EXHIBIT 99.1
[LETTERHEAD OF MID-PENINSULA BANCORP]
For Immediate Release For Information Contact
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June 6, 1996 David L. Kalkbrenner, President
Carol H. Rowland, CFO
(415) 323-5150
MID-PENINSULA BANCORP AND
CUPERTINO NATIONAL BANCORP TO MERGE
PALO ALTO, Calif. -- Mid-Peninsula Bancorp (Nasdaq Bulletin Board: MPBK), Palo
Alto, CA and Cupertino National Bancorp (Nasdaq: CUNB), Cupertino, CA announced
today the signing of a definitive agreement for a "merger of equals" between the
two companies. The merger will result in the formation of the largest multi-
bank holding company based in the San Francisco Peninsula/South Bay region, and
the third-largest publicly traded independent bank holding company in the San
Francisco Bay area, with total assets of approximately $500 million and equity
of over $40 million. The resulting entity will be named Greater Bay Bancorp.
Mid-Peninsula Bank and Cupertino National Bank & Trust will operate as wholly
owned subsidiaries of Greater Bay Bancorp and will focus on serving the greater
Bay area, including the Peninsula and South Bay markets, through their seven
office locations.
The terms of the agreement provide for Cupertino National Bancorp shareholders
to receive .81522 of a share of Mid-Peninsula Bancorp stock for each share of
Cupertino National Bancorp in a tax-free exchange to be accounted for as a
"pooling-of-interests." As part of the agreement, Mid-Peninsula will list its
shares on the Nasdaq National Market System, and, concurrent with closing, will
be renamed Greater Bay Bancorp. Following the merger, the shareholders of Mid-
Peninsula Bancorp will own approximately 51% of the combined company and the
shareholders of Cupertino National Bancorp will own approximately 49% of the
combined company, giving effect to all outstanding options.
The transaction is anticipated to be accretive in 1997 to shareholders of both
companies, based on reductions in duplicative administrative functions and
revenue enhancements resulting from an expanded product line and increased
lending capacity. Management of the organizations believe that significant
opportunities exist to enhance the spectrum of financial services offered to
both existing and potential clients.
Greater Bay Bancorp's new Board of Directors will consist of five directors from
each company, with Duncan L. Matteson (Chairman of Mid-Peninsula Bancorp) and
John M. Gatto (Chairman of Cupertino National Bancorp) serving as co-Chairmen.
David L. Kalkbrenner, who will serve as President and Chief Executive Officer of
the holding company, will continue as President and Chief Executive Officer of
Mid-Peninsula Bank, and C. Donald Allen will remain as Chairman and Chief
Executive Officer of Cupertino National Bank & Trust. Steven C. Smith, the Chief
Operating Officer of Cupertino National Bancorp, will serve as Chief Operating
Officer and Chief Financial Officer of the holding company.
The adoption of the multi-bank holding company format will facilitate the
addition of other independent banks to the organization and permits the
preservation of the personalized relationship banking philosophy espoused by
community banking organizations. "The combination of these two successful
institutions presents significant benefits for our clients, employees and
shareholders," commented David Kalkbrenner. "This is a rare opportunity to
create one of the largest locally based community bank franchises servicing the
needs of the business and venture community in the greater Bay area. The
complementary nature of our business philosophies, services provided and markets
will position our company for continued growth and profitability. The unique fit
offered by the services Cupertino National Bank has developed, particularly
trust services, will provide the opportunity and resources necessary to expand
and enhance the profitability of our core banking business as well as increase
opportunities to provide financial services not previously available to our
clients. Mid-Peninsula's historical cost-efficiency, combined with the wide
breadth of services offered by Cupertino National, will enable the combined
organization to provide, on a more cost-effective basis, a wider range of
services to an expanded client base."
Cupertino National Bancorp President and Chief Executive Officer Don Allen
commented, "The thrust of Cupertino National Bank & Trust has focused on
providing specific niche services that fit with its vision of becoming a
significant force throughout the Bay Area. The combination of our two banks will
preserve this focus and assure that significantly greater resources are
available for this effort. As a competitor, we have admired Mid-Peninsula Bank's
stellar performance for some time; we look forward to a combined focus on
providing the best client services available anywhere. The ability to leverage
the investment Cupertino National has made in its Trust and Venture Lending
units through the strong client relationships enjoyed by Mid-Peninsula is
expected to yield immediate incremental income. Additionally, the combined
strength of our organization will enable Cupertino National's Venture Lending
unit to compete more aggressively in the technology, life sciences and emerging
growth industries, as a result of increased lending limits and additional
resources."
In connection with the merger agreement, Mid-Peninsula and Cupertino will grant
each other options to purchase up to 19.0% of the outstanding shares of each
other's common stock under certain circumstances in the event the transaction is
terminated. The merger is expected to be completed in the fourth quarter of
1996, subject to shareholder and regulatory approvals.
Mid-Peninsula Bancorp had $233.0 million in assets, $209.2 million in deposits
and $22.0 million in shareholders' equity as of March 31, 1996. Cupertino
National Bancorp had $255.0 million in assets, $231.8 million in deposits and
$19.4 million in shareholders' equity as of that date.
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COMBINED SUMMARY FINANCIALS
(Dollars in thousands, except per share data)
MARCH 31, 1996
MPBK CUNB COMBINED (1)
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Total Assets $232,989 $254,960 $487,949
Total Loans 136,280 174,505 310,785
Total Deposits 209,210 231,830 441,040
Shareholders' Equity 21,983 19,410 41,393
Equity/Assets 9.44% 7.61% 8.48%
Tier I Risk-Based Capital Ratio 13.33% 9.14% 10.96%
Total Risk-Based Capital Ratio 14.46% 11.80% 12.60%
Leverage Ratio 9.86% 7.50% 8.59%
Non-Performing Assets 0 3,422 3,422
Loan Loss Allowance/Non-Performing Loans NM 90.70% 148.0%
F.D. Common Shares Outstanding (2) (3) 1,886,981 2,223,929 3,699,972 (4)
F.D. Book Value/Share (2) (3) $13.55 $9.94 $12.88
Market Capitalization (2) (5) $33,375 $25,885 ---
No. of Offices 3 4 7
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(1) Combined information does not reflect any merger-related expenses
(2) Based on shares outstanding as of May 31, 1996.
(3) Includes all outstanding options.
(4) Reflects exchange ratio of .81522 of a share of Mid-Peninsula Bancorp stock
for each share of Cupertino National Bancorp stock.
(5) Based on closing prices as of June 5, 1996.