EXHIBIT 99.1
[MID-PENINSULA BANCORP LETTERHEAD]
PRESS RELEASE
For Immediate Release For Information Contact
--------------------- -----------------------
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.
(SEE REVERSE)
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.
###
COMBINED SUMMARY FINANCIALS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
MARCH 31, 1996
MPBK CUNB COMBINED(1)
-------- -------- -------------
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
- ----------------------------
(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.