Valley.
Real estate valuations, lease rates and vacancy
factors in the San Francisco Bay Area.
Impact of Fed rate decreases on net interest
margin.
Market perception of GBBK’s credit quality and
overall risk profile.
Guidance
Loan growth
Focus on quality and relationships
Business loan growth is expected to
increase slightly in the last half of 2003
Deposit growth
Committed to expanding deposit base and
selectively adding new clients that fit
5% to 10% annualized growth for the
remainder of the year
Net interest margin
Continued pressure due to economic
conditions and competitive environment
For every 25 bps decline in market
interest rates, net interest margin is
expected to decline approximately 10-20
bps, depending on the mix of assets and
liabilities
Credit quality – net charge offs
estimated to be in the 60-70 bps range
for 2003
Guidance
Well Positioned for the
Economic Upturn
Our franchise provides competitive
opportunities
Asset sensitive balance sheet
Internal capital generation will support future
growth
Stable credit quality
Increase in fee income from insurance agency
and wealth management
Increased business activity will bring higher
commercial loan volume
No residential mortgage company
Schedule A – Custom Peer Group
Allfirst Financial, Inc.
Fulton Financial Corporation
Associated Banc-Corp
Greater Bay Bancorp
BancorpSouth, Inc.
Hibernia Corporation
Bank of Hawaii Corporation
Hudson United Bancorp
BOK Financial Corporation
International Bancshares Corporation
Bremer Financial Corporation
Mercantile Bankshares Corporation
Central Bancompany
Old National Bancorp
Citizens Banking Corporation
Provident Financial Group, Inc.
City National Corporation
RBC Centura Banks, Inc.
Colonial BancGroup, Inc.
Riggs National Corporation
Commerce Bancorp, Inc.
Sky Financial Group Inc.
Commerce Bancshares, Inc.
South Financial Group, Inc. (The)
Community First Bankshares, Inc.
Southwest Bancorporation of Texas, Inc.
Cullen/Frost Bankers, Inc.
Susquehanna Bancshares, Inc.
F.N.B. Corporation
Synovus Financial Corp.
FBOP Corporation
TCF Financial Corporation
First Banks, Inc.
Trustmark Corporation
First Citizens BancShares, Inc.
UMB Financial Corporation
First Midwest Bancorp, Inc.
United Bankshares, Inc.
First National of Nebraska, Incorporated
Valley National Bancorp
First Virginia Banks, Inc.
Whitney Holding Corporation
Firstbank Holding Company of Colorado
Wilmington Trust Corporation
FirstMerit Corporation