EX-99.1 3 dex991.htm PRESS RELEASE DATED JULY 17, 2002 Prepared by R.R. Donnelley Financial -- Press Release dated July 17, 2002
 
EXHIBIT 99.1
 
Press Release dated July 17, 2002
 
For Information Contact
    
At Greater Bay Bancorp:
  
At FRB|Weber Shandwick:
David L. Kalkbrenner
  
Christina Carrabino (general information)
President and CEO
  
(415) 296-2244
(650) 614-5767
  
James Hoyne (analyst/investor information)
Steven C. Smith
  
(310) 407-6546
EVP, CAO and CFO
    
(650) 813-8222
    
 
 
FOR IMMEDIATE RELEASE
 
 
 
 
GREATER BAY BANCORP REPORTS 40% INCREASE
IN SECOND QUARTER 2002 NET INCOME
 
PALO ALTO, CA, July 17, 2002 — Greater Bay Bancorp (Nasdaq:GBBK), an $8.5 billion in assets financial services holding company, today announced results for the second quarter and six months ended June 30, 2002. Greater Bay Bancorp’s NET INCOME for the second quarter of 2002 increased 40% to $33.5 million, or $0.62 per diluted share, compared to $23.9 million, or $0.47 per diluted share, in the second quarter of 2001. The Company’s CASH NET INCOME, excluding amortization of intangibles, was $0.63 per diluted share in the second quarter of 2002, compared to $0.47 per diluted share in the second quarter of 2001.
 
Based on NET INCOME, for the second quarter of 2002, Greater Bay Bancorp’s return on average equity was 22.48%, return on average assets was 1.60% and efficiency ratio was 48.32%. For the second quarter of 2001, net income resulted in a return on average equity of 21.80%, return on average assets of 1.47% and an efficiency ratio of 43.80%.
 
Based on CASH NET INCOME, for the second quarter of 2002, Greater Bay Bancorp’s return on average equity was 32.37%, return on average assets was 1.68% and efficiency ratio was 47.08%. For the second quarter of 2001, cash net income resulted in a return on average equity of 23.29%, return on average assets of 1.49% and an efficiency ratio of 43.39%.
 
For the first six months of 2002, Greater Bay Bancorp’s NET INCOME increased 26% to $61.1 million, or $1.14 per diluted share, compared to $48.5 million, or $0.94 per diluted share, for the first six months of 2001. The Company’s CASH NET INCOME, excluding amortization of intangibles, was $1.16 per diluted share for the first six months of 2002, compared to $0.95 per diluted share for the first six months of 2001.
 
Based on NET INCOME, for the first six months of 2002, Greater Bay Bancorp’s return on average equity was 21.47%, return on average assets was 1.50% and efficiency ratio was 45.92%. For the first six months of 2001, net income resulted in a return on average equity of 23.10%, return on average assets of 1.59% and an efficiency ratio of 43.57%.
 
Based on CASH NET INCOME, for the first six months of 2002, Greater Bay Bancorp’s return on average equity was 27.90%, return on average assets was 1.56% and efficiency ratio was 45.03%. For the first six months of 2001, cash net income resulted in a return on average equity of 24.72%, return on average assets of 1.61% and an efficiency ratio of 43.19%.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 2 of 10

 
“Once again, we are pleased to report that Greater Bay Bancorp had another outstanding quarter in delivering quality earnings growth and increased returns to our shareholders, while simultaneously aggressively managing and mitigating our exposure to credit risk during a continuing period of economic uncertainty,” said David Kalkbrenner, President and CEO of Greater Bay Bancorp.
 
At June 30, 2002, Greater Bay Bancorp’s total assets were $8.5 billion, an increase of 24% or $1.6 billion from June 30, 2001. Total loans grew to $4.7 billion, from $4.3 billion a year ago, with second quarter 2002 growth of $184.3 million or 16% annualized, split approximately evenly between commercial loans and commercial real estate loans. Total deposits increased to $5.3 billion, from $4.9 billion at June 30, 2001. Deposit growth for the second quarter of 2002 of $257.9 million or 21% annualized was driven by a renewed focus on money market deposits, which resulted from a marketing program for new business deposits with rates tied to the three-month Treasury Bill auction rate. The Company believes that the loan and deposit growth for the period provides an indication that the San Francisco Bay area economy, while sluggish, still has some underlying resiliency.
 
Greater Bay Bancorp’s allowance for loan losses was 2.68% of total loans at June 30, 2002 and 2.78% at March 31, 2002, while its ratio of non-performing assets to total assets was 0.50% at June 30, 2002, compared to 0.35% at March 31, 2002. The allowance for loan losses was 294.21% of total non-performing assets at June 30, 2002, compared to 435.04% at March 31, 2002.
 
Mr. Kalkbrenner stated, “Greater Bay continues to aggressively manage non-performing assets, which has resulted in non-performing assets remaining at low levels compared to our Uniform Bank Performance peer group. In addition, during the second quarter Greater Bay Bancorp completed a detailed operating statement review and stress analysis of all of our real estate loans in excess of $5 million, which represented approximately 30% of the total real estate loan portfolio. The review was in addition to the normal review of quarterly operating cashflows and the macro review of real estate market trends performed over the last four quarters. The results of this analysis did not identify any loans which would result in any material loan loss exposure to Greater Bay Bancorp. The Company attributes these results to our relationship style of banking and our commitment to building long-term relationships. While the results of our analysis were positive, we recognize that the economy is fragile and could deteriorate further before it improves, thus negatively impacting some of our lending relationships. Thus, continued vigilance on credit risk management will continue to be a key element for Greater Bay Bancorp.”
 
Greater Bay Bancorp’s net interest margin for the second quarter of 2002 was 4.85% compared to 4.98% for the first quarter of 2002 and 4.83% for the fourth quarter of 2001. The net interest margin declined slightly for the quarter, primarily as the result of a slight change in the mix of our asset and liability structure, combined with the impact of our new Treasury Bill money market account.
 
Mr. Kalkbrenner stated, “We believe that the benefits of increasing our core deposits and growing our balance sheet with quality core assets more than offset the few basis point decline in the margin and will be more than made up by the increase in net interest income.”
 
Greater Bay Bancorp’s non-interest income rose to 30% of total revenue for the second quarter of 2002, compared to 14% for the second quarter of 2001. This was primarily attributed to the additional revenue generated from ABD Insurance and Financial Services (“ABD”) during the second quarter of 2002.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 3 of 10

 
Mr. Kalkbrenner commented, “Our merger with ABD continues to provide excellent financial operating results for Greater Bay Bancorp. For the second quarter of 2002, ABD’s revenue topped $28.1 million and its net income contribution to Greater Bay Bancorp was in excess of $3.7 million. We are also pleased to report that the referrals of client relationships between the subsidiary banks and ABD continue to increase.”
 
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.
 
 
 
 
Forward-Looking Information
 
Mr. Kalkbrenner stated, “The economic stabilization in the San Francisco Bay Area is moving slower than all of us would like to see, but there is news coming from a variety of sources indicating we may be at or nearing the bottom of this economic recession. First, the UCLA Anderson Forecast indicates that the recession is ending in Northern California, while economic expansion is proceeding in Southern California, with improving trends in personal income, taxable sales and non-farm employment expected in the third quarter of 2002. Second, Grubb & Ellis, one of the nation’s largest commercial real estate service firms, also published a report on San Francisco office trends for the second quarter of 2002 that indicated the San Francisco office market is beginning to show signs that its two-year slide may be coming to an end. Given the current economic conditions in the Bay Area and our internal analysis of our current position, which includes information we gather from our client relationships, we continue to be cautiously optimistic about the outlook for the remainder of 2002. Based on these factors, we confirm our guidance for 2002 as follows.”
 
 
 
 
2002 Guidance
 
 
·
 
Earnings per share growth in the range of 22% to 27%
 
·
 
Revenue growth in excess of 50%
 
·
 
Net interest margin in the range of 4.85% to 4.90%
 
·
 
Return on average equity in excess of 20%
 
·
 
Return on average assets in excess of 1.40%
 
·
 
Loan growth in the range of approximately 7% to 10%
 
·
 
Deposit growth in the range of approximately 5% to 10%
 
·
 
Non-performing assets of approximately 0.50% of total assets
 
·
 
Net charge-offs in the range of 70 to 80 basis points of average loans including the Shared National Credit portfolio
 
·
 
Net charge-offs in the range of 35 to 40 basis points of average loans excluding the Shared National Credit portfolio
 
Greater Bay Bancorp through its eleven 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, Peninsula Bank of Commerce and San Jose National Bank, 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

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 4 of 10

 
Coastal Region. ABD Insurance and Financial Services, a wholly owned subsidiary of Greater Bay Bancorp, provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States.
 
Investors have the opportunity to listen to the conference call live over the Internet at http://www.companyboardroom.com on Wednesday, July 17, 2002 at 8:00 a.m. Investors should go to the CompanyBoardroom web site 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 Windows Media Player icon at the bottom of the page and follow directions from there. A replay of the conference call will be available on the CompanyBoardroom web site for 30 days and via telephone through July 24, 2002 by dialing 703-925-2435, passcode 6075668.
 
 
 
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, net loan charge-offs, asset quality, level of loan loss reserves, growth in loans, deposits and assets, continued success of its Regional 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) any difficulties that may be encountered in integrating newly acquired businesses and in realizing operating efficiencies; (3) government regulation; (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, 2001.
 
For additional information and press releases about Greater Bay Bancorp, visit the Company’s web site at http://www.gbbk.com.
 
 
 
 
-Financial Tables Follow-

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 5 of 10

GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

 
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
                                             
    
Jun 30
2002
     
Mar 31
2002
     
Dec 31
2002
     
Sept 30
2002
     
Jun 30
2001
  
Cash and Due From Banks
   
$
265,033
 
   
$
206,487
 
   
$
189,404
 
   
$
236,989
 
   
$
228,606
 
Investments
   
 
3,181,788
 
   
 
3,215,112
 
   
 
2,996,630
 
   
 
2,662,420
 
   
 
2,161,190
 
Loans:
                                             
Commercial
   
 
1,997,960
 
   
 
1,901,577
 
   
 
1,909,056
 
   
 
1,888,710
 
   
 
1,865,769
 
Term Real Estate—Commercial
   
 
1,500,972
 
   
 
1,466,686
 
   
 
1,407,300
 
   
 
1,332,095
 
   
 
1,192,601
 
    
  
  
  
  
Total Commercial
   
 
3,498,932
 
   
 
3,368,263
 
   
 
3,316,356
 
   
 
3,220,805
 
   
 
3,058,370
 
Construction & Land
   
 
728,795
 
   
 
697,899
 
   
 
744,127
 
   
 
731,619
 
   
 
781,018
 
Real Estate—Other
   
 
292,474
 
   
 
251,021
 
   
 
246,117
 
   
 
237,143
 
   
 
246,908
 
Consumer and Other
   
 
178,809
 
   
 
196,111
 
   
 
204,483
 
   
 
205,334
 
   
 
224,093
 
Deferred Loan Fees, Net
   
 
(16,354
)
   
 
(14,917
)
   
 
(15,362
)
   
 
(15,117
)
   
 
(14,788
)
    
  
  
  
  
Total Loans
   
 
4,682,656
 
   
 
4,498,377
 
   
 
4,495,721
 
   
 
4,379,784
 
   
 
4,295,601
 
Allowance for Loan Losses
   
 
(126,092
)
   
 
(125,331
)
   
 
(124,744
)
   
 
(98,178
)
   
 
(96,119
)
    
  
  
  
  
Total Loans, Net
   
 
4,556,564
 
   
 
4,373,046
 
   
 
4,370,977
 
   
 
4,281,606
 
   
 
4,199,482
 
Goodwill and Other Intangibles
   
 
170,432
 
   
 
171,722
 
   
 
25,080
 
   
 
23,851
 
   
 
24,226
 
Other Assets
   
 
352,405
 
   
 
363,658
 
   
 
294,963
 
   
 
300,093
 
   
 
271,994
 
    
  
  
  
  
Total Assets
   
$
8,526,222
 
   
$
8,330,025
 
   
$
7,877,054
 
   
$
7,504,959
 
   
$
6,885,498
 
    
  
  
  
  
Deposits:
                                             
Demand, Non-Interest Bearing
   
$
933,486
 
   
$
934,150
 
   
$
953,989
 
   
$
956,085
 
   
$
959,065
 
NOW, MMDA and Savings
   
 
2,555,057
 
   
 
2,271,837
 
   
 
2,280,119
 
   
 
2,265,671
 
   
 
2,295,315
 
Time Certificates, $100,000 and over
   
 
531,458
 
   
 
590,965
 
   
 
642,073
 
   
 
733,077
 
   
 
684,612
 
Other Time Certificates
   
 
1,279,125
 
   
 
1,244,260
 
   
 
1,113,890
 
   
 
918,482
 
   
 
940,581
 
    
  
  
  
  
Total Deposits
   
 
5,299,126
 
   
 
5,041,212
 
   
 
4,990,071
 
   
 
4,873,315
 
   
 
4,879,573
 
    
  
  
  
  
Other Borrowings
   
 
2,209,356
 
   
 
2,313,428
 
   
 
2,095,896
 
   
 
1,790,383
 
   
 
1,365,465
 
Other Liabilities
   
 
169,311
 
   
 
176,688
 
   
 
94,403
 
   
 
142,748
 
   
 
98,792
 
    
  
  
  
  
Total Liabilities
   
 
7,677,793
 
   
 
7,531,328
 
   
 
7,180,370
 
   
 
6,806,446
 
   
 
6,343,830
 
    
  
  
  
  
Trust Preferred Securities
   
 
223,000
 
   
 
218,000
 
   
 
218,000
 
   
 
218,000
 
   
 
99,500
 
REIT Preferred Securities
   
 
15,650
 
   
 
15,650
 
   
 
15,000
 
   
 
—  
 
   
 
—  
 
Convertible Preferred Stock
   
 
72,500
 
   
 
72,500
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
Shareholders’ Equity
   
 
537,279
 
   
 
492,547
 
   
 
463,684
 
   
 
480,513
 
   
 
442,168
 
    
  
  
  
  
    
 
609,779
 
   
 
565,047
 
   
 
463,684
 
   
 
480,513
 
   
 
442,168
 
    
  
  
  
  
Total Liabilities and Shareholders’ Equity
   
$
8,526,222
 
   
$
8,330,025
 
   
$
7,877,054
 
   
$
7,504,959
 
   
$
6,885,498
 
    
  
  
  
  
Average Quarterly Total Loans, excluding Nonaccrual
   
$
4,541,191
 
   
$
4,439,279
 
   
$
4,420,039
 
   
$
4,318,278
 
   
$
4,231,007
 
Average Quarterly Investments
   
$
3,202,106
 
   
$
3,098,595
 
   
$
2,794,646
 
   
$
2,434,315
 
   
$
1,787,608
 
Average Quarterly Interest Earning Assets
   
$
7,743,297
 
   
$
7,537,874
 
   
$
7,214,685
 
   
$
6,752,593
 
   
$
6,018,615
 
Average Quarterly Deposits
   
$
5,194,555
 
   
$
5,055,141
 
   
$
4,869,237
 
   
$
4,895,336
 
   
$
4,808,515
 
Average Quarterly Interest Bearing Liabilities
   
$
6,499,184
 
   
$
6,220,579
 
   
$
5,837,617
 
   
$
5,474,686
 
   
$
4,821,892
 
Average Quarterly Assets
   
$
8,413,187
 
   
$
8,028,660
 
   
$
7,613,853
 
   
$
7,154,318
 
   
$
6,436,244
 
Average Quarterly Equity
   
$
598,254
 
   
$
549,300
 
   
$
469,459
 
   
$
461,930
 
   
$
435,244
 
Total Regulatory Capital
                                             
Tier I or Leverage Capital
   
$
640,207
 
   
$
602,839
 
   
$
607,820
 
   
$
562,151
 
   
$
512,260
 
Total Capital
   
$
736,378
 
   
$
701,039
 
   
$
740,653
 
   
$
721,596
 
   
$
580,779
 
Nonperforming Assets
                                             
Nonaccrual Loans
   
$
42,349
 
   
$
27,837
 
   
$
30,970
 
   
$
22,273
 
   
$
8,186
 
OREO
   
 
509
 
   
 
972
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
    
  
  
  
  
Total Nonperforming Assets
   
$
42,858
 
   
$
28,809
 
   
$
30,970
 
   
$
22,273
 
   
$
8,186
 
    
  
  
  
  
Greater Bay Trust Company Assets
   
$
641,884
 
   
$
644,216
 
   
$
629,696
 
   
$
672,077
 
   
$
683,306
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 6 of 10

GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
 
    
Second Quarter 2002
     
First Quarter 2002
     
Fourth Quarter 2001
     
Third
Quarter 2001
     
Second
Quarter 2001
  
Interest Income
   
$
130,792
 
   
$
129,425
 
   
$
129,946
 
   
$
131,856
 
   
$
124,669
 
Interest Expense
   
 
37,120
 
   
 
36,891
 
   
 
42,054
 
   
 
50,879
 
   
 
47,628
 
    
  
  
  
  
Net Interest Income Before Provision for Loan Losses
   
 
93,672
 
   
 
92,534
 
   
 
87,892
 
   
 
80,977
 
   
 
77,041
 
Provision for Loan Losses
   
 
9,000
 
   
 
16,000
 
   
 
28,950
 
   
 
8,400
 
   
 
10,049
 
    
  
  
  
  
Net Interest Income After Provision for Loan Losses
   
 
84,672
 
   
 
76,534
 
   
 
58,942
 
   
 
72,577
 
   
 
66,992
 
Non-interest Income:
                                             
Insurance Agency Commissions & Fees (1)
   
 
27,601
 
   
 
10,891
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
Depositor Service Fees
   
 
2,762
 
   
 
2,828
 
   
 
3,223
 
   
 
2,564
 
   
 
2,481
 
Loan and International Banking Fees
   
 
2,273
 
   
 
2,527
 
   
 
2,243
 
   
 
1,987
 
   
 
2,085
 
Trust Fees
   
 
894
 
   
 
906
 
   
 
881
 
   
 
865
 
   
 
978
 
ATM Fees
   
 
628
 
   
 
583
 
   
 
656
 
   
 
803
 
   
 
766
 
Gain on Sale of Loans
   
 
210
 
   
 
496
 
   
 
347
 
   
 
1,684
 
   
 
375
 
Gain/(loss) on Investments
   
 
2,707
 
   
 
200
 
   
 
(46
)
   
 
819
 
   
 
3,944
 
Other Income
   
 
2,435
 
   
 
4,161
 
   
 
2,380
 
   
 
1,900
 
   
 
1,870
 
    
  
  
  
  
    
 
39,510
 
   
 
22,592
 
   
 
9,684
 
   
 
10,622
 
   
 
12,499
 
Nonrecurring—Warrant Income (2)
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
77
 
   
 
504
 
    
  
  
  
  
Total Non-interest Income
   
 
39,510
 
   
 
22,592
 
   
 
9,684
 
   
 
10,699
 
   
 
13,003
 
Operating Expenses:
                                             
Salaries
   
 
36,054
 
   
 
26,046
 
   
 
23,675
 
   
 
21,366
 
   
 
20,824
 
Deferred Loan Origination Costs
   
 
(3,745
)
   
 
(2,986
)
   
 
(3,117
)
   
 
(3,067
)
   
 
(3,480
)
Benefits
   
 
6,338
 
   
 
5,515
 
   
 
4,138
 
   
 
4,019
 
   
 
4,295
 
    
  
  
  
  
Total Compensation and Benefits
   
 
38,647
 
   
 
28,575
 
   
 
24,696
 
   
 
22,318
 
   
 
21,639
 
Occupancy and Equipment
   
 
10,267
 
   
 
8,838
 
   
 
7,817
 
   
 
7,036
 
   
 
6,642
 
Professional Services & Legal
   
 
1,915
 
   
 
1,689
 
   
 
2,342
 
   
 
2,418
 
   
 
1,626
 
Telephone, postage and supplies
   
 
1,918
 
   
 
1,633
 
   
 
1,615
 
   
 
1,366
 
   
 
1,541
 
Marketing and promotion
   
 
1,617
 
   
 
1,452
 
   
 
1,470
 
   
 
1,413
 
   
 
1,404
 
Data Processing
   
 
1,196
 
   
 
1,129
 
   
 
1,021
 
   
 
1,166
 
   
 
1,130
 
Client Services
   
 
557
 
   
 
647
 
   
 
645
 
   
 
712
 
   
 
805
 
FDIC Insurance and Assessments
   
 
417
 
   
 
463
 
   
 
627
 
   
 
406
 
   
 
393
 
Amortization of Intangibles
   
 
1,650
 
   
 
562
 
   
 
376
 
   
 
374
 
   
 
366
 
Other Expenses
   
 
6,170
 
   
 
4,682
 
   
 
3,331
 
   
 
4,000
 
   
 
3,669
 
    
  
  
  
  
    
 
64,354
 
   
 
49,670
 
   
 
43,940
 
   
 
41,209
 
   
 
39,215
 
Costs related to the Early Retirement of Trust Preferred Securities (TPS)
   
 
975
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
TPS & REIT Preferred Securities expense
   
 
5,185
 
   
 
5,323
 
   
 
5,088
 
   
 
3,724
 
   
 
2,454
 
    
  
  
  
  
Total Operating Expenses (1) (3)
   
 
70,514
 
   
 
54,993
 
   
 
49,028
 
   
 
44,933
 
   
 
41,669
 
Income Before Income Taxes, Merger and Other Related Nonrecurring Costs
   
 
53,668
 
   
 
44,133
 
   
 
19,598
 
   
 
38,343
 
   
 
38,326
 
Income Taxes:
                                             
Income Tax Expense
   
 
20,132
 
   
 
16,531
 
   
 
6,369
 
   
 
14,485
 
   
 
14,171
 
Capital Loss Carryback Tax (Benefit) (4)
   
 
—  
 
   
 
—  
 
   
 
(11,897
)
   
 
—  
 
   
 
—  
 
Nonrecurring Income Tax Expense (2)
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
32
 
   
 
212
 
    
  
  
  
  
Total Income Tax Expense
   
 
20,132
 
   
 
16,531
 
   
 
(5,528
)
   
 
14,517
 
   
 
14,383
 
Income Before Merger and Other Related Nonrecurring Costs
   
 
33,536
 
   
 
27,602
 
   
 
25,126
 
   
 
23,826
 
   
 
23,943
 
Merger and Other Related Nonrecurring Costs, net of tax (2)
   
 
—  
 
   
 
—  
 
   
 
17,611
 
   
 
—  
 
   
 
—  
 
    
  
  
  
  
Net Income
   
$
33,536
 
   
$
27,602
 
   
$
7,515
 
   
$
23,826
 
   
$
23,943
 
    
  
  
  
  
(1)
 
The Company acquired ABD Insurance and Financial Services (ABD) on March 12, 2002 which is accounted for under the purchase accounting method.
 
(2)
 
Components of Nonrecurring and Merger Items. Net Income excluding these items is $25,126 for Q4 2001; $23,781 for Q3 2001 and $23,651 for Q2 2001.
 
(3)
 
Total Operating Expenses were $49.0 million in Q2 2002 and $47.5 million in Q1 2002, excluding operating expenses of ABD.
 
(4)
 
The Capital Loss Carryback was recognized in conjunction with the establishment of a REIT which also generated $15 million in additional capital in Q4 2001.
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 7 of 10

GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA:
 
    
YTD
30-Jun
2002
     
YTD
30-Jun
2001
  
Interest Income
   
$
260,217
 
   
$
245,439
 
Interest Expense
   
 
74,011
 
   
 
93,299
 
    
  
Net Interest Income Before Provision for Loan Losses
   
 
186,206
 
   
 
152,140
 
Provision for Loan Losses
   
 
25,000
 
   
 
17,377
 
    
  
Net Interest Income After Provision for Loan Losses
   
 
161,206
 
   
 
134,763
 
Non-interest Income:
                  
Insurance Agency Commissions & Fees (1)
   
 
38,492
 
   
 
—  
 
Depositor Service Fees
   
 
5,590
 
   
 
4,815
 
Loan and International Banking Fees
   
 
4,800
 
   
 
4,626
 
Trust Fees
   
 
1,800
 
   
 
1,864
 
ATM Fees
   
 
1,211
 
   
 
1,428
 
Gain on Sale of Loans
   
 
706
 
   
 
1,210
 
Gain/(loss) on Investments
   
 
2,907
 
   
 
5,531
 
Other Income
   
 
6,596
 
   
 
4,481
 
    
  
    
 
62,102
 
   
 
23,955
 
Nonrecurring—Warrant Income (2)
   
 
—  
 
   
 
504
 
    
  
Total Non-interest Income
   
 
62,102
 
   
 
24,459
 
Operating Expenses:
                  
Salaries
   
 
62,100
 
   
 
39,517
 
Deferred Loan Origination Costs
   
 
(6,731
)
   
 
(5,230
)
Benefits
   
 
11,853
 
   
 
8,398
 
    
  
Total Compensation and Benefits
   
 
67,222
 
   
 
42,685
 
Occupancy and Equipment
   
 
19,105
 
   
 
12,903
 
Professional Services & Legal
   
 
3,604
 
   
 
3,079
 
Telephone, postage and supplies
   
 
3,551
 
   
 
3,046
 
Marketing and promotion
   
 
3,069
 
   
 
2,765
 
Data Processing
   
 
2,325
 
   
 
2,261
 
Client Services
   
 
1,204
 
   
 
1,608
 
FDIC Insurance and Assessments
   
 
880
 
   
 
729
 
Amortization of Intangibles
   
 
2,212
 
   
 
658
 
Other Expenses
   
 
10,852
 
   
 
6,984
 
    
  
    
 
114,024
 
   
 
76,718
 
Costs related to the Early Retirement of Trust Preferred Securities (TPS)
   
 
975
 
   
 
—  
 
TPS & REIT Preferred Securities expense
   
 
10,508
 
   
 
4,912
 
    
  
Total Operating Expenses (1) (3)
   
 
125,507
 
   
 
81,630
 
Income Before Income Taxes, Merger and Other Related Nonrecurring Costs
   
 
97,801
 
   
 
77,592
 
Income Taxes:
                  
Income Tax Expense
   
 
36,663
 
   
 
28,905
 
Nonrecurring Income Tax Expense (2)
   
 
—  
 
   
 
212
 
    
  
Total Income Tax Expense
   
 
36,663
 
   
 
29,117
 
Income Before Merger and Other Related Nonrecurring Costs
   
 
61,138
 
   
 
48,475
 
Merger and Other Related Nonrecurring Costs, net of tax (2)
   
 
—  
 
   
 
—  
 
    
  
Net Income
   
$
61,138
 
   
$
48,475
 
    
  
(1)
 
The Company acquired ABD Insurance and Financial Services (ABD) on March 12, 2002 which is accounted for under the purchase accounting method.
 
(2)
 
Components of Nonrecurring and Merger Items. Net Income excluding these items is $48,183 for YTD June 2001.
 
(3)
 
Total Operating Expenses were $96.5 million in YTD June 2002, excluding operating expenses of ABD.
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 8 of 10

GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
 
    
Jun 30
2002
     
Mar 31
2002
     
Dec 31
2001
     
Sept 30
2001
     
Jun 30
2001
  
Loan to Deposit Ratio
   
 
88.37
%
   
 
89.23
%
   
 
90.09
%
   
 
89.87
%
   
 
88.03
%
Core Bank Loan to Deposit Ratio (1)
   
 
71.49
%
   
 
72.26
%
   
 
75.41
%
   
 
75.60
%
   
 
73.94
%
Ratio of Allowance for Loan Losses to:
                                             
Average Loans
   
 
2.75
%
   
 
2.81
%
   
 
2.80
%
   
 
2.26
%
   
 
2.27
%
End of Period Loans
   
 
2.68
%
   
 
2.78
%
   
 
2.77
%
   
 
2.23
%
   
 
2.23
%
Total Nonperforming Assets
   
 
294.21
%
   
 
435.04
%
   
 
402.79
%
   
 
440.79
%
   
 
1174.19
%
Ratio of Provision for Loan Losses to Average Loans, annualized
   
 
0.79
%
   
 
1.45
%
   
 
2.58
%
   
 
0.77
%
   
 
0.95
%
Total Nonperforming Assets to Total Assets
   
 
0.50
%
   
 
0.35
%
   
 
0.39
%
   
 
0.30
%
   
 
0.12
%
Ratio of Quarterly Net Charge-offs to Average Loans, annualized
   
 
0.72
%
   
 
1.40
%
   
 
0.52
%
   
 
0.58
%
   
 
0.72
%
Ratio of YTD Net Charge-offs to YTD Average Loans, annualized
   
 
1.05
%
   
 
1.40
%
   
 
0.59
%
   
 
0.61
%
   
 
0.63
%
Loan Growth, current quarter to prior year quarter
   
 
9.01
%
   
 
7.08
%
   
 
10.60
%
   
 
24.28
%
   
 
31.85
%
Loan Growth, current quarter to prior quarter, annualized
   
 
16.43
%
   
 
0.24
%
   
 
10.50
%
   
 
7.78
%
   
 
9.02
%
Loan Growth, YTD annualized
   
 
8.39
%
   
 
0.24
%
   
 
10.60
%
   
 
10.36
%
   
 
11.45
%
Recurring Revenue Growth, current quarter to prior year quarter
   
 
48.74
%
   
 
33.01
%
   
 
17.96
%
   
 
18.97
%
   
 
22.77
%
Recurring Revenue Growth, current quarter to prior quarter, annualized
   
 
62.91
%
   
 
72.94
%
   
 
25.89
%
   
 
9.12
%
   
 
13.83
%
Net Interest Income Growth, current quarter to prior year quarter
   
 
21.59
%
   
 
23.22
%
   
 
18.47
%
   
 
18.50
%
   
 
18.33
%
Net Interest Income Growth, current quarter to prior quarter, annualized
   
 
4.93
%
   
 
21.42
%
   
 
33.88
%
   
 
20.27
%
   
 
10.37
%
Average Earning Assets to Average Total Assets
   
 
92.04
%
   
 
93.89
%
   
 
94.76
%
   
 
94.38
%
   
 
93.51
%
Average Earning Assets to Average Interest-Bearing Liabilities
   
 
119.14
%
   
 
121.18
%
   
 
123.59
%
   
 
123.34
%
   
 
124.82
%
Capital Ratios:
                                             
Leverage
   
 
7.77
%
   
 
7.67
%
   
 
8.01
%
   
 
7.86
%
   
 
7.96
%
Tier 1 Risk Based Capital
   
 
10.66
%
   
 
10.31
%
   
 
10.49
%
   
 
10.05
%
   
 
9.47
%
Total Risk Based Capital
   
 
12.26
%
   
 
11.99
%
   
 
12.79
%
   
 
12.90
%
   
 
10.73
%
Risk Weighted Assets
   
$
6,005,431
 
   
$
5,845,147
 
   
$
5,792,917
 
   
$
5,593,341
 
   
$
5,411,878
 
Book Value Per Share
   
$
10.50
 
   
$
9.75
 
   
$
9.31
 
   
$
9.66
 
   
$
8.92
 
Total Shares Outstanding
   
 
51,192,359
 
   
 
50,501,861
 
   
 
49,831,682
 
   
 
49,717,960
 
   
 
49,555,808
 
(1)
 
Includes the eleven core banking divisions and excludes ABD, Matsco, Capco, Pacific Business Funding and Corporate Finance.
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

 
Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 9 of 10

 
GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
 
    
Second
Quarter
2002
     
First
Quarter
2002
     
Fourth
Quarter
2001
     
Third
Quarter
2001
     
Second
Quarter
2001
  
GAAP EPS (including Amortization of Intangibles)
                                   
Income Per Share (Before Nonrecurring and Merger Items) (1) (2) (3)
                                   
Basic (4)
   
$0.64
 
   
$0.54
 
   
$0.51
 
   
$0.48
 
   
$0.48
 
Diluted
   
$0.62
 
   
$0.52
 
   
$0.49
 
   
$0.46
 
   
$0.46
 
Income Per Share (Before Merger Items) (3)
                                   
Basic (4)
   
$0.64
 
   
$0.54
 
   
$0.51
 
   
$0.48
 
   
$0.48
 
Diluted
   
$0.62
 
   
$0.52
 
   
$0.49
 
   
$0.46
 
   
$0.47
 
Net Income Per Share
                                   
Basic (4)
   
$0.64
 
   
$0.54
 
   
$0.15
 
   
$0.48
 
   
$0.48
 
Diluted
   
$0.62
 
   
$0.52
 
   
$0.15
 
   
$0.46
 
   
$0.47
 
Cash EPS (excluding Amortization of Intangibles)
                                   
Income Per Share (Before Nonrecurring and Merger Items) (1) (2) (3)
                                   
Basic (4)
   
$0.66
 
   
$0.55
 
   
$0.51
 
   
$0.48
 
   
$0.48
 
Diluted
   
$0.63
 
   
$0.53
 
   
$0.49
 
   
$0.47
 
   
$0.47
 
Income Per Share (Before Merger Items) (3)
                                   
Basic (4)
   
$0.66
 
   
$0.55
 
   
$0.51
 
   
$0.48
 
   
$0.49
 
Diluted
   
$0.63
 
   
$0.53
 
   
$0.49
 
   
$0.47
 
   
$0.47
 
Net Income Per Share (3)
                                   
Basic (4)
   
$0.66
 
   
$0.55
 
   
$0.16
 
   
$0.48
 
   
$0.49
 
Diluted
   
$0.63
 
   
$0.53
 
   
$0.15
 
   
$0.47
 
   
$0.47
 
Weighted Average Common Shares Outstanding
   
50,685,000
 
   
50,204,000
 
   
49,689,000
 
   
49,588,000
 
   
49,487,000
 
Weighted Average Common & Common Equivalent Shares Outstanding
   
54,500,000
 
   
53,026,000
 
   
51,221,000
 
   
51,352,000
 
   
50,976,000
 
GAAP Ratios (including Amortization of Intangibles)
                                   
Return on Period Average Assets, annualized (1)
   
1.60
%
   
1.39
%
   
1.31
%
   
1.32
%
   
1.47
%
Return on Period Average Equity, annualized (1)
   
22.48
%
   
20.38
%
   
21.23
%
   
20.42
%
   
21.80
%
Net Interest Margin—Average Earning Assets
   
4.85
%
   
4.98
%
   
4.83
%
   
4.76
%
   
5.13
%
Operating Expense Ratio (Before Nonrecurring and Merger Items)
   
3.36
%
   
2.78
%
   
2.55
%
   
2.49
%
   
2.60
%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
3.07
%
   
2.51
%
   
2.29
%
   
2.29
%
   
2.44
%
Efficiency Ratio (Before Nonrecurring and Merger Items)
   
52.95
%
   
47.77
%
   
50.25
%
   
49.05
%
   
46.54
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
48.32
%
   
43.14
%
   
45.03
%
   
44.99
%
   
43.80
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS, TPS & REIT preferred securities expense and excluding the operating results of ABD)
   
40.75
%
   
40.53
%
   
45.03
%
   
44.99
%
   
43.80
%
Cash Ratios (excluding Amortization of Intangibles)
                                   
Return on Period Average Assets, annualized (1)
   
1.68
%
   
1.42
%
   
1.33
%
   
1.34
%
   
1.49
%
Return on Period Average Equity, annualized (1)
   
32.37
%
   
23.89
%
   
22.63
%
   
21.74
%
   
23.29
%
Net Interest Margin—Average Earning Assets
   
4.85
%
   
4.98
%
   
4.83
%
   
4.76
%
   
5.13
%
Operating Expense Ratio (Before Nonrecurring and Merger Items)
   
3.28
%
   
2.75
%
   
2.54
%
   
2.47
%
   
2.57
%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
2.99
%
   
2.48
%
   
2.27
%
   
2.26
%
   
2.42
%
Efficiency Ratio (Before Nonrecurring and Merger Items)
   
51.71
%
   
47.28
%
   
49.86
%
   
48.65
%
   
46.13
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
47.08
%
   
42.66
%
   
44.65
%
   
44.58
%
   
43.39
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS, TPS & REIT preferred securities expense and excluding the operating results of ABD)
   
40.74
%
   
40.51
%
   
44.65
%
   
44.58
%
   
43.39
%
(1)
 
For Q4 2001 includes a Capital Loss Carryback Tax Benefit of $11.9 million and a Q4 2001 additional provision for loan losses of approximately $21 million over the recurring Q3 2001 provision and excludes Nonrecurring and Merger Items of $17.6 million, net of tax. Excludes Nonrecurring and Merger Items of $45 thousand, net of tax, in Q3 2001 and $292 thousand, net of tax, in Q2 2001.
 
(2)
 
Components of Nonrecurring and Merger Items. Net Income excluding these items is $25,126 for Q4 2001; $23,781 for Q3 2001 and $23,651 for Q2 2001.
 
(3)
 
In addition to the principal performance measures in accordance with generally accepted accounting principles, we are providing these supplemental pro forma performance measures to highlight the result of our core operations. We believe these calculations, which are derived from data presented on the face of our consolidated financial statements, are useful for investors to provide comparability from period to period with regard to our core operations. These calculations are not intended to be a substitute for the principal performance measures in accordance with generally accepted accounting principles.
 
(4)
 
Net income available to common shareholders is based on total net income less preferred dividends of $1.3 million in Q2 2002 and $263 thousand in Q1 2002.
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

Greater Bay Bancorp’s Second Quarter 2002 Earnings Results
July 17, 2002
Page 10 of 10

GREATER BAY BANCORP
 
JUNE 30, 2002 – FINANCIAL SUMMARY
 
($ in 000’s, except share and per share data)

SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS:
 
    
YTD
30-Jun
2002
     
YTD
30-Jun
2001
  
GAAP EPS (including Amortization of Intangibles)
                  
Income Per Share (Before Nonrecurring and Merger Items) (1) (2) (3)
                  
Basic (4)
   
 
$1.18
 
   
 
$0.98
 
Diluted
   
 
$1.14
 
   
 
$0.94
 
Income Per Share (Before Merger Items) (3)
                  
Basic (4)
   
 
$1.18
 
   
 
$0.98
 
Diluted
   
 
$1.14
 
   
 
$0.94
 
Net Income Per Share
                  
Basic (4)
   
 
$1.18
 
   
 
$0.98
 
Diluted
   
 
$1.14
 
   
 
$0.94
 
Cash EPS (excluding Amortization of Intangibles)
                  
Income Per Share (Before Nonrecurring and Merger Items) (1) (2) (3)
                  
Basic (4)
   
 
$1.21
 
   
 
$0.98
 
Diluted
   
 
$1.16
 
   
 
$0.95
 
Income Per Share (Before Merger Items) (3)
                  
Basic (4)
   
 
$1.21
 
   
 
$0.99
 
Diluted
   
 
$1.16
 
   
 
$0.95
 
Net Income Per Share (3)
                  
Basic (4)
   
$
1.21
 
   
$
0.99
 
Diluted
   
$
1.16
 
   
$
0.95
 
Weighted Average Common Shares Outstanding
   
 
50,446,000
 
   
 
49,341,000
 
Weighted Average Common & Common Equivalent Shares Outstanding
   
 
53,765,000
 
   
 
51,358,000
 
GAAP Ratios (including Amortization of Intangibles)
                  
Return on Period Average Assets, annualized (1)
   
 
1.50
%
   
 
1.59
%
Return on Period Average Equity, annualized (1)
   
 
21.47
%
   
 
23.10
%
Net Interest Margin—Average Earning Assets
   
 
4.92
%
   
 
5.42
%
Operating Expense Ratio (Before Nonrecurring and Merger Items)
   
 
3.08
%
   
 
2.70
%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
 
2.80
%
   
 
2.54
%
Efficiency Ratio (Before Nonrecurring and Merger Items)
   
 
50.54
%
   
 
46.36
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
 
45.92
%
   
 
43.57
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS, TPS & REIT preferred securities expense and excluding the operating results of ABD)
   
 
40.64
%
   
 
43.57
%
Cash Ratios (excluding Amortization of Intangibles)
                  
Return on Period Average Assets, annualized (1)
   
 
1.56
%
   
 
1.61
%
Return on Period Average Equity, annualized (1)
   
 
27.93
%
   
 
24.72
%
Net Interest Margin—Average Earning Assets
   
 
4.92
%
   
 
5.42
%
Operating Expense Ratio (Before Nonrecurring and Merger Items)
   
 
3.02
%
   
 
2.68
%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
 
2.74
%
   
 
2.52
%
Efficiency Ratio (Before Nonrecurring and Merger Items)
   
 
49.65
%
   
 
45.98
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)
   
 
45.03
%
   
 
43.19
%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS, TPS & REIT preferred securities expense and excluding the operating results of ABD)
   
 
40.62
%
   
 
43.19
%
(1)
 
Excludes Nonrecurring and Merger Items of $292 thousand, net of tax, in YTD June 2001.
 
(2)
 
Components of Nonrecurring and Merger Items. Net Income excluding these items is $48,183 for YTD June 2001.
 
(3)
 
In addition to the principal performance measures in accordance with generally accepted accounting principles, we are providing these supplemental pro forma performance measures to highlight the result of our core operations. We believe these calculations, which are derived from data presented on the face of our consolidated financial statements, are useful for investors to provide comparability from period to period with regard to our core operations. These calculations are not intended to be a substitute for the principal performance measures in accordance with generally accepted accounting principles.
 
(4)
 
Net income available to common shareholders is based on total net income less preferred dividends of $1.6 million in YTD June 2002.
 
Note:
 
Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.