EXHIBIT 99.2 For Information Contact - ----------------------- At Greater Bay Bancorp: At Financial Relations Board: David L. Kalkbrenner Christina Carrabino (general information) President and CEO Kristi Larson (analyst contact) (650) 614-5767 (415) 986-1591 Steven C. Smith EVP, CAO and CFO (650) 813-8222 FOR IMMEDIATE RELEASE GREATER BAY BANCORP REPORTS RECORD OPERATING RESULTS WITH A 37% INCREASE IN NET INCOME AND 35% INCREASE IN TOTAL ASSETS PALO ALTO, CA, October 14, 1999 -- Greater Bay Bancorp (Nasdaq: GBBK), a $2.3 billion in assets financial services holding company, today announced record results for the third quarter and nine months ended September 30, 1999. Net income, before merger and related non-recurring and extraordinary items for the --------------------------------------------------------------- third quarter, increased 37% to $7.4 million or $0.62 per diluted share, compared to $5.4 million or $0.46 per diluted share for the third quarter of 1998. For the nine months ended September 30, 1999, net income, before merger and ----------------- related non-recurring and extraordinary items, was $19.6 million or $1.66 per - --------------------------------------------- diluted share, up 34% from the $14.6 million or $1.26 per diluted share for the same period of the prior year. Merger and related non-recurring and extraordinary items were $2.5 million for the first nine months of 1999 and $1.3 million for the first nine months of 1998. Including these items, net income was $17.0 million or $1.44 per diluted share for the first nine months of 1999, compared with $13.3 million or $1.14 per diluted share for the first nine months of 1998. At September 30, 1999, Greater Bay Bancorp's total assets were $2.3 billion, an increase of 35% or $597 million from September 30, 1998. Total loans grew to $1.5 billion, an increase of $522 million or 54% compared to total loans at September 30, 1998. Total deposits increased to $2.0 billion at quarter end, a $612 million or 43% increase since September 30, 1998. For the third quarter of 1999, Greater Bay Bancorp's return on average equity, return on average assets and efficiency ratio were 24.50%, 1.34% and 47.96%, respectively, compared to 21.34%, 1.30%, and 53.37%, respectively, for the third quarter of 1998. For the year to date 1999, Greater Bay Bancorp's return on average equity, return on average assets and efficiency ratio were 22.63%, 1.30% and 51.44%, respectively, compared to 16.55%, 1.19% and 55.79%, respectively, for the same period a year ago. Greater Bay Bancorp's merger with Bay Commercial Services is expected to close on October 15, 1999. As a result of the merger, Bay Bank of Commerce, a wholly owned subsidiary of Bay Commercial Services, will become a wholly owned subsidiary of Greater Bay Bancorp. The Company recently signed a definitive agreement to merge with Mt. Diablo Bancshares, parent of Mt. Diablo National Bank. This transaction is expected to close early in the first quarter of 2000. On a pro forma basis after these acquisitions are completed, Greater Bay Bancorp would have approximately $2.6 billion in assets, as of September 30, 1999. "Once again, Greater Bay Bancorp continued to deliver excellent operating results combined with outstanding quality loan growth," said David L. Kalkbrenner, president and chief executive officer. "Our company's non- performing asset ratio continues to remain at very low levels compared to our peer banks, and our delinquent loans are at their lowest level in over two years." Mr. Kalkbrenner continued, "During the quarter, we signed a definitive merger agreement with Mt. Diablo Bancshares, the holding company for Mt. Diablo National Bank, with offices in Danville, Lafayette, Pleasanton and the Blackhawk Community. Combined with Bay Bank of Commerce's offices in Hayward, San Leandro and San Ramon, and the new Greater Bay Bank offices in Walnut Creek and Fremont, we are in an excellent position to continue our expansion in the dynamic East Bay Region of the San Francisco Bay Area." Mr. Kalkbrenner added, "We continue to focus on Greater Bay Bancorp's Super Community Banking strategy and this is having a very positive impact on our ability to increase market share and our relationship client base in the communities we serve." Operating results for the three months and nine months ended September 30, 1999, include approximately $28,000 and $206,000 respectively (excluding internal staff time) related to the correction of the year 2000 "millennium bug" which impacts all companies. The Company has budgeted an anticipated total expenditure of $300,000 in fiscal 1999 to address year 2000 issues. The Company has met all of its Year 2000 regulatory guidelines. Greater Bay Bancorp's ratio of non-performing assets to total assets was 0.32% at September 30, 1999, compared to 0.26% at September 30, 1998. In addition, the allowance for loan losses represented 2.00% of total loans at September 30, 1999, compared to 1.93% at June 30, 1999 and 2.27% at September 30, 1998. Non-interest income increased to $4.1 million in the third quarter of 1999 from $2.3 million in the third quarter of 1998. The core increase in non-interest income, excluding a $900,000 gain on an equity investment, was approximately $1.0 million or a 43% increase from the third quarter of 1998. Greater Bay Bancorp's capital ratios continue to be above the well-capitalized guidelines established by the bank regulatory agencies. Greater Bay Bancorp and its financial services subsidiaries, Bay Area Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank and Peninsula Bank of Commerce, along with its operating divisions, Greater Bay Bank Contra Costa Region, Greater Bay Bank Fremont Region, Greater Bay Bank Santa Clara Commercial Banking Group, Greater Bay Corporate Finance Group, Greater Bay International Banking Division, Greater Bay Trust Company, Pacific Business Funding and Venture Banking Group, serve clients throughout Silicon Valley, the San Francisco Peninsula and the Contra Costa Tri Valley Region, with offices located in Cupertino, Millbrae, Palo Alto, Redwood City, San Francisco, San Jose, San Mateo, Santa Clara and Walnut Creek. Safe Harbor This document may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. For a discussion of factors that could cause actual results to differ, please see the publicly available Securities and Exchange Commission filings of Greater Bay Bancorp, including the Annual Report on Form 10-K for the year ended December 31, 1998, and particularly the discussion of risk factors with such documents. For investor information on Greater Bay Bancorp at no charge, call our automated shareholder information line at 1-800-PRO-INFO (1-800-776-4636) and enter code GBBK. For international access, dial 1-201-432-6555. GREATER BAY BANCORP September 30, 1999 - FINANCIAL SUMMARY ($ in 000's, except share and per share data) - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION DATA: Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 1999 1999 1999 1998 1998 ------------ ------------ ------------ ------------ ------------ Cash and Due from Banks $ 98,863 $ 90,246 $ 79,244 $ 69,503 $ 66,536 Investments 527,383 606,442 511,842 497,667 609,781 Loans: Commercial 687,402 648,483 594,546 488,668 412,343 Construction 207,761 256,253 219,993 215,274 190,070 Real Estate 413,536 353,071 352,820 332,478 279,095 Consumer and Other 100,051 99,968 96,460 88,450 83,330 Deferred Loan Fees, Net (5,531) (5,133) (4,903) (3,896) (3,443) ------------ ------------ ------------ ------------ ------------ Total Loans 1,484,019 1 351,462 1,250,925 1,115,982 962,203 Allowance for Loan Losses (20,600) (26,066) (24,046) (23,379) (21,562) ------------ ------------ ------------ ------------ ------------ Total Loans, Net 1,454,339 1,325,376 1,234,879 1,092,603 940,341 Other Assets 103,302 91,540 82,487 78,116 68,330 ------------ ------------ ------------ ------------ ------------ Total Assets $ 2,283,867 $ 2,113,612 $ 1,938,452 $ 1,738,109 $ 1,686,988 ============ ============ ============ ============ ============ Deposits: Demand, Non-interest Bearing $ 375,302 $ 324,019 $ 316,054 $ 302,006 $ 274,091 NOW, MMDA and Savings 1,242,114 1,124,354 996,856 922,581 860,871 Time Certificates, $100,000 and over 353,607 320,286 298,959 190,312 224,140 Other Time Certificates 61,634 61,998 63,076 64,048 61,882 ------------ ------------ ------------ ------------ ------------ Total Deposits 2,032,737 1,830,657 1,075,044 1,476,941 1,420,904 ------------ ------------ ------------ ------------ ------------ Other Borrowings 52,000 90,435 72,288 76,234 92,235 Other Liabilities 29,112 27,397 27,082 22,967 18,011 ------------ ------------ ------------ ------------ ------------ Total Liabilities 2,113,849 1,948,409 1,775,214 1,578,148 1,531,230 ------------ ------------ ------------ ------------ ------------ Long-term Subordinated Debt _ _ _ 3,000 3,000 Trust Preferred Securities 50,000 50,000 50,000 50,000 50,000 Stockholders' Equity 120,036 115,123 113,238 107,011 102,750 ------------ ------------ ------------ ------------ ------------ Regulatory Capital 170,038 165,123 163,238 160,041 155,758 ------------ ------------ ------------ ------------ ------------ Total Liabilities and Shareholders' Equity $ 2,283,887 $ 2,113,012 $ 1,038,452 $ 1,738,189 $ 1,686,988 ============ ============ ============ ============ ============ Average Quarterly Total Loans, excluding Nonaccrual $ 1,419,303 $ 1,310,519 $ 1,187,214 $ 1,000,858 $ 926,399 Average Quarterly Investments $ 614,570 $ 598,984 $ 489,004 $ 582,428 $ 815,270 Average Quarterly Interest Bearing Liabilities $ 1,702,360 $ 1,602,021 $ 1,397,742 $ 1,319,199 $ 1,244,656 Average Quarterly Assets $ 2,184,002 $ 2,052,312 $ 1,810,870 $ 1,731,075 $ 1,634,178 Average Quarterly Equity $ 119,302 $ 117,713 $ 110,513 $ 104,710 $ 99,941 Regulatory Capital Tier 1 or Leverage Capital $ 165,062 $ 155,557 $ 145,260 $ 137,652 $ 129,757 Total Capital $ 197,102 $ 187,196 $ 181,900 $ 176,902 $ 169,838 Nonperforming Assets Nonaccrual Loans $ 5,584 $ 3,375 $ 2,002 $ 2,003 $ 3,061 Loans 90 Days Past Due & Accruing _ _ _ _ _ Restructured Loans 1,023 565 482 327 377 OREO 515 595 620 966 905 ------------ ------------ ------------ ------------ ------------ Total Nonperforming Assets $ 7,422 $ 4,535 $ 4,094 $ 3,296 $ 4,343 ============ ============ ============ ============ ============ Greater Bay Trust Company Assets $ 652,054 $ 659,414 $ 630,540 $ 640,336 $ 581,437 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS: Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 1999 1999 1999 1998 1998 ---------- ---------- ------------ ------------ ------------ Loan to Deposit Ratio 73.01% 73.02% 75.12% 75.46% 67.71% Ratio of Allowance for Loan losses in: Total Loans 2.00% 1.93% 1.91% 2.09% 2.7% Total Nonperforming Assets 399.89% 575.21% 587.35% 709.31% 503.36% Total Nonperforming Assets to Total Assets 0.32% 0.21% 0.21% 0.19% 0.26% Ratio of quarterly Net Charge-off to Average Loans annualized -0.02% 0.01% 0.09% 0.17% 0.05% Ratio of YTD Not Charge-offs to Average Loans, annualized 0.02% 0.05% 0.09% 0.13% 0.11 Earning Asset to Total Assets 92.43% 92.72% 93.00% 92.96% 93.21% Earning Assets to Interest-Bearing Liabilities 119.98% 118.98% 121.63% 123.70% 121.09% Capital Ratios: Leverage 7.56% 7.58% 7.99% 7.95% 7.94% Tier 1 Risk Based Capital 8.80% 9.48% 9.45% 10.12% 11.09% Total Risk Based Capital 10.52% 11.41% 11.83% 13.01% 14.51% Risk Weighted Assets $ 1,874,692 $ 1,640,736 $ 1,537,150 $ 1,360,078 $1,170,114 Book Value per Share $ 10.60 $ 10.24 $ 10.17 $ 9.72 $ 9.36 Total Shares Outstanding 11,325,572 11,247,791 11,135,923 11,011,482 10,985,955 Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Bay Area Bancshares on a pooling-of-interest basis. - -------------------------------------------------------------------------------- GREATER BAY BANCORP September 30, 1999 - 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 1999 1999 1999 1998 1998 ----------- ------------ ------------ ------------ ------------ Interest income $ 42,708 $ 39,043 $ 34,461 $ 33,152 $ 32,998 Interest Expense 17,612 16,161 13,921 13,475 13,947 ----------- ------------ ------------ ------------ ------------ Net Interest Income Before Provision for Loan Losses 25,096 22,862 20,540 19,677 19,051 Provision for Loan Losses 3,518 1,636 921 1,941 1,881 ----------- ------------ ------------ ------------ ------------ Net Interest Income After Provision for Loan Losses 21,578 21,226 19,619 17,736 17,170 Other Income: Trust Fees 768 727 721 684 642 Depositor Service Fees 520 393 419 428 431 ATM Fees 615 501 527 498 510 Loan and International Banking Fees 747 458 309 176 165 Gain on Sale of SBA Loans 253 298 284 282 200 Gain/(loss) on Investments - - - 320 4 Other income (1) 1,170 410 293 421 129 ----------- ------------ ------------ ------------ ------------ 4,073 2,787 2,553 2,787 2,179 Nonrecurring - Warrant Income - 226 4 314 134 ----------- ------------ ------------ ------------ ------------ Other Income 4,073 3,013 2,557 3,101 2,313 Operating Expenses: Compensation and Benefits 7,060 7,726 7,169 6,537 6,587 Occupancy and Equipment 2,005 2,436 2,355 1,908 1,862 Professional Services & Legal 551 406 575 609 537 Client Services 280 244 261 142 128 FDIC Insurance and Assessments 138 103 100 92 93 Other Retail Estate, Net 30 15 21 (0) 43 Other Expenses 2,345 2,379 2,210 2,953 2,000 ----------- ------------ ------------ ------------ ------------ Nonrecurring Expenses (2) 13,989 13,399 12,691 12,315 11,300 - 323 - 448 192 ----------- ------------ ------------ ------------ ------------ Total Operating Expenses 13,989 13,722 12,691 12,763 11,522 ----------- ------------ ------------ ------------ ------------ Net Income Before Income Taxes, Merger and Other Related Nonrecurring Costs and Extraordinary Items 11,662 10,517 9,485 8,074 7,961 Income Tax Expenses 4,295 4,062 3,695 2,446 2,586 ----------- ------------ ------------ ------------ ------------ Net Income Before Merger and Other Related Nonrecurring Costs and Extraordinary Items 7,367 6,455 5,790 5,628 5,375 Merger and Other Related Nonrecurring Costs, net of tax - 2,491 - - 360 ----------- ------------ ------------ ------------ ------------ Net Income Before Extraordinary Items 7,367 3,964 5,790 5,628 5,015 Extraordinary Items, net of tax (3) - - (88) - - ----------- ------------ ------------ ------------ ------------ Net Income $ 7,367 $ 3,964 $ 5,702 $ 5,628 $ 5,015 ----------- ------------ ------------ ------------ ------------ - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS: Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 1999 1999 1999 1998 1998 ----------- ------------ ------------ ------------ ------------ Net Income Per Share (Before Merger and Other Related Nonrecurring Costs and Extraordinary Items) Basic $ 0.65 $ 0.50 $ 0.53 $ 0.51 $ 0.49 Diluted $ 0.62 $ 0.55 $ 0.50 $ 0.48 $ 0.46 Net Income Per Share Basic $ 0.65 $ 0.35 $ 0.51 $ 0.51 $ 0.46 Diluted $ 0.52 $ 0.34 $ 0.40 $ 0.46 $ 0.43 Weighted Average Common Shares Outstanding 11,285,000 11,193,000 11,087,000 10,994,000 10,924,000 Weighted Average Common & Common Equivalent Shares Outstanding 11,911,000 11,798,000 11,718,000 11,705,000 11,622,000 Return on Quarterly Average Assets, annualized (4) 1.34% 1.26% 1.29% 1.29% 1.30% Return on Quarterly Average Equity, annualized (4) 24.50% 21.99% 21.25% 21.32% 21.34% Net Interest Margin - Average Earning Assets 4.90% 4.80% 4.97% 4.90% 4.90% Operating Expense Ration (Before Nonrecurring and Extraordinary Items) 2.54% 2.62% 2.83% 2.82% 2.75% Efficiency Ratio (Before Nonrecurring and Extraordinary Items) 47.96% 52.24% 54.95% 54.82% 53.37% - ---------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Q3 of 1998 includes a $100,000 write-down of an equity investment in accordance with APB 18 and Q3 1999 includes a $900,000 gain on an equity investment. (2) Q3 and Q4 of 1998 and Q2 of 1999 nonrecurring expenses are comprised of $192,000, $446,000 and $323,000 in donations to the GBB Foundation, respectively, (3) Includes $88,000 loss on early retirement of subordinated debt. (4) Before Merger and Other Related Nonrecurring Costs and Extraordinary Items of $2.5 million, net of tax, in Q2 1999, $00,000, net of tax, in Q1 1999 and $360,000, net of tax, in Q3 of 1998, Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Bay Area Bancshares on a pooling-of-interests basis. - -------------------------------------------------------------------------------- GREATER BAY BANCORP September 30, 1999 - FINANCIAL SUMMARY ($ in 000's, expect share and per share data) - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA: September 30, September 30, 1999 1998 ------------- ------------- Interest Income $ 116,212 $ 91,646 Interest Expense 47,714 37,705 ------------- ------------- Net Interest Income Before Provision for Loan Losses 68,498 53,941 Provision for Loan Losses 6,075 4,294 ------------- ------------- Net Interest Income After Provision for Loan Losses 62,423 49,647 Other Income (1) 9,413 6,122 Nonrecurring - Warrant Income 230 497 ------------- ------------- Total Other Income 9,643 6,619 Operating Expenses 40,079 33,609 Other Expenses - nonrecurring (2) 323 701 ------------- ------------- Total Operating Expenses 40,402 34,210 ------------- ------------- Net Income Before Income Taxes, Merger and Other Related Nonrecurring Costs and Extraordinary items 31,661 22,056 Income Tax Expense 12,052 7,427 ------------- ------------- Net Income Before Merger and Other Related Nonrecurring Costs and Extraordinary Items 19,012 14,620 Merger and Other Related Nonrecurring Costs, net of tax 2,491 1,314 ------------- ------------- Net Income Before Extraordinary Items 17,121 13,315 Extraordinary Items (3) (88) - ------------- ------------- Net Income $ 17,033 $ 13,315 ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS: September 30, September 30, 1999 1998 ------------- ------------- Net Income Per Share (Before Merger and Other Related Nonrecurring Costs and Extraordinary Items) Basic $ 1.75 $ 1.35 Diluted $ 1.66 $ 1.20 Net Income Per Share Basic $ 1.52 $ 1.23 Diluted $ 1.44 $ 1.14 Weighted Average Common Shares Outstanding 11,189,000 10,848,000 Weighted Average Common & Common Equivalent Shares Outstanding 11,810,000 11,649,000 Return on Average Assets, annualized (4) 1.30% 1.19% Return on Average Equity, annualized (4) 22.63% 16.55% Net Interest Margin - Average Earning Assets 4.88% 6.13% Operating Expense Ratio (Before Nonrecurring and Extraordinary Items) 2.65% 2.72% Efficiency Ratio (Before Nonrecurring and Extraordinary Items) 51.44% 55.79% - ------------------------------------------------------------------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (1) 1998 includes a $700,000 write-down of an equity investment in accordance with APB 18 and 1999 includes a $900,000 gain on an equity investment. (2) 1998 and 1999 nonrecurring expenses are comprised of a $701,000 and $323,000 donation to the GBB Foundation, respectively. (3) Includes $88,000 loss on early retirement of subordinated debt. (4) Before Merger and Other Related Nonrecurring Costs and Extraordinary Items of $2.6 million, net of tax in 1999 and $1.3 million, net of tax, in 1998. Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and Bay Area Bancshares on a pooling-of-interests basis. - --------------------------------------------------------------------------------