Exhibit 99.1
Slide Presentation of Greater Bay Bancorp Presented
At Annual Meeting of Shareholders on May 30, 2006
![]() ![]() ![]() ![]() 1 Greater Bay Bancorp Greater Bay Bancorp 2006 Annual Meeting of Shareholders 2006 Annual Meeting of Shareholders May 30, 2006 May 30, 2006 |
![]() ![]() ![]() ![]() 2 Greater Bay Bancorp Greater Bay Bancorp Certain matters discussed in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements relate to the Company’s current expectations regarding future operating results, net interest margin, net loan charge-offs, asset quality, level of loan loss reserves, growth in loans and deposits 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, 2005. 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 March 31, 2006 As of March 31, 2006 $4.5 billion Core Loans (1) 1.47% / 15.42% Q1 ROA / ROCE $1.46 billion Market Capitalization (3) $690 million Common Equity 50.3 million Common Shares Outstanding $0.46 Q1 Diluted EPS $25.9 million Q1 Net Income $4.5 billion Core Deposits (2) $7.1 billion Total Assets (1) Excludes purchased loans (2) Excludes brokered and wholesale institutional deposits (3) As of May 25, 2006 |
![]() ![]() ![]() ![]() 4 Framework for My Comments Framework for My Comments • • Why be an investor in Greater Bay? Why be an investor in Greater Bay? • • Who are we? What are we all about? Who are we? What are we all about? • • What is the essence of our business strategy? What is the essence of our business strategy? • • How are we doing? How are we doing? • • How are we seeking to build for the future? How are we seeking to build for the future? |
![]() ![]() ![]() ![]() 5 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. |
![]() ![]() ![]() ![]() 6 Investment Rationale Investment Rationale • Strong financial fundamentals and sound credit metrics. • Experienced and proven executive management team. • Leading to expectation of superior long-term shareholder return. |
![]() ![]() ![]() ![]() 7 “It’s Personal … “It’s Personal … It’s Business” It’s Business” • Our business is all about personal relationships. • Relationships with our clients, our communities, our shareholders, and each other. • And about serving the “sweet spot” between the impersonal scale of the mega-banks (and mega-brokers) and the limited capabilities and resources of smaller competitors. • Our founding beliefs are simple, strong, and lasting. |
![]() ![]() ![]() ![]() 8 Our Guiding Principles Our Guiding Principles • We understand that we work for our shareholders. • We believe that we have no divine right to exist. • We believe that the essence of success in financial services is responsibly assessing and bearing risk. • We believe that selling money (or commercial insurance) is merely a commodity business while providing consistently exceptional client service is a value business. • We believe that the most efficient competitor sets the standard for all others. |
![]() ![]() ![]() ![]() 9 Our Guiding Principles Our Guiding Principles • We understand that our future is only as strong as the communities that we serve. • We believe in the importance of our people. • In hiring, developing, recognizing, rewarding, and respecting them in our quest to attract and build the very best team possible. • We believe in the power of relationships. |
![]() ![]() ![]() ![]() 10 Diversified Financial Services Diversified Financial Services Provider Provider |
![]() ![]() ![]() ![]() 11 “We Are Far More Than Meets the Eye…” “We Are Far More Than Meets the Eye…” Loans of $3.0 billion Core deposits of $4.4 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 $1.6 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 and 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 $650 million Regional in scope Wealth Management Greater Bay Bancorp * Includes Lucini/Parish which was acquired May, 2005. |
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![]() ![]() ![]() ![]() 15 Regional Community Banking Regional Community Banking |
![]() ![]() ![]() ![]() 16 Regional Community Banking Business Regional Community Banking Business • Operating 12 separate business identities under single national banking 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: • Commercial ($500M-5MM), CRE ($1-10MM), and construction ($1-10MM) credit opportunities. • Full suite of business and personal deposit products. • Based upon a strategic belief that local people in local markets making local decisions based upon local knowledge will lead to sustainably superior returns. |
![]() ![]() ![]() ![]() 17 Greater Bay Community Banking - Greater Bay Community Banking - Today Today |
![]() ![]() ![]() ![]() 18 Community Banking Group Profile Community Banking Group Profile Note: Figures shown as of 03/31/06. Total Loans: $3.0 billion Core Deposits: $4.4 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 |
![]() ![]() ![]() ![]() 19 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. |
![]() ![]() ![]() ![]() 20 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 Q1 '06 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Avg Rent Vacancy |
![]() ![]() ![]() ![]() 21 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 |
![]() ![]() ![]() ![]() 22 Core Deposit Balances Core Deposit Balances (1) (1) $4.43 $4.56 $4.81 $4.56 $4.47 $0.00 $2.00 $4.00 $6.00 2002 2003 2004 2005 Q1 '06 ($ in Billions) (1) Core deposits exclude brokered and wholesale institutional deposits. |
![]() ![]() ![]() ![]() 23 Core Loan Balances Core Loan Balances $4.52 $4.84 $4.56 $4.47 $4.49 $4.50 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 2001 2002 2003 2004 2005 Q106 |
![]() ![]() ![]() ![]() 24 Cumulative Changes in GBBK Loan Portfolio 12/31/03 to 12/31/05 -300 -200 -100 0 100 200 300 $ Millions Total Loans* Commercial Construction CRE Matsco & GBC |
![]() ![]() ![]() ![]() 25 Construction Loan Portfolio Construction Loan Portfolio 2002 vs. 2006 2002 vs. 2006 December 31, 2002 March 31, 2006 1-4 SFR 38% Multifamily 18% Office 29% Industrial 1% Self Storage 3% Retail 2% Other 9% Total - $557 Million Total - $560 Million 1-4 SFR 48% Multifamily 32% Office 7% Retail 4% Land 2% Self Storage 2% R&D 2% Other 3% |
![]() ![]() ![]() ![]() 26 Construction Loan Portfolio Composition Construction Loan Portfolio Composition As of March 31, 2006 As of March 31, 2006 By County Total - $560 Million Santa Clara 27% San Francisco 15% San Mateo 14% Alameda 9% Santa Cruz 8% Contra Costa 7% Sacramento 4% San Diego 3% Other 5% Marin 2% Solano 2% Monterey 2% Sonoma 2% |
![]() ![]() ![]() ![]() 27 40% 15% 20% 19% 6% < 60% 60-65% 65-70% 70-75% 75-80% By LTV By Total Commitment Size Total - $468 Million 1-4 Family Construction Loan Portfolio Commitments 1-4 Family Construction Loan Portfolio Commitments As of 03/31/06 As of 03/31/06 47% 19% 10% 8% 7% 9% Under $5MM $5-10MM $10-15MM $15-20MM $20-25MM Over $25MM |
![]() ![]() ![]() ![]() 28 Term Commercial Real Estate Term Commercial Real Estate Portfolio Composition Portfolio Composition As of March 31, 2006 As of March 31, 2006 Office 36% Retail 21% Industrial 16% Warehouse 6% Self Storage 2% Other 10% R&D 4% Hotel/Motel 5% San Mateo 10% San Francisco 8% Contra Costa 7% Marin 6% Santa Cruz 5% Sonoma 7% Monterey 2% Other 8% Alameda 14% Santa Clara 33% By Type By County Total - $1.4 Billion |
![]() ![]() ![]() ![]() 29 Specialty Finance Specialty Finance |
![]() ![]() ![]() ![]() 30 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. |
![]() ![]() ![]() ![]() 31 Specialty Finance Group Profile Specialty Finance Group Profile Note: Figures as of 03/31/06. Total Assets: $1.6 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 Business 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 |
![]() ![]() ![]() ![]() 32 Specialty Finance Group Loan Growth Specialty Finance Group Loan Growth By Business Line By Business Line $1,457 29 255 108 180 $885 12/31/05 17% $207 $1,250 Group Total NM 29 0 Residential Lending 12% 26 228 SBA Lending 2% 2 106 Greater Bay Funding 38% 49 131 Greater Bay Capital (1) 13% $100 $785 Matsco % Growth Change 12/31/04 ($ in Millions) (1) Excludes operating lease totals of $66 million at 12/31/05 and $57 million at 12/31/04. |
![]() ![]() ![]() ![]() 33 Specialty Finance Asset Growth Specialty Finance Asset Growth 1/1/01 to 12/31/05 1/1/01 to 12/31/05 $601 $861 $926 $1,078 $1,239 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2001 2002 2003 2004 2005 ($ in Millions) * Excludes SBA and residential real estate lending totals. 20% CAGR |
![]() ![]() ![]() ![]() 34 Commercial Insurance Commercial Insurance Brokerage Brokerage |
![]() ![]() ![]() ![]() 35 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. (1) Source: Business Insurance Magazine – July 18, 2005 |
![]() ![]() ![]() ![]() 36 • Key strengths in technology, biotech, wine, construction, and agribusiness industry sectors. • 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 |
![]() ![]() ![]() ![]() 37 Commercial Insurance Services Group Commercial Insurance Services Group 2005 Premium Volume: $2.2 billion 2005 Commission & Fee Revenue: $154 million* *Includes Lucini/Parish which was acquired May, 2005. Bay Area Sacramento Los Angeles/ Southern CA Seattle Reno ABD Insurance and Financial Services Additional Major Western Regional Markets |
![]() ![]() ![]() ![]() 38 Commercial Insurance Brokerage Revenues Commercial Insurance Brokerage Revenues 1/1/02 to 12/31/05 1/1/02 to 12/31/05 $106 $119 $132 $157 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2002 2003 2004 2005 ($ in Millions) 14% CAGR |
![]() ![]() ![]() ![]() 39 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. 18% 13% 25% 12% 28% 12% 32% 12% 35% 12% 2002 2003 2004 2005 Q1 '06 ABD Other Fee-Based 40% 31% 37% 44% 47% |
![]() ![]() ![]() ![]() 40 ABD Geographic Diversification ABD Geographic Diversification % of Total Revenue by Location % of Total Revenue by Location 1/1/05 to 12/31/05 1/1/05 to 12/31/05 North Bay Nevada Bay Area Southern CA/ Central Coast Sacramento Seattle 10% 10% 10% 13% 17% 40% |
![]() ![]() ![]() ![]() 41 ABD Revenue Distribution ABD Revenue Distribution By Size of Client Relationship and Business Segment* By Size of Client Relationship and Business Segment* 1/1/05 to 12/31/05 1/1/05 to 12/31/05 ($000’s) ($000’s) $500-750 4% Over $750 2% $5-25 16% $25-50 14% $50-100 21% $250-500 14% $100-250 29% Property and Casualty * Excludes relationships of less than $5,000 Over $750 4% $500-750 4% $5-25 15% $25-50 16% $50-100 21% $250-500 12% $100-250 28% Employee Benefits |
![]() ![]() ![]() ![]() 42 Sound Credit Metrics Sound Credit Metrics |
![]() ![]() ![]() ![]() 43 Net Charge-Offs Net Charge-Offs $54.8 $31.6 $17.7 $11.3 $0.043 $0 $10 $20 $30 $40 $50 $60 $70 2002 2003 2004 2005 Q1 '06 ($ in Millions) |
![]() ![]() ![]() ![]() 44 Net Charge-Offs by Loan Type Net Charge-Offs by Loan Type $0 $5 $10 $15 $20 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 $1.9 Q1 '06 $0.732 $0.00 $0.298 -$0.910 -$0.077 Matsco SNC C & I CRE & Construction Consumer ($ in millions) |
![]() ![]() ![]() ![]() 45 Non-Performing Assets by Loan Type Non-Performing Assets by Loan Type $49 $42 $59 $44 ($ in millions) $53 $88* $73* $72* * Includes single borrowing relationship representing $41.6MM at 6/30/05, $36.6MM at 9/30/05 and $36.8MM 12/31/05. $33 $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 3/31/06 CRE Const./Land Commercial Corp. Finance Matsco/GBC All Other |
![]() ![]() ![]() ![]() 46 Strong Financial Indicators Strong Financial Indicators |
![]() ![]() ![]() ![]() 47 Capital Strength Capital Strength 13.7% 12.5% 10.8% 5.9% Q1 ‘06 13.3% 14.3% 10.0% Total Risk-Based Capital 12.0% 13.0% 6.0% Tier 1 Risk-Based Capital 10.4% 10.7% 5.0% Leverage Ratio 5.6% 6.1% n/a Tangible Common Equity/ Tangible Assets (1) 2005 2004 Regulatory Well- Capitalized Standard Capital Ratios (1) Common equity less intangible assets divided by tangible assets. |
![]() ![]() ![]() ![]() 48 Quality Management Quality Management |
![]() ![]() ![]() ![]() 49 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 |
![]() ![]() ![]() ![]() 50 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. |
![]() ![]() ![]() ![]() 51 Key Objectives for 2006 and Beyond Key Objectives for 2006 and Beyond • 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 for 2006 and Beyond Key Objectives for 2006 and Beyond • 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. |
![]() ![]() ![]() ![]() 53 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 low 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 15 basis points to 25 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. |
![]() ![]() ![]() ![]() 54 Focus on Shareholder Value Focus on Shareholder Value |
![]() ![]() ![]() ![]() 55 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 |
![]() ![]() ![]() ![]() 56 Greater Bay Bancorp Greater Bay Bancorp 2006 Annual Meeting of Shareholders 2006 Annual Meeting of Shareholders May 30, 2006 May 30, 2006 |