EXHIBIT 99.1 Press Release dated October 11, 2000 re Third Quarter Earnings For Information Contact - ----------------------- At Greater Bay Bancorp: At Financial Relations Board: David L. Kalkbrenner Christina Carrabino (general information) President and CEO James Hoyne (analyst contact) (650) 614-5767 Chris Cook (financial media) Steven C. Smith (415) 986-1591 EVP, CAO and CFO (650) 813-8222 FOR IMMEDIATE RELEASE GREATER BAY BANCORP REPORTS 49% INCREASE IN THIRD QUARTER CORE OPERATING RESULTS PALO ALTO, CA, October 11, 2000 -- Greater Bay Bancorp (Nasdaq: GBBK), a $4.3 billion in assets financial services holding company, today announced record results for the third quarter and nine months ended September 30, 2000. Greater Bay Bancorp's core earnings, which is its net income, excluding nonrecurring warrant income and merger related costs, for the third quarter of 2000 increased 49% to $17.6 million, or $0.84 per diluted share ($0.42 per diluted share after the stock split), compared to $11.8 million, or $0.61 per diluted share ($0.30 per diluted share after the stock split), in the third quarter of 1999. Net income, including nonrecurring warrant income and excluding nonrecurring merger related expenses, increased 63% to $19.2 million, or $0.92 per diluted share ($0.46 per diluted share after the stock split), for the third quarter of 2000, compared to $11.8 million, or $0.61 per diluted share ($0.30 per diluted share after the stock split), in the third quarter of 1999. Net income, including $2.8 million in nonrecurring warrant income and $11.4 million in nonrecurring merger related expenses, for the third quarter of 2000 increased to $12.1 million, or $0.58 per diluted share ($0.29 per diluted share after the stock split), compared to net income of $11.8 million, or $0.61 per diluted share ($0.30 per diluted share after the stock split), in the third quarter of 1999. The Company did not incur nonrecurring merger related expenses -------------------------------------------------------------- in the third quarter of 1999. - ---------------------------- Based on its core earnings for the third quarter of 2000, Greater Bay Bancorp's ---- return on average equity was 24.56%, its return on average assets was 1.62% and its efficiency ratio was 42.25%. During the third quarter of 1999, Greater Bay Bancorp's core earnings resulted in a return on average equity of 22.70%, return on average assets of 1.46% and an efficiency ratio of 51.42% Greater Bay Bancorp's core earnings, which is its net income, excluding nonrecurring warrant income and merger related costs for the first nine months of 2000 increased 55% to $47.7 million, or $2.31 per diluted share ($1.16 per diluted share after the stock split), compared to 5 $30.8 million, or $1.61 per diluted share ($0.80 per diluted share after the stock split), in the first nine months of 1999. Net income, including nonrecurring warrant income and excluding nonrecurring merger related expenses, increased 77% to $54.8 million, or $2.66 per diluted share ($1.33 per diluted share after the stock split), for the first nine months of 2000, compared to $30.9 million, or $1.61 per diluted share ($0.81 per diluted share after the stock split), in the first nine months of 1999. Net income, including nonrecurring warrant income and including nonrecurring merger related expenses, for the nine months ended September 30, 2000 increased 36% to $38.6 million, or $1.87 per diluted share ($0.94 per diluted share after the stock split), compared to net income of $28.3 million, or $1.48 per diluted share ($0.74 per diluted share after the stock split), for the first nine months of 1999. The first nine months of 2000 included $12.1 million in pretax nonrecurring warrant income and $25.5 million in merger related costs compared to $230,000 of nonrecurring warrant income and $4.0 million of nonrecurring merger related costs in the first nine months of 1999. Based on its core earnings for the first nine months of 2000, Greater Bay ---- Bancorp's return on average equity was 23.65%, its return on average assets was 1.58% and its efficiency ratio was 44.48%. During the first nine months of 1999, Greater Bay Bancorp's core earnings resulted in a return on average equity of 20.85%, return on average assets of 1.38% and an efficiency ratio of 54.65%. Non-interest income, excluding warrant income, continues to grow, reflecting Greater Bay Bancorp's efforts to further diversify its revenue stream. For the third quarter and year to date periods ended September 30, 2000, the Company's trust fees, depositor services fees, gain on sale of SBA loans, and loan and international banking fees were up 30% over the same periods in 1999. When warrant income is included in other income, the increase for the quarter to date and year to date periods ended September 30, 2000 compared to the same periods in 1999 increased 41% and 95%, respectively. At September 30, 2000, Greater Bay Bancorp's total assets were $4.3 billion, an increase of 31% or $1.0 billion from September 30, 1999. Total loans grew to $3.0 billion, an increase of 39% or $827 million from September 30, 1999, while total deposits increased to $3.7 billion, an increase of 28% or $810 million from September 30, 1999. "Greater Bay Bancorp continues to report record core operating results, with third quarter core EPS of $0.84 per diluted share, the 15th consecutive quarter ---------------------------- of earnings per share increases, and return on average equity in the third - -------------------------------- quarter of 24.56%, the 12th consecutive quarter where shareholders' return on ------------------------------------------------------ average equity exceeded 20%," said David Kalkbrenner, president and chief - ------------------------------ executive officer of Greater Bay Bancorp. Mr. Kalkbrenner continued, "We were also pleased to be added to the S&P MidCap 400 Index, effective at the close of trading on September 7, 2000. Our inclusion in this select group is recognition of the strong operating fundamentals and financial performance of the Company, which could not have been achieved without our dedicated employees and valued clients." 6 Mr. Kalkbrenner added, "We remain optimistic about continuing our strong operating results through the fourth quarter of 2000 and into the year 2001. The Company's average internal loan, deposit, asset and core revenue growth for 2000 were 39%, 28%, 31% and 40%, respectively, all substantially exceeding the banking industry average growth rates. We expect to continue to exceed the banking industry averages through the remainder of the current year and through 2001. Our Super Community Banking Strategy, with its emphasis on the relationship banking model, continues to win clients as our personal approach to client banking focuses on the individual versus our competitors who focus on the transaction. While the national economy has indicated some signs of slowing, we believe that our local economy continues to exhibit strong characteristics that will fuel economic growth through 2001." Greater Bay Bancorp's allowance for loan losses increased to 2.20% of total loans at September 30, 2000, compared to 2.08% at June 30, 2000 and 1.81% at September 30, 1999, while its ratio of non-performing assets to total assets was 0.39% at September 30, 2000, compared to 0.25% at June 30, 2000 and 0.31% at September 30, 1999. The allowance for loan losses was 402.37% of total non- performing assets at September 30, 2000, compared to 563.46% at June 30, 2000 and 377.21% at September 30, 1999. Greater Bay Bancorp's capital ratios continue to be above the well-capitalized guidelines established by the bank regulatory agencies. "During July, we closed and fully integrated our eighth acquisition in three years with the addition of Bank of Santa Clara. We have two additional quality companies scheduled to join the Greater Bay family by the end of the year 2000. On a pro forma basis, as if these transactions had occurred on September 30, 2000, Greater Bay Bancorp would have had assets of approximately $4.7 billion," said Kalkbrenner. Greater Bay Bancorp signed a definitive merger agreement to merge with Bank of Petaluma, Petaluma, California, which is anticipated to close early in the fourth quarter of 2000. The Company also signed a definitive agreement to acquire The Matsco Companies Inc., a financial services company headquartered in Emeryville, California which specializes in financial services for the dental and veterinary markets. The Matsco acquisition is subject to regulatory approval and is also expected to close in the fourth quarter of 2000. Greater Bay Bancorp through its nine subsidiary banks, 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, and Peninsula Bank of Commerce, along with its operating divisions serves clients throughout Silicon Valley, San Francisco, the San Francisco Peninsula, the East Bay Region, the North Bay Region and the Coastal Region. Greater Bay Bancorp's third quarter earnings conference call is scheduled for October 11, 2000 at 8:00 am PST. Investors have the opportunity to listen to the conference call live on the Internet at http://www.vcall.com. Investors should -------------------- go to the Vcall web site 15 minutes prior to the start of the call to register. It may be necessary to download audio software to hear the conference 7 call. To do so investors should click on the Real Player icon and follow directions from there. A replay of the conference call will be available through Vcall for 90 days. Greater Bay Bancorp's corporate press releases are available on the Company's Web site at http://www.gbbk.com. ------------------- 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, growth in loans, deposits and assets, continued success of its Super Community Banking strategy 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, the Company's ability to continue its internal growth at historical rates, the Company's ability to maintain its net interest spread, and the quality of the Company's earning assets; (2) when and if the pending mergers with Bank of Petaluma and The Matsco Companies Inc. are consummated, as well as any difficulties that may be encountered in integrating these businesses and timing related to achieving operating efficiencies; (3) government regulation; (4) the risks relating to the Company's warrant positions set forth in the paragraph below; and (5) 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, 1999. We have historically obtained rights to acquire stock, in the form of warrants, in certain clients as part of negotiated credit facilities. We may not be able to realize gains from these equity instruments in future periods due to fluctuations in the market prices of the underlying common stock of these companies. The timing and amount of income, if any, from the disposition of client warrants typically depend upon factors beyond our control, including the general condition of the public equity markets, levels of mergers and acquisitions activity, and legal and contractual restrictions on our ability to sell the underlying securities. Therefore, future gains cannot be predicted with any degree of accuracy and are likely to vary materially from period to period. In addition, a significant portion of the income we realize from the disposition of client warrants may be offset by expenses related to our efforts to build an infrastructure sufficient to support our present and future business activities, as well as expenses incurred in evaluating and pursuing new business opportunities. For investor information on Greater Bay Bancorp at no charge, call our automated shareholder information line at 1-800-PRO-INFO (1-800-776-4636) and enter code GBBK. For international access, dial 1-201-432-6555. - FINANCIAL TABLES FOLLOW - 8 GREATER BAY BANCORP SEPTEMBER 30, 2000 - FINANCIAL SUMMARY ($ in 000's, except share and per share data) - ---------------------------------------------------------------------------------------------------------------------- SELECTED CONSOLIDATED FINANCIAL CONDITION DATA: Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 2000 2000 2000 1999 1999 ----------- ----------- ----------- ----------- ----------- Cash and Due From Banks $ 232,171 $ 221,250 $ 171,653 $ 137,130 $ 159,601 Investments 1,012,789 1,038,784 1,119,382 940,757 910,038 Loans: Commercial 1,225,279 1,103,847 1,016,394 900,943 843,834 Term Real Estate - Commercial 819,210 797,702 764,168 696,707 640,819 ----------- ----------- ----------- ----------- ----------- Total Commercial 2,044,489 1,901,549 1,780,562 1,597,650 1,484,653 Construction 572,740 507,192 484,218 466,577 391,946 Real Estate - Other 171,134 123,708 120,519 133,256 120,577 Consumer and Other 192,230 195,799 163,007 159,679 155,492 Deferred Loan Fees, Net (13,339) (13,731) (12,891) (12,599) (12,611) ----------- ----------- ----------- ----------- ----------- Total Loans 2,967,254 2,714,517 2,535,415 2,344,563 2,140,057 Allowance for Loan Losses (65,699) (56,769) (51,148) (46,451) (39,007) ----------- ----------- ----------- ----------- ----------- Total Loans, Net 2,901,555 2,657,748 2,484,267 2,298,112 2,101,050 Other Assets 189,902 188,477 186,351 166,031 148,337 ----------- ----------- ----------- ----------- ----------- Total Assets $ 4,336,417 $ 4,106,259 $ 3,961,653 $ 3,542,030 $ 3,319,026 =========== =========== =========== =========== =========== Deposits: Demand, Non-Interest Bearing $ 856,454 $ 811,774 $ 810,001 $ 690,860 $ 640,770 NOW, MMDA and Savings 2,024,733 1,924,782 1,957,859 1,737,002 1,639,546 Time Certificates, $100,000 and over 727,257 665,539 579,288 527,766 494,965 Other Time Certificates 140,777 141,719 129,437 145,069 164,155 ----------- ----------- ----------- ----------- ----------- Total Deposits 3,749,221 3,543,814 3,476,585 3,100,697 2,939,436 ----------- ----------- ----------- ----------- ----------- Other Borrowings 118,392 133,500 102,044 100,600 84,178 Other Liabilities 86,439 59,177 60,444 53,731 38,885 ----------- ----------- ----------- ----------- ----------- Total Liabilities 3,954,052 3,736,491 3,639,073 3,255,028 3,062,499 ----------- ----------- ----------- ----------- ----------- Trust Preferred Securities 99,500 99,500 58,500 49,000 49,000 Stockholders' Equity 282,865 270,268 264,080 238,002 207,527 ----------- ----------- ----------- ----------- ----------- Regulatory Capital 382,365 369,768 322,580 287,002 256,527 ----------- ----------- ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $ 4,336,417 $ 4,106,259 $ 3,961,653 $ 3,542,030 $ 3,319,026 =========== =========== =========== =========== =========== Average Quarterly Total Loans, excluding Nonaccrual $ 2,840,850 $ 2,702,429 $ 2,433,473 $ 2,210,568 $ 2,061,303 Average Quarterly Investments $ 1,158,611 $ 1,092,580 $ 1,077,766 $ 1,030,726 $ 891,714 Average Quarterly Interest Earning Assets $ 3,999,461 $ 3,795,009 $ 3,511,239 $ 3,241,294 $ 2,953,017 Average Quarterly Interest Bearing $ 2,995,462 $ 2,825,569 $ 2,676,947 $ 2,559,610 $ 2,314,318 Liabilities Average Quarterly Assets $ 4,320,740 $ 4,011,760 $ 3,784,219 $ 3,560,669 $ 3,194,399 Average Quarterly Equity $ 284,780 $ 269,058 $ 254,463 $ 215,822 $ 206,064 Total Regulatory Capital Tier I or Leverage Capital $ 394,686 $ 368,460 $ 329,956 $ 286,132 $ 251,827 Total Capital $ 442,831 $ 428,098 $ 372,334 $ 325,554 $ 292,501 Nonperforming Assets Nonaccrual Loans $ 14,877 $ 8,720 $ 6,266 $ 5,682 $ 7,928 Loans 90 Days Past Due & Accruing 636 706 37 139 406 Restructured Loans 420 420 743 807 1,492 OREO 395 229 271 271 515 ----------- ----------- ----------- ----------- ----------- Total Nonperforming Assets $ 16,328 $ 10,075 $ 7,317 $ 6,899 $ 10,341 =========== =========== =========== =========== =========== Greater Bay Trust Company Assets $ 838,659 $ 795,042 $ 751,677 $ 697,435 $ 652,054 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS: Sept 30 June 30 Mar 31 Dec 31 Sept 30 2000 2000 2000 1999 1999 ----------- ----------- ----------- ----------- ----------- Loan to Deposit Ratio 79.14% 76.60% 72.93% 75.61% 72.81% Ratio of Allowance for Loan Losses to: Total Loans 2.20% 2.08% 2.01% 1.97% 1.81% Total Nonperforming Assets 402.37% 563.46% 699.03% 673.30% 377.21% Total Nonperforming Assets to Total Assets 0.38% 0.25% 0.18% 0.19% 0.31% Ratio of Quarterly Net Charge-offs to -0.39% -0.61% -0.28% -0.21% -0.02% Average Loans, annualized Ratio of YTD Net Charge-offs to Average -0.40% -0.43% -0.28% -0.08% -0.04% Loans, annualized Internal Loan Growth, Annualized 37.04% 28.41% 32.74% 37.91% 34.55% Recurring Revenue Growth, Annualized 17.02% 34.55% 21.42% 46.64% 50.73% Earning Assets to Total Assets 92.56% 92.74% 92.79% 91.03% 92.44% Earning Assets to Interest-Bearing 133.52% 131.68% 131.17% 126.63% 127.60% Liabilities Capital Ratios: Leverage 9.13% 9.18% 8.72% 8.04% 7.88% Tier 1 Risk Based Capital 10.80% 10.86% 10.30% 9.70% 9.42% Total Risk Based Capital 12.11% 12.62% 11.62% 11.04% 10.94% Risk Weighted Assets $ 3,655,509 $ 3,391,539 $ 3,204,697 $ 2,948,907 $ 2,674,160 Book Value Per Share (1) $ 14.15 $ 13.64 $ 13.38 $ 12.53 $ 11.28 Total Shares Outstanding (1) 19,990,264 19,814,173 19,732,859 18,989,511 18,401,962 Book Value Per Share (2) $ 7.08 $ 6.82 $ 6.69 $ 6.27 $ 5.64 Total Shares Outstanding (2) 39,980,528 39,628,346 39,465,718 37,979,022 36,803,924 (1) Before 2 for 1 stock split effective October 4, 2000 (2) After 2 for 1 stock split effective October 4, 2000 Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp, Bay Commercial Services, Mt. Diablo Bancshares, Coast Bancorp. and Bank of Santa Clara on a pooling-of-interests basis. - -------------------------------------------------------------------------------- Greater Bay Bancorp's Third Quarter 2000 Earnings Results October 11, 2000 Page 7 GREATER BAY BANCORP SEPTEMBER 30, 2000 - FINANCIAL SUMMARY ($ in 000's, except share and per share data) - -------------------------------------------------------------------------------------------------------------- SELECTED QUARTERLY CONSOLIDATED OPERATING DATA: Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2000 2000 2000 1999 1999 -------- -------- -------- -------- -------- Interest Income $ 92,641 $ 83,636 $ 76,206 $ 69,596 $ 62,703 Interest Expense 37,870 31,268 29,332 26,276 23,228 -------- -------- -------- -------- -------- Net Interest Income Before Provision for Loan Losses 54,771 52,368 46,874 43,320 39,475 Provision for Loan Losses 7,739 8,207 5,539 6,308 3,902 -------- -------- -------- -------- -------- Net Interest Income After Provision for Loan Losses 47,032 44,161 41,335 37,012 35,573 Other Income: Trust Fees 822 827 847 774 768 Depositor Service Fees 2,038 2,005 1,973 1,242 2,071 ATM Fees 799 658 636 635 789 Loan and International Banking Fees 2,497 1,927 1,176 1,699 946 Gain on Sale of SBA Loans 429 753 696 143 656 Gain/(loss) on Investments 3 58 (1) (3) - Other Income (1) 1,185 1,382 3,032 4,630 2,219 -------- -------- -------- -------- -------- 7,773 7,610 8,359 9,120 7,449 Nonrecurring - Warrant Income (4) 2,767 740 8,609 14,278 - -------- -------- -------- -------- -------- Other Income 10,540 8,350 16,968 23,398 7,449 Operating Expenses: Compensation and Benefits 14,954 14,422 14,963 14,636 13,416 Occupancy and Equipment 5,318 4,880 5,031 4,367 4,167 Professional Services & Legal 1,245 1,068 978 740 894 Client Services 477 496 545 764 825 FDIC Insurance and Assessments 361 233 240 141 196 Other Real Estate, Net - 41 10 (53) 30 Other Expenses 4,071 4,971 4,763 4,951 4,601 -------- -------- -------- -------- -------- 26,426 26,111 26,530 25,546 24,129 Nonrecurring Expenses (2) (4) - - - 11,837 - -------- -------- -------- -------- -------- Total Operating Expenses 26,426 26,111 26,530 37,383 24,129 -------- -------- -------- -------- -------- Income Before Income Taxes, Merger and Other Related Nonrecurring Costs and Extraordinary Items 31,146 26,400 31,773 23,027 18,893 Income Taxes: Income Tax Expense 10,800 9,632 9,065 7,515 7,105 Nonrecurring Income Tax Expense (4) 1,164 290 3,590 (2,046) - -------- -------- -------- -------- -------- Total Income Tax Expense 11,964 9,922 12,655 5,469 7,105 Income Before Merger and Other Related Nonrecurring Costs and Extraordinary Items 19,182 16,478 19,118 17,558 11,788 Merger and Other Related Nonrecurring Costs, net of tax (4) 7,037 6,744 2,389 3,995 - -------- -------- -------- -------- -------- Net Income Before Extraordinary Items 12,145 9,734 16,729 13,563 11,788 Extraordinary Items, net of tax - - - - - -------- -------- -------- -------- -------- Net Income $ 12,145 $ 9,734 $ 16,729 $ 13,563 $ 11,788 ======== ======== ======== ======== ======== - ------------------------------------------------------------------------------------------------------------------------------ SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS: Third Second First Fourth Third Before 2 for 1 stock split effective October 4, 2000 Quarter Quarter Quarter Quarter Quarter ---------------------------------------------------- 2000 2000 2000 1999 1999 ---- ---- ---- ---- ---- Income Per Share (Before Nonrecurring, Merger and Extraordinary Items) (4) Basic $ 0.88 $ 0.81 $ 0.74 $ 0.71 $ 0.64 Diluted $ 0.84 $ 0.78 $ 0.71 $ 0.67 $ 0.61 Income Per Share (Before Merger and Extraordinary Items) Basic $ 0.96 $ 0.83 $ 1.00 $ 0.95 $ 0.64 Diluted $ 0.92 $ 0.80 $ 0.96 $ 0.90 $ 0.61 Net Income Per Share Basic $ 0.61 $ 0.49 $ 0.88 $ 0.73 $ 0.64 Diluted $ 0.58 $ 0.47 $ 0.84 $ 0.69 $ 0.61 Weighted Average Common Shares Outstanding 19,890,000 19,775,000 19,064,000 18,479,000 18,354,000 Weighted Average Common & Common Equivalent Shares Outstanding 20,948,000 20,588,000 19,953,000 19,592,000 19,340,000 After 2 for 1 stock split effective October 4, 2000 ---------------------------------------------------- Income Per Share (Before Nonrecurring, Merger and Extraordinary Items) (4) Basic $ 0.44 $ 0.41 $ 0.37 $ 0.35 $ 0.32 Diluted $ 0.42 $ 0.39 $ 0.35 $ 0.33 $ 0.30 Income Per Share (Before Merger and Extraordinary Items) Basic $ 0.48 $ 0.42 $ 0.50 $ 0.48 $ 0.32 Diluted $ 0.46 $ 0.40 $ 0.48 $ 0.45 $ 0.30 Net Income Per Share Basic $ 0.31 $ 0.25 $ 0.44 $ 0.37 $ 0.32 Diluted $ 0.29 $ 0.24 $ 0.42 $ 0.35 $ 0.30 Weighted Average Common Shares Outstanding 39,780,000 39,550,000 38,128,000 36,958,000 36,708,000 Weighted Average Common & Common Equivalent Shares Outstanding 41,896,000 41,176,000 39,906,000 39,184,000 38,680,000 Return on Period Average Assets, annualized (3) 1.62% 1.61% 1.49% 1.46% 1.46% Return on Period Average Equity, annualized (3) 24.56% 23.96% 22.22% 24.03% 22.70% Net Interest Margin - Average Earning Assets 5.45% 5.55% 5.37% 5.30% 5.30% Operating Expense Ratio (Before Nonrecurring, 2.43% 2.62% 2.82% 2.85% 3.00% Merger and Extraordinary Items) Efficiency Ratio (Before Nonrecurring, Merger 42.25% 43.53% 48.03% 48.71% 51.42% and Extraordinary Items) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Q1 2000, Q4 and Q3 of 1999 include a $2.1 million, $3.1 million, and $900,000 gain on an equity investment, respectively. (2) Q4 of 1999 Nonrecurring Expenses are comprised of $7.4 million in donations to the GBB Foundation. (3) Before Nonrecurring, Merger and Extraordinary Items of $5.4 million, net of tax, in Q3 2000; $6.3 million, net of tax, in Q2 2000; $2.6 million, net of tax, in Q1 2000 and $492,000, net of tax, in Q4 1999. (4) Components of Nonrecurring, Merger and Extraordinary Items. Net Income excluding these items is $17,579 for Q3 2000, $16,028 for Q2 2000, $14,099 for Q1 2000, $13,071 for Q4 1999 and $11,788 for Q3 1999. Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp, Bay Commercial Services, Mt. Diablo Bancshares, Coast Bancorp. and Bank of Santa Clara on a pooling-of-interests basis. - -------------------------------------------------------------------------------- Greater Bay Bancorp's Third Quarter 2000 Earnings Result October 11, 2000 Page 8 GREATER BAY BANCORP September, 2000 - FINANCIAL SUMMARY ($ in 000's, except share and per share data) - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA: Sept 30, Sept 30, 2000 1999 ------------ ------------ Interest Income $ 252,483 $ 172,108 Interest Expense 98,470 63,697 ------------ ------------ Net Interest Income Before Provision for Loan Losses 154,013 108,411 Provision for Loan Losses 21,485 7,431 ------------ ------------ Net Interest Income After Provision for Loan Losses 132,528 100,980 Other Income (1) 23,742 18,155 Nonrecurring - Warrant Income 12,116 230 ------------ ------------ Total Other Income 35,858 18,385 Operating Expenses 79,067 69,172 Other Expenses - nonrecurring (2) - 323 ------------ ------------ Total Operating Expenses 79,067 69,495 Net Income Before Income Taxes, Merger and Other Related Nonrecurring Costs and ------------ ------------ Extraordinary Items 89,319 49,870 Income Tax Expense 34,541 18,973 ------------ ------------ Net Income Before Merger and Other Related Nonrecurring Costs and Extraordinary Items 54,778 30,897 Merger and Other Related Nonrecurring Costs, net of tax 16,170 2,492 ------------ ------------ Net Income Before Extraordinary Items 38,608 28,405 Extraordinary Items (3) - (88) ------------ ------------ Net Income $ 38,608 $ 28,317 ============ ============ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS: Sept 30, Sept 30, Before 2 for 1 stock split effective October 4, 2000 2000 1999 - ------------------------------------------------ ------------ ------------ Net Income Per Share (Before Nonrecurring, Merger and Extraordinary Items) (4) Basic $ 2.43 $ 1.69 Diluted $ 2.31 $ 1.61 Net Income Per Share (Before Merger and Extraordinary Items) Basic $ 2.79 $ 1.70 Diluted $ 2.66 $ 1.61 Net Income Per Share Basic $ 1.96 $ 1.56 Diluted $ 1.87 $ 1.48 Weighted Average Common Shares Outstanding 19,668,000 18,208,000 Weighted Average Common & Common Equivalent Shares Outstanding 20,616,000 19,173,000 After 2 for 1 stock split effective October 4, 2000 - --------------------------------------------------- Net Income Per Share (Before Nonrecurring, Merger and Extraordinary Items) (4) Basic $ 1.21 $ 0.85 Diluted $ 1.16 $ 0.80 Net Income Per Share (Before Merger and Extraordinary Items) Basic $ 1.39 $ 0.85 Diluted $ 1.33 $ 0.81 Net Income Per Share Basic $ 0.98 $ 0.78 Diluted $ 0.94 $ 0.74 Weighted Average Common Shares Outstanding 39,336,000 36,416,000 Weighted Average Common & Common Equivalent Shares Outstanding 41,233,000 38,347,000 Return on Average Assets, annualized (4) 1.58% 1.38% Return on Average Equity, annualized (4) 23.65% 20.85% Net Interest Margin - Average Earning Assets 5.49% 5.23% Operating Expense Ratio (Before Nonrecurring and Extraordinary Items) 2.62% 3.09% Efficiency Ratio (Before Nonrecurring, Merger and Extraordinary Items) 44.48% 54.65% - ------------------------------------------------------------------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (1) 2000 includes a $2.1 million gain on an equity investment. (2) 1999 nonrecurring expenses are comprised of a $323,000 donation to the GBB Foundation. (3) Includes $88,000 loss on early retirement of subordinated debt. (4) Before Merger and Other Related Nonrecurring Costs and Extraordinary Items of $9.1 million, net of tax in 2000 and $2.5 million, net of tax, in 1999. Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Bay Commercial Services, Mt. Diablo Bancshares, Coast Bancorp, and Bank of Santa Clara on a pooling-of-interests basis. - --------------------------------------------------------------------------------