EXHIBIT 99.1
Text of Press Release dated July 21, 2004
For Information Contact | ||
At Greater Bay Bancorp: | At Silverman Heller Associates: | |
Byron A. Scordelis, President and CEO | Philip Bourdillon/Gene Heller | |
(650) 614-5751 | (310) 208-2550 | |
James S. Westfall, EVP and CFO | ||
(650) 813-8275 |
FOR IMMEDIATE RELEASE
GREATER BAY BANCORP REPORTS SECOND QUARTER 2004
NET INCOMEOF $24.5 MILLIONOR $0.43PERSHARE
NET INCOME GREWBY 6% FROM LAST YEAR WITH STRONG CREDIT QUALITY RESULTS
PALO ALTO, Calif., July 21, 2004– Greater Bay Bancorp (Nasdaq:GBBK), a $7.6 billion in assets financial services holding company, today announced results for the second quarter and six months ended June 30, 2004.
For the second quarter of 2004, Greater Bay Bancorp’snet income was $24.5 million, or $0.43 per diluted share, compared to $24.9 million, or $0.43 per diluted share, for the first quarter of 2004, and $23.1 million, or $0.41 per diluted share, for the second quarter of 2003. For the first six months of 2004,net income was $49.4 million, or $0.86 per diluted share, compared to $48.2 million, or $0.86 per diluted share for the first six months of 2003.
Return on average common equity for the second quarter of 2004 rose to 15.46% from 14.82% in the first quarter of 2004, and 14.62% in the second quarter of 2003.Return on average assets for the second quarter of 2004 was 1.29% compared to 1.32% in the first quarter of 2004, and 1.15% in the second quarter of 2003. Return on average common equity for the first six months of 2004 was 15.13% compared to 15.59% for the same period in 2003. Return on average assets rose to 1.31% for the first six months of 2004 vs. 1.21% for the first six months in 2003.
“We are pleased to report another quarter of solid operating performance,” commented Byron A. Scordelis, President and Chief Executive Officer of Greater Bay Bancorp. “Attrition in our loan portfolio has abated and, while not an absolute predictor of future results, we currently perceive an increased level of potential new borrowing activity within our client base. Both results and trends in our key credit metrics were excellent for the period, expenses were well-controlled, and we took effective managerial steps to address the impact of changes in the interest rate environment on our financial position.”
Non-Interest Income
Non-interest income for the second quarter of 2004 increased to $46.6 million from $42.3 million in the second quarter of 2003. This increase was primarily attributable to an increase in insurance commissions and fees of $5.0 million in the Company’s insurance subsidiary, ABD Insurance and Financial Services (“ABD”). This increase was partially offset by a decrease of $1.0 million in the gain on sale of investment securities in the second quarter of 2004 compared to the same period in 2003.
Non-interest income during the second quarter of 2004 declined by $0.9 million from the $47.5 million reported in the first quarter of 2004. This decrease was largely attributable to a cyclical reduction of $1.7 million in ABD commissions and fees, which was partially offset by an increase of $0.8 million in bank non-interest revenue.
For the first half of 2004, non-interest income rose to $94.1 million from $87.1 million for the same period one year ago. This growth included an increase of $9.2 million in ABD commissions and fees, which was partially offset by a decline of $2.3 million in bank non-interest revenue.
Non-interest income as a percentage of total revenues increased in the second quarter of 2004 to 39.3% compared to 38.6% in the first quarter of 2004, and 36.4% in the second quarter of 2003. For the first half of 2004, this figure stood at 39.0%, which reflected an increase from 36.7% for the same period in 2003.
Operating Expenses
Operating expenses for the second quarter of 2004 increased by $4.8 million to $77.1 million relative to the second quarter of 2003. The major component of this increase was a rise of $5.4 million in expenses at ABD, which were partially offset by a $0.6 million decline in bank-level expenses.
Operating expenses decreased during the second quarter of 2004 by approximately $3.0 million compared to the first quarter of 2004. This decrease was largely due to a decline of $2.5 million in employee benefits costs that reflected the seasonality of payroll tax expenses.
Operating expenses for the first half of 2004 rose by $11.5 million compared to the same period in 2003. This growth was largely attributable to an increase in ABD expenses of $10.0 million.
Balance Sheet
At June 30, 2004, Greater Bay Bancorp’s total assets were $7.6 billion, total investments were $2.3 billion, total loans were $4.4 billion and total deposits were $5.3 billion.
Total loans grew by $6.8 million at June 30, 2004 from the March 31, 2004 level. This figure includes the impact of the sale of Matsco loans totaling approximately $14.4 million and the write-down of corporate finance loans of $2.0 million which occurred during the second quarter in this discontinued business area. Excluding these items, total loans increased by $23.2 million, an annualized rate of 2.09%.
Between June 30, 2003 and June 30, 2004, total loans declined by $264.6 million. This year-over-year portfolio contraction was almost entirely related to a decline in construction loan outstandings of $256.5 million, which the Company believes to be consistent with the relatively diminished level of construction activity in its primary market area.
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Total core deposits (excluding institutional time deposits) increased by $268.0 million as of June 30, 2004, compared to March 31, 2004, and by $469.2 million compared to June 30, 2003. This represents respective period-over-period annualized growth rates of 22.70% and 10.32%. Results in the second quarter partially benefited from success in securing sizable additions to certain relationship balances, which may be temporary in nature, as well as from normal organic portfolio growth. Institutional deposits and other wholesale borrowings at June 30, 2004 declined by $710.5 million compared to June 30, 2003 and by $142.5 million compared to March 31, 2004.
“We are pleased to have posted nominal growth in loan outstandings for the period and believe that these results are a direct consequence of the attention and energies that have been applied to this critical area of our business,” stated Mr. Scordelis. “Our sustained record of core deposit growth represents what we believe to be an enduring strength that will serve us well in terms of both our future growth and balance sheet flexibility.”
During the second quarter of 2004, total investments increased by $80 million to $2.26 billion. From June 30, 2003 to June 30, 2004, total investments declined by $383 million, which is reflective of the Company’s stated goal of maintaining an asset sensitive interest rate posture. During this second quarter of 2004, certain bank-level investments were re-designated as held-to-maturity (“HTM”) resulting in an outstanding HTM portfolio totaling $494 million and an available-for-sale (“AFS”) portfolio totaling $1.76 billion as of June 30, 2004.
“We believe that our investment portfolio actions during this period reflect our sensitivity to the dynamics of the interest rate environment and our efforts to prudently manage capital and interest rate risk,” commented James S. Westfall, Executive Vice President and Chief Financial Officer of Greater Bay Bancorp. “The reclassification of nearly one-quarter of our portfolio to HTM status was a reflection of the overall nature and needs of our balance sheet and also provided a degree of desirable insulation to our tangible equity level.”
Credit Quality Overview
Net charge-offs in the second quarter of 2004 were $4.0 million, or 0.36% of average annualized loans, compared to $6.5 million or 0.55% one year ago. Second quarter net charge-offs included approximately $2.0 million related to the Company’s discontinued Shared National Credit / corporate finance business. Excluding this discontinued business, losses for the period represented an annualized 0.18% net charge-off rate.
Nonperforming assets were $42.2 million at June 30, 2004, a reduction from $49.2 million at March 31, 2004 and from $49.0 million at June 30, 2003. The ratio of nonperforming assets to total assets was 0.55% at June 30, 2004, compared to 0.64% at March 31, 2004 and 0.61% at June 30, 2003. The ratio of non-accrual loans to total loans was 0.95% at June 30, 2004, compared to 1.08% at March 31, 2004 and 0.99% at June 30, 2003. Nonperforming assets at June 30, 2004 were at the lowest level since March 31, 2003.
The Company’s provision for loan losses was $2.0 million for the second quarter of 2004 compared to $2.0 million for the first quarter of 2004, and $6.7 million for the second quarter of
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2003. The provision for the first half of 2004 was $4.0 million compared to $13.2 million for the first half of 2003. Provision reductions reflect improved loan portfolio credit quality and declines in actual loss experience.
The allowance for loan losses was $120.6 million, or 2.71% of total loans, at June 30, 2004, compared to $122.6 million, or 2.76% of total loans, at March 31, 2004 and $130.0 million, or 2.75% of total loans, at June 30, 2003.
“While we remain vigilant, we are quite pleased with our reported credit performance metrics,” commented Mr. Scordelis. “Our level of non-performing assets has declined by nearly 32% since year-end 2003, and the comparatively low net charge-off levels in both our community banking and specialty finance areas continued the favorable trend that has been reported in recent quarters.”
Capital Overview
The capital ratios of Greater Bay Bancorp and its subsidiary bank continue to be above the well-capitalized guidelines established by the bank regulatory agencies.
The Company’s total tangible equity to tangible assets ratio was 6.67% at June 30, 2004 compared to 6.90% as of March 31, 2004, and 6.71% at June 30, 2003. The reduction in this ratio during the second quarter was primarily attributable to a downward investment securities valuation of $41.0 million reflective of increased market interest rates.
At June 30, 2004, year-to-date repurchases under the Company’s $70.0 million share repurchase program totaled approximately 1.8 million shares at an average price of $27.64 per share. Remaining unused authority at June 30, 2004 was $20.5 million.
Net Interest Margin and Interest Rate Risk Management
Greater Bay Bancorp’s net interest margin for the second quarter of 2004 was 4.29%, compared to 4.51% for first quarter of 2004 and 4.11% for the second quarter of 2003.
The 0.22% reduction from the net interest margin level in the first quarter was primarily due to an increase in the premium amortization expense recorded on the Company’s investment portfolio that reflected higher prepayment levels experienced in the second quarter. Additionally, a decline in the yield of the Company’s loan portfolio due to a shift in the portfolio mix was a contributing factor.
The Company currently adheres to a core strategy of maintaining a relatively neutral interest rate risk position. Within that context, its strategy may be tactically adjusted in response to its interest rate outlook and general portfolio dynamics. At present, the Company’s position is asset sensitive.
4
Outlook For The Remainder of 2004
• | Loan growth – based on the current forecast of moderate economic growth in our market area, and our clients’ current business outlook, we anticipate future loan portfolio growth ranging from the low single to mid-single digits. Even though we are now noting signs of limited job growth and improvement in the commercial real estate environment, the Bay Area economy continues to be challenging. |
• | Deposit growth –we anticipate future core deposit growth in the mid-single digits. We will adjust our use of institutional time deposits and other non-relationship funding sources to meet funding needs not satisfied by core deposit and capital funding sources. |
• | Credit quality–based on our continued aggressive credit risk management and the current economic outlook, we anticipate that future net charge-offs could range from 60 basis points to 70 basis points of average loans outstanding. |
• | Net interest margin – based on balance sheet trends and the rate sensitivity of the Company’s assets and liabilities, we expect the margin to fluctuate in the 4.40% to 4.50% range. |
Conference Call
The Company will broadcast its earnings conference call live via the Internet at 8:00 a.m. (PDT) on July 21, 2004. Participants may access this conference call through the Company’s website athttp://www.gbbk.com, under the “Investor Info.” link, or throughhttp://www.FullDisclosure.com. You should go to either of these websites 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 websites. A telephone replay will also be available beginning at 11 a.m. PDT on July 21 through midnight on July 28, 2004, by dialing 800-642-1687 or 706-645-9291 and providing Conference ID 8739042.
About Greater Bay Bancorp
Greater Bay Bancorp, a diversified financial services holding company, provides community banking services in the Greater San Francisco Bay Area through its community banking organization, including 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 Bank of Commerce and San Jose National Bank. Nationally, Greater Bay Bancorp provides specialized lending and loan services through its specialty finance group, which includes Matsco, CAPCO and Greater Bay Capital. ABD Insurance and Financial Services, the Company’s insurance brokerage subsidiary provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States.
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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, asset quality, level of loan loss reserves, growth in loans and deposits 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 and the quality of the Company’s earning assets; (2) any difficulties that may be encountered in consolidating the bank subsidiaries 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, 2003. Greater Bay does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
For additional information and press releases about Greater Bay Bancorp, visit the Company’s website athttp://www.gbbk.com.
-Financial Tables Follow-
6
Greater Bay Bancorp ’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
Jun 30 2004 | Mar 31 2004 | Dec 31 2003 | Sept 30 2003 | Jun 30 2003 | ||||||||||||||||
Cash and Due From Banks | $ | 242,517 | $ | 251,895 | $ | 238,534 | $ | 258,054 | $ | 278,989 | ||||||||||
Fed Funds Sold | 22,000 | 216,000 | 35,000 | 53,000 | 15,000 | |||||||||||||||
Securities | 2,256,839 | 2,177,330 | 2,229,509 | 2,402,434 | 2,639,714 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial | 1,941,573 | 1,929,257 | 1,937,766 | 1,945,030 | 1,992,499 | |||||||||||||||
Term Real Estate - Commercial | 1,658,921 | 1,632,921 | 1,636,356 | 1,656,059 | 1,650,330 | |||||||||||||||
Total Commercial | 3,600,494 | 3,562,178 | 3,574,122 | 3,601,089 | 3,642,829 | |||||||||||||||
Real Estate Construction and Land | 415,155 | 479,692 | 537,079 | 604,172 | 671,666 | |||||||||||||||
Real Estate Other | 268,947 | 261,127 | 273,504 | 253,502 | 244,955 | |||||||||||||||
Consumer and Other | 171,003 | 146,022 | 167,593 | 158,119 | 162,928 | |||||||||||||||
Deferred Fees and Discounts, Net | (12,575 | ) | (12,812 | ) | (14,491 | ) | (15,413 | ) | (14,803 | ) | ||||||||||
Total Loans, Net of Deferred Fees and Discounts | 4,443,024 | 4,436,207 | 4,537,807 | 4,601,469 | 4,707,575 | |||||||||||||||
Allowance for Loan and Lease Losses | (120,625 | ) | (122,609 | ) | (126,168 | ) | (128,499 | ) | (130,030 | ) | ||||||||||
Total Loans, Net | 4,322,399 | 4,313,598 | 4,411,639 | 4,472,970 | 4,577,545 | |||||||||||||||
Goodwill | 178,317 | 178,317 | 177,991 | 148,714 | 145,005 | |||||||||||||||
Other Intangible Assets | 43,544 | 45,778 | 47,238 | 51,102 | 44,294 | |||||||||||||||
Other Assets | 547,679 | 458,429 | 461,512 | 408,027 | 389,778 | |||||||||||||||
Total Assets | $ | 7,613,295 | $ | 7,641,347 | $ | 7,601,423 | $ | 7,794,301 | $ | 8,090,325 | ||||||||||
Deposits: | ||||||||||||||||||||
Demand, Non-Interest Bearing | $ | 1,045,651 | $ | 1,030,169 | $ | 1,077,648 | $ | 1,043,433 | $ | 975,122 | ||||||||||
NOW, MMDA and Savings | 3,361,211 | 3,133,005 | 2,858,647 | 2,865,841 | 2,873,737 | |||||||||||||||
Time Deposits, $100,000 and over | 725,753 | 696,885 | 735,657 | 768,712 | 808,723 | |||||||||||||||
Other Time Deposits | 174,297 | 321,384 | 640,715 | 760,925 | 890,669 | |||||||||||||||
Total Deposits | 5,306,912 | 5,181,443 | 5,312,667 | 5,438,911 | 5,548,251 | |||||||||||||||
Other Borrowings | 1,112,334 | 1,270,255 | 1,071,880 | 1,215,677 | 1,295,373 | |||||||||||||||
Subordinated Debt (1) | 210,311 | 210,311 | 210,311 | 210,311 | 210,311 | |||||||||||||||
Other Liabilities | 253,396 | 227,877 | 240,746 | 193,303 | 301,793 | |||||||||||||||
Total Liabilities | 6,882,953 | 6,889,886 | 6,835,604 | 7,058,202 | 7,355,728 | |||||||||||||||
Preferred Stock of Real Estate Investment Trust Subsidiaries | 15,302 | 15,302 | 15,302 | 15,302 | 15,302 | |||||||||||||||
Convertible Preferred Stock | 91,924 | 92,050 | 91,752 | 80,441 | 80,441 | |||||||||||||||
Common Shareholders’ Equity | 623,116 | 644,109 | 658,765 | 640,356 | 638,854 | |||||||||||||||
Total Equity | 715,040 | 736,159 | 750,517 | 720,797 | 719,295 | |||||||||||||||
Total Liabilities and Total Equity plus Minority Interest | $ | 7,613,295 | $ | 7,641,347 | $ | 7,601,423 | $ | 7,794,301 | $ | 8,090,325 | ||||||||||
Average Quarterly Total Loans, excluding Nonaccrual | $ | 4,414,731 | $ | 4,450,875 | $ | 4,494,411 | $ | 4,623,844 | $ | 4,720,462 | ||||||||||
Average Quarterly Securities | $ | 2,325,402 | $ | 2,272,026 | $ | 2,397,036 | $ | 2,487,171 | $ | 2,483,795 | ||||||||||
Average Quarterly Interest Earning Assets | $ | 6,740,133 | $ | 6,722,901 | $ | 6,891,447 | $ | 7,111,015 | $ | 7,204,257 | ||||||||||
Average Quarterly Deposits | $ | 5,280,262 | $ | 5,210,518 | $ | 5,382,868 | $ | 5,509,736 | $ | 5,661,474 | ||||||||||
Average Quarterly Interest Bearing Liabilities | $ | 5,613,803 | $ | 5,533,915 | $ | 5,720,832 | $ | 6,039,904 | $ | 6,256,372 | ||||||||||
Average Quarterly Assets | $ | 7,640,836 | $ | 7,557,473 | $ | 7,700,455 | $ | 7,965,048 | $ | 8,062,273 | ||||||||||
Average Quarterly Common Shareholders’ Equity | $ | 638,371 | $ | 674,670 | $ | 651,027 | $ | 636,796 | $ | 634,315 | ||||||||||
Average Quarterly Total Equity | $ | 730,420 | $ | 766,721 | $ | 735,280 | $ | 717,237 | $ | 714,908 | ||||||||||
Average YTD Interest Earning Assets | $ | 6,731,632 | $ | 6,722,901 | $ | 7,084,821 | $ | 7,152,886 | $ | 7,163,416 | ||||||||||
Average YTD Assets | $ | 7,598,494 | $ | 7,557,473 | $ | 7,918,177 | $ | 7,991,519 | $ | 8,004,518 | ||||||||||
Average YTD Common Shareholders’ Equity | $ | 656,520 | $ | 674,670 | $ | 633,503 | $ | 628,211 | $ | 623,847 | ||||||||||
Average YTD Total Equity | $ | 748,570 | $ | 766,721 | $ | 714,113 | $ | 708,836 | $ | 704,566 | ||||||||||
Total Regulatory Capital | ||||||||||||||||||||
Tier I Capital | $ | 727,214 | $ | 704,790 | $ | 745,586 | $ | 735,514 | $ | 730,432 | ||||||||||
Total Risk-based Capital | $ | 799,306 | $ | 775,571 | $ | 818,743 | $ | 808,986 | $ | 805,431 | ||||||||||
Nonperforming Assets | ||||||||||||||||||||
Nonaccrual Loans | $ | 42,230 | $ | 48,042 | $ | 61,700 | $ | 58,072 | $ | 46,491 | ||||||||||
OREO | — | 1,200 | — | — | 2,500 | |||||||||||||||
Total Nonperforming Assets | $ | 42,230 | $ | 49,242 | $ | 61,700 | $ | 58,072 | $ | 48,991 | ||||||||||
Greater Bay Trust Company Assets | $ | 647,022 | $ | 640,063 | $ | 629,333 | $ | 619,528 | $ | 616,847 |
(1) | Effective December 31, 2003, the Company adopted certain provisions of FASB Interpretation No. 46, as a result of which the liability previously reported as Trust Preferred Securities has been replaced with Subordinated Debt. Prior periods have been restated accordingly. |
7
Greater Bay Bancorp’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
Second Quarter 2004 | First Quarter 2004 | Fourth Quarter 2003 | Third Quarter 2003 | Second Quarter 2003 | ||||||||||||||||
Interest Income | $ | 93,604 | $ | 96,745 | $ | 98,197 | $ | 98,728 | $ | 103,450 | ||||||||||
Interest Expense | 21,722 | 21,374 | 22,975 | 26,040 | 29,646 | |||||||||||||||
Net Interest Income Before Provision for Loan and Lease Losses | 71,882 | 75,371 | 75,222 | 72,688 | 73,804 | |||||||||||||||
Provision for Loan and Lease Losses | 2,000 | 2,000 | 7,000 | 8,000 | 6,700 | |||||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 69,882 | 73,371 | 68,222 | 64,688 | 67,104 | |||||||||||||||
Non-interest Income: | ||||||||||||||||||||
Insurance Commissions and Fees | 32,916 | 34,581 | 27,747 | 31,174 | 27,945 | |||||||||||||||
Rental Revenue on Operating Lease | 2,665 | 2,317 | 1,934 | 1,537 | 1,234 | |||||||||||||||
Service Charges and Other Fees | 2,624 | 2,623 | 2,754 | 2,792 | 2,995 | |||||||||||||||
Gains on Sale of Securities, net | 2,117 | 1,166 | 764 | 38 | 3,136 | |||||||||||||||
Loan and International Banking Fees | 2,026 | 1,974 | 2,188 | 2,668 | 2,421 | |||||||||||||||
Trust Fees | 974 | 851 | 925 | 813 | 819 | |||||||||||||||
Gain on Sale of Loans | 635 | 400 | 1,113 | 1,515 | 364 | |||||||||||||||
ATM Network Revenue | 333 | 360 | 430 | 492 | 445 | |||||||||||||||
Other Income | 2,335 | 3,201 | 2,678 | 2,895 | 2,962 | |||||||||||||||
Total Non-interest Income | 46,625 | 47,473 | 40,533 | 43,924 | 42,321 | |||||||||||||||
Operating Expenses: | ||||||||||||||||||||
Salaries | 40,840 | 41,480 | 40,878 | 40,295 | 38,084 | |||||||||||||||
Deferred Loan Origination Costs | (3,797 | ) | (3,019 | ) | (3,709 | ) | (3,898 | ) | (3,545 | ) | ||||||||||
Benefits | 8,583 | 11,123 | 7,512 | 6,912 | 7,462 | |||||||||||||||
Total Compensation and Benefits | 45,626 | 49,584 | 44,681 | 43,309 | 42,001 | |||||||||||||||
Occupancy and Equipment | 10,251 | 10,205 | 10,390 | 10,695 | 10,171 | |||||||||||||||
Legal and Other Professional Fees | 4,646 | 3,298 | 3,641 | 3,601 | 4,390 | |||||||||||||||
Depreciation - Equipment Leased to Others | 2,252 | 1,905 | 1,712 | 1,096 | 1,072 | |||||||||||||||
Amortization of Intangibles | 2,072 | 2,071 | 1,889 | 1,949 | 1,671 | |||||||||||||||
Telephone, Postage and Supplies | 1,853 | 1,749 | 1,854 | 1,767 | 1,878 | |||||||||||||||
Marketing and Promotion | 1,729 | 1,669 | 1,755 | 1,428 | 1,822 | |||||||||||||||
Data Processing | 1,272 | 1,227 | 1,267 | 1,431 | 1,407 | |||||||||||||||
Insurance | 1,257 | 1,271 | 837 | 1,131 | 1,283 | |||||||||||||||
Correspondent Bank Charges | 692 | 862 | 1,036 | 1,101 | 1,277 | |||||||||||||||
FDIC Insurance and Regulatory Assessments | 496 | 500 | 505 | 588 | 482 | |||||||||||||||
Client Services Expenses | 272 | 327 | 337 | 294 | 318 | |||||||||||||||
Expenses on Other Real Estate Owned | 214 | 134 | — | 546 | 518 | |||||||||||||||
Contribution to Greater Bay Bancorp Foundation | — | 900 | — | — | — | |||||||||||||||
Other Expenses | 3,987 | 3,886 | 3,711 | 3,152 | 3,502 | |||||||||||||||
76,619 | 79,588 | 73,615 | 72,088 | 71,792 | ||||||||||||||||
Dividends paid on Preferred Stock of Real Estate Investment Trust Subsidiaries | 456 | 456 | 464 | 453 | 454 | |||||||||||||||
Total Operating Expenses | 77,075 | 80,044 | 74,079 | 72,541 | 72,246 | |||||||||||||||
Income Before Provision for Income Taxes | 39,432 | 40,800 | 34,676 | 36,071 | 37,179 | |||||||||||||||
Provision for Income Taxes | 14,899 | 15,948 | 13,256 | 13,710 | 14,054 | |||||||||||||||
Net Income | $ | 24,533 | $ | 24,852 | $ | 21,420 | $ | 22,361 | $ | 23,125 | ||||||||||
8
Greater Bay Bancorp’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED CONSOLIDATED OPERATING DATA FOR THE SIX MONTH PERIODS:
YTD Jun 30 | YTD Jun 30 | |||||||
Interest Income | $ | 190,349 | $ | 210,794 | ||||
Interest Expense | 43,096 | 60,823 | ||||||
Net Interest Income Before Provision for Loan and Lease Losses | 147,253 | 149,971 | ||||||
Provision for Loan and Lease Losses | 4,000 | 13,195 | ||||||
Net Interest Income After Provision for Loan and Lease Losses | 143,253 | 136,776 | ||||||
Non-interest Income: | ||||||||
Insurance Commissions and Fees | 67,497 | 58,587 | ||||||
Service Charges and Other Fees | 5,247 | 5,826 | ||||||
Rental Revenue on Operating Lease | 4,982 | 2,111 | ||||||
Loan and International Banking Fees | 4,000 | 4,459 | ||||||
Gains on Sale of Securities, net | 3,283 | 5,159 | ||||||
Trust Fees | 1,825 | 1,576 | ||||||
Gain on Sale of Loans | 1,035 | 1,907 | ||||||
ATM Network Revenue | 693 | 851 | ||||||
Other Income | 5,536 | 6,609 | ||||||
Total Non-interest Income | 94,098 | 87,085 | ||||||
Operating Expenses: | ||||||||
Salaries | 82,320 | 77,627 | ||||||
Deferred Loan Origination Costs | (6,816 | ) | (6,596 | ) | ||||
Benefits | 19,706 | 16,402 | ||||||
Total Compensation and Benefits | 95,210 | 87,433 | ||||||
Occupancy and Equipment | 20,456 | 19,813 | ||||||
Legal and Other Professional Fees | 7,944 | 9,352 | ||||||
Depreciation - Equipment Leased to Others | 4,157 | 1,807 | ||||||
Amortization of Intangibles | 4,143 | 3,342 | ||||||
Telephone, Postage and Supplies | 3,602 | 3,624 | ||||||
Marketing and Promotion | 3,398 | 2,937 | ||||||
Insurance | 2,528 | 2,519 | ||||||
Data Processing | 2,499 | 2,658 | ||||||
Correspondent Bank Charges | 1,554 | 2,382 | ||||||
FDIC Insurance and Regulatory Assessments | 996 | 980 | ||||||
Contribution to Greater Bay Bancorp Foundation | 900 | — | ||||||
Client Services Expenses | 599 | 662 | ||||||
Expenses on Other Real Estate Owned | 348 | 519 | ||||||
Other Expenses | 7,873 | 6,653 | ||||||
156,207 | 144,681 | |||||||
Dividends paid on Preferred Stock of Real Estate Investment Trust Subsidiaries | 912 | 907 | ||||||
Total Operating Expenses | 157,119 | 145,588 | ||||||
Income Before Provision for Income Taxes | 80,232 | 78,273 | ||||||
Provision for Income Taxes | 30,847 | 30,051 | ||||||
Net Income | $ | 49,385 | $ | 48,222 | ||||
9
Greater Bay Bancorp’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
Jun 30 2004 | Mar 31 2004 | Dec 31 2003 | Sept 30 2003 | Jun 30 2003 | ||||||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||||||
Loan to Deposit Ratio | 83.72 | % | 85.62 | % | 85.41 | % | 84.60 | % | 84.85 | % | ||||||||||
Ratio of Allowance for Loan and Lease Losses to: | ||||||||||||||||||||
Average Loans | 2.71 | % | 2.73 | % | 2.77 | % | 2.74 | % | 2.73 | % | ||||||||||
End of Period Loans | 2.71 | % | 2.76 | % | 2.77 | % | 2.78 | % | 2.75 | % | ||||||||||
Total Nonperforming Assets | 285.64 | % | 248.99 | % | 204.49 | % | 221.28 | % | 265.42 | % | ||||||||||
Ratio of Provision for Loan and Lease Losses to Average Loans, annualized | 0.18 | % | 0.18 | % | 0.61 | % | 0.68 | % | 0.56 | % | ||||||||||
Total Nonaccrual Loans to Total Loans | 0.95 | % | 1.08 | % | 1.36 | % | 1.26 | % | 0.99 | % | ||||||||||
Total Nonperforming Assets to Total Assets | 0.55 | % | 0.64 | % | 0.81 | % | 0.75 | % | 0.61 | % | ||||||||||
Ratio of Quarterly Net Charge-offs to Average Loans, annualized | 0.36 | % | 0.50 | % | 0.81 | % | 0.81 | % | 0.55 | % | ||||||||||
Ratio of YTD Net Charge-offs to YTD Average Loans | 0.43 | % | 0.50 | % | 0.67 | % | 0.63 | % | 0.54 | % | ||||||||||
Loan Growth, current quarter to prior year quarter | -5.62 | % | -6.00 | % | -5.29 | % | -1.97 | % | 0.53 | % | ||||||||||
Loan Growth, current quarter to prior quarter, annualized | 0.62 | % | -9.01 | % | -5.49 | % | -8.94 | % | -0.99 | % | ||||||||||
Loan Growth, YTD | -4.20 | % | -9.01 | % | -5.29 | % | -5.29 | % | -3.52 | % | ||||||||||
Core Deposits Growth, current quarter to prior year quarter (1) | 10.32 | % | 6.20 | % | 3.09 | % | 4.20 | % | 8.52 | % | ||||||||||
Core Deposits Growth, current quarter to prior quarter, annualized | 22.70 | % | 16.20 | % | -0.35 | % | 1.87 | % | 6.83 | % | ||||||||||
Core Deposits Growth, YTD | 19.91 | % | 16.20 | % | 3.09 | % | 4.26 | % | 5.44 | % | ||||||||||
Deposits Growth, current quarter to prior year quarter | -4.35 | % | -6.16 | % | 0.77 | % | -0.09 | % | 4.70 | % | ||||||||||
Deposits Growth, current quarter to prior quarter, annualized | 9.74 | % | -9.93 | % | -9.21 | % | -7.82 | % | 1.92 | % | ||||||||||
Deposits Growth, YTD | -0.22 | % | -9.93 | % | 0.77 | % | 4.23 | % | 10.56 | % | ||||||||||
Revenue Growth, current quarter to prior year quarter | 2.05 | % | 1.58 | % | -3.12 | % | -18.56 | % | -9.39 | % | ||||||||||
Revenue Growth, current quarter to prior quarter, annualized | -14.20 | % | 24.63 | % | -2.92 | % | 1.66 | % | -15.94 | % | ||||||||||
Net Interest Income Growth, current quarter to prior year quarter | -2.60 | % | -1.05 | % | -7.16 | % | -17.06 | % | -16.74 | % | ||||||||||
Net Interest Income Growth, current quarter to prior quarter, annualized | -18.62 | % | 0.80 | % | 13.83 | % | -6.00 | % | -12.44 | % | ||||||||||
Average Earning Assets to Average Total Assets | 88.21 | % | 88.96 | % | 89.49 | % | 89.28 | % | 89.36 | % | ||||||||||
Average Earning Assets to Average Interest-Bearing Liabilities | 120.06 | % | 121.49 | % | 120.46 | % | 117.73 | % | 115.15 | % | ||||||||||
Capital Ratios: | ||||||||||||||||||||
Tier 1 leverage ratio | 9.83 | % | 9.64 | % | 9.98 | % | 9.49 | % | 9.29 | % | ||||||||||
Tier 1 risk-based capital ratio | 12.72 | % | 12.58 | % | 12.87 | % | 12.64 | % | 12.29 | % | ||||||||||
Total risk-based capital ratio | 13.98 | % | 13.84 | % | 14.13 | % | 13.90 | % | 13.55 | % | ||||||||||
Risk Weighted Assets | $ | 5,715,605 | $ | 5,604,682 | $ | 5,793,334 | $ | 5,818,104 | $ | 5,942,616 | ||||||||||
Common Book Value Per Common Share | $ | 12.18 | $ | 12.57 | $ | 12.54 | $ | 12.28 | $ | 12.29 | ||||||||||
Total Common Shares Outstanding | 51,177,202 | 51,238,680 | 52,529,850 | 52,160,193 | 51,982,864 | |||||||||||||||
NON-GAAP RATIOS (2): | ||||||||||||||||||||
Tangible Total Equity plus Minority Interest (3) to Tangible Assets (4) | 6.88 | % | 7.11 | % | 7.33 | % | 7.06 | % | 6.90 | % | ||||||||||
Tangible Total Equity (5) to Tangible Assets (4) | 6.67 | % | 6.90 | % | 7.12 | % | 6.86 | % | 6.71 | % | ||||||||||
Tangible Common Book Value Per Common Share, including Convertible Preferred Stock (6) | $ | 9.10 | $ | 9.43 | $ | 9.51 | $ | 9.49 | $ | 9.69 | ||||||||||
Tangible Common Book Value Per Common Share, excluding Convertible Preferred Stock (7) | $ | 7.84 | $ | 8.20 | $ | 8.25 | $ | 8.45 | $ | 8.65 | ||||||||||
(1) Core Deposits includes Total Deposits, less Institutional Time Deposits. |
| |||||||||||||||||||
(2) Management believes that these ratios are meaningful measures because they reflect the equity deployed in the Company’s businesses. The following table sets forth the reconciliation of Common Shareholders’ Equity to Tangible Total Equity plus Minority Interest, Tangible Total Equity and Total Assets to Tangible Assets: |
| |||||||||||||||||||
Common Shareholders’ Equity | $ | 623,116 | $ | 644,109 | $ | 658,765 | $ | 640,356 | $ | 638,854 | ||||||||||
Convertible Preferred Stock | 91,924 | 92,050 | 91,752 | 80,441 | 80,441 | |||||||||||||||
Preferred Stock of Real Estate Investment Trust Subsidiaries | 15,302 | 15,302 | 15,302 | 15,302 | 15,302 | |||||||||||||||
Total Equity plus Minority Interest | 730,342 | 751,461 | 765,819 | 736,099 | 734,597 | |||||||||||||||
Less: Goodwill and Other Intangible Assets | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | (189,299 | ) | ||||||||||
Tangible Total Equity plus Minority Interest (3) | $ | 508,481 | $ | 527,366 | $ | 540,590 | $ | 536,283 | $ | 545,298 | ||||||||||
Common Shareholders’ Equity | $ | 623,116 | $ | 644,109 | $ | 658,765 | $ | 640,356 | $ | 638,854 | ||||||||||
Convertible Preferred Stock | 91,924 | 92,050 | 91,752 | 80,441 | 80,441 | |||||||||||||||
Total Equity | 715,040 | 736,159 | 750,517 | 720,797 | 719,295 | |||||||||||||||
Less: Goodwill and Other Intangible Assets | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | (189,299 | ) | ||||||||||
Tangible Total Equity (5) | $ | 493,179 | $ | 512,064 | $ | 525,288 | $ | 520,981 | $ | 529,996 | ||||||||||
Total Assets | $ | 7,613,295 | $ | 7,641,347 | $ | 7,601,423 | $ | 7,794,301 | $ | 8,090,325 | ||||||||||
Less: Goodwill and Other Intangible Assets | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | (189,299 | ) | ||||||||||
Tangible Assets (4) | $ | 7,391,434 | $ | 7,417,252 | $ | 7,376,194 | $ | 7,594,485 | $ | 7,901,026 | ||||||||||
(3) | Tangible Total Equity plus Minority Interest includes Common Shareholders’ Equity, Convertible Preferred Stock and Preferred Stock of Real Estate Investment Trust Subsidiaries, less Goodwill and Other Intangible Assets. |
(4) | Tangible Assets includes Total Assets, less Goodwill and Other Intangible Assets. |
(5) | Tangible Total Equity includes Common Shareholders’ Equity and Convertible Preferred Stock, less Goodwill and Other Intangible Assets. |
(6) | Computed by dividing the sum of Common Shareholders’ Equity and Convertible Preferred Stock, less Goodwill and Other Intangible Assets by the sum of Total Common Shares outstanding and the number of Common Shares that the Convertible Preferred Stock is converted into. |
(7) | Computed by dividing Common Shareholders’ Equity, less Goodwill and Other Intangible Assets by Total Common Shares outstanding. |
10
Greater Bay Bancorp’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
Second 2004 | First Quarter 2004 | Fourth 2003 | Third Quarter 2003 | Second 2003 | ||||||||||||||||
GAAP EPS | ||||||||||||||||||||
Net Income Per Common Share | ||||||||||||||||||||
Basic (1) | $ | 0.45 | $ | 0.44 | $ | 0.38 | $ | 0.40 | $ | 0.42 | ||||||||||
Diluted (2) | $ | 0.43 | $ | 0.43 | $ | 0.37 | $ | 0.39 | $ | 0.41 | ||||||||||
Weighted Average Common Shares Outstanding | 51,108,000 | 52,654,000 | 52,363,000 | 52,093,000 | 51,925,000 | |||||||||||||||
Weighted Average Common & Common Equivalent Shares Outstanding (2) | 52,613,000 | 54,266,000 | 53,961,000 | 53,134,000 | 52,745,000 | |||||||||||||||
GAAP Ratios | ||||||||||||||||||||
Return on Period Average Assets, annualized | 1.29 | % | 1.32 | % | 1.10 | % | 1.11 | % | 1.15 | % | ||||||||||
Return on Period Average Common Shareholders’ Equity, annualized | 15.46 | % | 14.82 | % | 13.05 | % | 13.93 | % | 14.62 | % | ||||||||||
Return on Period Average Total Equity, annualized | 13.51 | % | 13.04 | % | 11.56 | % | 12.37 | % | 12.97 | % | ||||||||||
Net Interest Margin - Average Earning Assets (3) | 4.29 | % | 4.51 | % | 4.33 | % | 4.06 | % | 4.11 | % | ||||||||||
Operating Expense Ratio (4) | 4.06 | % | 4.26 | % | 3.82 | % | 3.61 | % | 3.59 | % | ||||||||||
Efficiency Ratio (5) | 65.04 | % | 65.16 | % | 64.00 | % | 62.21 | % | 62.21 | % | ||||||||||
Total Operating Expenses | $ | 77,075 | $ | 80,044 | $ | 74,079 | $ | 72,541 | $ | 72,246 | ||||||||||
Total Revenue | $ | 118,507 | $ | 122,844 | $ | 115,755 | $ | 116,612 | $ | 116,125 | ||||||||||
NON-GAAP Ratios | ||||||||||||||||||||
Efficiency Ratio (Excluding the operating results of ABD) (6) | 57.24 | % | 59.00 | % | 54.11 | % | 54.88 | % | 56.04 | % | ||||||||||
ABD Operating Expenses | $ | 28,268 | $ | 28,139 | $ | 26,761 | $ | 25,880 | $ | 22,852 | ||||||||||
ABD Revenue | $ | 33,245 | $ | 34,870 | $ | 28,301 | $ | 31,591 | $ | 27,991 |
(1) | Net income available to common shareholders is based on total net income less preferred dividends of $1.7 million for Q2 and Q1, 2004, $1.5 million for Q4, Q3 and Q2 2003. |
(2) | The convertible preferred stock was considered anti-dilutive in Q2 and Q1 2004, Q4, Q3 and Q2 2003, whereby the preferred dividends of $1.7 million divided by the common stock equivalent of the convertible preferred stock of 3,041,000 shares and 3,043,000 shares in Q2 and Q1 2004 were greater than the diluted earnings per share and the preferred dividends of $1.5 million divided by the common stock equivalent of the convertible preferred stock of 2,718,000 shares in Q4, Q3 and Q2 2003 were greater than the diluted earnings per share. |
(3) | Net interest income for the period, annualized and divided by average quarterly interest earning assets. |
(4) | Total operating expenses for the period, annualized and divided by average quarterly assets. |
(5) | Total operating expenses divided by total revenue (the sum of net interest income and non-interest income). |
(6) | Total operating expenses minus ABD operating expenses divided by total revenue minus ABD revenue. |
11
Greater Bay Bancorp’s Second Quarter 2004 Earnings Results
July 21, 2004
GREATER BAY BANCORP
JUNE 30, 2004 - FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED CONSOLIDATED OPERATING RATIOS FOR THE SIX MONTH PERIODS:
YTD Jun 30 2004 | YTD Jun 30 2003 | |||||||
GAAP EPS | ||||||||
Net Income Per Common Share | ||||||||
Basic (1) | $ | 0.89 | $ | 0.87 | ||||
Diluted (2) | $ | 0.86 | $ | 0.86 | ||||
Weighted Average Common Shares Outstanding | 51,881,000 | 51,831,000 | ||||||
Weighted Average Common & Common Equivalent Shares Outstanding (2) | 53,435,000 | 52,420,000 | ||||||
GAAP Ratios | ||||||||
Return on Period Average Assets, annualized | 1.31 | % | 1.21 | % | ||||
Return on Period Average Common Shareholders’ Equity, annualized | 15.13 | % | 15.59 | % | ||||
Return on Period Average Total Equity, annualized | 13.27 | % | 13.80 | % | ||||
Net Interest Margin - Average Earning Assets (3) | 4.40 | % | 4.22 | % | ||||
Operating Expense Ratio (4) | 4.16 | % | 3.67 | % | ||||
Efficiency Ratio (5) | 65.10 | % | 61.42 | % | ||||
Total Operating Expenses | $ | 157,119 | $ | 145,588 | ||||
Total Revenue | $ | 241,351 | $ | 237,056 | ||||
NON-GAAP Ratios | ||||||||
Efficiency Ratio (Excluding the operating results of ABD) (6) | 58.14 | % | 55.66 | % | ||||
ABD Operating Expenses | $ | 56,407 | $ | 46,408 | ||||
ABD Revenue | $ | 68,115 | $ | 58,853 |
(1) | Net income available to common shareholders is based on total net income less preferred dividends of $3.3 million for YTD June 2004 and $3.0 million for YTD June 2003. |
(2) | The convertible preferred stock was considered anti-dilutive in YTD June 2004 and YTD June 2003, whereby the preferred dividends of $3.3 million divided by the common stock equivalent of the convertible preferred stock of 3,042,000 shares in YTD June 2004 were greater than the diluted earnings per share and the preferred dividends of $3.0 million divided by the common stock equivalent of the convertible preferred stock of 2,751,000 shares in YTD June 2003 were greater than the diluted earnings per share. |
(3) | Net interest income for the period, annualized and divided by YTD average interest earning assets. |
(4) | Total operating expenses for the period, annualized and divided by YTD average assets. |
(5) | Total operating expenses divided by total revenue (the sum of net interest income and non-interest income). |
(6) | Total operating expenses minus ABD operating expenses divided by total revenue minus ABD revenue. |
12