EXHIBIT 99.2
Press Release dated January 12, 1999
For Immediate Release For Information Contact
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January 12, 1999 David L. Kalkbrenner, President & CEO
(650) 614-5767
Steven C. Smith, EVP, COO & CFO
(650) 813-8222
GREATER BAY BANCORP ANNOUNCES
31.3% INCREASE IN CORE NET EARNINGS FOR 1998
PALO ALTO, CA; January 12, 1999 - Greater Bay Bancorp (Nasdaq:GBBK), a $1.6
billion in assets financial services holding company, announced net earnings of
$16.6 million or $1.62 per diluted share for the year ended December 31, 1998, a
42.7% increase over net earnings in 1997 of $11.6 million or $1.17 per share.
Net earnings in 1998 and 1997 included approximately $1.7 million and $2.3
million respectively, in merger and related nonrecurring costs. Without the
merger and related nonrecurring costs, 1998 net earnings would have been $18.3
million or $1.78 per share, an increase in net earnings of 31.3% over 1997
results of $13.9 million or $1.41 per share.
For the fourth quarter of 1998, the Company's net earnings were $5.0
million or $0.48 per share, compared to net earnings of $4.4 million or $0.43
per share in the third quarter 1998 and $1.8 million or $0.18 per share in the
fourth quarter 1997. Excluding the merger and related nonrecurring costs, third
quarter 1998 and fourth quarter 1997 net earnings would have been $4.8 million
or $0.47 per share, and $4.1 million or $0.41 per share, respectively.
Excluding the merger and related nonrecurring costs, the return on average
equity and average assets for 1998 were 21.72% and 1.28% compared to 18.86% and
1.33% in 1997. For the fourth quarter of 1998, the Company's return on average
equity and average assets excluding the merger and related nonrecurring costs
were 21.82% and 1.25% compared to 21.31% and 1.43% in the same quarter in 1997.
The Company's total assets reached $1.6 billion at December 31, 1998, an
increase of 30.0% or $365.2 million from December 31, 1997. For the 1998 year,
total loans grew to $1.0 billion, an increase of $254.2 million or 33.8%, while
total deposits increased $271.3 million to $1.3 billion at year end for a 25.3%
increase.
Commenting on the results, David L. Kalkbrenner, the Company's President
and CEO, said, "We had an excellent year in 1998 as the new business initiatives
we introduced in late 1997 and 1998 resulted in significant growth in earning
assets and a substantial increase in net
earnings. We anticipate continued growth over the next 12 months as a result of
additional contributions from our 1998 initiatives, as well as through new
business opportunities which we believe will be available in 1999."
Mr. Kalkbrenner added, "Underscoring our business opportunities for 1999,
the Company is currently in active discussions for a stock-for-stock merger with
a community bank representing less than 15% of the Company's total assets. While
no assurances can be given that a definitive agreement will be signed or that
the merger will be consummated, we believe this opportunity fits our continuing
strategy of building a quality, super community banking franchise."
Operating expenses for the year ended December 31, 1998 include
approximately $146,000, excluding internal staff time, related to the correction
of the year 2000 "millenium bug" which impacts all companies. The Company has
budgeted anticipated total expenditures of $300,000 to $500,000 to address the
year 2000 issues.
The Company's ratio of non-performing assets to total assets was 0.20% at
December 31, 1998 compared to 0.45% at December 31, 1997. The reserve for loan
losses represented 2.12% of total loans and 676.10% of non-performing assets at
December 31, 1998, compared to 2.18% and 298.39% at December 31, 1997.
The Company's Trust division, Greater Bay Trust Company, continues to
reflect strong growth, increasing the level of fiduciary assets under management
by 12.4% to a total of $649.3 million at December 31, 1998 compared to $577.7
million one year earlier. Trust fee income also increased to $2.5 million in
1998, compared to $2.1 million in 1997.
The Company's capital ratios continue to be above the well capitalized
guidelines established by the bank regulatory agencies.
Greater Bay Bancorp and its financial services subsidiaries, Cupertino
National Bank, Mid-Peninsula Bank, Peninsula Bank of Commerce and Golden Gate
Bank, along with its operating divisions, Greater Bay Bank Santa Clara Valley
Commercial Banking Group, Greater Bay Corporate Finance Group, Greater Bay
International Banking Division, Greater Bay Trust Company, Pacific Business
Funding and Venture Banking Group, serve clients throughout Silicon Valley, the
San Francisco Peninsula and the Contra Costa Tri Valley Region, with offices
located in San Jose, Cupertino, Santa Clara, Palo Alto, Redwood City, San Mateo,
Millbrae, San Bruno, San Francisco and Walnut Creek.
This document may contain forward-looking statements that are subject to
risks and uncertainties that could cause actual results to differ materially
from those projected. For a discussion of factors that could cause actual
results to differ, please see the Company's publicly available Securities and
Exchange Commission filings, including its Annual Report on Form 10-K for the
year ended December 31, 1997, and particularly the discussion of risk factors
within that document.
We Invest in Relationships!
GREATER BAY BANCORP
DECEMBER 31, 1998 - FINANCIAL SUMMARY
($ in 000's, except share and per share data)
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SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION DATA:
Dec 31 Sept 30 Jun 30 Mar 31 Dec 31
1998 1998 1998 1998 1997
----------- ----------- ----------- ----------- -----------
Cash and Due From Banks $ 59,975 $ 55,399 $ 70,010 $ 71,152 $ 53,167
Investments 463,470 574,636 558,335 426,098 393,676
Loans:
Commercial 455,077 388,094 372,930 367,384 362,747
Construction 173,857 153,378 139,850 121,446 112,514
Real Estate 299,111 245,340 227,652 217,845 196,217
Consumer and Other 81,089 75,673 81,750 79,177 82,914
Deferred Loan Fees, Net (3,343) (2,966) (2,446) (2,904) (2,765)
----------- ----------- ----------- ----------- -----------
Total Loans 1,005,791 859,519 819,736 782,948 751,627
Allowance for Loan Losses (21,304) (19,861) (17,985) (16,565) (16,394)
----------- ----------- ----------- ----------- -----------
Total Loans, Net 984,487 839,658 801,751 766,383 735,233
Other Assets 74,933 65,690 56,773 58,092 35,589
=========== =========== =========== =========== ===========
Total Assets $ 1,582,865 $ 1,535,383 $ 1,486,869 $ 1,321,725 $ 1,217,665
=========== =========== =========== =========== ===========
Deposits:
Demand, Non-Interest Bearing $ 268,448 $ 237,596 $ 263,121 $ 208,277 $ 219,495
NOW, MMDA and Savings 854,392 802,220 809,594 676,730 627,475
Time Certificates, $100,000 and over 168,075 198,286 180,891 175,381 183,147
Other Time Certificates 51,577 49,830 31,009 46,043 41,031
----------- ----------- ----------- ----------- -----------
Total Deposits 1,342,492 1,287,932 1,284,615 1,106,431 1,071,148
----------- ----------- ----------- ----------- -----------
Other Borrowings 73,734 89,735 82,275 85,142 32,355
Other Liabilities 20,963 15,764 14,556 26,857 14,622
----------- ----------- ----------- ----------- -----------
Total Liabilities 1,437,189 1,393,431 1,381,446 1,218,430 1,118,125
----------- ----------- ----------- ----------- -----------
Long-term Subordinated Debt 3,000 3,000 3,000 3,000 3,000
Trust Preferred Securities 50,000 50,000 20,000 20,000 20,000
Stockholders' Equity 92,676 88,952 82,423 80,295 76,540
----------- ----------- ----------- ----------- -----------
Regulatory Capital 145,676 141,952 105,423 103,295 99,540
----------- ----------- ----------- ----------- -----------
Total Liabilities and Shareholders' Equity $ 1,582,865 $ 1,535,383 $ 1,486,869 $ 1,321,725 $ 1,217,665
=========== =========== =========== =========== ===========
Average Quarterly Total Loans, excluding
Nonaccrual $ 905,675 $ 824,356 $ 794,786 $ 752,381 $ 714,594
Average Quarterly Investments $ 548,793 $ 585,654 $ 475,082 $ 410,650 $ 352,179
Average Quarterly Interest Bearing Liabilities $ 1,216,476 $ 1,148,268 $ 1,015,659 $ 969,365 $ 843,329
Average Quarterly Assets $ 1,578,508 $ 1,489,844 $ 1,375,328 $ 1,240,507 $ 1,135,426
Average Quarterly Equity $ 90,624 $ 86,577 $ 80,667 $ 77,425 $ 76,151
Regulatory Capital
Tier I or Leverage Capital $ 123,287 $ 115,951 $ 102,025 $ 99,755 $ 96,317
Total Capital $ 161,103 $ 154,597 $ 120,281 $ 117,031 $ 113,046
Nonperforming Assets
Nonaccrual Loans $ 1,858 $ 2,919 $ 3,758 $ 3,152 $ 2,971
Loans 90 Days Past Due & Accruing -- -- 75 108 158
Restructured Loans 327 377 531 903 1,062
OREO 966 905 1,001 1,001 1,303
----------- ----------- ----------- ----------- -----------
Total Nonperforming Assets $ 3,151 $ 4,201 $ 5,365 $ 5,164 $ 5,494
=========== =========== =========== =========== ===========
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SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
Dec 31 Sept 30 Jun 30 Mar 31 Dec 31
1998 1998 1998 1998 1997
----------- ----------- ----------- ----------- -----------
Greater Bay Trust Company Assets $ 649,336 $ 581,437 $ 636,362 $ 576,290 $ 577,746
Loan to Deposit Ratio 74.92% 66.74% 63.81% 70.76% 70.17%
Ratio of Allowance for Loan Losses to:
Total Loans 2.12% 2.31% 2.19% 2.12% 2.18%
Total Nonperforming Assets 676.10% 472.77% 335.24% 320.78% 298.39%
Total Nonperforming Assets to Total Assets 0.20% 0.27% 0.36% 0.39% 0.45%
Ratio of Quarterly Net Charge-offs to
Average Loans , annualized 0.22% 0.02% 0.01% 0.61% 0.26%
Ratio of YTD Net Charge-offs to Average
Loans, annualized 0.21% 0.20% 0.30% 0.61% 0.26%
Earning Assets to Total Assets 92.92% 93.41% 92.59% 91.46% 94.04%
Earning Assets to Interest-Bearing Liabilities 122.48% 120.21% 122.19% 120.12% 126.25%
Capital Ratios:
Leverage 7.81% 7.78% 7.42% 8.04% 8.48%
Tier 1 Risk Based Capital 9.90% 10.99% 10.08% 10.57% 10.72%
Total Risk Based Capital 12.94% 14.65% 11.88% 12.41% 12.58%
Risk Weighted Assets $ 1,245,336 $ 1,055,323 $ 1,012,545 $ 943,348 $ 898,734
Book Value Per Share $ 9.64 $ 9.28 $ 8.69 $ 8.55 $ 8.23
Total Shares Outstanding 9,612,141 9,584,634 9,489,134 9,395,764 9,303,930
Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Peninsula Bank of Commerce and Pacific
Rim Bancorporation (the parent of Golden Gate Bank), and Pacific Business Funding Corporation, on a pooling-of-interests basis.
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GREATER BAY BANCORP
DECEMBER 31, 1998 - FINANCIAL SUMMARY
($ in 999's except share and per share data)
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SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
1998 1998 1998 1998 1997
-------- -------- -------- -------- --------
Interest Income $ 29,989 $ 29,861 $ 27,510 $ 25,560 $ 24,853
Interest Expense 12,495 12,953 11,592 10,432 9,616
-------- -------- -------- -------- --------
Net Interest Income before Provision for Loan Losses 17,494 16,908 15,918 15,128 15,237
Provision for Loan Losses $ 1,901 1,791 1,347 996 1,109
------- -------- -------- -------- --------
Net Interest Income after Provision for Loan Losses 15,593 15,117 14,571 14,132 14,128
Other Income:
Trust Fees 664 642 617 550 603
Depositor Service Fees 357 361 349 420 394
Gain on Sale of SBA Loans 282 290 221 244 269
Loan Fees 176 165 190 146 152
Gain/(loss) on Investments 320 4 42 8 25
Other Income (1) 384 65 152 (339) 116
-------- -------- -------- -------- --------
2,183 1,527 1,571 1,029 1,559
Nonrecurring - Warrant Income 314 134 - 497 14
-------- -------- -------- -------- --------
Other Income 2,497 1,661 1,571 1,526 1,573
Operating Expenses:
Compensation and Benefits 5,807 5,753 5,729 5,426 5,449
Occupancy and Equipment 1,751 1,542 1,535 1,389 1,357
Professional Services & Legal 432 403 377 385 417
Client Services 140 122 131 151 80
FDIC Insurance and Assessments 84 88 77 89 73
Other Real Estate, Net (6) 43 (8) 24 25
Other Expenses 2,458 1,740 1,431 1,618 2,164
-------- -------- -------- -------- --------
10,666 9,691 9,272 9,082 9,565
Nonrecurring Expenses (2) 448 192 - 701 -
-------- -------- -------- -------- --------
Total Operating Expenses 11,114 9,883 9,272 9,783 9,565
-------- -------- -------- -------- --------
Income before Income Taxes & Merger and Other Related
Nonrecurring Costs 6,976 6,895 6,870 5,875 6,136
Income Tax Expense 1,993 2,141 2,334 1,896 2,045
-------- -------- -------- -------- --------
Income before Merger and Other Related Nonrecurring Costs 4,983 4,754 4,536 3,979 4,091
Merger and Other Related Nonrecurring Costs, net of tax - 360 1,314 - 2,282
-------- -------- -------- -------- --------
Net Income $ 4,983 $ 4,394 $ 3,222 $ 3,979 $ 1,809
======== ======== ======== ======== ========
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SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
1998 1998 1998 1998 1997
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Income Per Share (before merger and other related
nonrecurring items) (3) (4)
Basic $ 0.52 $ 0.50 $ 0.48 $ 0.43 $ 0.44
Diluted $ 0.48 $ 0.47 $ 0.44 $ 0.39 $ 0.41
Net Income Per Share (3) (4)
Basic $ 0.52 $ 0.46 $ 0.34 $ 0.43 $ 0.20
Diluted $ 0.48 $ 0.43 $ 0.31 $ 0.39 $ 0.18
Weighted Average Common Shares Outstanding (4) 9,595,000 9,525,000 9,460,000 9,356,000 9,266,000
Weighted Average Common & Common Equivalent
Shares Outstanding (4) 10,306,000 0,223,000 10,254,000 0,254,000 10,078,000
Return on Quarterly Average Assets, annualized (5) 1.25% 1.27% 1.32% 1.30% 1.43%
Return on Quarterly Average Equity, annualized (5) 21.82% 21.79% 22.55% 20.84% 21.31%
Net Interest Margin - Average Earning Assets 4.77% 4.76% 5.03% 5.22% 5.73%
Operating Expense Ratio (Before Merger and Other Related
Nonrecurring Items) 2.68% 2.58% 2.70% 2.97% 3.34%
Efficiency Ratio (Before Merger and Other Related
Nonrecurring Items) 54.21% 52.57% 53.02% 56.21% 56.95%
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(1) Q1 and Q3 of 1998 includes a $700,000 and $100,000 write-down of an equity investment in accordance with APB 18, respectively.
(2) Q1, Q3 and Q4 of 1998 nonrecurring expenses are comprised of a $701,000, $192,000 and $448,000 donation to the GBB Foundation,
respectively.
(3) Net income per share for prior periods have been restated as required by the adoption of SFAS No. 128. In accordance with the
newly adopted accounting standard, Net income Per Share is now presented on a Basic and Diluted basis.
(4) Restated to reflect the 2-for-1 stock split declared for shareholders of record as of April 30, 1998.
(5) Before Merger and Other Related Nonrecurring Costs of $360,000, net of tax, in Q3 of 1998, $1.31 million, net of tax, in Q2 of
1998 and $2.28 million, net of tax, in Q4 of 1997.
Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Peninsula Bank of Commerce and Pacific
Rim Bancorporation (the parent of Golden Gate Bank), and Pacific Business Funding Corporation, on a pooling-of-interests basis.
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GREATER BAY BANCORP
DECEMBER 31, 1998 - FINANCIAL SUMMARY
($ in 000's, except share data)
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SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA:
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
Interest Income $ 112,920 $ 88,527
Interest Expense 47,472 34,059
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Net Interest Income Before Provision for Loan Losses 65,448 54,468
Provision for Loan Losses 6,035 6,786
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Net Interest Income After Provision for Loan Losses 59,413 47,682
Other Income (1) 6,310 5,379
Nonrecurring - Warrant Income 945 1,162
------------ ------------
Total Other Income 7,255 6,541
Operating Expenses 38,711 34,083
Other Expenses - nonrecurring (2) 1,341 (1,287)
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Total Operating Expenses 40,052 32,796
------------ ------------
Income Before Income Taxes & Merger and Other Related Nonrecurring Costs 26,616 21,427
Income Tax Expense 8,364 7,526
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Income Before Merger and Other Related Nonrecurring Costs 18,252 13,901
Merger and Other Related Nonrecurring Costs, net of tax 1,674 2,282
------------ ------------
Net Income $ 16,578 $ 11,619
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SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS:
DECEMBER 31, DECEMBER 31,
1998 1997
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Income Per Share (3) (4) (before merger and other related nonrecurring costs)
Basic $ 1.92 $ 1.51
Diluted $ 1.78 $ 1.41
Net Income Per Share (3) (4)
Basic $ 1.75 $ 1.26
Diluted $ 1.62 $ 1.17
Weighted Average Common Shares Outstanding (4) 9,485,000 9,196,094
Weighted Average Common & Common Equivalent Shares Outstanding (4) 10,231,000 9,892,480
Return on Average Assets, annualized (5) 1.28% 1.33%
Return on Average Equity, annualized (5) 21.72% 18.86%
Net Interest Margin - Average Earning Assets 4.95% 5.54%
Operating Expense Ratio (Before Merger and Other Related Nonrecurring Costs) 2.73% 3.27%
Efficiency Ratio (Before Merger and Other Related Nonrecurring Costs) 53.95% 56.95%
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(1) Q1 and Q3 of 1998 includes a $700,000 and $100,000 write-down of an equity investment in accordance with APB 18,
respectively.
(2) Q1, Q3 and Q4 of 1998 nonrecurring expenses are comprised of a $701,000, $192,000 and $448,000 donation to the GBB
Foundation, respectively. Q1 of 1997 nonrecurring expenses includes $413,000 in nonrecurring charges as well as a
$1.70 million recovery from GBB's insurance coverage related to the $1.70 million legal settlement charge that
occurred in the second quarter of 1995.
(3) Net income per share for prior periods have been restated as required by the adoption of SFAS No. 128. In accordance
with the newly adopted accounting standard, Net income per share is now presented on a Basic and Diluted basis.
(4) Restated to reflect the 2-for-1 stock split declared for shareholders of record as of April 30, 1998.
(5) Before Merger and Other Related Nonrecurring Costs of $360,000, net of tax, in Q3 of 1998, $1.31 million, net of
tax, in Q2 of 1998.
Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Peninsula Bank of Commerce
and Pacific Rim Bancorporation (the parent of Golden Gate Bank), and Pacific Business Funding Corporation, on a pooling-
of-interests basis.
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