EXHIBIT 99.2
Press Release dated April 17, 2001
For Information Contact
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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 Dawn Swidorski (financial media)
Steven C. Smith (415) 986-1591
EVP, CAO and CFO
(650) 813-8222
FOR IMMEDIATE RELEASE
GREATER BAY BANCORP REPORTS 47% INCREASE IN FIRST
QUARTER 2001 CORE OPERATING EARNINGS
-Company Announces Share Repurchase Program-
PALO ALTO, CA, April 17, 2001 -- Greater Bay Bancorp (Nasdaq: GBBK), a $5.4
billion in assets financial services holding company, today announced record
results for the first quarter ended March 31, 2001. Greater Bay Bancorp's core
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earnings, which is its net income, excluding nonrecurring warrant income and
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merger related expenses, for the first quarter of 2001 increased 47% to $21.5
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million, or $0.49 per diluted share, compared to $14.7 million, or $0.35 per
diluted share, in the first quarter of 2000.
Based on its core earnings for the first quarter of 2001, Greater Bay Bancorp's
return on average equity was 25.64%, its return on average assets was 1.72% and
its efficiency ratio was 46.23%, while the first quarter of 2000 core earnings
resulted in a return on average equity of 21.88%, return on average assets of
1.48% and an efficiency ratio of 49.66%.
Non-interest income, excluding warrant income, continues to grow, reflecting
Greater Bay Bancorp's efforts to further diversify and expand its revenue
stream. For the first quarter of 2001, the Company's trust fees, depositor
service fees, gain on sale of SBA loans, and loan and international banking fees
were $6.8 million, up 40% from $4.9 million in the first quarter of 2000.
For the first quarter of 2001, net income increased to $21.5 million, or $0.49
per diluted share, compared to net income of $17.3 million, or $0.42 per diluted
share for the first quarter of 2000, which included $8.6 million in pre-tax
nonrecurring warrant income and only $3.9 million in merger related expenses
compared to zero nonrecurring warrant income and merger related expenses for the
first quarter of 2001.
At March 31, 2001, Greater Bay Bancorp's total assets were $5.4 billion, an
increase of 30% or $1.2 billion from March 31, 2000. Total loans grew 40% to
$3.7 billion, an increase of $1.1 billion from March 31, 2000, while total
deposits increased to $4.3 billion, an increase of 17% or $621 million from
March 31, 2000.
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"Greater Bay Bancorp's operating performance continues to exceed our peer group.
First quarter core EPS of $0.49 per diluted share represents the 17th
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consecutive quarter of earnings per share increases, and return on average
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equity in the first quarter in excess of 25% was the 14th consecutive quarter
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where shareholders' return on average equity exceeded 20%", said David
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Kalkbrenner, president and chief executive officer of Greater Bay Bancorp.
Mr. Kalkbrenner added, "Greater Bay Bancorp continues to outperform its peers
and provide exceptional returns to our shareholders. For the first quarter of
2001, our core earnings increased 47% while we also continued to generate
quality asset growth combined with strong credit quality. These results reflect
the continued success of our Super Community Banking Strategy and have been
accomplished during a period of economic uncertainty in both the U.S. and our
San Francisco Bay Area markets. While Greater Bay is not immune to the impact of
a slowing economy and declining interest rates, the history of our individual
subsidiary banks and the banking industry generally supports the fact that
community banking can be very successful during periods of economic uncertainty.
This is particularly true when big bank competitors cease lending to certain
market segments, thus allowing banks like Greater Bay to expand and add to its
client relationships."
Greater Bay Bancorp's allowance for loan losses was 2.30% of total loans at
March 31, 2001 and 1.98% at March 31, 2000, while its ratio of non-performing
assets to total assets was 0.34% at March 31, 2001, compared to 0.18% at March
31, 2000. The allowance for loan losses was 473.80% of total non-performing
assets at March 31, 2001.
The capital ratios of Greater Bay Bancorp and each of its subsidiary banks
continue to be above the well-capitalized guidelines established by the bank
regulatory agencies.
Mr. Kalkbrenner commented, "During the first quarter, we successfully
integrated Matsco, headquartered in Emeryville, California and specializing in
financial services for the dental and veterinarian markets. We also announced
the completion of our acquisition of CAPCO Financial Company, Inc., a factoring
and asset-based lending company headquartered in Bellevue, Washington. To date,
the financial impact of these two acquisitions has been negligible; however, we
anticipate they will enhance our financial performance for the remainder of
2001. In the case of Matsco, we originally anticipated selling 20% to 40% of
its loan production, yet in the first quarter we portfolioed all of Matsco's
loans. This larger portfolio will increase our net interest income while also
providing added flexibility to sell Matsco loans in future quarters. CAPCO,
which just closed at the end of March, will have its operating results included
with Greater Bay beginning in the second quarter and we are very confident the
CAPCO acquisition will be accretive in 2001.
- Share Repurchase Program -
Greater Bay Bancorp also announced today that its Board of Directors has
authorized the repurchase of up to 5% of Greater Bay Bancorp's outstanding
common stock. The Company intends to repurchase shares from time to time in the
open market. We expect that such purchases would be accretive to earnings,
while also maintaining capital ratios that exceed the regulatory guidelines for
a well-capitalized financial institution.
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"We believe this share repurchase program represents an excellent investment
opportunity for the company and reaffirms our commitment to enhancing
shareholder value by utilizing all alternatives to provide superior returns to
our shareholders," said Mr. Kalkbrenner.
-Looking Forward -2001 Performance Goals Reaffirmed -
Mr. Kalkbrenner continued, "We believe that the performance goals stated for
Greater Bay in our year end 2000 press release dated January 17, 2001 and
reaffirmed in our Form 8K filing with the SEC on March 6, 2001, still reflect
our current outlook for 2001 based on our assessment of the current economic
environment and its potential impact on our business."
Mr. Kalkbrenner continued, "Our current view is that we will see, at a minimum,
an additional 75 basis point decline in interest rates which will reduce our net
interest margin but should not impact our ability to meet our performance goals.
If the economic outlook deteriorates further than most economists anticipate, it
could impact the ability of Greater Bay to attain its performance goals.
However, if the economy would decline significantly, this impact would not only
impact Greater Bay's operating results, it would also impact most financial
services companies operating in the United States. We intend to manage through
this declining net interest rate and uncertain economic environment by
monitoring our expense growth, aggressively managing our credit quality and
focusing our relationship officers on generating new quality client
relationships while improving the overall profitability of our existing client
relationships."
The following are the performance guidance disclosed in the fourth quarter and
year-end press release dated January 17, 2001, reaffirmed in the Form 8K filed
with the SEC on March 6, 2001 and once again reaffirmed with this release:
. Loan growth in the 20%-25% range
. Deposit growth 15%
. Revenue growth of 22%-27%
. Return on equity greater than 20%
. Return on average assets greater than 1.4%
. Efficiency ratio less than 48%
. Earnings per share growth of 17%-25%
Greater Bay Bancorp through its ten subsidiary banks, Bank of Petaluma, 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 Central
Coastal Region.
Greater Bay Bancorp's first quarter 2001 earnings conference call is scheduled
for April 17, 2001 at 8:00 am PDT. Investors have the opportunity to listen to
the conference call live on the Internet through Street Events at
http://www.streetevents.com. Investors should go to the Street Events Web site
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15 minutes prior to the start of the call, as it may be necessary to download
audio software to hear the conference 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 on the
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Street Events Web site for 30 days and via telephone through April 23, 2001 by
dialing (703) 925-2435, passcode 511840.
Greater Bay Bancorp's corporate press releases are available on the Company's
Web site at http://www.gbbk.com.
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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) government regulations; (3) the
ability to successfully integrate recently completed mergers and acquisitions;
(4) the risks relating to the Company's warrant positions; 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, 2000.
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 -
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GREATER BAY BANCORP
MARCH 31, 2001 - FINANCIAL SUMMARY
($ in 000's, except share and per share data)
SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
2001 2000 2000 2000 2000
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Interest Income $106,694 $104,376 $ 96,612 $ 87,538 $ 79,837
Interest Expense 40,448 38,957 36,797 30,976 29,674
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Net Interest Income Before Provision for Loan Losses 66,246 65,419 59,815 56,562 50,163
Provision for Loan Losses 6,928 6,316 7,844 8,312 5,624
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Net Interest Income After Provision for Loan Losses 59,318 59,103 51,971 48,250 44,539
Other Income:
Trust Fees 886 954 822 827 847
Depositor Service Fees 2,013 2,034 2,219 2,194 2,147
ATM Fees 662 748 817 676 650
Loan and International Banking Fees 3,101 2,562 2,497 1,927 1,176
Gain on Sale of SBA Loans 835 312 429 753 696
Gain/(loss) on Investments 1,578 21 3 58 (1)
Other Income (1) 1,656 1,289 1,288 1,482 3,112
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10,731 7,920 8,075 7,917 8,627
Nonrecurring - Warrant Income (3) -- 870 2,767 740 8,609
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Total Other Income 10,731 8,790 10,842 8,657 17,236
Operating Expenses:
Compensation and Benefits (5) 18,405 17,449 15,792 15,258 15,825
Occupancy and Equipment 5,863 5,711 5,575 5,117 5,285
Professional Services & Legal 1,387 1,083 1,312 1,199 1,110
Client Services 644 563 477 496 545
FDIC Insurance and Assessments 273 356 379 251 250
Other Real Estate, Net -- 5 -- 41 10
Other Expenses 9,018 8,182 7,035 7,133 6,169
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Total Operating Expenses 35,590 33,349 30,570 29,495 29,194
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Income Before Income Taxes, Merger and Other Related Nonrecurring Costs 34,459 34,544 32,243 27,412 32,581
Income Taxes:
Income Tax Expense 12,928 12,695 11,173 9,953 9,306
Nonrecurring Income Tax Expense (3) -- 366 1,164 290 3,590
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Total Income Tax Expense 12,928 13,061 12,337 10,243 12,896
Income Before Merger and Other Related Nonrecurring Costs 21,531 21,483 19,906 17,169 19,685
Merger and Other Related Nonrecurring Costs, net of tax (3) -- 3,533 7,037 6,744 2,389
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Net Income $ 21,531 $ 17,950 $ 12,869 $ 10,425 $ 17,296
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SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
2001 2000 2000 2000 2000
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Income Per Share (Before Nonrecurring and Merger Items) (3), (4)
Basic $0.51 $0.50 $0.44 $0.41 $0.37
Diluted $0.49 $0.47 $0.42 $0.39 $0.35
Income Per Share (Before Merger Items) (4)
Basic $0.51 $0.51 $0.48 $0.42 $0.49
Diluted $0.49 $0.48 $0.46 $0.40 $0.47
Net Income Per Share (4)
Basic $0.51 $0.43 $0.31 $0.25 $0.43
Diluted $0.49 $0.41 $0.29 $0.24 $0.42
Weighted Average Common Shares Outstanding (4) 42,323,000 41,817,000 41,448,000 41,207,000 39,784,000
Weighted Average Common & Common Equivalent
Shares Outstanding (4) 44,175,000 44,319,000 43,676,000 42,913,000 41,632,000
Return on Period Average Assets, annualized (2) 1.72% 1.74% 1.61% 1.60% 1.48%
Return on Period Average Equity, annualized (2) 25.64% 26.38% 24.14% 23.62% 21.88%
Net Interest Margin - Average Earning Assets 5.73% 5.89% 5.68% 5.71% 5.47%
Operating Expense Ratio (Before Nonrecurring and Merger Items) 2.84% 2.77% 2.68% 2.82% 2.95%
Operating Expense Ratio (Before Nonrecurring and Merger
Items and excluding Matsco) 2.69% 2.85% 2.68% 2.82% 2.95%
Efficiency Ratio (Before Nonrecurring and Merger Items) 46.23% 45.47% 45.03% 45.74% 49.66%
Efficiency Ratio (Before Nonrecurring and Merger Items
and excluding Matsco) 44.67% 44.84% 45.03% 45.74% 49.66%
(1) Q1 2000 included a $2.1 million gain on an equity investment.
(2) Before Nonrecurring and Merger Items of $3.0 million, net of tax, in Q4
2000; $5.4 million, net of tax, in Q3 2000; $6.3 million, net of tax, in Q2 2000
and $2.6 million, net of tax, in Q1 2000.
(3) These items are the components of Nonrecurring and Merger Items. Net Income
excluding these items is $20,979 for Q4 2000, $18,303 for Q3 2000, $16,719 for
Q2 2000 and $14,666 for Q1 2000.
(4) Prior periods have been restated for the 2 for 1 stock split effective
October 4, 2000.
(5) Includes Matsco compensation and benefits of $2.4 million in Q1 2001 and
$904,000 in Q4 2000 as this was a purchase transaction that closed in November
2000.
Note: Prior periods have been restated to reflect the mergers between Greater
Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank of Petaluma on a
pooling-of-interests basis.
GREATER BAY BANCORP
MARCH 31, 2001 - FINANCIAL SUMMARY
($ in 000's, except share and per share data)
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
Mar 31 Dec 31 Sept 30 Jun 30 Mar 31
2001 2000 2000 2000 2000
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Cash and Due From Banks. $ 206,156 $ 270,774 $ 243,207 $ 232,371 $ 182,642
Investments 1,301,970 1,100,333 1,085,257 1,110,239 1,187,241
Loans:
Commercial 1,595,293 1,562,712 1,250,056 1,130,322 1,042,686
Term Real Estate - Commercial 992,777 967,428 890,127 869,226 834,146
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Total Commercial 2,588,070 2,530,140 2,140,183 1,999,548 1,876,832
Construction 701,414 691,912 581,956 516,998 494,099
Real Estate - Other 233,538 176,568 174,997 127,571 126,363
Consumer and Other 216,064 216,459 206,632 209,019 172,571
Deferred Loan Fees, Net (13,461) (13,657) (13,440) (13,829) (13,066)
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Total Loans 3,725,625 3,601,422 3,090,328 2,839,307 2,656,799
Allowance for Loan Losses (85,914) (84,014) (67,637) (58,578) (52,852)
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Total Loans, Net 3,639,711 3,517,408 3,022,691 2,780,729 2,603,947
Other Assets 258,409 241,863 196,914 195,746 194,001
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Total Assets $ 5,406,246 $5,130,378 $4,548,069 $4,319,085 $ 4,167,831
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Deposits:
Demand, Non-Interest Bearing $ 897,229 $1,003,828 $ 899,496 $ 851,590 $ 847,815
NOW, MMDA and Savings 2,108,098 2,082,708 2,132,184 2,032,360 2,070,090
Time Certificates, $100,000 and over 777,901 784,118 737,533 675,031 589,072
Other Time Certificates 490,402 294,407 156,125 157,554 145,221
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Total Deposits 4,273,630 4,165,061 3,925,338 3,716,535 3,652,198
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Other Borrowings 572,828 431,228 135,313 156,037 116,092
Other Liabilities 105,922 112,224 87,702 60,368 61,598
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Total Liabilities 4,952,380 4,708,513 4,148,353 3,932,940 3,829,888
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Trust Preferred Securities 99,500 99,500 99,500 99,500 58,500
Shareholders' Equity 354,366 322,365 300,216 286,645 279,443
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Total Liabilities and Shareholders' Equity $ 5,406,246 $5,130,378 $4,548,069 $4,319,085 $ 4,167,831
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Average Quarterly Total Loans, excluding Nonaccrual $ 3,638,946 $3,326,505 $2,962,402 $2,826,612 $ 2,553,083
Average Quarterly Investments $ 1,048,617 $1,095,752 $1,225,598 $1,154,824 $ 1,138,163
Average Quarterly Interest Earning Assets $ 4,687,563 $4,422,257 $4,188,000 $3,981,436 $ 3,691,246
Average Quarterly Interest Bearing Liabilities $ 3,643,025 $3,334,513 $3,044,342 $ 2,972,53 $ 2,819,566
Average Quarterly Assets $ 5,088,379 $4,783,445 $4,532,392 $4,213,203 $ 3,979,375
Average Quarterly Equity $ 340,582 $ 316,331 $ 301,644 $ 284,653 $ 269,530
Total Regulatory Capital
Tier I or Leverage Capital $ 431,427 $ 417,847 $ 412,724 $ 385,854 $ 346,472
Total Capital $ 491,675 $ 475,891 $ 462,807 $ 447,301 $ 390,554
Nonperforming Assets
Nonaccrual Loans $ 17,874 $ 12,593 $ 14,884 $ 8,779 $ 6,327
Restructured Loans - - 420 420 743
OREO 259 - 905 220 271
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Total Nonperforming Assets $ 18,133 $ 12,593 $ 15,699 $ 9,428 $ 7,341
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Greater Bay Trust Company Assets $ 734,910 $ 773,791 $ 838,659 $ 795,042 $ 751,677
SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
Mar 31 Dec 31 Sept 30 Jun 30 Mar 31
2001 2000 2000 2000 2000
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Loan to Deposit Ratio 87.18% 86.47% 78.73% 76.40% 72.75%
Core Bank Loan to Deposit Ratio (1) 72.39% 72.44% 71.89% 69.39% 66.40%
Ratio of Allowance for Loan Losses to:
Average Loans 2.35% 2.52% 2.27% 2.07% 2.07%
End of Period Loans 2.30% 2.32% 2.18% 2.05% 1.98%
Total Nonperforming Assets 473.80% 667.15% 430.84% 621.32% 719.96%
Total Nonperforming Assets to Total Assets 0.34% 0.25% 0.35% 0.22% 0.18%
Ratio of Quarterly Net Charge-offs to Average 0.59% 0.31% 0.37% 0.58% 0.26%
Ratio of YTD Net Charge-offs to YTD Average
Loans, annualized 0.59% 0.38% 0.41% 0.44% 0.26%
Loan Growth, current quarter to prior year quarter 40.23% 46.13% 37.05% 36.76% 41.57%
Loan Growth, current quarter to prior quarter,
annualized 13.99% 65.79% 35.17% 27.63% 31.39%
Recurring Revenue Growth, current quarter to
prior year quarter 30.94% 30.59% 34.71% 44.15% 40.84%
Recurring Revenue Growth, current quarter to
prior quarter, annualized 20.12% 31.93% 21.05% 38.92% 18.82%
Average Earning Assets to Average Total Assets 92.12% 92.45% 92.40% 94.50% 92.76%
Average Earning Assets to Average
Interest-Bearing Liabilities 128.67% 132.62% 137.57% 133.94% 130.92%
Capital Ratios:
Leverage 8.52% 8.77% 9.11% 9.16% 8.71%
Tier 1 Risk Based Capital 9.14% 9.40% 10.83% 10.87% 10.30%
Total Risk Based Capital 10.42% 10.70% 12.14% 12.61% 11.62%
Risk Weighted Assets $ 4,720,719 $ 4,446,088 $ 3,812,504 $ 3,548,503 $ 3,362,293
Book Value Per Share (2) $ 8.33 $ 7.69 $ 7.21 $ 6.94 $ 6.80
Total Shares Outstanding (2) 42,546,142 41,929,173 41,648,016 41,284,372 41,121,745
(1) Includes the ten core banking divisions and excludes Matsco, Capco,
Pacific Business Funding and Corporate Finance.
(2) Prior periods have been restated for the 2 for 1 stock split
effective October 4, 2000.
Note: Prior periods have been restated to reflect the mergers between
Greater Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank
of Petaluma on a pooling-of-interests basis.