EXHIBIT 99
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 THIRD QUARTER 2004
NET INCOMEOF $22.5 MILLIONOR $0.40PERSHARE
PALO ALTO, Calif., October 20, 2004– Greater Bay Bancorp (Nasdaq:GBBK), a $7.1 billion in assets financial services holding company, today announced results for the third quarter and nine months ended September 30, 2004.
For the third quarter of 2004, Greater Bay Bancorp’snet income was $22.5 million, or $0.40 per diluted share, compared to $22.4 million, or $0.39 per diluted share, for the third quarter of 2003, and $24.5 million, or $0.43 per diluted share, for the second quarter of 2004. For the first nine months of 2004,net income was $71.8 million, or $1.26 per diluted share, compared to $70.6 million, or $1.26 per diluted share for the first nine months of 2003.
Return on average common equity for the third quarter of 2004 was 13.90% versus 13.93% in the third quarter of 2003, and 15.46% in the second quarter of 2004.Return on average assets for the third quarter of 2004 was 1.20% compared to 1.11% in the third quarter of 2003, and 1.29% in the second quarter of 2004. Return on average common equity for the first nine months of 2004 was 14.72% compared to 15.02% for the same period in 2003. Return on average assets rose to 1.27% for the first nine months of 2004 versus 1.18% for the first nine months of 2003.
Operating results in the third quarter of 2004 included a gain on the sale of securities of $2.8 million, which was offset by the recognition of tax expenses from prior periods totaling $1.1 million, certain operating expenses totaling $1.6 million, and a $1.2 million adjustment in loan fee income recognition.
“We are pleased to report another solid quarter of core operating results and that we are able to post a second consecutive quarter of loan growth after several periods of decline,” commented Byron A. Scordelis, President and Chief Executive Officer of Greater Bay Bancorp. “We continued our proactive efforts to manage our financial position in light of the prevailing interest rate environment which we believe will enhance our flexibility and potential for future growth. We also note that our business environment continues to be both dynamic and challenging, and believe that we are responding to that environment in ways that fortify our platform for superior long-term performance.”
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Greater Bay Bancorp Reports Third Quarter 2004 Earnings Results
October 20, 2004
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Non-Interest Income
Non-interest income for the third quarter of 2004 increased to $47.8 million from $43.9 million in the third quarter of 2003, an increase of $3.9 million. This increase was primarily attributable to higher insurance commissions and fees of $2.1 million in the Company’s subsidiary, ABD Insurance and Financial Services (“ABD”), an increase of $1.5 million in rental revenue on operating leases booked by the Company’s Greater Bay Capital small ticket leasing unit and an increase of $2.5 million in the gain on sale of securities. These increases were partially offset by a $1.3 million reduction in loan sale gains.
Non-interest income during the third quarter of 2004 increased to $47.8 million from $46.6 million in the second quarter of 2004, an increase of $1.1 million. This increase was reflective of a $1.9 million increase in gain on sale of securities and a $0.5 million gain on sale of a former facility.
For the first nine months of 2004, non-interest income rose to $141.9 million from $131.0 million for the same period one year ago. This growth included an increase of $11.0 million in insurance commissions and fees and an increase of $4.4 million in operating lease rental revenue. These increases were partially offset by reduced loan sale gains of $1.8 million.
Non-interest income as a percentage of total revenues increased in the third quarter of 2004 to 40.0%, compared to 37.7% in the third quarter of 2003 and 39.3% in the second quarter of 2004. For the first nine months of 2004, this figure stood at 39.5%, which reflected an increase from 37.0% for the same period in 2003.
Operating Expenses
Operating expenses for the third quarter of 2004 increased by $6.2 million to $78.7 million relative to the third quarter of 2003. Major components of the change from the 2003 period included increases of:
· | $2.9 million in legal and professional fees primarily incurred in conjunction with Sarbanes-Oxley Act compliance activities; |
· | $1.5 million of leased equipment depreciation associated with operating leases booked by the Company’s Greater Bay Capital unit; and |
· | $1.2 million in compensation and benefits expense. |
Operating expenses increased during the third quarter of 2004 by approximately $1.6 million compared to the second quarter of 2004. The key components of the change from the second quarter included increases of:
· | $1.6 million resulting from an adjustment to the amortization of occupancy and equipment costs, settlement of a legal claim, recognition of capitalized expenses related to a terminated corporate development project, and adjustments to the amortization of preferred stock and debt issuance costs; and |
· | $1.0 million in Sarbanes-Oxley compliance costs. |
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Greater Bay Bancorp Reports Third Quarter 2004 Earnings Results
October 20, 2004
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The above increases in expenses were offset by a $1.5 million reduction in benefits expense as compared to the second quarter of 2004.
Operating expenses for the first nine months of 2004 rose by $17.7 million compared to the same period in 2003. The change from the 2003 period was largely attributable to increases of:
· | $12.0 million in ABD expenses, reflecting business activity growth; |
· | $3.8 million in leased equipment depreciation associated with operating leases booked by the Company’s Greater Bay Capital unit; and |
· | $1.5 million in legal and professional fees (entirely attributable to Sarbanes-Oxley compliance costs, which amounted to $2.9 million in the year-to-date period). |
Balance Sheet
At September 30, 2004, Greater Bay Bancorp’s total assets were $7.1 billion, total securities were $1.8 billion, total loans were $4.5 billion and total deposits were $5.2 billion.
Between September 30, 2003 and September 30, 2004, total loans declined by $131.8 million. This year-over-year portfolio contraction was driven by a decline in real estate construction loans outstanding of $144.6 million, which the Company believes to be consistent with the relatively diminished level of commercial construction activity in its primary market area during that period.
Total loans grew by $26.7 million during the quarter. This primarily reflects an increase in the real estate construction and land portfolio of $44.4 million, and in the specialty finance portfolio of $29.0 million, which includes an $8.7 million increase in SBA loans. These increases were partially offset by declines in other commercial loans of $18.7 million, in term real estate of $11.4 million, and in consumer loans of $18.5 million.
Institutional time deposits and other wholesale borrowings at September 30, 2004 declined by $1.1 billion compared to September 30, 2003 and decreased by $385.4 million compared to June 30, 2004. Total core deposits (excluding institutional time deposits) increased by $324.4 million as of September 30, 2004, compared to September 30, 2003 and decreased by $123.4 million compared to June 30, 2004.
“We are pleased to have posted positive growth in loans outstanding 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. “While we observed a decline in core deposit growth during the quarter, we believe our sustained record in this area represents an enduring strength that will serve us well in terms of both our future growth and balance sheet flexibility.”
During the quarter, the Company continued the planned reduction of its securities portfolio. Total securities at September 30, 2004, of $1.8 billion represent a decrease of $566.8 million compared to September 30, 2003 and a decrease of $421.2 million compared to June 30, 2004. Of the decrease from June 30, 2004, approximately $350 million was attributable to the sale of securities at a total gain of $2.8 million, with the remaining reduction resulting from normal portfolio run-off.
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Greater Bay Bancorp Reports Third Quarter 2004 Earnings Results
October 20, 2004
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“These actions were taken in an effort to realize several tangible benefits,” stated James Westfall, Executive Vice President and Chief Financial Officer. “In addition to the gains afforded by the prevailing interest rate environment during the period, the shrinkage of the portfolio further moderated our exposure to changes in tangible equity, strengthened our overall capital position, and reaffirmed the Company’s asset-sensitive bias within our overall objective of relative interest rate risk neutrality.”
Credit Quality Overview
Net charge-offs in the third quarter of 2004 were $3.6 million, or 0.32 % of average annualized loans, compared to $9.5 million or 0.81% one year ago and $4.0 million or 0.36% for the second quarter of 2004. Net charge-offs for the first nine months of 2004 totaled $13.1 million or 0.39% of average annualized loans, compared to $22.3 million or 0.63% for the first nine month of 2003.
Nonperforming assets were $59.3 million at September 30, 2004, compared to $58.1 million at September 30, 2003 and $42.2 million at June 30, 2004. The ratio of nonperforming assets to total assets was 0.83% at September 30, 2004, compared to 0.75% at September 30, 2003 and 0.55% at June 30, 2004. The ratio of non-accrual loans to total loans was 1.31% at September 30, 2004, compared to 1.26% at September 30, 2003 and 0.95% at June 30, 2004.
The Company’s provision for loan losses was $1.3 million for the third quarter of 2004 compared to $8.0 million for the third quarter of 2003 and $2.0 million for the second quarter of 2004. The provision for the first nine months of 2004 was $5.3 million compared to $21.2 million for the first nine months of 2003.
The allowance for loan losses stood at $118.3 million or 2.64% of total loans at September 30, 2004, compared to $128.5 million or 2.78% of total loans at September 30, 2003 and $120.6 million or 2.71% of total loans at June 30, 2004.
Capital Overview
The capital ratios of Greater Bay Bancorp and its subsidiary bank continue to substantially exceed well-capitalized guidelines established by bank regulatory agencies.
The Company’s total tangible equity to tangible assets ratio was 7.56% at September 30, 2004 compared to 6.86% at September 30, 2003 and 6.68% as of June 30, 2004. The increase during the third quarter primarily reflected an increase of $18.4 million in the valuation of its securities portfolio, a contraction of $503.6 million in total assets, and the impact of retained earnings.
At September 30, 2004, year-to-date repurchases under the Company’s $70.0 million share repurchase program totaled approximately 2.2 million shares at an average price of $27.26 per share. During the third quarter, the Company repurchased approximately 380,000 shares at an average purchase price of $25.49. Remaining unused repurchase authority at September 30, 2004 was $10.8 million.
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Greater Bay Bancorp Reports Third Quarter 2004 Earnings Results
October 20, 2004
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Net Interest Margin and Interest Rate Risk Management
Greater Bay Bancorp’s average net interest margin for the third quarter of 2004 was 4.27%, compared to 4.06% for the third quarter of 2003 and 4.29% for second quarter of 2004.
The 2 basis point decrease in the net interest margin from the second quarter is reflective of the following:
· | an 18 basis point increase in earning asset yields less a corresponding 12 basis point increase in related funding costs; and |
· | an 8 basis point asset yield decrease attributable to a timing adjustment in our recognition of loan fee income. |
Outlook For The Remainder of 2004
The guidance for the remainder of 2004 remains unchanged from that provided at the end of the second quarter.
· | 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 October 20, 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 October 20 through midnight on October 27, 2004 by dialing
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Greater Bay Bancorp Reports Third Quarter 2004 Earnings Results
October 20, 2004
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800-642-1687 or 706-645-9291 and providing Conference ID 1339027.
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 leasing 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.
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.
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Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
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GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
Sept 30 2004 | Jun 30 2004 | Mar 31 2004 | Dec 31 2003 | Sept 30 2003 | ||||||||||||||||
Cash and Due From Banks | $ | 184,639 | $ | 242,517 | $ | 251,895 | $ | 238,534 | $ | 258,054 | ||||||||||
Fed Funds Sold | 8,000 | 22,000 | 216,000 | 35,000 | 53,000 | |||||||||||||||
Securities | 1,835,647 | 2,256,839 | 2,177,330 | 2,229,509 | 2,402,434 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial | 1,951,813 | 1,941,573 | 1,929,257 | 1,937,766 | 1,945,030 | |||||||||||||||
Term Real Estate – Commercial | 1,647,568 | 1,658,921 | 1,632,921 | 1,636,356 | 1,656,059 | |||||||||||||||
Total Commercial | 3,599,381 | 3,600,494 | 3,562,178 | 3,574,122 | 3,601,089 | |||||||||||||||
Real Estate Construction and Land | 459,533 | 415,155 | 479,692 | 537,079 | 604,172 | |||||||||||||||
Real Estate Other | 272,684 | 268,947 | 261,127 | 273,504 | 253,502 | |||||||||||||||
Consumer and Other | 152,553 | 171,003 | 146,022 | 167,593 | 158,119 | |||||||||||||||
Deferred Fees and Discounts, Net | (14,457 | ) | (12,575 | ) | (12,812 | ) | (14,491 | ) | (15,413 | ) | ||||||||||
Total Loans, Net of Deferred Fees and Discounts | 4,469,694 | 4,443,024 | 4,436,207 | 4,537,807 | 4,601,469 | |||||||||||||||
Allowance for Loan and Lease Losses | (118,349 | ) | (120,625 | ) | (122,609 | ) | (126,168 | ) | (128,499 | ) | ||||||||||
Total Loans, Net | 4,351,345 | 4,322,399 | 4,313,598 | 4,411,639 | 4,472,970 | |||||||||||||||
Goodwill | 178,317 | 178,317 | 178,317 | 177,991 | 148,714 | |||||||||||||||
Other Intangible Assets | 41,310 | 43,544 | 45,778 | 47,238 | 51,102 | |||||||||||||||
Other Assets | 507,346 | 544,539 | 455,289 | 458,372 | 404,887 | |||||||||||||||
Total Assets | $ | 7,106,604 | $ | 7,610,155 | $ | 7,638,207 | $ | 7,598,283 | $ | 7,791,161 | ||||||||||
Deposits: | ||||||||||||||||||||
Demand, Non-Interest Bearing | $ | 1,053,348 | $ | 1,045,651 | $ | 1,030,169 | $ | 1,077,648 | $ | 1,043,433 | ||||||||||
NOW, MMDA and Savings | 3,272,922 | 3,361,211 | 3,133,005 | 2,858,647 | 2,865,841 | |||||||||||||||
Time Deposits, $100,000 and over | 716,911 | 725,753 | 696,885 | 735,657 | 768,712 | |||||||||||||||
Other Time Deposits | 152,376 | 174,297 | 321,384 | 640,715 | 760,925 | |||||||||||||||
Total Deposits | 5,195,557 | 5,306,912 | 5,181,443 | 5,312,667 | 5,438,911 | |||||||||||||||
Other Borrowings | 714,883 | 1,112,334 | 1,270,255 | 1,071,880 | 1,215,677 | |||||||||||||||
Subordinated Debt | 210,311 | 210,311 | 210,311 | 210,311 | 210,311 | |||||||||||||||
Other Liabilities | 233,332 | 253,396 | 227,877 | 240,746 | 193,303 | |||||||||||||||
Total Liabilities | 6,354,083 | 6,882,953 | 6,889,886 | 6,835,604 | 7,058,202 | |||||||||||||||
Preferred Stock of Real Estate Investment Trust Subsidiaries | 12,582 | 12,162 | 12,162 | 12,162 | 12,162 | |||||||||||||||
Convertible Preferred Stock | 91,917 | 91,924 | 92,050 | 91,752 | 80,441 | |||||||||||||||
Common Shareholders’ Equity | 648,022 | 623,116 | 644,109 | 658,765 | 640,356 | |||||||||||||||
Total Equity | 739,939 | 715,040 | 736,159 | 750,517 | 720,797 | |||||||||||||||
Total Liabilities and Total Equity plus Minority Interest | $ | 7,106,604 | $ | 7,610,155 | $ | 7,638,207 | $ | 7,598,283 | $ | 7,791,161 | ||||||||||
Average Quarterly Total Loans, excluding Nonaccrual | $ | 4,412,082 | $ | 4,414,731 | $ | 4,450,875 | $ | 4,494,411 | $ | 4,623,844 | ||||||||||
Average Quarterly Securities | $ | 2,135,059 | $ | 2,325,402 | $ | 2,272,026 | $ | 2,397,036 | $ | 2,487,171 | ||||||||||
Average Quarterly Interest Earning Assets | $ | 6,547,141 | $ | 6,740,133 | $ | 6,722,901 | $ | 6,891,447 | $ | 7,111,015 | ||||||||||
Average Quarterly Deposits | $ | 5,311,140 | $ | 5,280,262 | $ | 5,210,518 | $ | 5,382,868 | $ | 5,509,736 | ||||||||||
Average Quarterly Interest Bearing Liabilities | $ | 5,383,185 | $ | 5,613,803 | $ | 5,533,915 | $ | 5,720,832 | $ | 6,039,904 | ||||||||||
Average Quarterly Assets | $ | 7,442,983 | $ | 7,637,696 | $ | 7,554,333 | $ | 7,697,315 | $ | 7,961,908 | ||||||||||
Average Quarterly Common Shareholders’ Equity | $ | 642,523 | $ | 638,371 | $ | 674,670 | $ | 651,027 | $ | 636,796 | ||||||||||
Average Quarterly Total Equity | $ | 734,443 | $ | 730,420 | $ | 766,721 | $ | 735,280 | $ | 717,237 | ||||||||||
Average YTD Interest Earning Assets | $ | 6,669,512 | $ | 6,731,632 | $ | 6,722,901 | $ | 7,084,821 | $ | 7,152,886 | ||||||||||
Average YTD Assets | $ | 7,544,040 | $ | 7,595,354 | $ | 7,554,333 | $ | 7,915,037 | $ | 7,988,379 | ||||||||||
Average YTD Common Shareholders’ Equity | $ | 651,820 | $ | 656,520 | $ | 674,670 | $ | 633,503 | $ | 628,211 | ||||||||||
Average YTD Total Equity | $ | 743,826 | $ | 748,570 | $ | 766,721 | $ | 714,113 | $ | 708,836 | ||||||||||
Total Regulatory Capital | ||||||||||||||||||||
Tier I Capital | $ | 733,579 | $ | 727,214 | $ | 704,790 | $ | 745,586 | $ | 735,514 | ||||||||||
Total Risk-based Capital | $ | 804,839 | $ | 799,306 | $ | 775,571 | $ | 818,743 | $ | 808,986 | ||||||||||
Nonperforming Assets | ||||||||||||||||||||
Nonaccrual Loans | $ | 58,741 | $ | 42,230 | $ | 48,042 | $ | 61,700 | $ | 58,072 | ||||||||||
OREO | — | — | 1,200 | — | — | |||||||||||||||
Other Nonperforming Assets | 534 | — | — | — | — | |||||||||||||||
Total Nonperforming Assets | $ | 59,275 | $ | 42,230 | $ | 49,242 | $ | 61,700 | $ | 58,072 | ||||||||||
Greater Bay Trust Company Assets | $ | 653,910 | $ | 647,022 | $ | 640,063 | $ | 629,333 | $ | 619,528 |
Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
Page 8 of 12
GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
Third Quarter 2004 | Second Quarter 2004 | First Quarter 2004 | Fourth Quarter 2003 | Third Quarter 2003 | ||||||||||||||||
Interest Income | $ | 93,574 | $ | 93,604 | $ | 96,745 | $ | 98,197 | $ | 98,728 | ||||||||||
Interest Expense | 23,307 | 21,722 | 21,374 | 22,975 | 26,040 | |||||||||||||||
Net Interest Income Before Provision for Loan and Lease Losses | 70,267 | 71,882 | 75,371 | 75,222 | 72,688 | |||||||||||||||
Provision for Loan and Lease Losses | 1,308 | 2,000 | 2,000 | 7,000 | 8,000 | |||||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 68,959 | 69,882 | 73,371 | 68,222 | 64,688 | |||||||||||||||
Non-interest Income: | ||||||||||||||||||||
Insurance Commissions and Fees | 33,276 | 32,916 | 34,581 | 27,747 | 31,174 | |||||||||||||||
Rental Revenue on Operating Leases | 3,067 | 2,665 | 2,317 | 1,934 | 1,537 | |||||||||||||||
Gains on Sale of Securities, net | 2,825 | 930 | 1,364 | 623 | 277 | |||||||||||||||
Service Charges and Other Fees | 2,599 | 2,624 | 2,623 | 2,754 | 2,792 | |||||||||||||||
Loan and International Banking Fees | 2,013 | 2,022 | 2,096 | 2,242 | 2,785 | |||||||||||||||
Trust Fees | 972 | 974 | 851 | 925 | 813 | |||||||||||||||
ATM Network Revenue | 314 | 333 | 360 | 430 | 492 | |||||||||||||||
Gain on Sale of Loans | 69 | 639 | 278 | 1,059 | 1,398 | |||||||||||||||
Other Income | 2,632 | 3,522 | 3,003 | 2,819 | 2,656 | |||||||||||||||
Total Non-interest Income | 47,767 | 46,625 | 47,473 | 40,533 | 43,924 | |||||||||||||||
Operating Expenses: | ||||||||||||||||||||
Salaries | 41,207 | 40,840 | 41,480 | 40,878 | 40,295 | |||||||||||||||
Deferred Loan Origination Costs | (3,772 | ) | (3,797 | ) | (3,019 | ) | (3,709 | ) | (3,898 | ) | ||||||||||
Benefits | 7,075 | 8,583 | 11,123 | 7,512 | 6,912 | |||||||||||||||
Total Compensation and Benefits | 44,510 | 45,626 | 49,584 | 44,681 | 43,309 | |||||||||||||||
Occupancy and Equipment | 11,570 | 10,251 | 10,205 | 10,390 | 10,695 | |||||||||||||||
Legal and Other Professional Fees | 6,525 | 4,646 | 3,298 | 3,641 | 3,601 | |||||||||||||||
Depreciation – Equipment Leased to Others | 2,549 | 2,252 | 1,905 | 1,712 | 1,096 | |||||||||||||||
Amortization of Intangibles | 2,071 | 2,072 | 2,071 | 1,889 | 1,949 | |||||||||||||||
Marketing and Promotion | 1,741 | 1,729 | 1,669 | 1,755 | 1,428 | |||||||||||||||
Telephone, Postage and Supplies | 1,670 | 1,853 | 1,749 | 1,854 | 1,767 | |||||||||||||||
Data Processing | 1,303 | 1,272 | 1,227 | 1,267 | 1,431 | |||||||||||||||
Insurance | 1,267 | 1,257 | 1,271 | 837 | 1,131 | |||||||||||||||
Correspondent Bank Charges | 623 | 692 | 862 | 1,036 | 1,101 | |||||||||||||||
FDIC Insurance and Regulatory Assessments | 458 | 496 | 500 | 505 | 588 | |||||||||||||||
Client Services Expenses | 318 | 272 | 327 | 337 | 294 | |||||||||||||||
Expenses on Other Real Estate Owned | — | 214 | 134 | — | 546 | |||||||||||||||
Contribution to Greater Bay Bancorp Foundation | — | — | 900 | — | — | |||||||||||||||
Other Expenses | 3,654 | 3,987 | 3,886 | 3,711 | 3,152 | |||||||||||||||
78,259 | 76,619 | 79,588 | 73,615 | 72,088 | ||||||||||||||||
Dividends Paid on Preferred Stock of Real Estate Investment Trust Subsidiaries | 456 | 456 | 456 | 464 | 453 | |||||||||||||||
Total Operating Expenses | 78,715 | 77,075 | 80,044 | 74,079 | 72,541 | |||||||||||||||
Income Before Provision for Income Taxes | 38,011 | 39,432 | 40,800 | 34,676 | 36,071 | |||||||||||||||
Provision for Income Taxes | 15,556 | 14,899 | 15,948 | 13,256 | 13,710 | |||||||||||||||
Net Income | $ | 22,455 | $ | 24,533 | $ | 24,852 | $ | 21,420 | $ | 22,361 | ||||||||||
Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
Page 9 of 12
GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s)
SELECTED CONSOLIDATED OPERATING DATA FOR THE NINE MONTH PERIODS:
YTD Sept 30 | YTD Sept 30 | |||||||
Interest Income | $ | 283,923 | $ | 309,522 | ||||
Interest Expense | 66,403 | 86,863 | ||||||
Net Interest Income Before Provision for Loan and Lease Losses | 217,520 | 222,659 | ||||||
Provision for Loan and Lease Losses | 5,308 | 21,195 | ||||||
Net Interest Income After Provision for Loan and Lease Losses | 212,212 | 201,464 | ||||||
Non-interest Income: | ||||||||
Insurance Commissions and Fees | 100,773 | 89,761 | ||||||
Rental Revenue on Operating Leases | 8,049 | 3,648 | ||||||
Service Charges and Other Fees | 7,846 | 8,618 | ||||||
Loan and International Banking Fees | 6,131 | 7,715 | ||||||
Gains on Sale of Securities, net | 5,119 | 7,258 | ||||||
Trust Fees | 2,797 | 2,389 | ||||||
ATM Network Revenue | 1,007 | 1,343 | ||||||
Gain on Sale of Loans | 986 | 2,834 | ||||||
Other Income | 9,157 | 7,443 | ||||||
Total Non-interest Income | 141,865 | 131,009 | ||||||
Operating Expenses: | ||||||||
Salaries | 123,527 | 117,922 | ||||||
Deferred Loan Origination Costs | (10,588 | ) | (10,494 | ) | ||||
Benefits | 26,781 | 23,314 | ||||||
Total Compensation and Benefits | 139,720 | 130,742 | ||||||
Occupancy and Equipment | 32,026 | 30,508 | ||||||
Legal and Other Professional Fees | 14,469 | 12,953 | ||||||
Depreciation – Equipment Leased to Others | 6,706 | 2,903 | ||||||
Amortization of Intangibles | 6,214 | 5,291 | ||||||
Telephone, Postage and Supplies | 5,272 | 5,391 | ||||||
Marketing and Promotion | 5,139 | 4,365 | ||||||
Data Processing | 3,802 | 4,089 | ||||||
Insurance | 3,795 | 3,650 | ||||||
Correspondent Bank Charges | 2,177 | 3,483 | ||||||
FDIC Insurance and Regulatory Assessments | 1,454 | 1,568 | ||||||
Client Services Expenses | 917 | 956 | ||||||
Contribution to Greater Bay Bancorp Foundation | 900 | — | ||||||
Expenses on Other Real Estate Owned | 348 | 1,065 | ||||||
Other Expenses | 11,527 | 9,805 | ||||||
234,466 | 216,769 | |||||||
Dividends Paid on Preferred Stock of Real Estate Investment Trust Subsidiaries | 1,368 | 1,360 | ||||||
Total Operating Expenses | 235,834 | 218,129 | ||||||
Income Before Provision for Income Taxes | 118,243 | 114,344 | ||||||
Provision for Income Taxes | 46,403 | 43,761 | ||||||
Net Income | $ | 71,840 | $ | 70,583 | ||||
Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
Page 10 of 12
GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
Sept 30 2004 | Jun 30 2004 | Mar 31 2004 | Dec 31 2003 | Sept 30 2003 | |||||||||||
FINANCIAL RATIOS: | |||||||||||||||
Loan to Deposit Ratio | 86.03% | 83.72% | 85.62% | 85.41% | 84.60% | ||||||||||
Ratio of Allowance for Loan and Lease Losses to: | |||||||||||||||
Average Loans | 2.65% | 2.71% | 2.73% | 2.77% | 2.74% | ||||||||||
End of Period Loans | 2.64% | 2.71% | 2.76% | 2.77% | 2.78% | ||||||||||
Total Nonaccrual Loans | 201.48% | 285.64% | 255.21% | 204.49% | 221.28% | ||||||||||
Ratio of Provision for Loan and Lease Losses to Average Loans, annualized | 0.12% | 0.18% | 0.18% | 0.61% | 0.68% | ||||||||||
Total Nonaccrual Loans to Total Loans | 1.31% | 0.95% | 1.08% | 1.36% | 1.26% | ||||||||||
Total Nonperforming Assets to Total Assets | 0.83% | 0.55% | 0.64% | 0.81% | 0.75% | ||||||||||
Ratio of Quarterly Net Charge-offs to Average Loans, annualized | 0.32% | 0.36% | 0.50% | 0.81% | 0.81% | ||||||||||
Ratio of YTD Net Charge-offs to YTD Average Loans | 0.39% | 0.43% | 0.50% | 0.67% | 0.63% | ||||||||||
Loan Growth, current quarter to prior year quarter | -2.86% | -5.62% | -6.00% | -5.29% | -1.97% | ||||||||||
Loan Growth, current quarter to prior quarter, annualized | 2.39% | 0.62% | -9.01% | -5.49% | -8.94% | ||||||||||
Loan Growth, YTD | -2.01% | -4.20% | -9.01% | -5.29% | -5.29% | ||||||||||
Core Deposits Growth, current quarter to prior year quarter (1) | 7.10% | 10.32% | 6.20% | 3.09% | 4.20% | ||||||||||
Core Deposits Growth, current quarter to prior quarter, annualized | -9.79% | 22.70% | 16.20% | -0.35% | 1.87% | ||||||||||
Core Deposits Growth, YTD | 9.61% | 19.91% | 16.20% | 3.09% | 4.26% | ||||||||||
Deposits Growth, current quarter to prior year quarter | -4.47% | -4.35% | -6.16% | 0.77% | -0.09% | ||||||||||
Deposits Growth, current quarter to prior quarter, annualized | -8.35% | 9.74% | -9.93% | -9.21% | -7.82% | ||||||||||
Deposits Growth, YTD | -2.94% | -0.22% | -9.93% | 0.77% | 4.23% | ||||||||||
Revenue Growth, current quarter to prior year quarter | 1.22% | 2.05% | 1.58% | -3.12% | -18.56% | ||||||||||
Revenue Growth, current quarter to prior quarter, annualized | -1.59% | -14.20% | 24.63% | -2.92% | 1.66% | ||||||||||
Net Interest Income Growth, current quarter to prior year quarter | -3.33% | -2.60% | -1.05% | �� | -7.16% | -17.06% | |||||||||
Net Interest Income Growth, current quarter to prior quarter, annualized | -8.94% | -18.62% | 0.80% | 13.83% | -6.00% | ||||||||||
Average Earning Assets to Average Total Assets | 87.96% | 88.25% | 88.99% | 89.53% | 89.31% | ||||||||||
Average Earning Assets to Average Interest-Bearing Liabilities | 121.62% | 120.06% | 121.49% | 120.46% | 117.73% | ||||||||||
Capital Ratios: | |||||||||||||||
Tier 1 leverage ratio | 10.18% | 9.83% | 9.64% | 9.98% | 9.49% | ||||||||||
Tier 1 risk-based capital ratio | 12.98% | 12.72% | 12.58% | 12.87% | 12.64% | ||||||||||
Total risk-based capital ratio | 14.24% | 13.98% | 13.84% | 14.13% | 13.90% | ||||||||||
Risk Weighted Assets | $ | 5,651,203 | $ | 5,715,605 | $ | 5,604,682 | $ | 5,793,334 | $ | 5,818,104 | |||||
Common Book Value Per Common Share | $ | 12.73 | $ | 12.18 | $ | 12.57 | $ | 12.54 | $ | 12.28 | |||||
Total Common Shares Outstanding | 50,907,052 | 51,177,202 | 51,238,680 | 52,529,850 | 52,160,193 | ||||||||||
NON-GAAP RATIOS (2): | |||||||||||||||
Tangible Total Equity plus Minority Interest (3) to Tangible Assets (4) | 7.74% | 6.84% | 7.07% | 7.29% | 7.02% | ||||||||||
Tangible Total Equity (5) to Tangible Assets (4) | 7.56% | 6.68% | 6.91% | 7.12% | 6.86% | ||||||||||
Tangible Common Book Value Per Common Share, including Convertible Preferred Stock (6) | $ | 9.64 | $ | 9.10 | $ | 9.43 | $ | 9.51 | $ | 9.49 | |||||
Tangible Common Book Value Per Common Share, excluding Convertible Preferred Stock (7) | $ | 8.42 | $ | 7.84 | $ | 8.20 | $ | 8.25 | $ | 8.45 |
(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 | $ | 648,022 | $ | 623,116 | $ | 644,109 | $ | 658,765 | $ | 640,356 | ||||||||||
Convertible Preferred Stock | 91,917 | 91,924 | 92,050 | 91,752 | 80,441 | |||||||||||||||
Preferred Stock of Real Estate Investment Trust Subsidiaries | 12,582 | 12,162 | 12,162 | 12,162 | 12,162 | |||||||||||||||
Total Equity plus Minority Interest | 752,521 | 727,202 | 748,321 | 762,679 | 732,959 | |||||||||||||||
Less: Goodwill and Other Intangible Assets | (219,627 | ) | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | ||||||||||
Tangible Total Equity plus Minority Interest (3) | $ | 532,894 | $ | 505,341 | $ | 524,226 | $ | 537,450 | $ | 533,143 | ||||||||||
Common Shareholders’ Equity | $ | 648,022 | $ | 623,116 | $ | 644,109 | $ | 658,765 | $ | 640,356 | ||||||||||
Convertible Preferred Stock | 91,917 | 91,924 | 92,050 | 91,752 | 80,441 | |||||||||||||||
Total Equity | 739,939 | 715,040 | 736,159 | 750,517 | 720,797 | |||||||||||||||
Less: Goodwill and Other Intangible Assets | (219,627 | ) | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | ||||||||||
Tangible Total Equity (5) | $ | 520,312 | $ | 493,179 | $ | 512,064 | $ | 525,288 | $ | 520,981 | ||||||||||
Total Assets | $ | 7,106,604 | $ | 7,610,155 | $ | 7,638,207 | $ | 7,598,283 | $ | 7,791,161 | ||||||||||
Less: Goodwill and Other Intangible Assets | (219,627 | ) | (221,861 | ) | (224,095 | ) | (225,229 | ) | (199,816 | ) | ||||||||||
Tangible Assets (4) | $ | 6,886,977 | $ | 7,388,294 | $ | 7,414,112 | $ | 7,373,054 | $ | 7,591,345 | ||||||||||
(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. |
Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
Page 11 of 12
GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
Third Quarter 2004 | Second Quarter 2004 | First Quarter 2004 | Fourth Quarter 2003 | Third Quarter 2003 | |||||||||||
GAAP EPS | |||||||||||||||
Net Income Per Common Share | |||||||||||||||
Basic (1) | $ | 0.41 | $ | 0.45 | $ | 0.44 | $ | 0.38 | $ | 0.40 | |||||
Diluted (2) | $ | 0.40 | $ | 0.43 | $ | 0.43 | $ | 0.37 | $ | 0.39 | |||||
Weighted Average Common Shares Outstanding | 51,046,000 | 51,108,000 | 52,654,000 | 52,363,000 | 52,093,000 | ||||||||||
Weighted Average Common & Common Equivalent Shares Outstanding (2) | 52,460,000 | 52,613,000 | 54,266,000 | 53,961,000 | 53,134,000 | ||||||||||
GAAP Ratios | |||||||||||||||
Return on Period Average Assets, annualized | 1.20% | 1.29% | 1.32% | 1.10% | 1.11% | ||||||||||
Return on Period Average Common Shareholders’ Equity, annualized | 13.90% | 15.46% | 14.82% | 13.05% | 13.93% | ||||||||||
Return on Period Average Total Equity, annualized | 12.16% | 13.51% | 13.04% | 11.56% | 12.37% | ||||||||||
Net Interest Margin – Average Earning Assets (3) | 4.27% | 4.29% | 4.51% | 4.33% | 4.06% | ||||||||||
Operating Expense Ratio (4) | 4.21% | 4.06% | 4.26% | 3.82% | 3.61% | ||||||||||
Efficiency Ratio (5) | 66.69% | 65.04% | 65.16% | 64.00% | 62.21% | ||||||||||
Total Operating Expenses | $ | 78,715 | $ | 77,075 | $ | 80,044 | $ | 74,079 | $ | 72,541 | |||||
Total Revenue | $ | 118,034 | $ | 118,507 | $ | 122,844 | $ | 115,755 | $ | 116,612 | |||||
NON-GAAP Ratios | |||||||||||||||
Efficiency Ratio (Excluding the operating results of ABD) (6) | 60.26% | 57.24% | 59.00% | 54.11% | 54.88% | ||||||||||
ABD Operating Expenses | $ | 27,857 | $ | 28,268 | $ | 28,139 | $ | 26,761 | $ | 25,880 | |||||
ABD Revenue | $ | 33,643 | $ | 33,245 | $ | 34,870 | $ | 28,301 | $ | 31,591 |
(1) | Net income available to common shareholders is based on total net income less preferred dividends of $1.7 million for Q3, Q2 and Q1, 2004, $1.5 million for Q4 and Q3 2003. |
(2) | The convertible preferred stock was considered anti-dilutive in Q3, Q2 and Q1 2004, Q4 and Q3 2003, whereby the preferred dividends of $1.7 million divided by the common stock equivalent of the convertible preferred stock of 3,044,000 shares, 3,041,000 shares and 3,043,000 shares in Q3, Q2 and Q1 2004 were greater than the diluted earnings per share and the preferred dividends of $1.5 million divided by the common stock equivalent of the convertible preferred stock of 2,718,000 shares in Q4 and Q3 2003 were greater than the diluted earnings per share. |
(3) | Net interest income for the period, annualized and divided by average quarterly interest earning assets. |
(4) | Total operating expenses for the period, annualized and divided by average quarterly assets. |
(5) | Total operating expenses divided by total revenue (the sum of net interest income and non-interest income). |
(6) | Total operating expenses minus ABD operating expenses divided by total revenue minus ABD revenue. |
Greater Bay Bancorp’s Third Quarter 2004 Earnings Results
October 20, 2004
Page 12 of 12
GREATER BAY BANCORP
SEPTEMBER 30, 2004 – FINANCIAL SUMMARY (UNAUDITED)
($ in 000’s, except share and per share data)
SELECTED CONSOLIDATED OPERATING RATIOS FOR THE NINE MONTH PERIODS:
YTD Sept 30 2004 | YTD Sept 30 2003 | |||||
GAAP EPS | ||||||
Net Income Per Common Share | ||||||
Basic (1) | $ | 1.30 | $ | 1.27 | ||
Diluted (2) | $ | 1.26 | $ | 1.26 | ||
Weighted Average Common Shares Outstanding | 51,605,000 | 51,919,000 | ||||
Weighted Average Common & Common Equivalent Shares Outstanding (2) | 53,114,000 | 52,646,000 | ||||
GAAP Ratios | ||||||
Return on Period Average Assets, annualized | 1.27% | 1.18% | ||||
Return on Period Average Common Shareholders’ Equity, annualized | 14.72% | 15.02% | ||||
Return on Period Average Total Equity, annualized | 12.90% | 13.31% | ||||
Net Interest Margin – Average Earning Assets (3) | 4.36% | 4.16% | ||||
Operating Expense Ratio (4) | 4.18% | 3.65% | ||||
Efficiency Ratio (5) | 65.62% | 61.68% | ||||
Total Operating Expenses | $ | 235,834 | $ | 218,129 | ||
Total Revenue | $ | 359,385 | $ | 353,668 | ||
NON-GAAP Ratios | ||||||
Efficiency Ratio (Excluding the operating results of ABD) (6) | 58.83% | 55.41% | ||||
ABD Operating Expenses | $ | 84,264 | $ | 72,288 | ||
ABD Revenue | $ | 101,758 | $ | 90,444 |
(1) | Net income available to common shareholders is based on total net income less preferred dividends of $5.0 million for YTD September 2004 and $4.4 million for YTD September 2003. |
(2) | The convertible preferred stock was considered anti-dilutive in YTD September 2004 and YTD September 2003, whereby the preferred dividends of $5.0 million divided by the common stock equivalent of the convertible preferred stock of 3,047,000 shares in YTD September 2004 were greater than the diluted earnings per share and the preferred dividends of $4.4 million divided by the common stock equivalent of the convertible preferred stock of 2,740,000 shares in YTD September 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. |