EXHIBIT 99.1
Press Release dated September 15, 1999
For Information Contact
At Greater Bay Bancorp: At Financial Relations Board:
David L. Kalkbrenner, President & CEO Christina Carrabino (general
(650) 614-5767 information)
Steven C. Smith, EVP, CAO & CFO Kristi Larson (analyst contact)
(650) 813-8222 (415) 986-1591
John J. Hounslow, Chairman & CEO
Mt. Diablo Bancshares
(925) 552-4709
FOR IMMEDIATE RELEASE
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GREATER BAY BANCORP AND
MT. DIABLO BANCSHARES ANNOUNCE AGREEMENT TO MERGE
PALO ALTO, CA; September 15, 1999 -- Greater Bay Bancorp (Nasdaq: GBBK), Palo
Alto, California, and Mt. Diablo Bancshares (OTC Bulletin Board: DBLB),
Danville, California, announced today the signing of a definitive agreement for
a merger of the two companies. Following the transaction, Mt. Diablo National
Bank, a wholly owned subsidiary of Mt. Diablo Bancshares, will operate as a
wholly owned subsidiary of Greater Bay Bancorp. The merger is expected to be
completed late in the fourth quarter of 1999 or early in the first quarter of
2000.
Greater Bay Bancorp anticipates the transaction, including cost savings, to be
neutral on 1999 earnings per share and approximately 2% accretive to 2000
earnings per share. Greater Bay Bancorp has not included any anticipated revenue
enhancements that may be realized from the merger, even though Greater Bay
Bancorp's prior acquisitions have resulted in revenue growth at the newly
acquired subsidiary banks.
Mt. Diablo National Bank, established in April 1992, has banking offices in
Danville, Pleasanton and Lafayette, California serving the small- to mid-sized
business community. As of June 30, 1999, Mt. Diablo Bancshares had total assets
of $200 million, and deposits of $189 million. For the six months ended June 30,
1999, net income was $1.1 million.
David Kalkbrenner, president and chief executive officer of Greater Bay Bancorp,
stated, "We are excited to have Mt. Diablo Bancshares join us as we believe the
company's market areas have substantial growth opportunities. We will also be
pleased to welcome John J. Hounslow, Chairman and Chief Executive Officer of Mt.
Diablo Bancshares, to our Board when the merger closes. The completion of the
mergers with Mt. Diablo Bancshares and Bay Commercial Services will result in
substantial Greater Bay representation in the East Bay region of the San
Francisco Bay Area with offices in Walnut Creek, Lafayette, Danville, Sam Ramon,
Pleasanton, Hayward, San Leandro and Fremont."
Mr. Hounslow commented, "We are pleased to be joining the Greater Bay Bancorp
super community banking family. Mt. Diablo National Bank has been one of the
fastest growing
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community banks in Northern California during the past three years. Our goal is
to ensure that our clients benefit from Greater Bay Bancorp's extended product
offerings and increased lending capabilities and that our shareholders receive
enhanced value for their Mt. Diablo Bancshares stock."
Greater Bay Bancorp previously announced the execution of a definitive agreement
to acquire Bay Commercial Services and its wholly owned subsidiary, Bay Bank of
Commerce. When the acquisitions of Bay Commercial Services and Mt. Diablo
Bancshares are both completed, Greater Bay Bancorp would have on a pro forma
basis as of June 30, 1999 total assets of approximately $2.5 billion and total
shareholders' equity of approximately $139 million. Shareholders of Bay
Commercial Services recently approved the merger with Greater Bay Bancorp, which
is expected to close next month, subject to receipt of all regulatory approvals.
Terms of the Merger
The terms of the agreement provide for the shareholders of Mt. Diablo Bancshares
to receive shares of Greater Bay Bancorp stock in a tax-free merger. Mt. Diablo
Bancshares currently has approximately 1,215,000 shares of common stock
outstanding. If the average closing price of Greater Bay Bancorp common stock is
between $33.00 and $38.00, Greater Bay Bancorp will issue 0.975 shares for each
outstanding share of common stock of Mt. Diablo Bancshares, for an estimated
aggregate value of between approximately $46.5 million and $53.5 million. If the
average closing price of Greater Bay Bancorp common stock is greater than
$38.00, the conversion ratio will adjust downward according to a formula.
If the average closing price of Greater Bay Bancorp common stock is less than
$33.00, Greater Bay Bancorp has the alternative of either allowing the
conversion ratio to remain at 0.975 shares or electing to revise the conversion
ratio according to a formula. If Greater Bay Bancorp does not elect to revise
the conversion ratio, Mt. Diablo Bancshares can elect to terminate the
transaction.
The sale of Mt. Diablo Bancshares' corporate headquarters building is currently
in escrow and is scheduled to close by the end of the third quarter. The sale
will result in an economic gain of approximately $1.4 million. Based on the last
twelve months earnings, the acquisition price equates to a multiple of 22.79
times, while the acquisition price to 1999 earnings is estimated to be
approximately 19.00 times. The acquisition price to book value will be
approximately 3.36 times when adjusted for the economic gain on the sale of the
corporate headquarters building and adjusted for estimated earnings through
December 31, 1999.
The merger is subject to certain conditions, including the approval of the
shareholders of Mt. Diablo Bancshares and regulatory approval, and will be
accounted for as a pooling of interests.
Greater Bay Bancorp and its financial services subsidiaries, Bay Area Bank,
Cupertino National Bank, Mid-Peninsula Bank, Peninsula Bank of Commerce and
Golden Gate Bank, along with its operating divisions, Greater Bay Corporate
Finance Group, Greater Bay Bank Contra Costa Region, Greater Bay Bank Fremont
Region, Greater Bay Bank Santa Clara Commercial Banking 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,
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Cupertino, Santa Clara, Palo Alto, Redwood City, San Mateo, Millbrae, San
Francisco and Walnut Creek.
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 future financial performance
and condition and pending acquisitions. 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 due to a number of factors,
including, but not limited to, when and if the proposed acquisitions are
consummated, the success of Greater Bay Bancorp in integrating the new banks
into its organization and other risks detailed in the Greater Bay Bancorp
reports filed with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for the year ended December 31, 1998.
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.
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