Exhibit 99.1
Slide Presentation of Greater Bay Bancorp as of December 31, 2005
![]() ![]() ![]() ![]() 1 Greater Bay Bancorp Greater Bay Bancorp Investor Presentation Investor Presentation March 2006 March 2006 |
![]() ![]() ![]() ![]() 2 Greater Bay Bancorp Greater Bay Bancorp 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 local, national and international 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) government regulation, including ABD’s receipt of requests for information from state insurance commissioners and subpoenas from state attorneys general related to the ongoing insurance industry-wide investigations into contingent commissions and override payments; and (3) 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, 2004. 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. |
![]() ![]() ![]() ![]() 3 Company Profile Company Profile As of December 31, 2005 As of December 31, 2005 1.27% / 13.5% Q4 ROA / ROCE $1.37 billion Market Capitalization (2) $668 million Common Equity 49.9 million Common Shares Outstanding $0.39 / $1.55 Q4/FY05 Diluted EPS $22.8 / $92.9 million Q4/FY05 Net Income $4.6 billion Core Deposits (1) $7.1 billion Total Assets (1) Excludes brokered and wholesale institutional deposits (2) As of February 1, 2006 |
![]() ![]() ![]() ![]() 4 Investment Rationale Investment Rationale • Largest independent banking franchise in Northern California operating in lucrative San Francisco Bay Area regional market. • Established track record as acquirer of choice. • Proven record of organic growth and in-market expansion. • Diversified provider of financial services in four distinct business areas. • Mitigates geographic concentration of banking business and sector-specific earnings volatility. • Reduces spread income dependence. |
![]() ![]() ![]() ![]() 5 Investment Rationale Investment Rationale • Strong financial fundamentals and sound credit metrics. • Experienced and proven executive management team. • Leading to long-term record of superior shareholder return. |
![]() ![]() ![]() ![]() 6 An Exceptional Regional Market An Exceptional Regional Market |
![]() ![]() ![]() ![]() 7 Greater San Francisco Bay Area Greater San Francisco Bay Area |
![]() ![]() ![]() ![]() 8 Greater San Francisco Bay Area Profile Greater San Francisco Bay Area Profile • Recognized global leadership in technological innovation, advancement, and growth. • Unmatched concentration of venture capital funding and investment. • Entrepreneurial spirit and results-oriented ethic. • Highest levels of worker productivity and per capita income in the nation. • Highest level of workforce education in the nation. • Exceptionally strong international trade position. |
![]() ![]() ![]() ![]() 9 Diversified Financial Services Diversified Financial Services Provider Provider |
![]() ![]() ![]() ![]() 10 Diversified Financial Services Provider Diversified Financial Services Provider * Includes Lucini/Parish which was acquired May, 2005. Loans of $3.0 billion Core deposit of $4.6 billion 12 distinct community bank brands 40 offices Relationship based Centralized operations, international and cash management support Regional in scope Regional Community Banking Assets of $1.5 billion Commercial finance to health care businesses Small ticket leasing Factoring and asset based lending SBA lending National in scope Specialty Finance Annual premiums of $2.2 billion 2005 annual revenues of $154 million* Offering P&C, D&O, employee benefits, risk management services No underwriting risk Western U.S. in scope Insurance Brokerage Trust and private banking AUM in excess of $600 million Regional in scope Wealth Management Greater Bay Bancorp |
![]() ![]() ![]() ![]() 11 Regional Community Banking Regional Community Banking |
![]() ![]() ![]() ![]() 12 Regional Community Banking Business Regional Community Banking Business • Operating 12 separate business dbas under single consolidated charter – 40 office locations throughout the Greater Bay Area. • Common data processing platform, credit policies and operating procedures – served and supported by single administrative staff. • Relationship focused: • Loans: Commercial ($500M-5MM), CRE ($1-10MM), and construction ($1-10MM) credit opportunities. • Deposits: Full suite of business and personal products. • Local people in local markets making local decisions based upon local knowledge. |
![]() ![]() ![]() ![]() 13 Greater Bay Community Banking - Greater Bay Community Banking - Today Today |
![]() ![]() ![]() ![]() 14 Community Banking Group Profile Community Banking Group Profile Note: Figures shown as of 12/31/05. Total Loans: $3.0 billion Core Deposits: $4.6 billion Mid-Peninsula Bank Peninsula Bank of Commerce Bay Area Bank Peninsula/ San Mateo County Cupertino National Bank San Jose National Bank Bank of Santa Clara Santa Clara County Golden Gate Bank Greater Bay Bank- Marin San Francisco/ Marin Counties Bay Bank of Commerce Greater Bay Bank- Fremont Alameda County Mt. Diablo National Bank Greater Bay Bank- Walnut Creek Contra Costa County Coast Commercial Bank Greater Bay Bank- Carmel Santa Cruz/ Monterey Counties Bank of Petaluma Sonoma County Community Banking Group |
![]() ![]() ![]() ![]() 15 Client-Centric Banking Model Client-Centric Banking Model Install Sell Service Craft Locate and Diagnose 1 5 4 2 3 Client Link and Build 6 Relationship Management Business Development |
![]() ![]() ![]() ![]() 16 Business Development Group Initiatives Business Development Group Initiatives • Proven executive hired in Q4 to develop and manage group. • Modeling, tracking, and compensation plans completed. • Five proven BDOs recruited to date. • Including top Northern California performers from two major competitors. • And virtually all from large bank sources. • Targeted to grow to 12 BDOs by mid-year. • And to total of 18 by YE 06. • Each producer modeled to generate $25MM in annual loan/line commitments. • Commercial and owner-occupied CRE in nature. • Target size of $1-5MM per loan commitment. |
![]() ![]() ![]() ![]() 17 Core Deposit Balances Core Deposit Balances (1) (1) $4.43 $4.56 $4.81 $4.75 $4.55 $4.58 $4.56 $0.00 $2.00 $4.00 $6.00 2002 2003 2004 Q1 '05 Q2 '05 Q3 '05 Q4 '05 ($ in Billions) (1) Core deposits exclude brokered and wholesale institutional deposits. |
![]() ![]() ![]() ![]() 18 (1) Core deposits exclude brokered and wholesale institutional deposits. By Region By Type Demand 24% MMDAs 40% Savings & NOW 26% Other Time Deposits 3% Time Deposits >$100 7% San Mateo 26% Contra Costa 12% Sonoma 5% Santa Clara 40% Santa Cruz & Monterey 6% Alameda 4% Marin 2% San Francisco 5% Core Deposit Composition Core Deposit Composition (1) (1) As of December 31, 2005 As of December 31, 2005 |
![]() ![]() ![]() ![]() 19 Cumulative Change in Cost of Interest-Bearing Core Cumulative Change in Cost of Interest-Bearing Core Deposits vs. Change in Three-Month Libor Deposits vs. Change in Three-Month Libor 0.00% 1.00% 2.00% 3.00% 4.00% '12/31/03 '12/31/04 '12/31/05 GBBK IB Core Three-Month Libor Cumulative %Change |
![]() ![]() ![]() ![]() 20 Specialty Finance Specialty Finance |
![]() ![]() ![]() ![]() 21 Specialty Finance Business Specialty Finance Business • Collection of discrete businesses focused on acquisition and servicing/sale of value-based assets where execution, efficiency, standardization, and productivity are essential to optimizing profitability. • Transaction rather than relationship-based. • Relationships essentially limited to intermediaries who source the business (dealers, distributors, etc.). • Mandate to compete at high end of credit quality spectrum. • No deviation from target borrower – very disciplined. • Intense focus on perpetual growth of credit risk knowledge and on automation-based underwriting as core strategic elements. |
![]() ![]() ![]() ![]() 22 Specialty Finance Group Profile Specialty Finance Group Profile Note: Figures as of 12/31/05. Total Assets: $1.5 billion Professional dental and veterinary term commercial financing National in scope Matsco Small-ticket leasing National in scope Greater Bay Capital Factoring and asset- based lending National in scope Greater Bay Funding 504 and 7(A) business sourced direct and via community banks Regional in scope SBA Lending Start-up venture aimed at brokering or retaining high quality SFD REL Regional in scope Residential Mortgage Lending Specialty Finance Group |
![]() ![]() ![]() ![]() 23 Specialty Finance Group Loan Growth Specialty Finance Group Loan Growth By Business Line – By Business Line – 12/31/05 vs. 12/31/04 12/31/05 vs. 12/31/04 $1,456.5 28.9 254.5 107.7 180.1 $885.3 12/31/05 18% $217.4 $1,239.1 Group Total NM 28.9 0.0 Residential Lending 12% 26.3 228.2 SBA Lending 2% 2.1 105.6 Greater Bay Funding 38% 49.2 130.9 Greater Bay Capital (1) 14% $110.9 $774.4 Matsco % Growth Change 12/31/04 ($ in Millions) (1) Excludes operating lease totals of $65.4 million at 12/31/05 and $56.8 million at 12/31/04. |
![]() ![]() ![]() ![]() 24 Credit Portfolio Profile Credit Portfolio Profile |
![]() ![]() ![]() ![]() 25 $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 2001 2002 2003 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 CRE Construction and Land Commercial-SBA & Community Banking Commercial-Matsco/GBC/GBBF SNC/Residential/All Other Core Loan Portfolio Composition* Core Loan Portfolio Composition* Combined Community Banking and Specialty Finance Combined Community Banking and Specialty Finance ($ in Billions) * Excludes purchased loans * Gross of Deferred Fees & Discounts $4.51 $4.81 $4.55 $4.47 $4.43 $4.48 $4.44 $4.49 14% 13% 26% 16% 31% 11% 17% 24% 15% 34% 10% 19% 23% 12% 36% 10% 23% 21% 11% 36% 9% 24% 22% 11% 35% 9% 24% 24% 12% 30% 9% 25% 23% 14% 29% 9% 26% 24% 14% 27% |
![]() ![]() ![]() ![]() 26 Commercial Real Estate Portfolio Composition Commercial Real Estate Portfolio Composition As of December 31, 2005 As of December 31, 2005 Office 35% Retail 18% Industrial 14% Other 9% 1-4SFR 5% Warehouse 4% Self Storage 2% Multifamily 4% R&D 4% Hotel/Motel 5% Alameda 12% San Francisco 8% Santa Cruz 5% Sonoma 6% Other 8% Solano 0% Sacramento 1% Contra Costa 6% Marin 6% Monterey 2% San Mateo 12% Santa Clara 34% By Type By County Total - $1.5 Billion |
![]() ![]() ![]() ![]() 27 CRE Loan Outstandings by Vintage CRE Loan Outstandings by Vintage 12% 10% 9% 10% 18% 14% 11% 16% $0 $100 $200 $300 Pre 1999 1999 2000 2001 2002 2003 2004 2005 ($ in Millions) Total Outstandings = $1.5 billion |
![]() ![]() ![]() ![]() 28 Bay Area Office Market Bay Area Office Market Rental and Vacancy Trends Rental and Vacancy Trends Source: BT Commercial $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 1999 2000 2001 2002 2003 2004 2005 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Avg Rent Vacancy |
![]() ![]() ![]() ![]() 29 Construction Loan Portfolio Construction Loan Portfolio 2002 vs. 2005 2002 vs. 2005 2002 2005 1-4 SFR 38% Multifamily 18% Office 29% Industrial 1% Self Storage 3% Retail 2% Other 9% 1-4 SFR 49% Multifamily 36% Office 7% Industrial 1% Self Storage 1% Retail 3% Other 3% Total - $557 Million Total - $501 Million |
![]() ![]() ![]() ![]() 30 Construction Loan Portfolio Composition Construction Loan Portfolio Composition As of December 31, 2005 As of December 31, 2005 By County Santa Clara 22% San Mateo 16% San Francisco 13% Contra Costa 13% Alameda 9% Santa Cruz 9% Sonoma 2% San Bernadino 3% Placer 0% Other 6% Sacramento 5% Marin 2% Total - $501 Million |
![]() ![]() ![]() ![]() 31 43% 17% 20% 19% 1% < 60% 60-65% 65-70% 70-75% 75-80% By LTV By Total Commitment Total - $470 Million 1-4 Family Construction Loan Portfolio Commitments 1-4 Family Construction Loan Portfolio Commitments As of 12/31/05 As of 12/31/05 48% 21% 12% 3% 7% 9% Under $5MM $5-10MM $10-15MM $15-20MM $20-25MM Over $25MM |
![]() ![]() ![]() ![]() 32 Commercial Insurance Commercial Insurance Brokerage Brokerage |
![]() ![]() ![]() ![]() 33 Commercial Insurance Services Business Commercial Insurance Services Business • Acquired ABD Insurance and Financial Services in March 2002 – a highly-respected provider of commercial insurance brokerage and risk management services. • Largest brokerage firm headquartered on the West Coast and 15 th largest in the nation. (1) • And 4 th largest bank-owned firm in the country. • Diversified property and casualty (65%) and employee benefit (35%) revenue streams. • Key strengths in technology, biotech, wine, construction, and agribusiness industry sectors. (1) Source: Business Insurance Magazine – July 18, 2005 |
![]() ![]() ![]() ![]() 34 • Strategic focus on disciplined expansion (via organic growth and acquisitions) into key western regional markets. • To leverage existing lines of business expertise – and to develop enhanced “provider-of-choice” branding and pricing positions. • Highly successful expansion into Seattle is indicative of both capabilities and expectations. • Completed acquisition of highly regarded Lucini/Parish firm in Nevada – May 1, 2005 Commercial Insurance Services Business Commercial Insurance Services Business |
![]() ![]() ![]() ![]() 35 Commercial Insurance Services Group Commercial Insurance Services Group 2005 Premium Volume: $2.2 billion 2005 Commission & Fee Revenue: $154.4 million |
![]() ![]() ![]() ![]() 36 Increased Non-Interest Revenue Contribution* Increased Non-Interest Revenue Contribution* * As a result of the ABD acquisition in March 2002, the Company’s 2002 results included 10 months of insurance commissions and fees totaling $88.5 million. 17.7% 13.3% 25.0% 11.4% 27.6% 11.7% 30.7% 13.2% 2002 2003 2004 2005 ABD Other Fee-Based 40% 31% 37% 44% |
![]() ![]() ![]() ![]() 37 Sound Credit Metrics Sound Credit Metrics |
![]() ![]() ![]() ![]() 38 Net Total Charge-Offs Net Total Charge-Offs 2002-2005 2002-2005 $54.8 $31.6 $17.7 $14.8 $0 $10 $20 $30 $40 $50 $60 $70 2002 2003 2004 2005 ($ in Millions) |
![]() ![]() ![]() ![]() 39 Net Charge-Offs by Loan Type Net Charge-Offs by Loan Type 2002 to 2005 2002 to 2005 $0 $5 $10 $15 $20 2002 $17.5 $13.8 $13.5 $9.5 $0.5 2003 $9.6 $10.3 $5.6 $5.2 $0.9 2004 $6.6 $3.0 $3.0 $4.6 $0.5 2005 $4.6 $0.0 $2.1 $2.7 $5.4 Matsco SNC C & I CRE & Construction Consumer ($ in millions) |
![]() ![]() ![]() ![]() 40 Non-Performing Assets by Loan Type Non-Performing Assets by Loan Type $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 3/31/04 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 9/30/05 12/31/05 CRE Const./Land Commercial Corp. Finance Matsco/GBC All Other $49 $42 $59 $44 ($ in millions) $53 $88* $73* $68* * Includes single borrowing relationship representing $41.6MM at 6/30/05, $36.6MM at 9/30/05 and $33.3MM 12/31/05. |
![]() ![]() ![]() ![]() 41 Allowance and Charge-Off Levels Allowance and Charge-Off Levels 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% GBBK Annualized Net Charge-Off Rate GBBK Allowance as % of Loans Peer Allowance as % of Loans |
![]() ![]() ![]() ![]() 42 Strong Financial Indicators Strong Financial Indicators |
![]() ![]() ![]() ![]() 43 Capital Strength Capital Strength 13.2% 11.9% 10.3% 7.0% 2005 14.3% 14.1% 10.0% Total Risk-Based Capital 13.0% 12.9% 6.0% Tier 1 Risk-Based Capital 10.7% 10.0% 5.0% Leverage Ratio 7.7% 7.1% n/a Tang.Equity/Tang. Assets (1) 2004 2003 Regulatory Well- Capitalized Standard Capital Ratios (1) Common equity plus preferred stock less intangible assets divided by tangible assets. |
![]() ![]() ![]() ![]() 44 4.29% 4.45% 5.29% 5.56% 4.86% 4.52% 4.20% 4.36% 4.35% 4.37% 6.00% 5.75% 8.50% 9.50% 5.00% 4.25% 4.00% 5.25% 6.75% 7.25% 2% 4% 6% 8% 10% 12/99 12/00 12/01 12/02 12/03 12/04 03/05 06/05 09/05 12/05 GBBK's Avg. Margin Prime Rate Net Interest Margin Levels Net Interest Margin Levels |
![]() ![]() ![]() ![]() 45 Interest Rate Risk Profile Interest Rate Risk Profile • Greater Bay is fundamentally neutral with current slight bias to net asset-sensitive position. • Balance sheet actively managed to sustain slightly net asset sensitive position • $1.9 billion of indexed loans that adjust with market rate movements. • Restrained upward deposit pricing. • Wholesale financing duration extensions. • Investment portfolio continues to be managed for minimal credit and controlled extension risk. |
![]() ![]() ![]() ![]() 46 Quality Management Quality Management |
![]() ![]() ![]() ![]() 47 Experienced and Committed Experienced and Committed Management Team Management Team Stanford University, Bank of America, EurekaBank Peggy Hiraoka Human Resources ABD, Minet, COMPRO Dan R. Francis Insurance Brokerage Wells Fargo, ATT Capital Keith Wilton Specialty Finance Wells Fargo Colleen M. Anderson Community Banking Cal Fed, OTS Kenneth Shannon Chief Risk Officer Bank of America James S. Westfall Chief Financial Officer Wells Fargo, Bank of America, EurekaBank Byron A. Scordelis Chief Executive Officer Experience Name Officer |
![]() ![]() ![]() ![]() 48 Focus on the Future Focus on the Future |
![]() ![]() ![]() ![]() 49 2005 Accomplishments of Note 2005 Accomplishments of Note • Continuation of solid and quality growth realized in specialty finance and commercial insurance brokerage businesses. • Successful strategic insurance acquisition completed. • Expansion of GBC franchise sustained. • Community bank charter consolidation and deposit pricing standardization seamlessly executed. • Repositioning of community bank asset portfolio proceeding in concert with stated objectives. • Balance migration from CRE to construction. • BDO initiative established and growing. • Key risk and control metrics favorably reflect devotion of focus and resources. • Credit quality trends sustainably strengthening. • SOX compliance efforts consistent with control-based ethic. |
![]() ![]() ![]() ![]() 50 Key Objectives Key Objectives • Restore and drive top-line revenue growth. • Quality loan and deposit growth in target product types and client profiles. • Focus on C&I, construction, and specialty finance asset areas. • Continued acceleration of insurance and other fee revenue sources. • Redoubled focus on pricing disciplines. • Achieve and sustain increased cost efficiency. • Rationalize responsibilities and structures. • Realize growth without added recurring cost. |
![]() ![]() ![]() ![]() 52 Key Objectives Key Objectives • Pursue expansion of all existing business lines. • Be regarded as “best of breed” in all control endeavors. • Regulatory, compliance, accounting, SOX, and enterprise-wide risk management. • Portfolio concentration and credit quality. • Interest-rate risk management. • Be an active force for positive change in the communities that we serve. |
![]() ![]() ![]() ![]() 52 Outlook for 2006 Outlook for 2006 Our full year guidance for 2006 is as follows: • Core Loan Growth – based on the current forecast of moderate economic growth in our primary market area coupled with a planned increase in our lending and relationship management staff, we anticipate core loan portfolio growth in the mid to high single digit range, with this growth concentrated in the second half of the year. • Core Deposit Growth – we anticipate core deposit growth in the mid single digits, and intend to 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 net charge-offs from 25 basis points to 35 basis points of average loans outstanding. • Net Interest Margin – based on the Company’s anticipated core loan and deposit growth and its slightly net asset interest rate sensitivity position, we expect the margin to fluctuate in the 4.20% to 4.40% range. |
![]() ![]() ![]() ![]() 53 Focus on Shareholder Value Focus on Shareholder Value |
![]() ![]() ![]() ![]() 54 GBBK Share Price Performance GBBK Share Price Performance 0% 100% 200% 300% 400% 500% 600% 700% 800% GBBK S&P Bank Index S&P 500 Nasdaq Bank Index |
![]() ![]() ![]() ![]() 55 Schedule A – Schedule A – Custom Peer Group 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 Whitney Holding Corporation Firstbank Holding Company of Colorado Wilmington Trust Corporation FirstMerit Corporation |